(Mark One) | |
R | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2015 | |
or | |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from __________ to __________ | |
Commission file number 1-3950 |
Delaware | 38-0549190 |
(State of incorporation) | (I.R.S. Employer Identification No.) |
One American Road, Dearborn, Michigan | 48126 |
(Address of principal executive offices) | (Zip Code) |
Table of Contents | Page | ||
Part I - Financial Information | |||
Item 1 | Financial Statements | ||
Consolidated Income Statement | |||
Consolidated Statement of Comprehensive Income | |||
Sector Income Statement | |||
Consolidated Balance Sheet | |||
Sector Balance Sheet | |||
Condensed Consolidated Statement of Cash Flows | |||
Condensed Sector Statement of Cash Flows | |||
Consolidated Statement of Equity | |||
Notes to the Financial Statements | |||
Report of Independent Registered Public Accounting Firm | |||
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Results of Operations | |||
Automotive Sector | |||
Financial Services Sector | |||
Liquidity and Capital Resources | |||
Production Volumes | |||
Outlook | |||
Accounting Standards Issued But Not Yet Adopted | |||
Other Financial Information | |||
Item 3 | Quantitative and Qualitative Disclosures About Market Risk | ||
Automotive Sector | |||
Financial Services Sector | |||
Item 4 | Controls and Procedures | ||
Part II - Other Information | |||
Item 1 | Legal Proceedings | ||
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 6 | Exhibits | ||
Signature | |||
Exhibit Index |
For the periods ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Third Quarter | First Nine Months | ||||||||||||||
(unaudited) | |||||||||||||||
Revenues | |||||||||||||||
Automotive | $ | 35,818 | $ | 32,779 | $ | 102,723 | $ | 102,020 | |||||||
Financial Services | 2,326 | 2,141 | 6,584 | 6,187 | |||||||||||
Total revenues | 38,144 | 34,920 | 109,307 | 108,207 | |||||||||||
Costs and expenses | |||||||||||||||
Automotive cost of sales | 31,493 | 30,197 | 90,797 | 92,465 | |||||||||||
Selling, administrative, and other expenses | 3,731 | 3,484 | 11,058 | 10,332 | |||||||||||
Financial Services interest expense | 592 | 673 | 1,846 | 2,034 | |||||||||||
Financial Services provision for credit and insurance losses | 120 | 74 | 299 | 217 | |||||||||||
Total costs and expenses | 35,936 | 34,428 | 104,000 | 105,048 | |||||||||||
Automotive interest expense | 206 | 204 | 561 | 619 | |||||||||||
Automotive interest income and other income/(loss), net (Note 14) | 446 | 255 | 908 | 739 | |||||||||||
Financial Services other income/(loss), net (Note 14) | 97 | 90 | 241 | 245 | |||||||||||
Equity in net income of affiliated companies | 314 | 388 | 1,237 | 874 | |||||||||||
Income before income taxes | 2,859 | 1,021 | 7,132 | 4,398 | |||||||||||
Provision for/(Benefit from) income taxes (Note 16) | 950 | 188 | 2,412 | 1,261 | |||||||||||
Net income | 1,909 | 833 | 4,720 | 3,137 | |||||||||||
Less: Income/(Loss) attributable to noncontrolling interests | — | (2 | ) | 2 | 2 | ||||||||||
Net income attributable to Ford Motor Company | $ | 1,909 | $ | 835 | $ | 4,718 | $ | 3,135 | |||||||
EARNINGS PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 18) | |||||||||||||||
Basic income | $ | 0.48 | $ | 0.22 | $ | 1.19 | $ | 0.80 | |||||||
Diluted income | 0.48 | 0.21 | 1.18 | 0.78 | |||||||||||
Cash dividends declared | 0.15 | 0.125 | 0.45 | 0.375 |
For the periods ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Third Quarter | First Nine Months | ||||||||||||||
(unaudited) | |||||||||||||||
Net income | $ | 1,909 | $ | 833 | $ | 4,720 | $ | 3,137 | |||||||
Other comprehensive income/(loss), net of tax (Note 13) | |||||||||||||||
Foreign currency translation | (1,036 | ) | (550 | ) | (1,344 | ) | (468 | ) | |||||||
Derivative instruments | 374 | (48 | ) | 208 | (243 | ) | |||||||||
Pension and other postretirement benefits | 481 | 540 | 726 | 776 | |||||||||||
Total other comprehensive income/(loss), net of tax | (181 | ) | (58 | ) | (410 | ) | 65 | ||||||||
Comprehensive income | 1,728 | 775 | 4,310 | 3,202 | |||||||||||
Less: Comprehensive income/(loss) attributable to noncontrolling interests | 1 | (2 | ) | 2 | 2 | ||||||||||
Comprehensive income attributable to Ford Motor Company | $ | 1,727 | $ | 777 | $ | 4,308 | $ | 3,200 |
For the periods ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Third Quarter | First Nine Months | ||||||||||||||
(unaudited) | |||||||||||||||
AUTOMOTIVE | |||||||||||||||
Revenues | $ | 35,818 | $ | 32,779 | $ | 102,723 | $ | 102,020 | |||||||
Costs and expenses | |||||||||||||||
Cost of sales | 31,493 | 30,197 | 90,797 | 92,465 | |||||||||||
Selling, administrative, and other expenses | 2,538 | 2,489 | 7,840 | 7,516 | |||||||||||
Total costs and expenses | 34,031 | 32,686 | 98,637 | 99,981 | |||||||||||
Interest expense | 206 | 204 | 561 | 619 | |||||||||||
Interest income and other income/(loss), net (Note 14) | 446 | 255 | 908 | 739 | |||||||||||
Equity in net income of affiliated companies | 306 | 382 | 1,213 | 853 | |||||||||||
Income before income taxes — Automotive | 2,333 | 526 | 5,646 | 3,012 | |||||||||||
FINANCIAL SERVICES | |||||||||||||||
Revenues | 2,326 | 2,141 | 6,584 | 6,187 | |||||||||||
Costs and expenses | |||||||||||||||
Interest expense | 592 | 673 | 1,846 | 2,034 | |||||||||||
Depreciation on vehicles subject to operating leases | 956 | 808 | 2,630 | 2,256 | |||||||||||
Operating and other expenses | 237 | 187 | 588 | 560 | |||||||||||
Provision for credit and insurance losses | 120 | 74 | 299 | 217 | |||||||||||
Total costs and expenses | 1,905 | 1,742 | 5,363 | 5,067 | |||||||||||
Other income/(loss), net (Note 14) | 97 | 90 | 241 | 245 | |||||||||||
Equity in net income of affiliated companies | 8 | 6 | 24 | 21 | |||||||||||
Income before income taxes — Financial Services | 526 | 495 | 1,486 | 1,386 | |||||||||||
TOTAL COMPANY | |||||||||||||||
Income before income taxes | 2,859 | 1,021 | 7,132 | 4,398 | |||||||||||
Provision for/(Benefit from) income taxes (Note 16) | 950 | 188 | 2,412 | 1,261 | |||||||||||
Net income | 1,909 | 833 | 4,720 | 3,137 | |||||||||||
Less: Income/(Loss) attributable to noncontrolling interests | — | (2 | ) | 2 | 2 | ||||||||||
Net income attributable to Ford Motor Company | $ | 1,909 | $ | 835 | $ | 4,718 | $ | 3,135 |
September 30, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 14,686 | $ | 10,757 | |||
Marketable securities | 17,161 | 20,393 | |||||
Finance receivables, net (Note 4) | 85,208 | 81,111 | |||||
Other receivables, net | 13,373 | 11,708 | |||||
Net investment in operating leases | 26,907 | 23,217 | |||||
Inventories (Note 6) | 9,496 | 7,866 | |||||
Equity in net assets of affiliated companies | 3,505 | 3,357 | |||||
Net property | 30,137 | 30,126 | |||||
Deferred income taxes | 11,434 | 13,639 | |||||
Other assets | 7,524 | 6,353 | |||||
Total assets | $ | 219,431 | $ | 208,527 | |||
LIABILITIES | |||||||
Payables | $ | 22,386 | $ | 20,035 | |||
Other liabilities and deferred revenue (Note 7) | 42,513 | 43,577 | |||||
Debt (Note 9) | 126,425 | 119,171 | |||||
Deferred income taxes | 529 | 570 | |||||
Total liabilities | 191,853 | 183,353 | |||||
Redeemable noncontrolling interest (Note 10) | 94 | 342 | |||||
EQUITY | |||||||
Capital stock | |||||||
Common Stock, par value $.01 per share (3,960 million shares issued of 6 billion authorized) | 40 | 39 | |||||
Class B Stock, par value $.01 per share (71 million shares issued of 530 million authorized) | 1 | 1 | |||||
Capital in excess of par value of stock | 21,354 | 21,089 | |||||
Retained earnings | 27,489 | 24,556 | |||||
Accumulated other comprehensive income/(loss) (Note 13) | (20,442 | ) | (20,032 | ) | |||
Treasury stock | (977 | ) | (848 | ) | |||
Total equity attributable to Ford Motor Company | 27,465 | 24,805 | |||||
Equity attributable to noncontrolling interests | 19 | 27 | |||||
Total equity | 27,484 | 24,832 | |||||
Total liabilities and equity | $ | 219,431 | $ | 208,527 |
September 30, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 2,443 | $ | 2,094 | |||
Finance receivables, net | 44,036 | 39,522 | |||||
Net investment in operating leases | 11,266 | 9,631 | |||||
Other assets | 64 | 27 | |||||
LIABILITIES | |||||||
Other liabilities and deferred revenue | $ | 30 | $ | 22 | |||
Debt | 41,712 | 37,156 |
September 30, 2015 | December 31, 2014 | ||||||
ASSETS | (unaudited) | ||||||
Automotive | |||||||
Cash and cash equivalents | $ | 7,773 | $ | 4,567 | |||
Marketable securities | 14,404 | 17,135 | |||||
Total cash and marketable securities | 22,177 | 21,702 | |||||
Receivables, less allowances of $387 and $455 | 5,827 | 5,789 | |||||
Inventories (Note 6) | 9,496 | 7,866 | |||||
Deferred income taxes | 2,885 | 2,039 | |||||
Net investment in operating leases | 2,397 | 1,699 | |||||
Other current assets | 1,588 | 1,347 | |||||
Total current assets | 44,370 | 40,442 | |||||
Equity in net assets of affiliated companies | 3,356 | 3,216 | |||||
Net property | 30,003 | 29,795 | |||||
Deferred income taxes | 11,453 | 13,331 | |||||
Other assets | 3,544 | 2,798 | |||||
Non-current receivable from Financial Services | — | 497 | |||||
Total Automotive assets | 92,726 | 90,079 | |||||
Financial Services | |||||||
Cash and cash equivalents | 6,913 | 6,190 | |||||
Marketable securities | 2,757 | 3,258 | |||||
Finance receivables, net (Note 4) | 91,968 | 86,141 | |||||
Net investment in operating leases | 24,510 | 21,518 | |||||
Equity in net assets of affiliated companies | 149 | 141 | |||||
Other assets | 3,476 | 3,613 | |||||
Receivable from Automotive | 853 | 527 | |||||
Total Financial Services assets | 130,626 | 121,388 | |||||
Intersector elimination | (853 | ) | (1,024 | ) | |||
Total assets | $ | 222,499 | $ | 210,443 | |||
LIABILITIES | |||||||
Automotive | |||||||
Payables | $ | 21,095 | $ | 18,876 | |||
Other liabilities and deferred revenue (Note 7) | 17,509 | 17,934 | |||||
Deferred income taxes | 263 | 270 | |||||
Debt payable within one year (Note 9) | 1,590 | 2,501 | |||||
Current payable to Financial Services | 555 | 527 | |||||
Total current liabilities | 41,012 | 40,108 | |||||
Long-term debt (Note 9) | 11,208 | 11,323 | |||||
Other liabilities and deferred revenue (Note 7) | 23,210 | 23,793 | |||||
