福特汽車公司Ford Motor Company (F) 2013年年度報告「NYSE」.pdf

《福特汽車公司Ford Motor Company (F) 2013年年度報告「NYSE」.pdf》由會員分享，可在線閱讀，更多相關《福特汽車公司Ford Motor Company (F) 2013年年度報告「NYSE」.pdf（152頁珍藏版）》請在三個皮匠報告上搜索。

1、Ford Motor CompanyOne American Road Dearborn,MI Printed in U.S.A.10%post-consumer waste paper.Ford encourages you to please recycle this document.Ford Motor Company 2013 Annual ReportDelivering Profitable Growth for All2013 Annual ReportFord Motor CompanyFord Motor Company|2013 Annual Report Ford Mo

2、tor Company created a framework for the development of vehicles that customers truly want and value with its One Ford plan.The result is a full lineup of cars,utilities and trucks that meet and exceed driver expectations across global markets.Pictured on the front cover(clockwise from top left)are:E

3、coSport,Mustang,all-new F-150,Transit,Focus,Kuga,C-MAX Hybrid with hands-free liftgate and Fusion Energi Plug-In Hybrid.Pictured on the back cover(clockwise from top left)are:Focus Electric,Fusion,Fiesta,Explorer,1.0-liter EcoBoost engine,SmartGauge with EcoGuide,F-150 and SYNC display screen.Revenu

4、es 2013 2012Worldwide wholesale unit volumes by automotive segment(in thousands)North America 3,088 2,784 South America 538 498 Europe 1,360 1,353 Asia Pacific Africa 1,344 1,033Total 6,330 5,668Revenues(in millions)Automotive$139,369$126,567 Financial Services 7,548 6,992Total$146,917$133,559Financ

5、ial Results Income before income taxes(in millions)Automotive$5,329$6,010 Financial Services 1,672 1,710Total$7,001$7,720Amounts Attributable to Ford Motor Company Net income(in millions)$7,155$5,665Diluted net income per share of Common and Class B Stock$1.76$1.42Cash and SpendingAutomotive capital

6、 spending Amount(in billions)$6.6$5.5 As a percentage of Automotive revenues 4.7%4.3%Automotive cash at year end(in billions)Automotive gross cash(a)$24.8$24.3 Cash net of Automotive debt 9.1 10.0Shareholder ValueDividends paid per share$0.40$0.20 Total shareholder returns%(b)22%23%Operating Highlig

7、htsContent 1 Behind the Blue Oval 2 A Message from the Executive Chairman 3 A Message from the President and CEO 7 Board of Directors and Executives 8 Shareholder Information 9 Financial Content 149 Company Information (a)Automotive gross cash includes cash and cash equivalents and net marketable se

8、curities.(b)Source:Standard&Poors,a division of the McGraw Hill Companies,Inc.;includes reinvestment of dividends.On the CoverFord Motor Company|2013 Annual Report 149For more information visit Customer ServicesOperationsCustomer AssistanceServiceA total service experience for Ford,Lincoln and Mercu

9、ry owners available only at Ford and Lincoln stores designed to deliver customer satisfaction and loyalty Parts engineered to Ford Motor Company specifications Technicians trained and certified specifically on Ford,Lincoln and Mercury vehicles One-stop service for all vehicle maintenance and repair

10、needsLocate Ford and Lincoln Dealer Service at:FordOLincolnOOrder Genuine Ford parts at:FordPQuick Lane Tire&Auto CenterFord Motor Companys all-makes quick service brand,successfully occupies a unique niche in the marketplace by offering customers“fast and dependable auto service”.Fast comes in the

11、form of all-makes-all-models service capabilities,no-appointment-necessary,service while you wait,evening and weekend hours,and competitive prices.Dependable comes in the form of factory-trained technicians and quality Motorcraft parts.Locate Quick Lane Tire&Auto Center at:QFord Parts and Motorcraft

12、New and remanufactured parts recommended by Ford Motor Company and available in Ford and Lincoln stores,Ford authorized distributors and thousands of major retail and repair locationsOrder Motorcraft and Ford Genuine Parts at:FordPFord and Lincoln AccessoriesWide variety of original and licensed acc

13、essories are available,all designed to personalize Ford and Lincoln vehiclesOriginal and licensed accessories at:Ford and Lincoln Extended Service Plan(ESP)Provides comprehensive vehicle service contracts and maintenance programs to support dealer and direct mail sales to Ford,Lincoln,and competitiv

14、e-make owners ESP800.521.4144FordOLincolnOFinancial ServicesOperationsCustomer AssistanceFord Motor Credit Company A leading automotive financial services company founded in 1959 Provides a wide variety of dealer and customer financing products and services globally in support of Ford Motor Company

15、vehicle sales As of year-end 2013,Ford Credit was financing about 5,200 Ford and Lincoln dealers and more than 3.8 million retail customers around the world800.727.7000FordC888.498.8801LincolnAFS.comCompany InformationAutomotive BrandCustomer AssistanceAutomotive BrandCustomer Assistance800.392.3673

16、 FFordO800.521.4140 L LincolnO LINCOLN EXTENDED SERVICE PLANAbout the CompanyFord Motor Company,a global automotive industry leader based in Dearborn,Mich.,manufactures or distributes automobiles across six continents.With about 181,000 employees and 65 plants worldwide,the companys automotive brand

17、s include Ford and Lincoln.The company provides financial services through Ford Motor Credit Company.For more information regarding Ford and its products worldwide,please visit .From building greener products to adopting greener operations,Ford has shown a commitment to reducing its impact on the en

18、vironment.Fords EcoBoost engine technology,as well as its hybrid and all-electric vehicles,stands as evidence of the companys commitment to promoting a greener lifestyle on the road.Ford has also adopted rigorous manufacturing standards to reduce the companys overall environmental impact.By cutting

19、energy and water use,as well as emissions and waste,Ford continues to demonstrate that building better products begins with building a better world.Ford is committed to achieving world-class vehicle quality and desirability.Standardized global manufacturing processes are in place,and Ford operates w

20、ith the goal of achieving continuous improvement.Best practices are shared worldwide.In 2013,for example,Ford added its industry-leading 3-Wet paint process to four more plants on three continents,reducing plant emissions and improving vehicle durability with a chip-and stain-resistant finish.Succes

21、s stories include J.D.Power and Associates honoring Lincoln MKZ with its APEAL award,and the 2013 Fusion and 2013 F-250 and F-350 trucks ranking No.1 in their segments in Strategic Visions Quality Index study.Ford is a recognized safety leader in the industry with technologies that play an important

22、 role in helping drivers avoid crashes.Blind Spot Information System,lane-keeping alert and active park assist are just a few of the driver-assist features that have helped Ford earn top ratings from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety.Fo

23、rd continues to pioneer new technologies such as inflatable seat belts,next-generation airbags and its innovative MyKey system.In 2013,Ford also celebrated the 10th year of its Ford Driving Skills for Life program,a global training initiative that teaches safe driving practices.Delivering industry-l

24、eading technology solutions that enhance the experience of owning,driving and riding in a Ford car,utility or truck is a top priority for the company.SYNC with MyFord Touch remains an industry-leading driver connectivity technology and evolves with each next-generation upgrade.The EcoBoost engine li

25、neup continues to put Ford at the forefront of fuel-efficiency and performance.Hybrid and all-electric options have become an essential part of Fords vehicle portfolio.Identifying what todays drivers want and creating vehicles that meet those demands positions Ford as one of the worlds premier autom

26、akers.Ford Motor Companys One Ford strategic business plan is centered around the companys four pillars:Quality,Green,Safe and Smart.From the dependable toughness of Fords iconic F-Series trucks to the fuel-efficiency of the companys EcoBoost engine lineup,from smart technologies such as SYNC connec

27、tivity and lane-keeping alert,to the use of high-strength steel to improve vehicle safety ratings,Ford delivers cars,utilities and trucks equipped with features and technologies todays drivers want and value.GreenSmartQualitySafeFord Motor Company|2013 Annual Report 1Behind the Blue OvalFord Motor C

28、ompany completed one of its best years ever in 2013.Led by record profits in North America and Asia Pacific Africa,we achieved our fifth year in a row of positive net income.We are now rated investment grade by four of the major credit rating agencies.Our strong performance enabled us to double the

29、quarterly dividend in 2013,and subsequently raise it by 25 percent in the first quarter of 2014.A Message from the Executive Chairman 2 Ford Motor Company|2013 Annual Report After achieving one of our best years,we are now embarked on one of our most ambitious years,building a strong foundation for

