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Transactions With Affiliated Companies
 12 Months Ended
Dec. 31, 2011
TRANSACTIONS WITH AFFILIATED COMPANIES [Abstract]  
Related Party Transactions Disclosure
TRANSACTIONS WITH AFFILIATED COMPANIES

Transactions with Ford and affiliated companies occur in the ordinary course of business.

Income Statement

The income statement effects of transactions with Ford and affiliated companies for the years ended December 31 were as follows (reductions to Income/(Loss) before income taxes are presented as negative amounts) (in millions):
 
2011
 
2010
 
2009
Net financing margin
 
 
 
 
 
Interest supplements and other support costs earned
$
2,800

 
$
3,226

 
$
3,725

Operating lease revenue on leased vehicles
211

 
230

 
229

Residual value support (a)
152

 
339

 
431

Interest expense on debt
(36
)
 
(27
)
 
(28
)
Interest income on notes receivables
27

 
48

 
28

Interest income on finance receivables (b)
36

 
6

 
16

Interest expense under tax sharing agreement (c)
(9
)
 
(13
)
 
(1
)
Other revenue
 
 
 
 
 
Gains/(Losses) from derivative transactions (d)
2

 
(22
)
 
(533
)
Earned insurance premiums
99

 
118

 
148

Earned insurance premiums ceded
(59
)
 
(86
)
 
(127
)
Interest income under tax sharing agreement (c)
—

 
—

 
3

Expenses
 
 
 
 
 
Advice and services expense (e)
(107
)
 
(105
)
 
(99
)
Insurance loss and loss adjustment expenses
(47
)
 
(57
)
 
(65
)
Insurance loss and loss adjustment expenses recovered
31

 
45

 
56

Retirement benefits and share-based compensation (f)
(12
)
 
(12
)
 
(12
)
 
 
 
 
 
 
(a)
These amounts are primarily included in Depreciation on vehicles subject to operating leases.
(b)
Certain entities are reported as consolidated subsidiaries of Ford; revenue from providing financing to these entities is included in Financing revenue.
(c)
Under our intercompany tax sharing agreement with Ford, we earn interest on net tax assets and pay interest on certain tax liabilities. Interest earned by us under this agreement is included in Other income, net. Interest expenses due to Ford under this agreement are included in Interest expense.
(d)
Currency revaluation gains/(losses) primarily related to foreign denominated debt were substantially offset by gains/(losses) on derivatives. See Notes 12 and 15 for additional information.
(e)
We receive technical and administrative advice and services from Ford and its affiliates, occupy office space furnished by Ford and its affiliates, utilize data processing facilities maintained by Ford and sell returned lease and repossessed vehicles sold through Ford auction lots. These costs are charged to Operating expenses.
(f)
In the U.S., we are a participating employer in certain retirement, postretirement health care and life insurance and share-based compensation plans that are sponsored by Ford. Ford allocates costs to us based on the total number of participating or eligible employees at Ford Credit. See Note 17 for additional information.


FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 18. TRANSACTIONS WITH AFFILIATED COMPANIES (Continued)

Balance Sheet

The balance sheet effects of transactions with Ford and affiliated companies at December 31 were as follows (in millions):
 
2011
 
2010
Assets
 
 
 
Net finance receivables and investment in operating leases
 
 
 
Purchased receivables (a)
$
3,709

 
$
3,419

Unearned interest supplements on finance receivables (b)
(1,643
)
 
(1,881
)
Finance receivables (c)
653

 
487

Net investment in leased vehicles (d)
413

 
610

Notes and accounts receivables
1,152

 
1,095

Derivative financial instruments
53

 
33

Other assets
 
 
 
Vehicles held for resale (e)
15

 
298

Investment in non-consolidated affiliates
141

 
130

Liabilities
 
 
 
Accounts payable (f)(g)
(773
)
 
(884
)
Income taxes payable (g)
(660
)
 
(1,348
)
Debt (h)
(605
)
 
(661
)
Derivative financial instruments
(35
)
 
(16
)
Unearned interest supplements and residual support on operating leases (b)
(962
)
 
(863
)
 
 
 
 
(a)
We purchase certain receivables generated by divisions and affiliates of Ford, primarily in connection with the delivery of vehicle inventories from Ford, the sale of parts and accessories by Ford to dealers, and the purchase of other receivables generated by Ford. At December 31, 2011, $791 million of these assets are subject to limited guarantees by Ford. In addition, at December 31, 2011, Ford guaranteed $32 million of our finance receivables related to dealers.
(b)
Represents unearned interest supplements on finance receivables and operating leases and residual support payments for operating leases received from Ford. For contracts purchased prior to January 1, 2008, in the U.S. and Canada, Ford is obligated to pay us $47 million of interest supplements and $0 residual value support over the terms of the related finance and lease contracts at December 31, 2011, compared with $269 million of interest supplements and $26 million of residual support at December 31, 2010. The unpaid interest supplements and residual value support obligations on these contracts will continue to decline as the contracts liquidate.
(c)
Represents other receivables related to certain used vehicles from daily rental fleet companies where we are serving as Ford's agent and wholesale receivables with entities that are reported as consolidated subsidiaries of Ford. Consolidated subsidiaries include dealerships that are partially owned by Ford as consolidated VIEs and also certain overseas affiliates.
(d)
We have entered into a sale-leaseback agreement with Ford primarily for vehicles that Ford leases to employees of Ford and its subsidiaries. The investment in these vehicles is included in Net investment in operating leases and is guaranteed by Ford.
(e)
See Note 8 for information related to certain used vehicles from daily rental fleet companies where we are serving as Ford's agent that are reported in Other assets.
(f)
Includes $328 million and $366 million of postretirement health care and life insurance benefits due to Ford at December 31, 2011 and 2010, respectively.
(g)
In accordance with our intercompany tax sharing agreement with Ford, the United States income tax liabilities or credits are allocated to us generally on a separate return basis calculated as if we were taxable as a corporation. The income tax payable to Ford does not include amounts recorded as Deferred income taxes. Refer to Note 10 for additional information. During 2011, we paid Ford $1.4 billion related to the agreement.
(h)
Includes $466 million and $483 million at December 31, 2011 and 2010, respectively, for cash from Blue Oval Holdings, a Ford U.K. subsidiary, to collateralize guarantees from FCE for Ford in Romania. See Note 21 for further information.

Commitments and Contingencies

We provide various guarantees to third parties on behalf of Ford. At December 31, 2011, the value of these guarantees totaled $324 million; Ford counter-guaranteed $314 million of these items. See Note 21 for information regarding guarantees of certain obligations of unconsolidated and other affiliates.