Deferred income taxes | 388 | 367 | |||||
Non-current payable to Financial Services | 298 | — | |||||
Total Automotive liabilities | 76,116 | 75,591 | |||||
Financial Services | |||||||
Payables | 1,291 | 1,159 | |||||
Debt (Note 9) | 113,627 | 105,347 | |||||
Deferred income taxes | 2,946 | 1,849 | |||||
Other liabilities and deferred income (Note 7) | 1,794 | 1,850 | |||||
Payable to Automotive | — | 497 | |||||
Total Financial Services liabilities | 119,658 | 110,702 | |||||
Intersector elimination | (853 | ) | (1,024 | ) | |||
Total liabilities | 194,921 | 185,269 | |||||
Redeemable noncontrolling interest (Note 10) | 94 | 342 | |||||
EQUITY | |||||||
Capital stock | |||||||
Common Stock, par value $.01 per share (3,960 million shares issued of 6 billion authorized) | 40 | 39 | |||||
Class B Stock, par value $.01 per share (71 million shares issued of 530 million authorized) | 1 | 1 | |||||
Capital in excess of par value of stock | 21,354 | 21,089 | |||||
Retained earnings | 27,489 | 24,556 | |||||
Accumulated other comprehensive income/(loss) (Note 13) | (20,442 | ) | (20,032 | ) | |||
Treasury stock | (977 | ) | (848 | ) | |||
Total equity attributable to Ford Motor Company | 27,465 | 24,805 | |||||
Equity attributable to noncontrolling interests | 19 | 27 | |||||
Total equity | 27,484 | 24,832 | |||||
Total liabilities and equity | $ | 222,499 | $ | 210,443 |
For the periods ended September 30, | |||||||
2015 | 2014 | ||||||
First Nine Months | |||||||
(unaudited) | |||||||
Cash flows from operating activities | |||||||
Net cash provided by/(used in) operating activities | $ | 14,078 | $ | 12,339 | |||
Cash flows from investing activities | |||||||
Capital spending | (5,358 | ) | (5,309 | ) | |||
Acquisitions of finance receivables and operating leases | (43,762 | ) | (39,368 | ) | |||
Collections of finance receivables and operating leases | 28,632 | 27,607 | |||||
Purchases of marketable securities | (29,493 | ) | (37,788 | ) | |||
Sales and maturities of marketable securities | 32,874 | 39,153 | |||||
Settlements of derivatives | 26 | (46 | ) | ||||
Other | 417 | 157 | |||||
Net cash provided by/(used in) investing activities | (16,664 | ) | (15,594 | ) | |||
Cash flows from financing activities | |||||||
Cash dividends | (1,785 | ) | (1,470 | ) | |||
Purchases of Common Stock | (129 | ) | (1,964 | ) | |||
Net changes in short-term debt | 844 | (2,792 | ) | ||||
Proceeds from issuance of other debt | 35,876 | 31,107 | |||||
Principal payments on other debt | (27,366 | ) | (22,504 | ) | |||
Other | (303 | ) | 36 | ||||
Net cash provided by/(used in) financing activities | 7,137 | 2,413 | |||||
Effect of exchange rate changes on cash and cash equivalents | (622 | ) | (306 | ) | |||
Net increase/(decrease) in cash and cash equivalents | $ | 3,929 | $ | (1,148 | ) | ||
Cash and cash equivalents at January 1 | $ | 10,757 | $ | 14,468 | |||
Net increase/(decrease) in cash and cash equivalents | 3,929 | (1,148 | ) | ||||
Cash and cash equivalents at September 30 | $ | 14,686 | $ | 13,320 |
For the periods ended September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||
First Nine Months | |||||||||||||||
Automotive | Financial Services | Automotive | Financial Services | ||||||||||||
(unaudited) | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net cash provided by/(used in) operating activities (a) | $ | 8,749 | $ | 4,297 | $ | 6,733 | $ | 3,878 | |||||||
Cash flows from investing activities | |||||||||||||||
Capital spending | (5,324 | ) | (34 | ) | (5,236 | ) | (73 | ) | |||||||
Acquisitions of finance receivables and operating leases (excluding wholesale and other) | — | (43,762 | ) | — | (39,368 | ) | |||||||||
Collections of finance receivables and operating leases (excluding wholesale and other) | — | 28,632 | — | 27,607 | |||||||||||
Net change in wholesale and other receivables (b) | — | (1,552 | ) | — | (729 | ) | |||||||||
Purchases of marketable securities | (21,748 | ) | (7,745 | ) | (26,836 | ) | (10,952 | ) | |||||||
Sales and maturities of marketable securities | 24,636 | 8,238 | 30,061 | 9,092 | |||||||||||
Settlements of derivatives | (90 | ) | 116 | 115 | (161 | ) | |||||||||
Other | 362 | 55 | 55 | 102 | |||||||||||
Investing activity (to)/from Financial Services (c) | 2 | — | 178 | — | |||||||||||
Interest supplements and residual value support from Automotive (a) | — | 2,584 | — | 2,457 | |||||||||||
Net cash provided by/(used in) investing activities | (2,162 | ) | (13,468 | ) | (1,663 | ) | (12,025 | ) | |||||||
Cash flows from financing activities | |||||||||||||||
Cash dividends | (1,785 | ) | — | (1,470 | ) | — | |||||||||
Purchases of Common Stock | (129 | ) | — | (1,964 | ) | — | |||||||||
Net changes in short-term debt | 385 | 459 | 22 | (2,814 | ) | ||||||||||
Proceeds from issuance of other debt | 615 | 35,261 | 156 | 30,951 | |||||||||||
Principal payments on other debt | (1,945 | ) | (25,421 | ) | (829 | ) | (21,675 | ) | |||||||
Other | (219 | ) | (84 | ) | 122 | (86 | ) | ||||||||
Financing activity to/(from) Automotive (c) | — | (2 | ) | — | (178 | ) | |||||||||
Net cash provided by/(used in) financing activities | (3,078 | ) | 10,213 | (3,963 | ) | 6,198 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (303 | ) | (319 | ) | (86 | ) | (220 | ) | |||||||
Net increase/(decrease) in cash and cash equivalents | $ | 3,206 | $ | 723 | $ | 1,021 | $ | (2,169 | ) | ||||||
Cash and cash equivalents at January 1 | $ | 4,567 | $ | 6,190 | $ | 4,959 | $ | 9,509 | |||||||
Net increase/(decrease) in cash and cash equivalents | 3,206 | 723 | 1,021 | (2,169 | ) | ||||||||||
Cash and cash equivalents at September 30 | $ | 7,773 | $ | 6,913 | $ | 5,980 | $ | 7,340 |
(a) | Operating activities include outflows of $2,584 million and $2,457 million for the periods ended September 30, 2015 and 2014, respectively, of interest supplements and residual value support to Financial Services. Interest supplements and residual value support from Automotive to Financial Services are eliminated in the condensed consolidated statement of cash flows. |
(b) | Reclassified to operating activities in the condensed consolidated statement of cash flows. |
(c) | Eliminated in the condensed consolidated statement of cash flows. |
Equity Attributable to Ford Motor Company | |||||||||||||||||||||||||||||||
Capital Stock | Cap. in Excess of Par Value of Stock | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) (Note 13) | Treasury Stock | Total | Equity Attributable to Non-controlling Interests | Total Equity | ||||||||||||||||||||||||
Balance at December 31, 2014 | $ | 40 | $ | 21,089 | $ | 24,556 | $ | (20,032 | ) | $ | (848 | ) | $ | 24,805 | $ | 27 | $ | 24,832 | |||||||||||||
Net income | — | — | 4,718 | — | — | 4,718 | 2 | 4,720 | |||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | — | — | (410 | ) | — | (410 | ) | — | (410 | ) | ||||||||||||||||||||
Common stock issued (including share-based compensation impacts) | 1 | 265 | — | — | — | 266 | — | 266 | |||||||||||||||||||||||
Treasury stock/other | — | — | — | — | (129 | ) | (129 | ) | (4 | ) | (133 | ) | |||||||||||||||||||
Cash dividends declared | — | — | (1,785 | ) | — | — | (1,785 | ) | (6 | ) | (1,791 | ) | |||||||||||||||||||
Balance at September 30, 2015 | $ | 41 | $ | 21,354 | $ | 27,489 | $ | (20,442 | ) | $ | (977 | ) | $ | 27,465 | $ | 19 | $ | 27,484 | |||||||||||||
Balance at December 31, 2013 | $ | 40 | $ | 21,422 | $ | 23,386 | $ | (18,230 | ) | $ | (506 | ) | $ | 26,112 | $ | 33 | $ | 26,145 | |||||||||||||
Net income | — | — | 3,135 | — | — | 3,135 | 2 | 3,137 | |||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | — | — | 65 | — | 65 | — | 65 | |||||||||||||||||||||||
Common stock issued (including share-based compensation impacts) | — | 258 | — | — | — | 258 | — | 258 | |||||||||||||||||||||||
Treasury stock/other | — | — | — | — | (1,964 | ) | (1,964 | ) | (4 | ) | (1,968 | ) | |||||||||||||||||||
Cash dividends declared | — | — | (1,470 | ) | — | — | (1,470 | ) | (2 | ) | (1,472 | ) | |||||||||||||||||||
Balance at September 30, 2014 | $ | 40 | $ | 21,680 | $ | 25,051 | $ | (18,165 | ) | $ | (2,470 | ) | $ | 26,136 | $ | 29 | $ | 26,165 |
Footnote | Page | |
Note 1 | Presentation | |
Note 2 | Accounting Standards Issued But Not Yet Adopted | |
Note 3 | Fair Value Measurements | |
Note 4 | Financial Services Sector Finance Receivables | |
Note 5 | Financial Services Sector Allowance for Credit Losses | |
Note 6 | Inventories | |
Note 7 | Other Liabilities and Deferred Revenue | |
Note 8 | Retirement Benefits | |
Note 9 | Debt | |
Note 10 | Redeemable Noncontrolling Interest | |
Note 11 | Variable Interest Entities | |
Note 12 | Derivative Financial Instruments and Hedging Activities | |
Note 13 | Accumulated Other Comprehensive Income/(Loss) | |
Note 14 | Other Income/(Loss) | |
Note 15 | Employee Separation Actions and Exit and Disposal Activities | |
Note 16 | Income Taxes | |
Note 17 | Changes in Investments in Affiliates | |
Note 18 | Capital Stock and Earnings Per Share | |
Note 19 | Segment Information | |
Note 20 | Commitments and Contingencies |
September 30, 2015 | December 31, 2014 | ||||||
Sector balance sheet presentation of deferred income tax assets | |||||||
Automotive sector current deferred income tax assets | $ | 2,885 | $ | 2,039 | |||
Automotive sector non-current deferred income tax assets | 11,453 | 13,331 | |||||
Financial Services sector deferred income tax assets (a) | 164 | 185 | |||||
Total | 14,502 | 15,555 | |||||
Reclassification for netting of deferred income taxes | (3,068 | ) | (1,916 | ) | |||
Consolidated balance sheet presentation of deferred income tax assets | $ | 11,434 | $ | 13,639 | |||
Sector balance sheet presentation of deferred income tax liabilities | |||||||
Automotive sector current deferred income tax liabilities | $ | 263 | $ | 270 | |||
Automotive sector non-current deferred income tax liabilities | 388 | 367 | |||||
Financial Services sector deferred income tax liabilities | 2,946 | 1,849 | |||||
Total | 3,597 | 2,486 | |||||
Reclassification for netting of deferred income taxes | (3,068 | ) | (1,916 | ) | |||
Consolidated balance sheet presentation of deferred income tax liabilities | $ | 529 | $ | 570 |