30、future growth and profitability.In 2014 we plan to go further by launching the most vehicles worldwide in a single year in our history.Included in these launches will be all-new versions of two iconic Ford vehicles,Mustang and F-150.Celebrating its 50th anniversary this year,Mustang will be availabl

31、e for the first time in key markets in Europe and Asia.The all-new F-150,part of Americas best-selling F-Series lineup,is the toughest,smartest and most capable F-150 ever setting the standard for the future of trucks.To support these product launches we are continuing with our largest manufacturing

32、 expansion in the last 50 years.We will increase capacity or add production in six of our U.S.assembly plants,and are opening two new plants in Asia,one in South America and one in Europe.Our focus continues to be on producing vehicles that are best-in-class in quality,environmental impact,safety an

33、d innovative technology.The record number of new vehicles we will introduce this year supports our goals of increased global sales and market share,as well as our ongoing commitment to reducing the environmental impact of our vehicles.Our environmental commitment included the sale of more than 85,00

34、0 hybrid,plug-in hybrid and all-electric vehicles in the United States in 2013,the first full year all six of our electrified vehicles were available.That represented a sales increase of nearly 150 percent from the prior year.We also introduced a Ford Fusion Hybrid automated research vehicle with th

35、e University of Michigan and State Farm to study autonomous driving and other advanced technologies.This vehicle builds on a decade of automated driving research at Ford and represents a vital step toward our vision for the future of mobility.We are a leader in wireless automotive communication tech

36、nology,which will make driving safer,ease traffic congestion and sustain the environment.Our employees around the world are working together to meet the needs of our customers and the issues confronting our world.We have completed one of the most profitable and successful years in our history,and ar

37、e building a foundation for even greater success in the future.We have a strong leadership team,a great plan and growing momentum.I look forward to progress and profitability for all.Thank you for your continued support of our efforts.William Clay Ford,Jr.Executive ChairmanMarch 13,2014A Message fro

38、m the President and CEOOne team.One plan.One goal.Our One Ford plan continues to deliver.The comprehensive strategy we outlined in our message to shareholders seven years ago continues to inspire us as we transform Ford into an exciting,viable company delivering profitable growth for all.Guided by o

39、ur plan,we are working together to serve all markets with a full family of vehicles small,medium and large;cars,utilities and trucks each with the best quality,fuel efficiency,safety,smart design and value.In 2013,we achieved one of the best years in the history of our 111-year-old company,driven by

40、 our highest Automotive pre-tax profit in more than a decade and continued solid profit from Ford Credit.Our strong product lineup led to record full-year profits in North America.Asia Pacific Africa also achieved record profits as we continue to grow aggressively with an expanding portfolio of glob

41、al products.South America continues to execute its strategy of expanding the product line-up,and despite the impact of unfavorable external factors we delivered an about breakeven result in 2013.Europe continues to implement its transformation plan,achieving lower losses for 2013 compared with 2012

42、despite higher restructuring costs and lower industry volume.While we celebrate our strong performance in 2013,we are even more excited by the fact that we have only just begun to see the full potential of our One Ford plan.2014 represents the next major step in our plan.Great ProductsWe will introd

43、uce the most vehicles in a single year in our history in 2014,with Ford and Lincoln launching 23 new or significantly refreshed vehicles to customers around the world to help us build on our strong sales momentum.In 2013,Ford was Americas best-selling vehicle brand for the fourth consecutive year,an

44、d Ford F-Series continued as the countrys best-selling truck for the 37th year in a row and best-selling vehicle for the 32nd consecutive year.Ford had the largest U.S.market share point gain of any automaker in 2013.Our business is undergoing unprecedented growth in China,where our sales increased

45、nearly 50 percent and set a new record.We also achieved market share gains in South America and Asia Pacific Africa,as well as higher retail sales share in Europe compared with 2012.Our global sales increased 12 percent in 2013 compared with 2012,as customers took delivery of more than 6 million new

46、 Ford and Lincoln vehicles.Our strong global performance Ford Motor Company|2013 Annual Report 3Fords Senior Management TeamThe senior management team continues to successfully advance the companys One Ford global plan.Pictured from left to right (front row):Hau Thai-Tang,David Leitch,Joe Hinrichs,S

47、tephen Odell,Felicia Fields and John Fleming.(back row)Nick Smither,Robert Brown,Ray Day,Jim Farley,Bernard Silverstone,Mark Fields,Alan Mulally,David Schoch,Raj Nair,Bennie Fowler,Bob Shanks and Ziad Ojakli.was led by Focus,which was the best-selling nameplate in the world for the first nine months

48、 of 2013(the latest data available).Focus was joined by Fiesta to give Ford two of the top five best-selling nameplates worldwide.We expect to serve even more customers and achieve global sales growth of another 25 percent in the years ahead with a product portfolio that is more balanced than ever.S

49、trong BusinessTo meet this growth,we will continue our most ambitious manufacturing expansion in 50 years with two new plants in China,one new plant in Brazil and one new plant in Turkey,as well as increasing capacity or adding production in six of 4 Ford Motor Company|2013 Annual Report our U.S.ass

50、embly plants.We also are creating 11,000 new jobs globally in 2014 more than we have created in any year in more than a decade.We made progress in delivering profitable growth in 2013,achieving a full year pre-tax profit of$8.6 billion(excluding special items),or$1.62 per share on an after-tax basis

51、.We achieved our fifth year in a row of positive net income,and 18th consecutive quarter of operating profit.In 2013 we made$5 billion in cash contributions to our worldwide funded pension plans,and our underfunded position improved by about$10 billion compared with year-end 2012.We also made record

52、 profit-sharing payments to our U.S.hourly employees as part of the UAW-Ford collective bargaining agreement.In addition,we doubled the shareholder dividend to 10 cents a share before raising it to 12.5 cents a share in the first quarter of 2014.Better WorldIn addition to creating great products and

53、 a strong business,we have a proud heritage of making the world a better place.As we expand and realign globally and introduce new products,we are contributing solutions to economic development,energy security and independence,and environmental sustainability.For example,today in the United States w

54、e offer eight Ford brand vehicles that deliver 40 mpg or better more than any of our competitors brands.Community service is another important part of our heritage.Ford Motor Company Fund and Community Services,our philanthropic organization,has donated more than$1.5 billion in its 65-year history.O

55、ur Ford Volunteer Corps,which will celebrate its 10th anniversary next year,encourages salaried employees to volunteer in their communities.During the eighth annual Ford Global Week of Caring in 2013,approximately 10,000 members of the Ford Volunteer Corps worked on more than 200 projects on six con

56、tinents.Ford Motor Company|2013 Annual Report 5Going Further to Deliver Profitable Growth for AllWe expect 2014 to be another solid year for Ford Motor Company and a critical building block as we invest around the world for profitable growth beyond 2014.As a result of our record number of new produc

57、t launches,we expect North American pre-tax profit to be lower in 2014 than in 2013.The payoff will be higher volume and revenue opportunities into 2015 and beyond.Results in 2014 for South America are expected to be about the same as in 2013 at about breakeven.In Europe,we expect results to improve

58、 compared with 2013 as we continue the successful implementation of our transformation plan to achieve profitability in the region in 2015.Our investments in growth in Asia Pacific during the last several years helped us to achieve record market share and profits in 2013.We will continue to execute

59、our growth strategy for the region in 2014,and expect pre-tax profit to be about the same as in 2013.Overall,total company pre-tax profit,excluding special items,is projected at$7 billion to$8 billion.Our One Ford plan is driving solid results and profitable growth for all,and we are confident it wi

60、ll continue to do so in the future.Thank you for your support of our efforts.Alan R.MulallyPresident and Chief Executive OfficerMarch 13,20146 Ford Motor Company|2013 Annual Report 6 Ford Motor Company|2013 Annual Report Ford Transit and Ford Transit ConnectFord Motor Company|2013 Annual Report 7Exe

61、cutive Officer GroupWilliam Clay Ford,Jr.Executive Chairman and Chairman of the BoardAlan R.Mulally President and Chief Executive OfficerMark Fields Chief Operating OfficerJames D.Farley,Jr.Executive Vice President,Global Marketing,Sales and Service and LincolnJohn Fleming Executive Vice President,G

62、lobal Manufacturing and Labor AffairsJoseph R.Hinrichs Executive Vice President and President,The AmericasStephen T.Odell Executive Vice President and President,Europe,Middle East and AfricaRobert L.Shanks Executive Vice President and Chief Financial OfficerRaymond F.Day Group Vice President,Communi

63、cationsFelicia J.Fields Group Vice President,Human Resources and Corporate ServicesBennie W.Fowler Group Vice President,Quality and New Model LaunchDavid G.Leitch Group Vice President and General CounselRaj Nair Group Vice President,Global Product DevelopmentZiad S.Ojakli Group Vice President,Govern

