Transfers of Receivables

9 Months Ended

Sep. 30, 2012

Transfers and Servicing [Abstract]

TRANSFERS OF RECEIVABLES

TRANSFERS OF RECEIVABLES

We securitize finance receivables and net investment in operating leases through a variety of programs using amortizing, variable funding and revolving structures. We also sell finance receivables in structured financing transactions. Due to the similarities between securitization and structured financing, we refer to structured financings as securitization transactions. Our securitization programs are targeted to many different institutional investors in both public and private transactions in capital markets worldwide.

We engage in securitization transactions to fund operations and to maintain liquidity. Our securitization transactions are recorded as asset-backed debt and the associated assets are not derecognized and continue to be included in our financial statements.

The finance receivables and net investment in operating leases that have been included in securitization transactions are available only for payment of the debt and other obligations issued or arising in the securitization transactions. They are not available to pay our other obligations or the claims of our other creditors. We hold the right to the excess cash flows not needed to pay the debt and other obligations issued or arising in the securitization transactions. The debt is the obligation of our consolidated securitization entities and not the obligation of Ford Credit or our other subsidiaries.

Most of these securitization transactions utilize VIEs. See Note 6 for more information concerning VIEs. The following tables show the assets and debt related to our securitization transactions that were included in our financial statements (in billions):

	September 30, 2012
	Cash and Cash Equivalents		Finance Receivables and Net Investment in Operating Leases (a)						Related Debt
			Before Allowance for Credit Losses		Allowance for Credit Losses		After Allowance for Credit Losses
VIE (b)
Retail (c)	$	2.2	$	27.1	$	0.2	$	26.9	$	22.8
Wholesale	0.3		17.1		—		17.1		11.4
Finance receivables	2.5		44.2		0.2		44.0		34.2
Net investment in operating leases	0.3		5.1		—		5.1		3.4
Total VIE	$	2.8	$	49.3	$	0.2	$	49.1	$	37.6
Non-VIE
Retail (c)	$	0.1	$	2.5	$	—	$	2.5	$	2.2
Wholesale	—		1.4		—		1.4		1.3
Finance receivables	0.1		3.9		—		3.9		3.5
Net investment in operating leases	—		—		—		—		—
Total Non-VIE	$	0.1	$	3.9	$	—	$	3.9	$	3.5
Total securitization transactions
Retail (c)	$	2.3	$	29.6	$	0.2	$	29.4	$	25.0
Wholesale	0.3		18.5		—		18.5		12.7
Finance receivables	2.6		48.1		0.2		47.9		37.7
Net investment in operating leases	0.3		5.1		—		5.1		3.4
Total securitization transactions	$	2.9	$	53.2	$	0.2	$	53.0	$	41.1

__________

(a) Unearned interest supplements are excluded from securitization transactions.

(b) Includes assets to be used to settle the liabilities of the consolidated VIEs.

(c) Includes direct financing leases.

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

	December 31, 2011
	Cash and Cash Equivalents		Finance Receivables and Net Investment in Operating Leases (a)						Related Debt
			Before Allowance for Credit Losses		Allowance for Credit Losses		After Allowance for Credit Losses
VIE (b)
Retail (c)	$	2.5	$	31.7	$	0.3	$	31.4	$	26.0
Wholesale	0.5		17.9		—		17.9		11.2
Finance receivables	3.0		49.6		0.3		49.3		37.2
Net investment in operating leases	0.4		6.4		—		6.4		4.2
Total VIE	$	3.4	$	56.0	$	0.3	$	55.7	$	41.4
Non-VIE
Retail (c)	$	0.3	$	4.3	$	—	$	4.3	$	3.8
Wholesale	—		1.9		—		1.9		1.5
Finance receivables	0.3		6.2		—		6.2		5.3
Net investment in operating leases	—		—		—		—		—
Total Non-VIE	$	0.3	$	6.2	$	—	$	6.2	$	5.3
Total securitization transactions
Retail (c)	$	2.8	$	36.0	$	0.3	$	35.7	$	29.8
Wholesale	0.5		19.8		—		19.8		12.7
Finance receivables	3.3		55.8		0.3		55.5		42.5
Net investment in operating leases	0.4		6.4		—		6.4		4.2
Total securitization transactions	$	3.7	$	62.2	$	0.3	$	61.9	$	46.7

__________

(a) Unearned interest supplements are excluded from securitization transactions.

(b) Includes assets to be used to settle the liabilities of the consolidated VIEs.

(c) Includes direct financing leases.

Interest expense related to securitization debt for the periods ended September 30 was as follows (in millions):

	Third Quarter				First Nine Months
	2012		2011		2012		2011
VIE	$	171	$	248	$	599	$	763
Non-VIE	23		35		73		108
Total securitization transactions	$	194	$	283	$	672	$	871

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

Certain of our securitization entities enter into derivative transactions to mitigate interest rate exposure, primarily resulting from fixed-rate assets securing floating-rate debt and, in certain instances, currency exposure resulting from assets in one currency and debt in another currency. In many instances, the counterparty enters into offsetting derivative transactions with us to mitigate their interest rate risk resulting from derivatives with our securitization entities. See Notes 7 and 12 for information regarding our derivatives. Our exposures based on the fair value of derivative instruments related to securitization programs were as follows (in millions):

	September 30, 2012				December 31, 2011
	Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability
VIE - securitization entities	$	3	$	139	$	157	$	97
Ford Credit related to VIE	85		70		81		63
Other Ford Credit securitization related	13		26		12		25
Total securitization transactions	$	101	$	235	$	250	$	185

Derivative expense/(income) related to our securitization transactions for the periods ended September 30 was as follows (in millions):

	Third Quarter					First Nine Months
	2012		2011			2012			2011
VIE - securitization entities	$	58	$	(46	)	$	209		$	(13	)
Ford Credit related to VIE	8		(18		)	(7		)	20
Other Ford Credit securitization related	4		4			16			12
Total securitization transactions	$	70	$	(60	)	$	218		$	19