(a) | Financial Services deferred income tax assets are included in Financial Services Other assets on our sector balance sheet. |
Standard | Effective Date (a) | ||
2015-16 | Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments | January 1, 2016 | |
2015-09 | Insurance - Disclosures about Short-Duration Contracts | January 1, 2016 | |
2015-07 | Fair Value Measurement - Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent) | January 1, 2016 | |
2015-05 | Internal-Use Software - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement | January 1, 2016 | |
2015-03 | Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs | January 1, 2016 | |
2015-02 | Consolidation - Amendments to the Consolidation Analysis | January 1, 2016 | |
2015-01 | Extraordinary and Unusual Items - Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items | January 1, 2016 | |
2014-16 | Derivatives and Hedging - Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity | January 1, 2016 | |
2014-13 | Consolidation - Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity | January 1, 2016 | |
2014-12 | Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period | January 1, 2016 | |
2014-15 | Going Concern - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern | December 31, 2016 | |
2015-11 | Inventory - Simplifying the Measurement of Inventory | January 1, 2017 |
(a) | Early adoption for each of the standards is permitted. |
September 30, 2015 | December 31, 2014 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Automotive Sector | |||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash equivalents – financial instruments | |||||||||||||||||||||||||||||||
U.S. government and agencies | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 64 | $ | — | $ | 64 | |||||||||||||||
Non-U.S. government and agencies | — | 422 | — | 422 | — | 122 | — | 122 | |||||||||||||||||||||||
Corporate debt | — | 70 | — | 70 | — | 20 | — | 20 | |||||||||||||||||||||||
Total cash equivalents (a) | — | 492 | — | 492 | — | 206 | — | 206 | |||||||||||||||||||||||
Marketable securities | |||||||||||||||||||||||||||||||
U.S. government and agencies | 609 | 3,434 | — | 4,043 | 969 | 5,789 | — | 6,758 | |||||||||||||||||||||||
Non-U.S. government and agencies | — | 6,220 | — | 6,220 | — | 7,004 | — | 7,004 | |||||||||||||||||||||||
Corporate debt | — | 3,568 | — | 3,568 | — | 2,738 | — | 2,738 | |||||||||||||||||||||||
Equities | 217 | — | — | 217 | 322 | — | — | 322 | |||||||||||||||||||||||
Other marketable securities | — | 356 | — | 356 | — | 313 | — | 313 | |||||||||||||||||||||||
Total marketable securities | 826 | 13,578 | — | 14,404 | 1,291 | 15,844 | — | 17,135 | |||||||||||||||||||||||
Derivative financial instruments (b) | — | 754 | — | 754 | — | 517 | — | 517 | |||||||||||||||||||||||
Total assets at fair value | $ | 826 | $ | 14,824 | $ | — | $ | 15,650 | $ | 1,291 | $ | 16,567 | $ | — | $ | 17,858 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Derivative financial instruments (b) | $ | — | $ | 650 | $ | 1 | $ | 651 | $ | — | $ | 710 | $ | 3 | $ | 713 | |||||||||||||||
Total liabilities at fair value | $ | — | $ | 650 | $ | 1 | $ | 651 | $ | — | $ | 710 | $ | 3 | $ | 713 | |||||||||||||||
Financial Services Sector | |||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash equivalents – financial instruments | |||||||||||||||||||||||||||||||
Non-U.S. government and agencies | $ | — | $ | 307 | $ | — | $ | 307 | $ | — | $ | 341 | $ | — | $ | 341 | |||||||||||||||
Corporate debt | — | 20 | — | 20 | — | 10 | — | 10 | |||||||||||||||||||||||
Total cash equivalents (a) | — | 327 | — | 327 | — | 351 | — | 351 | |||||||||||||||||||||||
Marketable securities | |||||||||||||||||||||||||||||||
U.S. government and agencies | 105 | 319 | — | 424 | 17 | 1,251 | — | 1,268 | |||||||||||||||||||||||
Non-U.S. government and agencies | — | 700 | — | 700 | — | 405 | — | 405 | |||||||||||||||||||||||
Corporate debt | — | 1,613 | — | 1,613 | — | 1,555 | — | 1,555 | |||||||||||||||||||||||
Other marketable securities | — | 20 | — | 20 | — | 30 | — | 30 | |||||||||||||||||||||||
Total marketable securities | 105 | 2,652 | — | 2,757 | 17 | 3,241 | — | 3,258 | |||||||||||||||||||||||
Derivative financial instruments (b) | — | 1,168 | — | 1,168 | — | 859 | — | 859 | |||||||||||||||||||||||
Total assets at fair value | $ | 105 | $ | 4,147 | $ | — | $ | 4,252 | $ | 17 | $ | 4,451 | $ | — | $ | 4,468 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Derivative financial instruments (b) | $ | — | $ | 280 | $ | — | $ | 280 | $ | — | $ | 167 | $ | — | $ | 167 | |||||||||||||||
Total liabilities at fair value | $ | — | $ | 280 | $ | — | $ | 280 | $ | — | $ | 167 | $ | — | $ | 167 |
(a) | Excludes time deposits, certificates of deposit, money market accounts, and other cash equivalents reported at par value on our balance sheet totaling $6.2 billion and $3.3 billion for Automotive sector and $4.9 billion and $3.8 billion for Financial Services sector at September 30, 2015 and December 31, 2014, respectively. In addition to these cash equivalents, we also had cash on hand totaling $1.1 billion and $1.1 billion for Automotive sector and $1.7 billion and $2 billion for Financial Services sector at September 30, 2015 and December 31, 2014, respectively. |
(b) | See Note 12 for additional information regarding derivative financial instruments. |
September 30, 2015 | December 31, 2014 | ||||||
Consumer | |||||||
Retail financing, gross | $ | 61,241 | $ | 55,856 | |||
Unearned interest supplements | (2,117 | ) | (1,760 | ) | |||
Consumer finance receivables | 59,124 | 54,096 | |||||
Non-Consumer | |||||||
Dealer financing | 32,151 | 31,340 | |||||
Other financing | 1,049 | 1,026 | |||||
Non-Consumer finance receivables | 33,200 | 32,366 | |||||
Total recorded investment | $ | 92,324 | $ | 86,462 | |||
Recorded investment in finance receivables | $ | 92,324 | $ | 86,462 | |||
Allowance for credit losses | (356 | ) | (321 | ) | |||
Finance receivables, net (a) | $ | 91,968 | $ | 86,141 | |||
Net finance receivables subject to fair value (b) | $ | 90,163 | $ | 84,468 | |||
Fair value | 91,848 | 85,941 |
(a) | On the consolidated balance sheet at September 30, 2015 and December 31, 2014, $6.8 billion and $5 billion, respectively, are reclassified to Other receivables, net, resulting in Finance receivables, net of $85.2 billion and $81.1 billion, respectively. |
(b) | At September 30, 2015 and December 31, 2014, excludes $1.8 billion and $1.7 billion, respectively, of certain receivables (primarily direct financing leases) that are not subject to fair value disclosure requirements. |
September 30, 2015 | December 31, 2014 | ||||||
Consumer | |||||||
31-60 days past due | $ | 597 | $ | 718 | |||
61-90 days past due | 94 | 97 | |||||
91-120 days past due | 25 | 29 | |||||
Greater than 120 days past due | 39 | 52 | |||||
Total past due | 755 | 896 | |||||
Current | 58,369 | 53,200 | |||||
Consumer finance receivables | 59,124 | 54,096 | |||||
Non-Consumer | |||||||
Total past due | 127 | 117 | |||||
Current | 33,073 | 32,249 | |||||
Non-Consumer finance receivables | 33,200 | 32,366 | |||||
Total recorded investment | $ | 92,324 | $ | 86,462 |
• | Pass – current to 60 days past due |
• | Special Mention – 61 to 120 days past due and in intensified collection status |
• | Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral |
• | Group I – strong to superior financial metrics |
• | Group II – fair to favorable financial metrics |
• | Group III – marginal to weak financial metrics |
• | Group IV – poor financial metrics, including dealers classified as uncollectible |
September 30, 2015 | December 31, 2014 | ||||||
Dealer Financing | |||||||
Group I | $ | 24,206 | $ | 23,125 | |||
Group II | 6,379 | 6,350 | |||||
Group III | 1,458 | 1,783 | |||||
Group IV | 108 | 82 | |||||
Total recorded investment | $ | 32,151 | $ | 31,340 |
Third Quarter 2015 | First Nine Months 2015 | ||||||||||||||||||||||
Consumer | Non-Consumer | Total | Consumer | Non-Consumer | Total | ||||||||||||||||||
Allowance for credit losses | |||||||||||||||||||||||
Beginning balance | $ | 322 | $ | 13 | $ | 335 | $ | 305 | $ | 16 | $ | 321 | |||||||||||
Charge-offs | (85 | ) | (2 | ) | (87 | ) | (235 | ) | (3 | ) | (238 | ) | |||||||||||
Recoveries | 29 | 1 | 30 | 90 | 4 | 94 | |||||||||||||||||
Provision for credit losses | 80 | 2 | 82 | 190 | (2 | ) | 188 | ||||||||||||||||
Other (a) | (4 | ) | — | (4 | ) | (8 | ) | (1 | ) | (9 | ) | ||||||||||||
Ending balance (b) | $ | 342 | $ | 14 | $ | 356 | $ | 342 | $ | 14 | $ | 356 | |||||||||||
Analysis of ending balance of allowance for credit losses | |||||||||||||||||||||||
Collective impairment allowance | $ | 323 | $ | 12 | $ | 335 | |||||||||||||||||
Specific impairment allowance | 19 | 2 | 21 | ||||||||||||||||||||
Ending balance (b) | 342 | 14 | 356 | ||||||||||||||||||||
Analysis of ending balance of finance receivables | |||||||||||||||||||||||
Collectively evaluated for impairment | 58,749 | 33,071 | 91,820 | ||||||||||||||||||||
Specifically evaluated for impairment | 375 | 129 | 504 | ||||||||||||||||||||
Recorded investment | 59,124 | 33,200 | 92,324 | ||||||||||||||||||||
Ending balance, net of allowance for credit losses | $ | 58,782 | $ | 33,186 | $ | 91,968 |
(a) | Primarily represents amounts related to translation adjustments. |
(b) | Total allowance, including reserves for operating leases, was $403 million. |
Third Quarter 2014 | First Nine Months 2014 | ||||||||||||||||||||||
Consumer | Non-Consumer | Total | Consumer | Non-Consumer | Total | ||||||||||||||||||
Allowance for credit losses | |||||||||||||||||||||||
Beginning balance | $ | 303 | $ | 24 | $ | 327 | $ | 327 | $ | 30 | $ | 357 | |||||||||||
Charge-offs | (67 | ) | (2 | ) | (69 | ) | (200 | ) | (7 | ) | (207 | ) | |||||||||||
Recoveries | 33 | 2 | 35 | 101 | 8 | 109 | |||||||||||||||||
Provision for credit losses | 42 | (3 | ) | 39 | 82 | (10 | ) | 72 | |||||||||||||||
Other (a) | (6 | ) | (1 | ) | (7 | ) | (5 | ) | (1 | ) | (6 | ) | |||||||||||
Ending balance (b) | $ | 305 | $ | 20 | $ | 325 | $ | 305 | $ | 20 | $ | 325 | |||||||||||
Analysis of ending balance of allowance for credit losses | |||||||||||||||||||||||
Collective impairment allowance | $ | 283 | $ | 19 | $ | 302 | |||||||||||||||||