64、ment and Community RelationsStuart J.Rowley Vice President and ControllerDavid L.Schoch Group Vice President and President,Asia PacificBernard B.Silverstone Group Vice President,Chairman and Chief Executive Officer,Ford Motor Credit CompanyNicholas J.Smither Group Vice President and Chief Informatio

65、n OfficerHau Thai-Tang Group Vice President,Global PurchasingBoard of Directors Stephen G.Butler(1,5)Kimberly A.Casiano(1,3,5)Anthony F.Earley,Jr.(2,3,5)Edsel B.Ford II(3,4)William Clay Ford,Jr.(3,4)Richard A.Gephardt(3,5)James P.Hackett(3,5)James H.Hance,Jr.(1,4,5)William W.Helman IV(3,4,5)Jon M.Hu

66、ntsman,Jr.(2,3,5)John C.Lechleiter(2,5)Richard A.Manoogian(2,5)Ellen R.Marram(2,3,5)Alan R.Mulally(4)Homer A.Neal(3,4,5)Gerald L.Shaheen(1,5)John L.Thornton(2,4,5)William Clay Ford (Director Emeritus)Committee Membership(1)Audit(2)Compensation(3)Sustainability(4)Finance(5)Nominating and GovernanceOt

67、her Vice PresidentsSteven R.Armstrong President,Ford South AmericaJoseph Bakaj Product Development,Ford of EuropeBirgit Behrendt Global Programs and Purchasing OperationsStephen E.Biegun International Governmental AffairsRobert D.Brown Sustainability,Environment and Safety EngineeringMarin A.Burela

68、President,Changan Ford Automobile Corporation,Ltd.Moray Callum DesignRoelant de Waard Marketing,Sales and Service,Ford of EuropeWilliam P.Dirksen Labor AffairsRobert J.Fascetti Powertrain EngineeringJohn V.Felice U.S.Marketing,Sales and ServiceElena A.FordGlobal Dealer and Consumer ExperienceKumar A

69、.Galhotra EngineeringBruce Hettle North America ManufacturingGary A.Johnson Manufacturing,Ford Asia PacificBurt Jordan Global Vehicle and Powertrain Purchasing and Supplier DiversityJohn T.Lawler Chairman and Chief Executive Officer,Ford Motor ChinaPaul A.Mascarenas Chief Technical Officer,Research

70、and Advanced EngineeringBarb J.Samardzich Chief Operating Officer,Ford of EuropeNeil M.Schloss TreasurerFrederiek Toney President,Global Ford Customer Service DivisionJeffery C.Wood Manufacturing,Ford of EuropeTrevor Worthington Product Development,Asia PacificBoard of Directors and Executives8 Ford

71、 Motor Company|2013 Annual Report Lincoln MKCONE FORD:ONE Ford expands on the companys four-point business plan for achieving success globally.It encourages focus,teamwork and a single global approach,aligning employee efforts toward a common definition of success and optimizing their collective str

72、engths worldwide.The elements of ONE Ford are:ONE TEAM:ONE Ford emphasizes the importance of working together as one team to achieve automotive leadership,which is measured by the satisfaction of our customers,employees and essential business partners,such as our dealers,investors,suppliers,unions/c

73、ouncils and communities.ONE PLAN:Aggressively restructure to operate profitably at the current demand and changing model mix.Accelerate development of new products our customers want and value.Finance our plan and improve our balance sheet.Work together effectively as one team,leveraging our global

74、assets.ONE GOAL:The goal of ONE Ford is to create an exciting and viable company delivering profitable growth for all.Corporate HeadquartersFord Motor Company One American Road Dearborn,MI 48126(313)322-3000Shareholder Account AssistanceComputershare Trust Company,our transfer agent,maintains the re

75、cords for our registered stockholders and can help you with a variety of stockholder-related services.Computershare offers the DirectSERVICE Investment and Stock Purchase Program.This shareholder-paid program provides an alternative to traditional retail brokerage methods of purchasing,holding and s

76、elling Ford Common Stock.You can contact Computershare through the following methods:Ford Motor Companyc/o Computershare Trust Company,N.A.P.O.Box 43087 Providence,RI 02940-3087 Telephone:(800)279-1237(U.S.and Canada)(781)575-2732(International)E-mail: Website:Stock ExchangesFord Common Stock is lis

77、ted and traded on the New York Stock Exchange in the United States and on stock exchanges in Belgium and France.The NYSE trading symbol is:F Common StockInvestor InformationInvestor information including this report,quarterly financial results,press releases and various other reports are available o

78、nline at .Alternatively,individual investors may contact us at:Ford Motor Company Shareholder Relations One American Road Dearborn,MI 48126 Telephone:(800)555-5259(U.S.and Canada)(313)845-8540(International)Fax:(313)845-6073 E-mail:Security analysts and institutional investors may contact:Ford Motor

79、 Company Investor Relations One American Road Dearborn,MI 48126 Telephone:(313)390-4563 Fax:(313)845-6073 E-mail:Annual MeetingThe 2014 Annual Meeting of Shareholders will be held in Wilmington,Delaware on May 8,2014.A notice of the meeting and instructions for voting will be mailed to shareholders

80、in advance.Shareholder InformationFord Motor Company|2013 Annual Report 9For more information visit Financial Content*Financial information contained herein(pages 10-147)is excerpted from the Annual Report on Form 10-K for the year ended December 31,2013 of Ford Motor Company,which is available on o

81、ur website at .10 Managements Discussion and Analysis of Financial Condition and Results of Operations 60 Quantitative and Qualitative Disclosures About Market Risk 65 Report of Independent Registered Public Accounting Firm 66 Consolidated Income Statement 66 Consolidated Statement of Comprehensive

82、Income 67 Sector Income Statement 68 Consolidated Balance Sheet 69 Sector Balance Sheet 70 Condensed Consolidated Statement of Cash Flows 7 1 Condensed Sector Statement of Cash Flows 72 Consolidated Statement of Equity 73 Notes to the Financial Statements 145 Selected Financial Data 146 Employment D

83、ata 147 Managements Report on Internal Control Over Financial Reporting 147 New York Stock Exchange Required Disclosures 147 Market for Common Equity and Related Stockholder Matters10 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Oper

84、ationsOVERVIEW RevenueOur Automotive sectors revenue is generated primarily by sales of vehicles,parts,and accessories;we generally treat sales and marketing incentives as a reduction to revenue.Revenue is recorded when all risks and rewards of ownership are transferred to our customers(generally,ou

85、r dealers and distributors).For the majority of sales,this occurs when products are shipped from our manufacturing facilities.This is not the case,however,with respect to vehicles produced for sale to daily rental car companies that are subject to a guaranteed repurchase option.These vehicles are ac

86、counted for as operating leases,with lease revenue and profits recognized over the term of the lease.When we sell the returned vehicle at auction,we recognize a gain or loss on the difference,if any,between actual auction value and the projected auction value.In addition,revenue for finished vehicle

87、s we sell to customers or vehicle modifiers on consignment is not recognized until the vehicle is sold to the ultimate customer.Most of the vehicles sold by us to our dealers and distributors are financed at wholesale by Ford Credit.Upon Ford Credit originating the wholesale receivable related to a

88、dealers purchase of a vehicle,Ford Credit pays cash to the relevant legal entity in our Automotive sector in payment of the dealers obligation for the purchase price of the vehicle.The dealer then pays the wholesale finance receivable to Ford Credit when it sells the vehicle to a retail customer.Our

89、 Financial Services sectors revenue is generated primarily from interest on finance receivables,net of certain deferred origination costs that are included as a reduction of financing revenue,and such revenue is recognized over the term of the receivable using the interest method.Also,revenue from o

90、perating leases is recognized on a straight-line basis over the term of the lease.Income is generated to the extent revenues exceed expenses,most of which are interest,depreciation,and operating expenses.Transactions between our Automotive and Financial Services sectors occur in the ordinary course

91、of business.For example,we offer special retail financing and lease incentives to dealers customers who choose to finance or lease our vehicles from Ford Credit.The estimated cost for these incentives is recorded as revenue reduction to Automotive sales at the later of the date the related vehicle s

92、ales to our dealers are recorded or the date the incentive program is both approved and communicated.In order to compensate Ford Credit for the lower interest or lease rates offered to the retail customer,we pay the discounted value of the incentive directly to Ford Credit when it originates the ret

93、ail finance or lease contract with the dealers customer.Ford Credit recognizes the amount over the life of retail finance contracts as an element of financing revenue and over the life of lease contracts as a reduction to depreciation.See Note 1 of the Notes to the Financial Statements for a more de

94、tailed discussion of transactions and payments between our Automotive and Financial Services sectors.Costs and ExpensesOur income statement classifies our Automotive total costs and expenses into two categories:(i)cost of sales,and(ii)selling,administrative,and other expenses.We include within cost

95、of sales those costs related to the development,manufacture,and distribution of our vehicles,parts,and accessories.Specifically,we include in cost of sales each of the following:material costs(including commodity costs);freight costs;warranty,including product recall and customer satisfaction progra

96、m costs;labor and other costs related to the development and manufacture of our products;depreciation and amortization;and other associated costs.We include within selling,administrative,and other expenses labor and other costs not directly related to the development and manufacture of our products,

97、including such expenses as advertising and sales promotion costs.Certain of our costs,such as material costs,generally vary directly with changes in volume and mix of production.In our industry,production volume often varies significantly from quarter to quarter and year to year.Quarterly production

98、 volumes experience seasonal shifts throughout the year(including peak retail sales seasons,and the impact on production of model changeover and new product launches).As we have seen in recent years,annual production volumes are heavily impacted by external economic factors,including the pace of eco

99、nomic growth and factors such as the availability of consumer credit and cost of fuel.Ford Motor Company|2013 Annual Report 11Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)As a result,we analyze the profit impact of certain cost changes holding consta

100、nt present-year volume and mix and currency exchange,in order to evaluate our cost trends absent the impact of varying production and currency exchange levels.We analyze these cost changes in the following categories:Material excluding commodity costs-primarily reflecting the change in cost of purch

101、ased parts used in the assembly of our vehicles.Commodity costs-reflecting the change in cost for raw materials(such as steel,aluminum,and resins)used in the manufacture of our products.Structural costs-reflecting the change in costs that generally do not have a directly proportionate relationship t

102、o our production volumes,such as labor costs,including pension and health care;other costs related to the development and manufacture of our vehicles;depreciation and amortization;and advertising and sales promotion costs.Warranty and other costs-reflecting the change in cost related to warranty cov

103、erage,including product recalls and customer satisfaction actions,as well as the change in freight and other costs related to the distribution of our vehicles and support for the sale and distribution of parts and accessories.While material(including commodity),freight,and warranty costs generally v

104、ary directly in proportion to production volume,elements within our structural costs category are impacted to differing degrees by changes in production volume.We also have varying degrees of discretion when it comes to controlling the different elements within our structural costs.For example,depre

105、ciation and amortization expense largely is associated with prior capital spending decisions.On the other hand,while labor costs do not vary directly with production volume,manufacturing labor costs may be impacted by changes in volume,for example when we increase overtime,add a production shift or

106、add personnel to support volume increases.Other structural costs,such as advertising or engineering costs,do not necessarily have a directly proportionate relationship to production volume.Our structural costs generally are within our discretion,although to varying degrees,and can be adjusted over t

107、ime in response to external factors.We consider certain structural costs to be a direct investment in future growth and revenue.For example,increases in structural costs are necessary to grow our business and improve profitability as we expand around the world,invest in new products and technologies

108、,respond to increasing industry sales volume,and grow our market share.Automotive total costs and expenses for full-year 2013 was$135.2 billion.Material costs(including commodity costs)make up the largest portion of our Automotive total costs and expenses,representing in 2013 about two-thirds of the

109、 total amount.Of the remaining balance of our Automotive costs and expenses,the largest piece is structural costs.Although material costs are our largest absolute cost,our margins can be affected significantly by changes in any category of costs.Key Economic Factors and Trends Affecting the Automoti

110、ve Industry Currency Exchange Rate Volatility.The U.S.Federal Reserve has begun reducing the pace of financial asset purchases,and the resulting shifts in capital flows have contributed to downward pressure on several emerging market currencies.In some cases that pressure is aggravated by high infla

111、tion,unstable policy environments,or both.Additionally,the yen has depreciated significantly over the last year as a result of policy changes by the Japanese government and Bank of Japan.This adds significant potential downward pressure on vehicle pricing across many markets globally.In most markets

112、,exchange rates are market-determined,and all are impacted by many different macroeconomic and policy factors,and thus likely to remain volatile.In some other markets,exchange rates are heavily influenced or controlled by governments.Excess Capacity.According to IHS Automotive,an automotive research

113、 firm,the estimated automotive industry global production capacity for light vehicles of about 107 million units exceeded global production by about 23 million units in 2013.In North America and Europe,the two regions where the majority of industry revenue and profits are earned,excess capacity as a

114、 percent of production in 2013 was an estimated 7%and 34%,respectively.In China,the auto industry also witnessed excess capacity at 31%of production in 2013,as manufacturers competed to capitalize on Chinas future market potential.According to production capacity data projected by IHS Automotive,glo

115、bal excess capacity conditions could continue for several years at an average of about 25 million units per year during the period from 2014 to 2018.For more information visit 12 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operation

116、s(Continued)Pricing Pressure.Excess capacity,coupled with a proliferation of new products being introduced in key segments,will keep pressure on manufacturers ability to increase prices.In North America,the industry restructuring of the past few years has allowed manufacturers to better match produc

117、tion with demand,although Japanese and Korean manufacturers also have capacity(located outside of the region)directed to North America.In the future,Chinese and Indian manufacturers are expected to enter U.S.and European markets,further intensifying competition.Although there has been a modest incre

118、ase in new vehicle pricing in the U.S.market during 2013,it seems likely that over the long term intense competition and excess capacity will continue to put downward pressure on inflation-adjusted prices for similarly-contented vehicles in the United States and contribute to a challenging pricing e

119、nvironment for the automotive industry.In Europe,the excess capacity situation was exacerbated by weakening demand and the lack of reductions in existing capacity,such that negative pricing pressure is expected to continue for the foreseeable future.Commodity and Energy Price Increases.Despite weak

120、demand conditions,light sweet crude oil prices increased from an average of$79 per barrel in 2010 to$95 per barrel in 2011,before declining slightly to about$94 per barrel in late 2012.In 2013,oil prices rose slightly to$98 per barrel.Commodity prices have declined recently,but over the longer term

121、prices are likely to trend higher given global demand growth.Vehicle Profitability.Our financial results depend on the profitability of the vehicles we sell,which may vary significantly by vehicle line.In general,larger vehicles tend to command higher prices and be more profitable than smaller vehic

122、les,both across and within vehicle segments.For example,in North America,our larger,more profitable vehicles had an average contribution margin that was about 130%of our total average contribution margin across all vehicles,whereas our smaller vehicles had significantly lower contribution margins.As

123、 we execute our One Ford plan,we are working to create best-in-class vehicles on global platforms that contribute higher margins,and offering a more balanced portfolio of vehicles with which we aim to be among the leaders in fuel efficiency in every segment in which we compete.Increasing Sales of Sm

124、aller Vehicles.Like other manufacturers,we are increasing our participation in newly-developed and emerging markets,such as Brazil,Russia,India,and China,in which vehicle sales are expected to increase at a faster rate than in most mature markets.The largest segments in these markets are small vehic

125、les(i.e.,Sub-B,B,and C segments).To increase our participation in these fast-growing markets,we are significantly increasing our production capacity,directly or through joint ventures.In addition,we expect that increased demand for smaller,more fuel-efficient vehicles will continue in the mature mar

126、kets of North America and Europe and,consequently,we have seen and expect in the future strong demand in those markets for our small car offerings(including our new Ford Fiesta and Focus models that are based on global platforms).Although we expect positive contribution margins from higher small veh

127、icle sales,one result of increased production of small vehicles may be that,over time,our average per unit margin decreases because small vehicles tend to have lower margins than medium and large vehicles.Trade Policy.To the extent governments in various regions erect or intensify barriers to import

128、s,or implement currency policy that advantages local exporters selling into the global marketplace,there can be a significant negative impact on manufacturers based in markets that promote free trade.While we believe the long-term trend is toward the growth of free trade,we have noted with concern r

129、ecent developments in a number of regions.In Asia Pacific Africa,for example,the recent dramatic depreciation of the yen significantly reduces the cost of exports into the United States,Europe,and other global markets by Japanese manufacturers.Over a period of time,the emerging weakness of the yen c

130、an contribute to other countries pursuing weak currency policies by intervening in the exchange rate markets.This is particularly likely in other Asian countries,such as South Korea.As another example,government actions in South America to incentivize local production and balance trade are driving t

131、rade frictions between South American countries and also with Mexico,resulting in business environment instability and new trade barriers.We will continue to monitor and address developing issues around trade policy.Other Economic Factors.The eventual implications of higher government deficits and d