Specific impairment allowance | 22 | 1 | 23 | ||||||||||||||||||||
Ending balance (b) | 305 | 20 | 325 | ||||||||||||||||||||
Analysis of ending balance of finance receivables | |||||||||||||||||||||||
Collectively evaluated for impairment | 53,150 | 31,176 | 84,326 | ||||||||||||||||||||
Specifically evaluated for impairment | 421 | 115 | 536 | ||||||||||||||||||||
Recorded investment | 53,571 | 31,291 | 84,862 | ||||||||||||||||||||
Ending balance, net of allowance for credit losses | $ | 53,266 | $ | 31,271 | $ | 84,537 |
(a) | Primarily represents amounts related to translation adjustments. |
(b) | Total allowance, including reserves for operating leases, was $356 million. |
September 30, 2015 | December 31, 2014 | ||||||
Raw materials, work-in-process, and supplies | $ | 4,280 | $ | 3,822 | |||
Finished products | 6,222 | 5,022 | |||||
Total inventories under FIFO | 10,502 | 8,844 | |||||
LIFO adjustment | (1,006 | ) | (978 | ) | |||
Total inventories | $ | 9,496 | $ | 7,866 |
September 30, 2015 | December 31, 2014 | ||||||
Automotive Sector | |||||||
Current | |||||||
Dealer and dealers’ customer allowances and claims | $ | 7,496 | $ | 7,846 | |||
Deferred revenue | 4,906 | 3,923 | |||||
Employee benefit plans | 1,348 | 1,994 | |||||
Accrued interest | 195 | 222 | |||||
Other postretirement employee benefits (“OPEB”) | 376 | 397 | |||||
Pension (a) | 307 | 374 | |||||
Other | 2,881 | 3,178 | |||||
Total Automotive other liabilities and deferred revenue | 17,509 | 17,934 | |||||
Non-current | |||||||
Pension (a) | 9,209 | 9,721 | |||||
OPEB | 5,708 | 5,991 | |||||
Dealer and dealers’ customer allowances and claims | 3,042 | 2,852 | |||||
Deferred revenue | 2,874 | 2,686 | |||||
Employee benefit plans | 1,109 | 1,149 | |||||
Other | 1,268 | 1,394 | |||||
Total Automotive other liabilities and deferred revenue | 23,210 | 23,793 | |||||
Total Automotive sector | 40,719 | 41,727 | |||||
Financial Services Sector | 1,794 | 1,850 | |||||
Total Company | $ | 42,513 | $ | 43,577 |
(a) | Balances at September 30, 2015 reflect net pension liabilities at December 31, 2014, updated for service and interest cost, expected return on assets, separation expense, actual benefit payments, cash contributions, and an adjustment recorded in the first quarter of 2015 (see Note 8 for additional information). The discount rate and rate of expected return assumptions are unchanged from year-end 2014. |
Third Quarter | |||||||||||||||||||||||
Pension Benefits | |||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Worldwide OPEB | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Service cost | $ | 147 | $ | 127 | $ | 133 | $ | 118 | $ | 15 | $ | 13 | |||||||||||
Interest cost | 454 | 498 | 236 | 302 | 59 | 68 | |||||||||||||||||
Expected return on assets | (689 | ) | (678 | ) | (346 | ) | (383 | ) | — | — | |||||||||||||
Amortization of: | |||||||||||||||||||||||
Prior service costs/(credits) | 38 | 38 | 13 | 15 | (51 | ) | (58 | ) | |||||||||||||||
(Gains)/Losses | 116 | 52 | 200 | 149 | 36 | 24 | |||||||||||||||||
Separation programs/other | 6 | 8 | 11 | 15 | (1 | ) | 1 | ||||||||||||||||
Recognition of (gains)/losses due to: | |||||||||||||||||||||||
Curtailments | — | — | — | — | — | — | |||||||||||||||||
Settlements | — | — | 9 | — | — | — | |||||||||||||||||
Total expense/(income) | $ | 72 | $ | 45 | $ | 256 | $ | 216 | $ | 58 | $ | 48 |
First Nine Months | |||||||||||||||||||||||
Pension Benefits | |||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Worldwide OPEB | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Service cost | $ | 440 | $ | 380 | $ | 401 | $ | 356 | $ | 45 | $ | 40 | |||||||||||
Interest cost | 1,363 | 1,494 | 707 | 904 | 178 | 202 | |||||||||||||||||
Expected return on assets | (2,066 | ) | (2,034 | ) | (1,038 | ) | (1,145 | ) | — | — | |||||||||||||
Amortization of: | |||||||||||||||||||||||
Prior service costs/(credits) | 116 | 116 | 36 | 42 | (154 | ) | (172 | ) | |||||||||||||||
(Gains)/Losses | 348 | 155 | 604 | 445 | 107 | 73 | |||||||||||||||||
Separation programs/other | 7 | 9 | 30 | 54 | 1 | 1 | |||||||||||||||||
Recognition of (gains)/losses due to: | |||||||||||||||||||||||
Curtailments | — | — | — | — | — | — | |||||||||||||||||
Settlements | — | — | 9 | 14 | — | — | |||||||||||||||||
Total expense/(income) | $ | 208 | $ | 120 | $ | 749 | $ | 670 | $ | 177 | $ | 144 |
Automotive Sector | September 30, 2015 | December 31, 2014 | |||||
Debt payable within one year | |||||||
Short-term | $ | 709 | $ | 373 | |||
Long-term payable within one year | |||||||
U.S. Department of Energy (“DOE”) Advanced Technology Vehicles Manufacturing (“ATVM”) Incentive Program | 591 | 591 | |||||
European Investment Bank (“EIB”) loans | — | 1,187 | |||||
Other debt | 290 | 350 | |||||
Total debt payable within one year | 1,590 | 2,501 | |||||
Long-term debt payable after one year | |||||||
Public unsecured debt securities | 6,594 | 6,634 | |||||
DOE ATVM Incentive Program | 3,390 | 3,833 | |||||
Other debt | 1,675 | 1,000 | |||||
Unamortized (discount)/premium | (451 | ) | (144 | ) | |||
Total long-term debt payable after one year | 11,208 | 11,323 | |||||
Total Automotive sector | $ | 12,798 | $ | 13,824 | |||
Fair value of Automotive sector debt (a) | $ | 14,048 | $ | 15,553 | |||
Financial Services Sector | |||||||
Short-term debt | |||||||
Unsecured debt | $ | 9,624 | $ | 9,761 | |||
Asset-backed debt | 1,877 | 1,377 | |||||
Total short-term debt | 11,501 | 11,138 | |||||
Long-term debt | |||||||
Unsecured debt | |||||||
Notes payable within one year | 7,885 | 8,795 | |||||
Notes payable after one year | 47,531 | 43,087 | |||||
Asset-backed debt | |||||||
Notes payable within one year | 18,462 | 16,738 | |||||
Notes payable after one year | 27,553 | 25,216 | |||||
Unamortized (discount)/premium | (40 | ) | (55 | ) | |||
Fair value adjustments (b) | 735 | 428 | |||||
Total long-term debt | 102,126 | 94,209 | |||||
Total Financial Services sector | $ | 113,627 | $ | 105,347 | |||
Fair value of Financial Services sector debt (a) | $ | 114,712 | $ | 107,758 |
(a) | The fair value of debt includes $518 million and $131 million of Automotive sector short-term debt and $9.6 billion and $9.8 billion of Financial Services sector short-term debt at September 30, 2015 and December 31, 2014, respectively, carried at cost, which approximates fair value. All debt is categorized within Level 2 of the fair value hierarchy. |
(b) | Adjustments related to designated fair value hedges of unsecured debt. |
Third Quarter | First Nine Months | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Automotive Sector | |||||||||||||||
Cash flow hedges (a) | |||||||||||||||
Reclassified from AOCI to income | $ | (60 | ) | $ | (61 | ) | $ | (196 | ) | $ | 99 | ||||
Ineffectiveness | — | — | — | — | |||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||
Foreign currency exchange contracts | 25 | 168 | 170 | 107 | |||||||||||
Commodity contracts | (22 | ) | (28 | ) | (47 | ) | 7 | ||||||||
Total | $ | (57 | ) | $ | 79 | $ | (73 | ) | $ | 213 | |||||
Financial Services Sector | |||||||||||||||
Fair value hedges | |||||||||||||||
Interest rate contracts | |||||||||||||||
Net interest settlements and accruals excluded from the assessment of hedge effectiveness | $ | 94 | $ | 79 | $ | 271 | $ | 220 | |||||||
Ineffectiveness (b) | 10 | (2 | ) | 6 | 8 | ||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||
Interest rate contracts | (22 | ) | (10 | ) | (83 | ) | (37 | ) | |||||||
Foreign currency exchange contracts | 40 | 52 | 40 | 22 | |||||||||||
Cross-currency interest rate swap contracts | 63 | 118 | 75 | 102 | |||||||||||
Total | $ | 185 | $ | 237 | $ | 309 | $ | 315 |
(a) | For the third quarter and first nine months of 2015, $453 million gain and a $86 million gain, respectively, were recorded in Other comprehensive income. For the third quarter and first nine months of 2014, $128 million loss and a $336 million loss, respectively, were recorded in Other comprehensive income. |
(b) | For the third quarter and first nine months of 2015, hedge ineffectiveness reflects the net change in fair value on derivatives of $373 million gain and $345 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $363 million loss and $339 million loss, respectively. For the third quarter and first nine months of 2014, hedge ineffectiveness reflects the net change in fair value on derivatives of $88 million loss and $179 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $86 million gain and $171 million loss, respectively. |
September 30, 2015 | December 31, 2014 | ||||||||||||||||||||||
Notional | Fair Value of Assets | Fair Value of Liabilities | Notional | Fair Value of Assets | Fair Value of Liabilities | ||||||||||||||||||
Automotive Sector | |||||||||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||
Foreign currency exchange and commodity contracts | $ | 10,232 | $ | 510 | $ | 422 | $ | 15,434 | $ | 359 | $ | 517 | |||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Foreign currency exchange contracts | 15,059 | 243 | 205 | 12,198 | 157 | 129 | |||||||||||||||||
Commodity contracts | 490 | 1 | 24 | 693 | 1 | 67 | |||||||||||||||||
Total derivative financial instruments, gross | $ | 25,781 | 754 | 651 | $ | 28,325 | 517 | 713 | |||||||||||||||
Counterparty netting and collateral (a) | (514 | ) | (514 | ) | (463 | ) | (463 | ) | |||||||||||||||
Total derivative financial instruments, net | $ | 240 | $ | 137 | $ | 54 | $ | 250 | |||||||||||||||
Financial Services Sector | |||||||||||||||||||||||
Fair value hedges | |||||||||||||||||||||||
Interest rate contracts | $ | 26,323 | $ | 848 | $ | 4 | $ | 23,203 | $ | 602 | $ | 38 | |||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Interest rate contracts | 56,173 | 216 | 174 | 56,558 | 168 | 89 | |||||||||||||||||
Foreign currency exchange contracts | 1,189 | 7 | 1 | 1,527 | 18 | 1 | |||||||||||||||||
Cross-currency interest rate swap contracts | 2,615 | 97 | 101 | 2,425 | 71 | 39 | |||||||||||||||||
Total derivative financial instruments, gross | $ | 86,300 | 1,168 | 280 | $ | 83,713 | 859 | 167 | |||||||||||||||
Counterparty netting and collateral (a) | (189 | ) | (189 | ) | (136 | ) | (136 | ) | |||||||||||||||