132、ebt,with potentially higher long-term interest rates,could drive a higher cost of capital over our planning period.Higher interest rates and/or taxes to address the higher deficits also may impede real growth in gross domestic product and,therefore,vehicle sales over our planning period.For addition

133、al information on our assessment of the business environment,refer to the“Outlook”section below.Ford Motor Company|2013 Annual Report 13Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Trends and Strategies We remain firm in our belief that our continued

134、 focus on executing the four key priorities of our One Ford plan enables us to go further for our customers,dealers,suppliers,employees,shareholders,and other key constituencies:Aggressively restructure to operate profitably at the current demand and changing model mix;Accelerate development of new

135、products our customers want and value;Finance our plan and improve our balance sheet;and Work together effectively as one team,leveraging our global assets.Despite the external economic environment in recent years,we have made significant progress in transforming our business.Aggressively Restructur

136、e to Operate ProfitablyBrands.In recent years,we have eliminated a number of brands from our portfolio in order to devote fully our financial,product development,production,and marketing and sales and services resources toward growing our Ford and Lincoln brands.Manufacturing.We are committed to mai

137、ntaining an appropriate manufacturing footprint in markets around the world,both in the more mature markets in which we have an established presence,and in fast-growing newly-developed and emerging markets.We are making substantial investments in newly-developed and emerging markets,including in Chi

138、na,India,and Thailand,to increase our production capacity with flexible new manufacturing plants.We and our unconsolidated affiliates in Asia Pacific Africa have launched four new plants in the past two years,and have announced that we expect to complete six more plants in the region by mid-decade.W

139、e also are making substantial investments in North America to grow production,including the addition of 200,000 annual incremental units of production capacity during 2013 and significant hiring in the United States as part of our manufacturing capacity expansions.In 2014,we are increasing capacity

140、or adding production at six of our assembly plants in the United States.In Europe,however,we are reducing our capacity.As part of our Europe transformation plan,we completed the planned closures of two manufacturing facilities in the United Kingdom in 2013,and will close our Genk,Belgium manufacturi

141、ng facility at the end of 2014.These and other actions are expected to reduce our employment levels and production capacity in Europe,excluding Russia,by 13%and 18%,respectively.Suppliers.We continue to work to strengthen our global supply base.As part of this process,we have been reducing the globa

142、l number of production suppliers from 3,300 in 2004 to about 1,200 at year-end 2013.We have identified plans that will take us to a target of about 750 suppliers,and we are confident that our consolidation efforts will result in a stronger and healthier supply base.We continue to work closely with o

143、ur suppliers to address any near-term capacity constraints as we continue to ramp up production.In addition,our move to global vehicle platforms increases our ability to source to common suppliers for the total global volume of vehicle components resulting in a smaller number of suppliers receiving

144、a greater volume of purchases to support our global vehicle platforms and allowing us to gain greater economies of scale.Ford and Lincoln Dealerships.We have over 11,000 dealerships worldwide.Our dealers are a source of strength around the world,representing the face of Ford to our customers and loc

145、al communities.Our goal is to achieve a profitable dealer network by rightsizing the number of dealerships,identifying the right locations with modern facilities that deliver an innovative and engaging sales and service experience for our retail customers.In 2013,we added about 100 dealers in China,

146、bringing the total number of Ford dealers in China to more than 600.We plan to add dealers in other growth markets as well.In the United States,our Ford and Lincoln network had about 3,260 outlets at the end of 2013.Product Development.Our One Ford global product development system is fully operatio

147、nalized,utilizing global platforms to deliver customer-focused programs rapidly and efficiently across global markets.Through our“hub and satellite”approach,one lead product development engineering centerthe hubis assigned for each global vehicle line,thereby ensuring global scale and efficiency thr

148、ough common designs,parts,suppliers,and manufacturing processes.The hubs are supported by regional engineering centers-satellites-which also help deliver products tuned to local market customer preferences while maintaining global design DNA.For more information visit 14 Ford Motor Company|2013 Annu

149、al Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Our One Ford global product development process utilizes global platforms to deliver customer-focused programs rapidly and efficiently across global markets.Significant progress has been made and

150、 continues on our commitment to consolidate platforms.In 2007,we utilized 27 different vehicle platforms;we now have 15 total platforms,and are on track to meet our target of nine core platforms globally.In 2013,about 85%of our global vehicle volume was produced off of nine global core platforms.By

151、2016,99%of our global vehicle volume will come off of our nine global core platforms.We are able to reinvest the savings of this platform consolidation back into product development,introducing more products at a faster product cadence,and better profitability.Accelerate Development of New Products

152、Our Customers Want and ValueOur product launch schedule for 2014 is the most aggressive in our history.We will launch 23 all-new or significantly refreshed vehicles around the worldmore than double the 11 global vehicles launched in 2013.In North America,we will have 16 launchestriple the number of

153、vehicles launched in 2013.Globally,150%of our product portfolio will change with all-new or significantly refreshed vehicles between 2014 and 2018.Our industry-leading refresh rate results in continuous improvement,and we expect to have the lowest average age for global passenger vehicles in 2014.Du

154、ring 2014,we will launch an all-new Mustang,which will be available in the United States this fall,in Europe in early 2015,and in China and other Asia-Pacific markets in 2015.Mustang will be available with three engines offering a broader power of choice,and world-class ride and handling enabled by

155、a fully independent suspension.An all-new F-150 will be available in late 2014 with an all-new high-strength steel frame and advanced aluminum alloy body,which will result in up to 700 pounds of weight savings to help the F-150 tow more,haul more,accelerate quicker,and stop shorter,all with better g

156、as mileage.The new F-150 also will introduce 11 new class-exclusive features,including a 360-degree camera view,integrated loading ramps stowed in the pickup bed,400-watt power outlets inside the cab,LED headlights and sideview mirror spotlights,and remote tailgate release.Four engine choices will b

157、e available to provide unmatched power to meet almost any customer need.We remain committed to reinventing Lincoln into a world-class luxury brand with a client experience to match.Our Lincoln brand transformation began with the Lincoln MKZ which was completely redesigned for 2013.The Lincoln MKZ is

158、 the first of four all-new vehicles that we will be launching through 2016 as part of our reinvention.The Lincoln MKZ was named 2013s best compact premium vehicle in the J.D.Power APEAL Study,with January 2014 sales in the United States up 368%year-over-year.In 2014,we are adding the Lincoln MKC to

159、the Lincoln line-up,providing an entry in the important and fast-growing small premium utility segment,one of the fastest growing premium segments in both the United States and China.Our global product strategy is to serve customers in all markets with a full family of best in class vehiclessmall,me

160、dium and large;cars,utilities and trucks;each delivering the highest quality,fuel efficiency,safety,smart design,and valueand delivering profitable growth for all.The fundamentals of our global product strategy are consistent,producing vehicles that:Have bold,emotive exterior designs Are great to dr

161、ive Are great to sit in(second home comfort,convenience,exceptional quietness)Provide fuel economy as a reason to buy Are unmistakably a Ford or Lincoln in look,sound,and feel Provide exceptional value and qualityDeveloping products customers want and delivering value for Ford and Lincoln demands co

162、nsistent focus on our commitment in four key areasQuality,Green,Safe,and Smart.Quality.We have made significant strides toward improving quality since 2005.One way we track this is in the incidence of warranty repairs per 1,000 vehicles in the first 3 months of service.Global warranty repairs have f

163、allen 66%from 2005 to 2013.As the incidence of repair has come down,so has the average warranty cost per unit in the first 3 months in service.Over the same period,global warranty repair cost per unit has improved by 54%,including improvements of more than 70%in Asia Pacific Africa,more than 60%in E

164、urope and South America,and about 45%in North America.Ford Motor Company|2013 Annual Report 15Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)A challenge we have faced recently has been customer satisfaction issues brought on by the rapid rise in the le

165、vel of consumer technology we have introduced in our vehicles.One area of significant focus is MyFord Touch.Since launch of the feature in the 2011 model year,we have reduced“Things Gone Wrong”(TGW)per affected unit by more than 50%.At the same time,we have introduced more products with MyFord Touch

166、,and the demand for the technology remains high.In addition,overall vehicle customer satisfaction is higher on vehicles with MyFord Touch than those without.Two other areas of focus for us have been issues related to certain of our transmissions and some interior items.As we are doing with MyFord To

167、uch,we have implemented high-leverage quality actions to address the transmission and interior issues.Green.Our commitment and approach to sustainability is unique in the industry.We prefer to provide our customers the power of choice,with a full technology range of gasoline,diesel,hybrid,plug-in hy

168、brid,and electric propulsion systems.We are also electrifying our most popular global platforms instead of one-off specialty models,so we have the manufacturing flexibility to balance our production to meet customer demand.For example,we produce vehicles with gas engines,EcoBoost,hybrid,plug-in hybr

169、id,and full electrics at our Michigan Assembly Plant.The EcoBoost engine is the centerpiece of our Blueprint for Sustainability.In 2009,we embarked on a strategy to populate our product line with a portfolio of modern engines that uses advanced technologies to deliver high power output but with smal

170、ler displacements to provide big gains in fuel economy and emissions.The first application of this strategy was the 3.5L V6 EcoBoost engine,which accounts for more than 125 patents on EcoBoost technology and was named one of Wards Ten Best Engines in 2010.The EcoBoost technology migrated to the I4 a

171、rchitectures in 2010 and the 2.0L EcoBoost was named one of Wards Ten Best Engines in 2012 and again in 2013.The 1.0L I3 EcoBoost launched in 2012 and was named International Engine of the Year in 2012 and again in 2013 by Engine Technology International magazine.Wards recently named the 1.0L EcoBoo

172、st one of its ten best engines for 2014.The 2014 Fiesta powered by the 1.0L EcoBoost delivers an EPA-estimated rating of 45 mpg on the highway,which is best-in-class highway fuel economy among all subcompacts offered in the United States.We have produced more than 2 million EcoBoost engines globally

173、 since we launched the engine line in 2009.With the upcoming launches of our MKC,Mustang and F-150,we will introduce the new 2.3L I4 EcoBoost and 2.7L V6 EcoBoost engines.The 2.3L I4 FWD/AWD configuration will be available on the MKC,generating 285 horsepower/305 lb-ft torque.The 2.3L I4 RWD configu

174、ration for the Mustang will generate more than 305 horsepower/300 lb-ft torque.Finally,the new 2.7L V6 EcoBoost engine with Auto Start-Stop has been developed for the new F-150 and will deliver the same power as a mid-range V8 and better fuel economy.We also offer six electrified vehiclesdelivering

175、the power of choice for leading fuel economy across our lineupthe Focus Electric,C-MAX Hybrid,C-MAX Energi,Fusion Hybrid,Fusion Energi,and Lincoln MKZ Hybrid.Our share of the U.S.electrified vehicle market more than doubled in 2013up approximately 9 percentage points to 15.3 percent for 2013,compare

176、d with 2012.The increase contributed to our 0.5 percentage point increase in overall U.S.market share in 2013,the biggest gain of any full-line automaker.Our sustainability strategy also identifies opportunities to use recycled or renewable material while enabling markets for end-of-life vehicle rec

177、ycling.We are committed to increasing the use of recycled and renewable content in our vehicles.In support of our product development strategy,our material engineers are developing standardized specifications for sustainable materials and working with the recycling industry and our supply base to re

178、duce the environmental impact of components.Safe.Vehicle safety is a critical part of our brand promise to Go Further.We are specifically committed to designing and manufacturing vehicles that achieve high levels of performance in real-world safety and meet or exceed all regulatory requirements for

179、safety.Ford remains among the leaders in vehicle safety,earning a total of 91“Top Safety Picks”from the Insurance Institute for Highway Safety(“IIHS”)more than any other manufacturer in the eight-year history of that crash testing program.For the 2013 model year,13 of our vehicles earned Top Safety

180、Picks from IIHS.We aim to give customers peace of mind and make the world safer by developing advanced safety technologies and making them available across a wide range of vehicles.Our available rear-seat inflatable safety belts,launched on the 2011 Ford Explorer,are an automotive industry exclusive

181、 and have won numerous awards.In the 2013 model year,we expanded the availability of these safety belts in North America to the Ford Flex and the Lincoln MKT and MKZ.The Lane Keeping System,a driver assist feature,was launched in 2011 in Europe on the Ford Focus.Its availability has been expanded to

182、 North America on the 2013 Lincoln MKS,MKT,and MKZ and the Ford Explorer and Fusion.For the 2013 model year,we expanded the availability of Curve Control,a driver assist technology that helps slow the vehicle when it senses the driver is taking a curve too quickly.In North America,Curve Control is n

183、ow offered on the Ford Explorer,Taurus,Flex,and Escape,as well as the Lincoln MKS and MKT.In Europe,it is available on the Ford Kuga.For more information visit 16 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Driv

184、er behavior is a key contributing factor in many vehicle crashes.We have developed an array of programs and technologies that help to encourage safer behavior on the roadways,for both experienced and novice drivers.The Ford Driving Skills for Life(“Ford DSFL”),our flagship driver-education program,d

185、emonstrates our commitment to help new drivers to improve their motoring skills.In the United States,Ford DSFL focuses on teen drivers;in our Asia Pacific Africa markets,the program is aimed at novice drivers of all ages.Smart.Ford continues to build upon its technology leadership by launching new f

186、eatures that make customers lives easier and their driving experience safer and more enjoyable.Examples of recently launched features include Emergency Assistance,Active City Stop,Active Park Assist,Lane Departure Warning,Lane Keeping Assist,Traffic Sign Recognition,Door Edge Protector,Enhanced Traf

187、fic Message Channel,Hands-Free Liftgate,and Multi-Contour Seats.Other exciting concepts are under developmentfeatures that our customers see and appreciate,and make their driving experience safer and more enjoyable.Ford set the benchmark for in-car connectivity systems with SYNC and we are now build

188、ing on that success.We have produced more than 10 million vehicles that are equipped with SYNC,and we expect the total to increase to more than 14 million by 2015 as we launch SYNC globally.We are taking an agnostic approach to in-car connectivity which has three components:built-in,brought-in,and b

189、eamed-in to enable and enhance the customers digital lifestyle.Fords newly established connectivity organization will focus on creating a seamless customer experience both inside and outside the vehicle.Finance Our Plan and Improve Our Balance SheetExecution of our One Ford plan has generated signif

190、icant positive Automotive operating-related cash flow in recent years,which has allowed us to strengthen our balance sheet while continuing to invest in new products that customers want and value,transform and grow our business,pay our debts and obligations as and when they come due,pay a sustainabl

191、e dividend,and provide protection within an uncertain global economic environment.A proof point of this in 2013 was our ability to improve the funded status of our global pension plans by nearly$10 billion,while continuing to invest in new products and grow our business.In addition,we plan to increa

192、se the ongoing amount of capital spending to support product development,growth,restructuring,and infrastructure to about$7.5 billion annually with variation by year.At the same time,we are targeting to reduce our Automotive debt levels to about$10 billion by mid-decade.Further,to provide attractive

193、 returns to our shareholders,our plan includes paying a regular,growing dividend that is sustainable over an economic or business cycle.In 2013,we doubled the quarterly dividend paid on our Common and Class B Stock to$0.10 per share,and we have increased it an additional 25%for the first quarter of

194、2014.Work Together Effectively as One TeamAs part of the One Team approach,we have implemented a disciplined business plan process to regularly review our business environment,risks and opportunities,strategy,and plan,and to identify areas of our plan that need special attention while pursuing oppor

195、tunities to improve our plan.Everyone is included and contributes,openness is encouraged,our leaders are responsible and accountable,we use facts and data to make our decisions,high performance teamwork is a performance criteriaand we follow this process every week,every month,and every quarter,driv

196、ing continuous improvement.We believe this process gives us a clear picture of our business in real time and the ability to respond quickly and decisively to new issues and changing conditionsas we have done in the face of rapid changes in the market and business environment in the last few years.As

197、 needed,we convene daily management meetings to handle potentially acute situations,which allows us to ensure that we are vigorously managing daily developments and moving decisively in response to changing conditions.In addition,we are partnering with and enlisting all of our stakeholders to help u

198、s execute our plan to deal with our business realities and create an exciting and viable business going forward.We are reaching out and listening to customers,dealers,employees,labor unions,suppliers,investors,communities,retirees,and federal,state,and local governments.Each of these constituencies

199、is a critical part of the success of our business going forward.Realizing our goal of profitable growth for all is as important to these stakeholders as it is to our shareholders.Ford Motor Company|2013 Annual Report 17Managements Discussion and Analysis of Financial Condition and Results of Operati

200、ons(Continued)RESULTS OF OPERATIONS TOTAL COMPANYOur net income attributable to Ford Motor Company was$7.2 billion or$1.76 per share of Common and Class B Stock in 2013,an improvement of$1.5 billion or$0.34 per share from 2012.Total Company results are shown below:201320122011(Mils.)(Mils.)(Mils.)In