Total derivative financial instruments, net | $ | 979 | $ | 91 | $ | 723 | $ | 31 |
(a) | At September 30, 2015 and December 31, 2014, we did not receive or pledge any cash collateral. |
Third Quarter | First Nine Months | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Foreign currency translation | |||||||||||||||
Beginning balance | $ | (2,655 | ) | $ | (1,664 | ) | $ | (2,348 | ) | $ | (1,746 | ) | |||
Gains/(Losses) on foreign currency translation | (1,037 | ) | (550 | ) | (1,344 | ) | (434 | ) | |||||||
Less: Tax/(Tax benefit) | — | — | — | 53 | |||||||||||
Net gains/(losses) on foreign currency translation | (1,037 | ) | (550 | ) | (1,344 | ) | (487 | ) | |||||||
(Gains)/Losses reclassified from AOCI to income (a) | — | — | — | 19 | |||||||||||
Other comprehensive income/(loss), net of tax (b) | (1,037 | ) | (550 | ) | (1,344 | ) | (468 | ) | |||||||
Ending balance | $ | (3,692 | ) | $ | (2,214 | ) | $ | (3,692 | ) | $ | (2,214 | ) | |||
Derivative instruments (c) | |||||||||||||||
Beginning balance | $ | (308 | ) | $ | (155 | ) | $ | (142 | ) | $ | 40 | ||||
Gains/(Losses) on derivative instruments | 453 | (128 | ) | 86 | (336 | ) | |||||||||
Less: Tax/(Tax benefit) | 196 | (35 | ) | 86 | (125 | ) | |||||||||
Net gains/(losses) on derivative instruments | 257 | (93 | ) | — | (211 | ) | |||||||||
(Gains)/Losses reclassified from AOCI to income | 60 | 61 | 196 | (99 | ) | ||||||||||
Less: Tax/(Tax benefit) | (57 | ) | 16 | (12 | ) | (67 | ) | ||||||||
Net (gains)/losses reclassified from AOCI to net income (d) | 117 | 45 | 208 | (32 | ) | ||||||||||
Other comprehensive income/(loss), net of tax | 374 | (48 | ) | 208 | (243 | ) | |||||||||
Ending balance | $ | 66 | $ | (203 | ) | $ | 66 | $ | (203 | ) | |||||
Pension and other postretirement benefits | |||||||||||||||
Beginning balance | $ | (17,297 | ) | $ | (16,288 | ) | $ | (17,542 | ) | $ | (16,524 | ) | |||
Gains/(Losses) arising during the period | 4 | — | (765 | ) | (13 | ) | |||||||||
Less: Tax/(Tax benefit) | — | — | (269 | ) | (5 | ) | |||||||||
Net gains/(losses) arising during the period | 4 | — | (496 | ) | (8 | ) | |||||||||
Amortization of prior service costs/(credits) (e) | — | (5 | ) | (2 | ) | (14 | ) | ||||||||
Amortization of (gains)/losses (e) | 352 | 225 | 1,059 | 673 | |||||||||||
Recognition of (gains)/losses due to curtailments (e) | — | — | — | — | |||||||||||
Recognition of (gains)/losses due to settlements (e) | 9 | — | 9 | 14 | |||||||||||
Less: Tax/(Tax benefit) | 86 | 52 | 362 | 185 | |||||||||||
Net amortization and (gains)/losses reclassified from AOCI to net income | 275 | 168 | 704 | 488 | |||||||||||
Translation impact on non-U.S. plans | 202 | 372 | 518 | 296 | |||||||||||
Other comprehensive income/(loss), net of tax | 481 | 540 | 726 | 776 | |||||||||||
Ending balance | $ | (16,816 | ) | $ | (15,748 | ) | $ | (16,816 | ) | $ | (15,748 | ) | |||
Total AOCI ending balance at September 30 | $ | (20,442 | ) | $ | (18,165 | ) | $ | (20,442 | ) | $ | (18,165 | ) |
(a) | The accumulated translation adjustments related to an investment in a foreign subsidiary are reclassified to Automotive interest income and other income/(loss), net, Financial Services other income/(loss), net, or Equity in net income of affiliated companies. |
(b) | In the third quarter of 2015, there was a $1 million gain attributable to noncontrolling interests. |
(c) | We expect to reclassify existing net gains of $73 million from Accumulated other comprehensive income/(loss) to Automotive cost of sales during the next twelve months as the underlying exposures are realized. |
(d) | Gains/(Losses) on cash flow hedges are reclassified from Accumulated other comprehensive income/(loss) to income when the hedged item affects earnings and is recognized in Automotive cost of sales. See Note 12 for additional information. |
(e) | These Accumulated other comprehensive income/(loss) components are included in the computation of net periodic pension cost. See Note 8 for additional information. |
Third Quarter | First Nine Months | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Investment-related interest income | $ | 60 | $ | 65 | $ | 161 | $ | 145 | |||||||
Interest income/(expense) on income taxes | — | (3 | ) | 1 | 34 | ||||||||||
Realized and unrealized gains/(losses) on cash equivalents and marketable securities | 189 | 7 | 146 | 7 | |||||||||||
Gains/(Losses) on changes in investments in affiliates | — | — | 18 | 1 | |||||||||||
Gains/(Losses) on extinguishment of debt | — | — | 1 | (5 | ) | ||||||||||
Royalty income | 149 | 142 | 448 | 444 | |||||||||||
Other | 48 | 44 | 133 | 113 | |||||||||||
Total | $ | 446 | $ | 255 | $ | 908 | $ | 739 |
Third Quarter | First Nine Months | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Investment-related interest income | $ | 21 | $ | 14 | $ | 58 | $ | 35 | |||||||
Interest income/(expense) on income taxes | (3 | ) | 1 | (9 | ) | (9 | ) | ||||||||
Realized and unrealized gains/(losses) on cash equivalents and marketable securities | 10 | (1 | ) | 16 | 7 | ||||||||||
Insurance premiums earned | 32 | 31 | 97 | 94 | |||||||||||
Other | 37 | 45 | 79 | 118 | |||||||||||
Total | $ | 97 | $ | 90 | $ | 241 | $ | 245 |
Third Quarter | First Nine Months | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Beginning balance | $ | 173 | $ | 643 | $ | 730 | $ | 497 | |||||||
Changes in accruals | (5 | ) | 146 | (11 | ) | 365 | |||||||||
Payments | (74 | ) | (30 | ) | (599 | ) | (99 | ) | |||||||
Foreign currency translation | — | (57 | ) | (26 | ) | (61 | ) | ||||||||
Ending balance | $ | 94 | $ | 702 | $ | 94 | $ | 702 |
Third Quarter | First Nine Months | ||||||
2015 | 2015 | ||||||
Beginning balance | $ | 126 | $ | 111 | |||
Changes in accruals | 5 | 36 | |||||
Payments | (6 | ) | (16 | ) | |||
Foreign currency translation | (11 | ) | (17 | ) | |||
Ending balance | $ | 114 | $ | 114 |
March 31, 2015 | |||
Assets | |||
Cash and cash equivalents | $ | 40 | |
Other receivables, net | 113 | ||
Inventories | 258 | ||
Net property | 541 | ||
Other assets | 25 | ||
Total assets of Ford Sollers (a) | $ | 977 | |
Liabilities | |||
Payables | $ | 514 | |
Debt | 370 | ||
Total liabilities of Ford Sollers (a) | $ | 884 |
(a) | At March 31, 2015, intercompany assets of $10 million and intercompany liabilities of $394 million have been eliminated in both the consolidated and sector balance sheet. |
Third Quarter | First Nine Months | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Basic and Diluted Income Attributable to Ford Motor Company | |||||||||||||||
Basic income | $ | 1,909 | $ | 835 | $ | 4,718 | $ | 3,135 | |||||||
Effect of dilutive 2016 Convertible Notes (a) (b) | — | 12 | — | 36 | |||||||||||
Diluted income | $ | 1,909 | $ | 847 | $ | 4,718 | $ | 3,171 | |||||||
Basic and Diluted Shares | |||||||||||||||
Basic shares (average shares outstanding) | 3,969 | 3,861 | 3,968 | 3,915 | |||||||||||
Net dilutive options and unvested restricted stock units | 30 | 48 | 34 | 47 | |||||||||||
Dilutive 2016 Convertible Notes (b) | — | 101 | — | 100 | |||||||||||
Diluted shares | 3,999 | 4,010 | 4,002 | 4,062 |
(a) | As applicable, includes interest expense, amortization of discount, amortization of fees, and other changes in income or loss that would result from the assumed conversion. |
(b) | In October 2014, we elected to terminate the conversion rights of holders under the 2016 Convertible Notes in accordance with their terms effective as of the close of business on November 20, 2014. On November 21, 2014, we redeemed for cash the remaining outstanding 2016 Convertible Notes. |
Automotive Sector | |||||||||||||||||||||||||||||||
Operating Segments | Reconciling Items | ||||||||||||||||||||||||||||||
North America | South America | Europe | Middle East & Africa | Asia Pacific | Other Automotive | Special Items | Total | ||||||||||||||||||||||||
Third Quarter 2015 | |||||||||||||||||||||||||||||||
Revenues | $ | 23,663 | $ | 1,582 | $ | 6,998 | $ | 930 | $ | 2,645 | $ | — | $ | — | $ | 35,818 | |||||||||||||||
Income/(Loss) before income taxes | 2,670 | (163 | ) | (182 | ) | (15 | ) | 20 | (163 | ) | 166 | 2,333 | |||||||||||||||||||
Total assets at September 30 | 62,349 | 4,707 | 15,345 | 1,297 | 9,028 | — | — | 92,726 | |||||||||||||||||||||||
Third Quarter 2014 | |||||||||||||||||||||||||||||||
Revenues | $ | 19,942 | $ | 2,335 | $ | 6,844 | $ | 1,077 | $ | 2,581 | $ | — | $ | — | $ | 32,779 | |||||||||||||||
Income/(Loss) before income taxes | 1,410 | (170 | ) | (439 | ) | (15 | ) | 44 | (144 | ) | (160 | ) | 526 | ||||||||||||||||||
Total assets at September 30 | 60,158 | 6,710 | 15,079 | 1,258 | 8,068 | — | — | 91,273 |
Automotive Sector | |||||||||||||||||||||||||||||||
Operating Segments | Reconciling Items | ||||||||||||||||||||||||||||||
North America | South America | Europe | Middle East & Africa | Asia Pacific | Other Automotive | Special Items | Total | ||||||||||||||||||||||||
First Nine Months 2015 | |||||||||||||||||||||||||||||||
Revenues | $ | 67,019 | $ | 4,589 | $ | 20,859 | $ | 2,891 | $ | 7,365 | $ | — | $ | — | $ | 102,723 | |||||||||||||||
Income/(Loss) before income taxes | 6,607 | (537 | ) | (381 | ) | 18 | 315 | (542 | ) | 166 | 5,646 | ||||||||||||||||||||
First Nine Months 2014 | |||||||||||||||||||||||||||||||
Revenues | $ | 61,495 | $ | 6,337 | $ | 22,680 | $ | 3,404 | $ | 8,104 | $ | — | $ | — | $ | 102,020 | |||||||||||||||
Income/(Loss) before income taxes | 5,350 | (975 | ) | (619 | ) | 62 | 494 | (537 | ) | (763 | ) | 3,012 |
Financial Services Sector | Company | ||||||||||||||||||||||
Operating Segment | Reconciling Items | ||||||||||||||||||||||
Ford Credit | Other | Elims | Total | Elims (a) | Total | ||||||||||||||||||
Third Quarter 2015 | |||||||||||||||||||||||
Revenues | $ | 2,368 | $ | — | $ | (42 | ) | $ | 2,326 | $ | — | $ | 38,144 | ||||||||||
Income/(Loss) before income taxes | 541 | (14 | ) | (1 | ) | 526 | — | 2,859 | |||||||||||||||
Total assets at September 30 | 131,490 | 2 | (866 | ) | 130,626 | (3,921 | ) | 219,431 | |||||||||||||||
Third Quarter 2014 | |||||||||||||||||||||||
Revenues | $ | 2,214 | $ | 37 | $ | (110 | ) | $ | 2,141 | $ | — | $ | 34,920 | ||||||||||
Income/(Loss) before income taxes | 498 | (3 | ) | — | 495 | — | 1,021 | ||||||||||||||||