201、come Pre-tax results(excl.special items)$8,569$7,966$8,763Special items(1,568)(246)(82)Pre-tax results(incl.special items)7,0017,7208,681 (Provision for)/Benefit from income taxes147(2,056)11,541Net income7,1485,66420,222 Less:Income/(Loss)attributable to noncontrolling interests(7)(1)9Net income at

202、tributable to Ford$7,155$5,665$20,213Net income includes certain items(“special items”)that we have grouped into“Personnel and Dealer-Related Items”and“Other Items”to provide useful information to investors about the nature of the special items.The first category includes items related to our effort

203、s to match production capacity and cost structure to market demand and changing model mix and therefore helps investors track amounts related to those activities.The second category includes items that we do not generally consider to be indicative of our ongoing operating activities,and therefore al

204、lows investors analyzing our pre-tax results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results.As detailed in Note 26 of the Notes to the Financial Statements,we allocate special items to a separate reconciling item

205、,as opposed to allocating them among the operating segments and Other Automotive,reflecting the fact that management excludes these items from its review of operating segment results for purposes of measuring segment profitability and allocating resources among the segments.The following table detai

206、ls Automotive sector pre-tax special items in each category:201320122011(Mils.)(Mils.)(Mils.)Personnel and Dealer-Related ItemsSeparation-related actions(a)$(856)$(481)$(176)Mercury discontinuation/Other dealer actions(71)(151)Total Personnel and Dealer-Related Items(856)(552)(327)Other Items U.S.pe

207、nsion lump-sum program(594)(250)FCTA-subsidiary liquidation(103)(4)CFMA restructuring625Loss on sale of two component businesses(174)AAI consolidation(b)136FordSollers gain401Belgium pension settlement(109)Debt reduction actions(60)Other(15)(27)13Total Other Items(712)306245Total Special Items$(1,56

208、8)$(246)$(82)_(a)For 2013,primarily related to separation costs for personnel at the Genk and U.K.facilities.(b)The special item of$136 million is comprised of the$155 million gain from the consolidation of AAI(see Note 23 of the Notes to the Financial Statements),less a related$19 million adjustmen

209、t for sales in September 2012 of Ford-brand vehicles produced by AAI.For more information visit 18 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Not shown in the table above are tax benefits of$2.2 billion,$315 mi

210、llion,and$14.2 billion for 2013,2012,and 2011,respectively,that we consider to be special items.For 2013,these included the impact of a favorable increase in deferred tax assets related to investments in our European operations and the release of valuation allowances held against U.S.state and local

211、 deferred tax assets.For 2011,these primarily consisted of the release of almost all of the valuation allowance against our net deferred tax assets in the United States,Canada,and Spain.Discussion of Automotive sector,Financial Services sector,and total Company results of operations below is on a pr

212、e-tax basis and excludes special items unless otherwise specifically noted.References to records by Automotive segmentsNorth America,South America,Europe,and Asia Pacific Africaare since at least 2000 when we began reporting results for these segments.The chart below shows 2013 pre-tax results by se

213、ctor:Total Company 2013 pre-tax profit of$8.6 billion was among the best in our history.Compared with 2012,total Company pre-tax profit increased by$603 million,explained by higher Automotive sector results.Ford Motor Company|2013 Annual Report 19Managements Discussion and Analysis of Financial Cond

214、ition and Results of Operations(Continued)AUTOMOTIVE SECTOR In general,we measure year-over-year change in Automotive pre-tax operating profit for our total Automotive sector and reportable segments using the causal factors listed below,with revenue and cost variances calculated at present-year volu

215、me and mix and exchange: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,in

216、cluding 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 Contrib

217、ution 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 Other Costs-Primarily measures profit variance driven by absolute c

218、hange in cost categories that typically do not have a directly proportionate relationship to production volume.These include mainly structural costs,described below,as well as all other costs,which include items such as litigation costs and costs related to our after-market parts,accessories,and ser

219、vice business.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 outsid

220、e 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,custome

221、r 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 serv

222、ice pension costs and other postretirement employee benefit costs Exchange-Primarily measures profit variance driven by one or more of the following:(i)impact of gains or losses arising from transactions denominated in currencies other than the functional currency of the locations,including currency

223、 transactions,(ii)effect of remeasuring income,assets,and liabilities of foreign subsidiaries using U.S.dollars as the functional currency,or(iii)results of our foreign currency hedging activities Net Interest and Other Net Interest-Primarily measures profit variance driven by changes in our Automot

224、ive sectors centrally-managed net interest,which consists of interest expense,interest income,fair market value adjustments on our cash equivalents and marketable securities portfolio,and other adjustments Other-consists of fair market value adjustments to our investment in Mazda,as well as other it

225、ems not included in the causal factors defined aboveFor more information visit 20 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)2013 Compared with 2012Total Automotive.The charts below detail key metrics and the c

226、hange in 2013 pre-tax results compared with 2012 by causal factor.Automotive operating margin is defined as Automotive pre-tax results,excluding special items and Other Automotive,divided by Automotive revenue.As shown above,full-year wholesale volume and revenue for the Automotive sector were highe

227、r than a year ago by 12%and 10%,respectively.Operating margin,at 5.4%,and pre-tax profit,at$6.9 billion,were also higher.Higher pre-tax profit primarily reflects favorable marketable factors across all regions,offset partially by higher costs,mainly structural,and unfavorable exchange,principally in

228、 South America.Ford Motor Company|2013 Annual Report 21Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Total costs and expenses for our Automotive sector for 2013 and 2012 was$135.2 billion and$122 billion,respectively,a difference of$13.2 billion.An ex

229、planation of the change is shown below(in billions):2013 Better/(Worse)2012Explanation of change:Volume and mix,exchange,and other$(8.6)Contribution costs(a)Commodity costs(incl.hedging)0.2Material costs excluding commodity costs(0.6)Warranty/Freight(0.4)Other costs(a)Structural costs(2.9)Other(0.3)

230、Special items(0.6)Total$(13.2)_(a)Our key cost change elements are measured primarily at present-year exchange;in addition,costs that vary directly with volume,such as material,freight and warranty costs,are measured at present-year volume and mix.Excludes special items.Results by Automotive Segment

231、.Details by segment of Income before income taxes are shown below for 2013.In 2013,Automotive pre-tax profit was the highest in more than a decade,with record profits in North America and Asia Pacific Africa,an about breakeven result in South America,and a lower loss in Europe than last year.Other A

232、utomotive reflects net interest expense,offset partially by a favorable fair market value adjustment of our investment in Mazda.For more information visit 22 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)North Ame

233、rica Segment.The charts below detail key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor.North America continued to perform well,driven by a strong industry,our strong product line-up,growth in U.S.market share,continued discipline in matching production to real de

234、mand,and a lean cost structureeven as we invested more in product and capacity for future growth.As shown above,North Americas full-year wholesale volume and revenue both improved 11%compared with 2012.Operating margin was 9.9%,0.5 percentage points lower than a year ago,while pre-tax profit was$8.8

235、 billion,up about$400 million.The increase in pre-tax profit for 2013 compared with 2012 is more than explained by favorable market factors,offset partially by higher costs,mainly structural and warranty costs.For the full year,total U.S.market share was up 0.5 percentage points,more than explained

236、by F-Series and Fusion,and U.S.retail share of retail industry was up 0.4 percentage points,more than explained by F-Series,Escape,and Fusion.Ford Motor Company|2013 Annual Report 23Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)South America Segment.T

237、he charts below detail key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor.In South America we are continuing to execute our strategy of expanding our product line-up and progressively replacing legacy products with global One Ford offerings.As shown above,full-yea

238、r wholesale volume and revenue both improved 8%compared with last year.Operating margin was negative 0.3%,and the pre-tax loss was$34 million,both lower than positive results a year ago.The decrease in pre-tax profit for 2013 compared with 2012 is more than explained by higher costs and unfavorable

239、exchange,offset partially by favorable market factors.The higher net pricing reflects partial recovery of the adverse effects of high local inflation and weaker local currencies,along with pricing associated with our new products.For more information visit 24 Ford Motor Company|2013 Annual Report Ma

240、nagements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Europe Segment.The charts below detail key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor.The improvement in Europes 2013 results,as shown above,reflect our continued impl

241、ementation of our transformation plan.Europes full-year wholesale volume and revenue were up less than 1%and 5%,respectively,from a year ago.Operating margin was negative 5.8%and the pre-tax loss was$1.6 billion,both improved from a year ago despite higher restructuring costs of about$400 million,lo

242、wer industry volume,and unfavorable exchange.The improvement in pre-tax results is explained by favorable market factors,offset partially by higher costs and unfavorable exchange.Europes full-year market share,at 7.8%,was down 0.1 percentage points,mainly reflecting low availability of Mondeo,S-MAX,

243、and Galaxy in the first quarter.For the year,total Europe retail share of the retail passenger car industry was up one percentage point,primarily due to B-MAX and Fiesta.Our commercial vehicle market share for the full year,at 9.2%,was up 0.7 percentage points compared with the prior year,our highes

244、t share since 2007.In 2013,Ford was the fastest-growing commercial vehicle brand,and Transit nameplate was the leader in the commercial van segment.Ford Motor Company|2013 Annual Report 25Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Asia Pacific Afri

245、ca Segment.The charts below detail key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor.Our strategy in Asia Pacific Africa continues to be to grow aggressively with an expanding portfolio of global One Ford products with manufacturing hubs in China,India,and ASEAN.