Total assets at September 30 | 121,216 | 391 | (1,135 | ) | 120,472 | (2,910 | ) | 208,835 |
Financial Services Sector | Company | ||||||||||||||||||||||
Operating Segment | Reconciling Items | ||||||||||||||||||||||
Ford Credit | Other | Elims | Total | Elims (a) | Total | ||||||||||||||||||
First Nine Months 2015 | |||||||||||||||||||||||
Revenues | $ | 6,822 | $ | — | $ | (238 | ) | $ | 6,584 | $ | — | $ | 109,307 | ||||||||||
Income/(Loss) before income taxes | 1,530 | (43 | ) | (1 | ) | 1,486 | — | 7,132 | |||||||||||||||
First Nine Months 2014 | |||||||||||||||||||||||
Revenues | $ | 6,427 | $ | 105 | $ | (345 | ) | $ | 6,187 | $ | — | $ | 108,207 | ||||||||||
Income/(Loss) before income taxes | 1,431 | (45 | ) | — | 1,386 | — | 4,398 |
(a) | Includes intersector transactions occurring in the ordinary course of business and deferred tax netting. |
September 30, 2015 | December 31, 2014 | ||||||
Maximum potential payments | $ | 392 | $ | 592 | |||
Carrying value of recorded liabilities related to guarantees and limited indemnities | 16 | 17 |
First Nine Months | |||||||
2015 | 2014 | ||||||
Beginning balance | $ | 4,785 | $ | 3,927 | |||
Payments made during the period | (2,036 | ) | (2,186 | ) | |||
Changes in accrual related to warranties issued during the period | 1,523 | 1,506 | |||||
Changes in accrual related to pre-existing warranties | 495 | 1,522 | |||||
Foreign currency translation and other | (192 | ) | (67 | ) | |||
Ending balance | $ | 4,575 | $ | 4,702 |
Third Quarter | First Nine Months | ||||||||||||||||||
2015 | Better/(Worse) 2014 | 2015 | Better/(Worse) 2014 | Memo: Full Year 2014 | |||||||||||||||
(Mils.) | (Mils.) | (Mils.) | (Mils.) | (Mils.) | |||||||||||||||
Pre-tax results | |||||||||||||||||||
Automotive sector pre-tax results (excl. special items) | $ | 2,167 | $ | 1,481 | $ | 5,480 | $ | 1,705 | $ | 4,488 | |||||||||
Financial Services sector pre-tax results | 526 | 31 | 1,486 | 100 | 1,794 | ||||||||||||||
Total Company pre-tax results (excl. special items) | 2,693 | 1,512 | 6,966 | 1,805 | 6,282 | ||||||||||||||
Special items - Automotive sector | 166 | 326 | 166 | 929 | (1,940 | ) | |||||||||||||
Total Company pre-tax results (incl. special items) | 2,859 | 1,838 | 7,132 | 2,734 | 4,342 | ||||||||||||||
(Provision for)/Benefit from income taxes | (950 | ) | (762 | ) | (2,412 | ) | (1,151 | ) | (1,156 | ) | |||||||||
Net income | 1,909 | 1,076 | 4,720 | 1,583 | 3,186 | ||||||||||||||
Less: Income/(Loss) attributable to noncontrolling interests | — | 2 | 2 | — | (1 | ) | |||||||||||||
Net income attributable to Ford | $ | 1,909 | $ | 1,074 | $ | 4,718 | $ | 1,583 | $ | 3,187 |
Third quarter | First Nine Months | Memo: Full Year 2014 | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||
(Mils.) | (Mils.) | (Mils.) | (Mils.) | (Mils.) | |||||||||||||||
Personnel and Dealer-Related Items | |||||||||||||||||||
Separation-related actions (a) | $ | — | $ | (160 | ) | $ | — | $ | (434 | ) | $ | (685 | ) | ||||||
Other Items | |||||||||||||||||||
Nemak IPO | 166 | — | 166 | — | — | ||||||||||||||
Venezuela accounting change | — | — | — | — | (800 | ) | |||||||||||||
Ford Sollers equity impairment | — | — | — | (329 | ) | (329 | ) | ||||||||||||
2016 Convertible Notes settlement | — | — | — | — | (126 | ) | |||||||||||||
Total Other Items | 166 | — | 166 | (329 | ) | (1,255 | ) | ||||||||||||
Total Special Items | $ | 166 | $ | (160 | ) | $ | 166 | $ | (763 | ) | $ | (1,940 | ) |
(a) | Primarily related to separation costs for personnel at the Genk and U.K. facilities. |
• | Wholesales and Revenue - Wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that are sold to dealerships, units manufactured by Ford that are sold to other manufacturers, units distributed by Ford for other manufacturers, and local brand units produced by our China joint venture, Jiangling Motors Corporation, Ltd. (“JMC”), that are sold to dealerships. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option (i.e., rental repurchase), as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), also are included in wholesale unit volumes. Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our revenue |
• | Automotive Operating Margin - defined as Automotive pre-tax results, excluding special items and Other Automotive, divided by Automotive revenue |
• | Industry Volume and Market Share - based, in part, on estimated vehicle registrations; includes medium and heavy duty trucks |
• | SAAR - seasonally adjusted annual rate |
• | Market Factors: |
◦ | Volume and Mix - primarily measures profit variance from changes in wholesale volumes (at prior-year average margin per unit) driven by changes in industry volume, market share, and dealer stocks, as well as the profit variance resulting from changes in product mix, including mix among vehicle lines and mix of trim levels and options within a vehicle line |
◦ | Net Pricing - primarily measures profit variance driven by changes in wholesale prices to dealers and marketing incentive programs such as rebate programs, low-rate financing offers, and special lease offers |
• | Contribution Costs - primarily measures profit variance driven by per-unit changes in cost categories that typically vary with volume, such as material costs (including commodity and component costs), warranty expense, and freight and duty costs |
• | Structural Costs - primarily measures profit variance driven by absolute change in cost categories that typically do not have a directly proportionate relationship to production volume. Structural costs include the following cost categories: |
◦ | Manufacturing and Engineering - consists primarily of costs for hourly and salaried manufacturing- and engineering-related personnel, plant overhead (such as utilities and taxes), new product launch expense, prototype materials, and outside engineering services |
◦ | Spending-Related - consists primarily of depreciation and amortization of our manufacturing and engineering assets, but also includes asset retirements and operating leases |
◦ | Advertising and Sales Promotions - includes costs for advertising, marketing programs, brand promotions, customer mailings and promotional events, and auto shows |
◦ | Administrative and Selling - includes primarily costs for salaried personnel and purchased services related to our staff activities and selling functions, as well as associated information technology costs |
◦ | Pension and OPEB - consists primarily of past service pension costs and other postretirement employee benefit costs |
• | Exchange - primarily measures profit variance driven by one or more of the following: (i) transactions denominated in currencies other than the functional currencies of the relevant entities, (ii) effects of converting functional currency income to U.S. dollars, (iii) effects of remeasuring monetary assets and liabilities of the relevant entities in currencies other than their functional currency, or (iv) results of our foreign currency hedging |
• | Net Interest and Other |
◦ | Net Interest - primarily measures profit variance driven by changes in our Automotive sector’s centrally-managed net interest, which consists of interest expense, interest income, fair market value adjustments on our cash equivalents and marketable securities portfolio (excluding strategic equity investments held in marketable securities), and other adjustments |
◦ | Other - items not included in the causal factors defined above |
2015 Lower/(Higher) 2014 | |||||||
Explanation of change: | Third Quarter | First Nine Months | |||||
Volume and mix, exchange, and other | $ | (0.6 | ) | $ | 4.0 | ||
Contribution costs | |||||||
Material excluding commodities | (1.2 | ) | (2.8 | ) | |||
Commodities | 0.4 | 0.5 | |||||
Warranty/Freight/Other | 0.4 | 1.2 | |||||
Structural costs | (0.5 | ) | (1.9 | ) | |||
Special items | 0.2 | 0.4 | |||||
Total | $ | (1.3 | ) | $ | 1.4 |
• | Volume and Mix: |
◦ | Volume primarily measures changes in net financing margin driven by changes in average finance receivables and net investment in operating leases at prior period financing margin yield (defined below in financing margin) at prior period exchange rates. Volume changes are primarily driven by the volume of new and used vehicle sales and leases, the extent to which Ford Credit purchases retail installment sale and lease contracts, the extent to which Ford Credit provides wholesale financing, the sales price of the vehicles financed, the level of dealer inventories, Ford-sponsored special financing programs available exclusively through Ford Credit, and the availability of cost-effective funding for the purchase of retail installment sale and lease contracts and to provide wholesale financing. |
◦ | Mix primarily measures changes in net financing margin driven by period over period changes in the composition of Ford Credit’s average managed receivables by product and by country or region. |
◦ | Financing margin variance is the period-to-period change in financing margin yield multiplied by the present period average receivables at prior period exchange rates. This calculation is performed at the product and country level and then aggregated. Financing margin yield equals revenue, less interest expense and scheduled depreciation for the period, divided by average receivables for the same period. |
◦ | Financing margin changes are driven by changes in revenue and interest expense. Changes in revenue are primarily driven by the level of market interest rates, cost assumptions in pricing, mix of business, and competitive environment. Changes in interest expense are primarily driven by the level of market interest rates, borrowing spreads, and asset-liability management. |
• | Credit Loss: |
◦ | Credit loss measures changes in the provision for credit losses at prior period exchange rates. For analysis purposes, management splits the provision for credit losses primarily into net charge-offs and the change in the allowance for credit losses. |
◦ | Net charge-off changes are primarily driven by the number of repossessions, severity per repossession, and recoveries. Changes in the allowance for credit losses are primarily driven by changes in historical trends in credit losses and recoveries, changes in the composition and size of Ford Credit’s present portfolio, changes in trends in historical used vehicle values, and changes in economic conditions. For additional information on the allowance for credit losses, refer to the “Critical Accounting Estimates - Allowance for Credit Losses” section of Item 7 of Part II of our 2014 Form 10-K Report. |
• | Lease Residual: |
◦ | Lease residual measures changes to residual performance at prior period exchange rates. For analysis purposes, management splits residual performance primarily into residual gains and losses, and the change in accumulated supplemental depreciation. |
◦ | Residual gain and loss changes are primarily driven by the number of vehicles returned to Ford Credit and sold, and the difference between the auction value and the depreciated value of the vehicles sold. Changes in accumulated supplemental depreciation are primarily driven by changes in Ford Credit’s estimate of the number of vehicles that will be returned to it and sold, and changes in the estimate of the expected auction value at the end of the lease term. For additional information on accumulated supplemental depreciation, refer to the “Critical Accounting Estimates - Accumulated Depreciation on Vehicles Subject to Operating Leases” section of Item 7 of Part II of our 2014 Form 10-K Report. |
• | Exchange: |
◦ | Reflects changes in pre-tax results driven by the effects of converting functional currency income to U.S. dollars. |
• | Other: |
◦ | Primarily includes operating expenses, other revenue, and insurance expenses at prior period exchange rates. |
◦ | Changes in operating expenses are primarily driven by salaried personnel costs, facilities costs, and costs associated with the origination and servicing of customer contracts. |
◦ | In general, other revenue changes are primarily driven by changes in earnings related to market valuation adjustments to derivatives (primarily related to movements in interest rates), and other miscellaneous items. |
September 30, 2015 | December 31, 2014 | ||||||
Net Receivables (a) | |||||||
Finance receivables - North America | |||||||
Consumer - Retail financing | $ | 48.6 | $ | 44.1 | |||
Non-Consumer | |||||||
Dealer financing (b) | 22.9 | 22.5 | |||||
Other | 0.9 | 1.0 | |||||
Total finance receivables - North America | 72.4 | 67.6 | |||||
Finance receivables - International | |||||||
Consumer - Retail financing | 12.7 | 11.8 | |||||
Non-Consumer | |||||||
Dealer financing (b) | 9.8 | 9.3 | |||||
Other | 0.3 | 0.3 | |||||
Total finance receivables - International | 22.8 | 21.4 | |||||
Unearned interest supplements | (2.1 | ) | (1.8 | ) | |||
Allowance for credit losses | (0.4 | ) | (0.3 | ) | |||
Finance receivables, net | 92.7 | 86.9 | |||||
Net investment in operating leases | 24.5 | 21.5 | |||||
Total net receivables | $ | 117.2 | $ | 108.4 | |||
Managed Receivables | |||||||
Total net receivables | $ | 117.2 | $ | 108.4 | |||
Unearned interest supplements and residual support | 4.5 | 3.9 | |||||
Allowance for credit losses | 0.4 | 0.4 | |||||
Other, primarily accumulated supplemental depreciation | 0.3 | 0.1 | |||||
Total managed receivables | $ | 122.4 | $ | 112.8 |
(a) | At September 30, 2015 and December 31, 2014, includes consumer receivables before allowance for credit losses of $27.7 billion and |
(b) | Dealer financing primarily includes wholesale loans to dealers to finance the purchase of vehicle inventory. |
September 30, 2015 | December 31, 2014 | September 30, 2014 | |||||||||
Cash and cash equivalents | $ | 7.8 | $ | 4.6 | $ | 6.0 | |||||
Marketable securities | 14.4 | 17.1 | 16.9 | ||||||||
Total cash and marketable securities | 22.2 | 21.7 | 22.9 | ||||||||
Securities-in-transit (a) | — | — | (0.1 | ) | |||||||
Automotive gross cash | $ | 22.2 | $ | 21.7 | $ | 22.8 |
(a) | The purchase or sale of marketable securities for which the cash settlement was not made by period-end and a payable or receivable was recorded on the balance sheet. |
September 30, 2015 | December 31, 2014 | September 30, 2014 | |||||||||
Automotive gross cash | $ | 22.2 | $ | 21.7 | $ | 22.8 | |||||
Available credit lines | |||||||||||
Revolving credit facility, unutilized portion | 10.3 | 10.1 | 10.1 | ||||||||
Local lines available to foreign affiliates, unutilized portion | 0.7 | 0.6 | 0.7 | ||||||||
Automotive liquidity | $ | 33.2 | $ | 32.4 | $ | 33.6 |
Third Quarter | First Nine Months | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Automotive gross cash at end of period | $ | 22.2 | $ | 22.8 | $ | 22.2 | $ | 22.8 | |||||||
Automotive gross cash at beginning of period | 20.7 | 25.8 | 21.7 | 24.8 | |||||||||||
Change in Automotive gross cash | $ | 1.5 | $ | (3.0 | ) | $ | 0.5 | $ | (2.0 | ) | |||||
Automotive pre-tax profits (excluding special items) | $ | 2.2 | $ | 0.7 | $ | 5.5 | $ | 3.8 | |||||||
Capital spending | (1.8 | ) | (1.8 | ) | (5.3 | ) | (5.2 | ) | |||||||
Depreciation and tooling amortization | 1.1 | 1.1 | 3.2 | 3.1 | |||||||||||
Changes in working capital (a) | 0.3 | (1.5 | ) | 0.5 | (0.5 | ) | |||||||||
Other/Timing differences (b) | 1.0 | 0.8 | 1.3 | 1.9 | |||||||||||
Automotive operating-related cash flows | 2.8 | (0.7 | ) | 5.2 | 3.1 | ||||||||||
Separation payments | (0.1 | ) | — | (0.6 | ) | (0.1 | ) | ||||||||
Net receipts from Financial Services sector (c) | — | 0.2 | — | 0.4 | |||||||||||
Other | (0.1 | ) | (0.3 | ) | (0.4 | ) | (0.2 | ) | |||||||
Cash flow before other actions | 2.6 | (0.8 | ) | 4.2 | 3.2 | ||||||||||
Changes in debt | (0.5 | ) | (0.3 | ) | (0.9 | ) | (0.7 | ) | |||||||
Funded pension contributions | — | (0.3 | ) | (0.9 | ) | (1.1 | ) | ||||||||
Dividends/Other items | (0.6 | ) | (1.6 | ) | (1.9 | ) | (3.4 | ) | |||||||
Change in Automotive gross cash | $ | 1.5 | $ | (3.0 | ) | $ | 0.5 | $ | (2.0 | ) |
(a) | Working capital comprised of changes in receivables, inventory, and trade payables. |
(b) | Primarily expense and payment timing differences for items such as pension and OPEB, compensation, marketing, warranty, and timing differences between unconsolidated affiliate profits and dividends received. Also includes other factors, such as the impact of tax payments and vehicle financing activities between Automotive and FSG sectors. |
(c) | Primarily distributions from Ford Holdings (Ford Credit’s parent) and tax payments received from Ford Credit. |
Memo: | |||||||||||||||||||
Third Quarter | First Nine Months | Full Year | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2014 | |||||||||||||||
Net cash provided by/(used in) operating activities | $ | 4.2 | $ | 0.6 | $ | 8.7 | $ | 6.7 | $ | 8.8 | |||||||||
Items included in operating-related cash flows | |||||||||||||||||||
Capital spending | (1.8 | ) | (1.8 | ) | (5.3 | ) | (5.2 | ) | (7.4 | ) | |||||||||
Proceeds from the exercise of stock options | — | 0.1 | 0.1 | 0.2 | 0.2 | ||||||||||||||
Net cash flows from non-designated derivatives | (0.1 | ) | — | (0.1 | ) | 0.1 | 0.2 | ||||||||||||
Items not included in operating-related cash flows | |||||||||||||||||||
Separation payments | 0.1 | — | 0.6 | 0.1 | 0.2 | ||||||||||||||
Funded pension contributions | — | 0.3 | 0.9 | 1.1 | 1.5 | ||||||||||||||
Tax refunds, tax payments, and tax receipts from affiliates | — | — | — | (0.2 | ) | (0.2 | ) | ||||||||||||
Other | 0.4 | 0.1 | 0.3 | 0.3 | 0.3 | ||||||||||||||
Operating-related cash flows | $ | 2.8 | $ | (0.7 | ) | $ | 5.2 | $ | 3.1 | $ | 3.6 |
September 30, 2015 | December 31, 2014 | ||||||
Automotive gross cash | $ | 22.2 | $ | 21.7 | |||
Less: | |||||||
Long-term debt | 11.2 | 11.3 | |||||
Debt payable within one year | 1.6 | 2.5 | |||||
Total debt | 12.8 | 13.8 | |||||
Net cash | $ | 9.4 | $ | 7.9 |
Public Term Funding Plan | |||||||||||||
2015 | |||||||||||||
Full-Year Forecast | Through October 26 | Full-Year 2014 | Full-Year 2013 | ||||||||||
Unsecured | $ 15-16 | $ | 14 | $ | 13 | $ | 11 | ||||||
Securitizations (a) | 13-15 | 11 | 15 | 14 | |||||||||
Total | $ 28-31 | $ | 25 | $ | 28 | $ | 25 |
(a) | Includes Rule 144A offerings. |
September 30, 2015 | December 31, 2014 | ||||||
Liquidity Sources | |||||||
Cash (a) | $ | 9.2 | $ | 8.9 | |||
Committed ABS lines (b) | 32.1 | 33.7 | |||||
FCE/Other unsecured credit facilities | 2.0 | 1.6 | |||||
Ford revolving credit facility allocation | 3.0 | 2.0 | |||||
Total liquidity sources | 46.3 | 46.2 | |||||
Utilization of Liquidity | |||||||
Securitization cash (c) | (2.8 | ) | (2.4 | ) | |||
Committed ABS lines | (17.5 | ) | (15.3 | ) | |||
FCE/Other unsecured credit facilities | (0.3 | ) | (0.4 | ) | |||
Ford revolving credit facility allocation | — | — | |||||
Total utilization of liquidity | (20.6 | ) | (18.1 | ) | |||
Gross liquidity | 25.7 | 28.1 | |||||
Adjustments (d) | (0.4 | ) | (1.6 | ) | |||
Net liquidity available for use | $ | 25.3 | $ | 26.5 |
(a) | Cash, cash equivalents, and marketable securities (excludes marketable securities related to insurance activities). |
(b) | Committed ABS lines are subject to availability of sufficient assets, ability to obtain derivatives to manage interest rate risk, and exclude FCE Bank plc (“FCE”) access to the Bank of England’s Discount Window Facility. |
(c) | Used only to support on-balance sheet securitization transactions. |
(d) | Adjustments include other committed ABS lines in excess of eligible receivables and certain cash within FordREV available through future sales of receivables. |
September 30, 2015 | December 31, 2014 | ||||||
Total debt (a) | $ | 113.3 | $ | 105.0 | |||
Equity | 11.8 | 11.4 | |||||
Financial statement leverage (to 1) | 9.6 | 9.2 |
(a) | Includes debt issued in securitization transactions and payable only out of collections on the underlying securitized assets and related enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions. |
September 30, 2015 | December 31, 2014 | ||||||
Total debt (a) | $ | 113.3 | $ | 105.0 | |||
Adjustments for cash (b) | (9.2 | ) | (8.9 | ) | |||
Adjustments for derivative accounting (c) | (0.7 | ) | (0.4 | ) | |||
Total adjusted debt | $ | 103.4 | $ | 95.7 | |||
Equity | $ | 11.8 | $ | 11.4 | |||
Adjustments for derivative accounting (c) | (0.4 | ) | (0.4 | ) | |||
Total adjusted equity | $ | 11.4 | $ | 11.0 | |||
Managed leverage (to 1) (d) | 9.1 | 8.7 |
(a) | Includes debt issued in securitization transactions and payable only out of collections on the underlying securitized assets and related enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions. |
(b) | Cash, cash equivalents, and marketable securities (excludes marketable securities related to insurance activities). |
(c) | Primarily related to market valuation adjustments to derivatives due to movements in interest rates. Adjustments to debt are related to designated fair value hedges and adjustments to equity are related to retained earnings. |
(d) | Equals total adjusted debt over total adjusted equity. |
• | DBRS Limited (“DBRS”); |
• | Fitch, Inc. (“Fitch”); |
• | Moody’s Investors Service, Inc. (“Moody’s”); and |
• | Standard & Poor’s Ratings Services, a division of McGraw Hill Financial (“S&P”). |
• | On October 9, 2015, DBRS confirmed its ratings for Ford and Ford Credit, and changed the outlook to positive from stable. |
NRSRO RATINGS | |||||||||||||
Ford | Ford Credit | NRSROs | |||||||||||
Issuer Default / Corporate / Issuer Rating | Long-Term Senior Unsecured | Outlook / Trend | Long-Term Senior Unsecured | Short-Term Unsecured | Outlook / Trend | Minimum Long-Term Investment Grade Rating | |||||||
DBRS | BBB (low) | BBB (low) | Positive | BBB (low) | R-3 | Positive | BBB (low) | ||||||
Fitch | BBB- | BBB- | Positive | BBB- | F3 | Positive | BBB- | ||||||
Moody’s | N/A | Baa3 | Stable | Baa3 | P-3 | Stable | Baa3 | ||||||
S&P * | BBB- | BBB- | Stable | BBB- | A-3 | Stable | BBB- |
* | S&P assigns FCE a long-term senior unsecured credit rating of BBB, a one-notch higher rating than Ford and Ford Credit, with a stable outlook. |
2015 | ||||||||||||
Third Quarter Actual | Fourth Quarter Forecast | |||||||||||
Units | O/(U) 2014 | Units | O/(U) 2014 | |||||||||
North America | 792 | 97 | 780 | 82 | ||||||||
South America | 85 | (12 | ) | 70 | (35 | ) | ||||||
Europe | 377 | 51 | 390 | 62 | ||||||||
Middle East & Africa | 22 | 2 | 20 | 1 | ||||||||
Asia Pacific | 341 | (11 | ) | 430 | 54 | |||||||
Total | 1,617 | 127 | 1,690 | 164 |
Memo: | |||||||||||||||
2014 | 2015 | 2015 First | |||||||||||||
Full Year | Full Year | Nine Months | GDP Growth | ||||||||||||
Results | Plan | Outlook | Results | Outlook | |||||||||||
Planning Assumptions (Mils.) | |||||||||||||||
Industry Volume -- U.S. | 16.8 | 17.0 - 17.5 | About 17.7 | 17.7 | About 2.5% | ||||||||||
-- Europe 20 | 14.6 | 14.8 - 15.3 | About 16.0 | 15.9 | Improving to about 1.8% | ||||||||||
-- China | 24.0 | 24.5 - 26.5 | About 24.0 | 23.6 | About 7% | ||||||||||
Key Metrics | |||||||||||||||
Automotive (Compared with 2014): | |||||||||||||||
- Revenue (Bils.) | $ | 135.8 | Higher | On Track | $ | 102.7 | |||||||||
- Operating Margin | 3.9 | % | Higher | On Track | 5.9 | % | |||||||||
- Operating-Related Cash Flow (Bils.) (a) | $ | 3.6 | Higher | On Track | $ | 5.2 | |||||||||
Ford Credit (Compared with 2014): | |||||||||||||||
- Pre-Tax Profit (Bils.) | $ | 1.9 | Equal To Or Higher | On Track | $ | 1.5 | |||||||||
Total Company: | |||||||||||||||
- Pre-Tax Profit (Bils.) (a) | $ | 6.3 | $8.5 - $9.5 | On Track | $ | 7.0 |
(a) | Excludes special items; reconciliation to GAAP provided in “Results of Operations” and “Liquidity and Capital Resources” above |
• | Decline in industry sales volume, particularly in the United States, Europe, or China, due to financial crisis, recession, geopolitical events, or other factors; |
• | Decline in Ford’s market share or failure to achieve growth; |
• | Lower-than-anticipated market acceptance of Ford’s new or existing products; |
• | Market shift away from sales of larger, more profitable vehicles beyond Ford’s current planning assumption, particularly in the United States; |
• | An increase in or continued volatility of fuel prices, or reduced availability of fuel; |
• | Continued or increased price competition resulting from industry excess capacity, currency fluctuations, or other factors; |
• | Fluctuations in foreign currency exchange rates, commodity prices, and interest rates; |
• | Adverse effects resulting from economic, geopolitical, or other events; |
• | Economic distress of suppliers that may require Ford to provide substantial financial support or take other measures to ensure supplies of components or materials and could increase costs, affect liquidity, or cause production constraints or disruptions; |
• | Work stoppages at Ford or supplier facilities or other limitations on production (whether as a result of labor disputes, natural or man-made disasters, tight credit markets or other financial distress, production constraints or difficulties, or other factors); |
• | Single-source supply of components or materials; |
• | Labor or other constraints on Ford’s ability to maintain competitive cost structure; |
• | Substantial pension and postretirement health care and life insurance liabilities impairing liquidity or financial condition; |
• | Worse-than-assumed economic and demographic experience for postretirement benefit plans (e.g., discount rates or investment returns); |
• | Restriction on use of tax attributes from tax law “ownership change;” |
• | The discovery of defects in vehicles resulting in delays in new model launches, recall campaigns, or increased warranty costs; |
• | Increased safety, emissions, fuel economy, or other regulations resulting in higher costs, cash expenditures, and/or sales restrictions; |
• | Unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, perceived environmental impacts, or otherwise; |
• | A change in requirements under long-term supply arrangements committing Ford to purchase minimum or fixed quantities of certain parts, or to pay a minimum amount to the seller (“take-or-pay” contracts); |
• | Adverse effects on results from a decrease in or cessation or clawback of government incentives related to investments; |
• | Inherent limitations of internal controls impacting financial statements and safeguarding of assets; |
• | Cybersecurity risks to operational systems, security systems, or infrastructure owned by Ford, Ford Credit, or a third-party vendor or supplier; |
• | Failure of financial institutions to fulfill commitments under committed credit and liquidity facilities; |
• | Inability of Ford Credit to access debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts, due to credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors; |
• | Higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles; |
• | Increased competition from banks, financial institutions, or other third parties seeking to increase their share of financing Ford vehicles; and |
• | New or increased credit, consumer, or data protection or other regulations resulting in higher costs and/or additional financing restrictions. |
Period | Total Number of Shares Purchased(a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly- Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||
July 1, 2015 through July 31, 2015 | 2,552,612 | $ | 14.81 | 2,550,008 | — | ||||||||
August 1, 2015 through August 31, 2015 | 1,926 | 14.80 | — | — | |||||||||
September 1, 2015 through September 30, 2015 | — | — | |||||||||||
Total/Average | 2,554,538 | $ | 14.81 | 2,550,008 |
(a) | In any given month, the difference between the total number of shares purchased and the total number of shares purchased as part of the publicly-announced plans or programs reflects shares that were acquired from our employees or directors related to certain exercises of stock options in accordance with our various compensation plans. |
By: | /s/ Stuart Rowley |
Stuart Rowley, Vice President and Controller | |
(principal accounting officer) | |
Date: | October 27, 2015 |
Designation | Description | Method of Filing | ||
Exhibit 12 | Calculation of Ratio of Earnings to Fixed Charges. | Filed with this Report. | ||
Exhibit 15 | Letter of PricewaterhouseCoopers LLP, dated October 27, 2015, relating to financial information. | Filed with this Report. | ||
Exhibit 31.1 | Rule 15d-14(a) Certification of CEO. | Filed with this Report. | ||
Exhibit 31.2 | Rule 15d-14(a) Certification of CFO. | Filed with this Report. | ||
Exhibit 32.1 | Section 1350 Certification of CEO. | Furnished with this Report. | ||
Exhibit 32.2 | Section 1350 Certification of CFO. | Furnished with this Report. | ||
Exhibit 101.INS | XBRL Instance Document. | * | ||
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document. | * | ||
Exhibit 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | * | ||
Exhibit 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | * | ||
Exhibit 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | * | ||
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | * |
First Nine Months 2015 | |||
Earnings | |||
Income before income taxes | $ | 7,132 | |
Add/(Deduct): | |||
Equity in net income of affiliated companies | (1,237 | ) | |
Dividends from affiliated companies | 745 | ||
Fixed charges excluding capitalized interest | 2,522 | ||
Amortization of capitalized interest | 29 | ||
Earnings | $ | 9,191 | |
Fixed Charges | |||
Interest expense | $ | 2,407 | |
Interest portion of rental expense (a) | 115 | ||
Capitalized interest | 7 | ||
Total fixed charges | $ | 2,529 | |
Ratios | |||
Ratio of earnings to fixed charges | 3.6 |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2015 of Ford Motor Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Dated: | October 27, 2015 | /s/ Mark Fields |
Mark Fields | ||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2015 of Ford Motor Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Dated: | October 27, 2015 | /s/ Bob Shanks |
Bob Shanks | ||
Executive Vice President and | ||
Chief Financial Officer |
1. | The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, to which this statement is furnished as an exhibit (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | October 27, 2015 | /s/ Mark Fields |
Mark Fields | ||
President and Chief Executive Officer |
1. | The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, to which this statement is furnished as an exhibit (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | October 27, 2015 | /s/ Bob Shanks |
Bob Shanks | ||
Executive Vice President and | ||
Chief Financial Officer |
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