246、As shown above,full-year wholesale volume and revenue improved 30%and 17%,respectively,compared with a year ago.Operating margin was 3.5%and pre-tax profit was$415 million,both substantially improved from last years results.The improvement in 2013 pre-tax results is explained by favorable market fac

247、tors and other items,including higher royalties from our joint ventures and insurance recoveries,offset partially by higher costs associated with investments to support future growth,and unfavorable exchange.Our market share in the region was a record 3.5%for the full year,up by 0.7 percentage point

248、s compared with 2012.The improvement was driven by China,where our market share for the full year rose to a record 4.1%,up by 0.9 percentage points compared with 2012.For more information visit 26 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Re

249、sults of Operations(Continued)2012 Compared with 2011Total Automotive.The charts below detail key metrics and the change in 2012 pre-tax results compared with 2011 by causal factor.Automotive operating margin is defined as Automotive pre-tax results,excluding special items and Other Automotive,divid

250、ed by Automotive revenue.As shown above,all four key metrics were about equal for 2012 compared with 2011,with pre-tax profit primarily reflecting higher net pricing and lower compensation costs(primarily the non-repeat of 2011 UAW ratification bonuses),offset by higher costs,mainly structural,and u

251、nfavorable volume and mix.Ford Motor Company|2013 Annual Report 27Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Total costs and expenses for our Automotive sector for 2012 and 2011 was$122 billion and$122.7 billion,respectively,a difference of about$7

252、00 million.An explanation of the change is shown below(in billions):2012 Better/(Worse)2011Explanation of change:Volume and mix,exchange,and other$2.9Contribution costs(a)Commodity costs(incl.hedging)Material costs excluding commodity costs(0.9)Warranty/Freight0.8Other costs(a)Structural costs(1.5)O

253、ther(0.2)Special items(0.4)Total$0.7_(a)Our key cost change elements are measured primarily at present-year exchange;in addition,costs that vary directly with volume,such as material,freight and warranty costs,are measured at present-year volume and mix.Excludes special items.Results by Automotive S

254、egment.Details by segment of Income before income taxes are shown below for 2012.Total Automotive pre-tax profit in 2012 was more than explained by profit from North America.South America was profitable and Asia Pacific Africa incurred a small loss,while Europe reported a substantial loss.The loss i

255、n Other Automotive was more than explained by net interest expense.For more information visit 28 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)North America Segment.The charts below detail key metrics and the chan

256、ge in 2012 pre-tax results compared with 2011 by causal factor.As shown above,all four key metrics increased for 2012 compared with 2011.The increase in pre-tax profit for 2012 compared with 2011 primarily reflected favorable market factors,lower contribution costs,and lower compensation costs(prima

257、rily the non-repeat of 2011 UAW ratification bonuses),offset partially by higher structural cost.For the year,total U.S.market share was down 1.3 percentage points,while U.S.retail share of retail industry declined 0.7 percentage points.The declines largely reflected the discontinuation of the Crown

258、 Victoria and Ranger,capacity constraints,and reduced availability associated with our Fusion and Escape model changeovers.Ford Motor Company|2013 Annual Report 29Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)South America Segment.The charts below det

259、ail key metrics and the change in 2012 pre-tax results compared with 2011 by causal factor.As shown above,all four key metrics decreased for 2012 compared with 2011.The decrease in pre-tax profit for 2012 compared with 2011 primarily reflects higher costs and unfavorable exchange,primarily in Brazil

260、,offset partially by higher net pricing.For more information visit 30 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Europe Segment.The charts below detail key metrics and the change in 2012 pre-tax results compare

261、d with 2011 by causal factor.All four key metrics declined for 2012 compared with 2011.The decline in wholesales and revenue primarily reflected lower industry sales and market share,and reductions in dealer stocks.Exchange was also a contributing factor adversely affecting net revenue.The decline i

262、n 2012 pre-tax results compared with 2011 primarily reflected unfavorable market factors.Ford Motor Company|2013 Annual Report 31Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Asia Pacific Africa Segment.The charts below detail key metrics and the chan

263、ge in 2012 pre-tax results compared with 2011 by causal factor.As shown above,all four key metrics improved for 2012 compared with 2011.The improvement in 2012 pre-tax results compared with 2011 is more than explained by higher net pricing,favorable volume and mix,and favorable exchange,offset parti

264、ally by higher costs associated with new products and investments to support higher volumes and future growth.Our market share in the region increased sequentially each quarter during 2012,with fourth quarter 2012 market share at 3.4%,as we continued to benefit from increased capacity and new produc

265、ts.Further demonstrating the growth we are experiencing in Asia Pacific Africa,since 2009,wholesale volume has about doubled,market share has improved by half a point and net revenue has increased by about two-thirds even though our reported revenue does not include the revenue of unconsolidated joi

266、nt ventures in China.For more information visit 32 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)FINANCIAL SERVICES SECTORAs shown in the total Company discussion above,we present our Financial Services sector res

267、ults in two segments,Ford Credit and Other Financial Services.Ford Credit,in turn,has two operations,North America and International.In general,we measure year-over-year changes in Ford Credits pre-tax results using the causal factors listed below:Volume:Volume primarily measures changes in net fina

268、ncing 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).Volume changes are primarily driven by the volume of new and used vehicle sales and leases,the extent to which Ford Credit pu

269、rchases 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-e

270、ffective funding for the purchase of retail installment sale and lease contracts and to provide wholesale financing.Financing Margin:Financing margin variance is the period-to-period change in financing margin yield multiplied by the present period average receivables.Financing margin yield equals r

271、evenue,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 p

272、ricing,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.For analysis purposes,management spli

273、ts 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 c

274、hanges in historical trends in credit losses and recoveries,changes in the composition and size of Ford Credits 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

275、 Accounting Estimates-Allowance for Credit Losses”section below.Lease Residual:Lease residual measures changes to residual performance.For analysis purposes,management splits residual performance primarily into residual gains and losses,and the change in accumulated supplemental depreciation.Residua

276、l 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 Credits estimat

277、e 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

278、Subject to Operating Leases”section below.Other:Primarily includes operating expenses,other revenue,and insurance expenses.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

279、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),which are included in unallocated risk management,and other miscellaneous items.Ford Motor Company|2013 Annual Report 33M

280、anagements Discussion and Analysis of Financial Condition and Results of Operations(Continued)2013 Compared with 2012The chart below details the change in Ford Credits 2013 pre-tax results compared with 2012 by causal factor:The improvement of$59 million is more than explained by higher volume,prima

281、rily in North America,driven by an increase in leasing reflecting changes in Fords marketing programs,as well as higher non-consumer finance receivables due to higher dealer stocks.Partial offsets are higher credit losses due to lower credit loss reserve reductions in all operations,and unfavorable

282、residual performance related to lower than expected auction values in North America.Results of Ford Credits operations and unallocated risk management for the years ended December 31 are shown below(in millions):Income before income taxes201320122013 Over/(Under)2012 North America$1,438$1,550$(112)I

283、nternational371249122 Unallocated risk management(53)(102)49Income before income taxes$1,756$1,697$59The full year decrease in North America pre-tax profit is primarily explained by lower financing margin reflecting the run-off of higher yielding assets originated in prior years,unfavorable residual

284、 performance due to lower auction values in the United States,and higher credit losses due to lower credit loss reserve reductions.A partial offset is higher volume,primarily driven by an increase in leasing reflecting changes in Fords marketing programs,and higher non-consumer finance receivables d

285、ue to higher dealer stocks.The full year increase in International pre-tax profit is primarily attributable to Europe,explained by higher financing margin primarily driven by lower borrowing costs,as well as lower residual losses,partially offset by lower credit loss reserve reductions.The improveme

286、nt in unallocated risk management primarily reflects the non-recurrence of unfavorable performance in market valuation adjustments to derivative features included in the Ford Upgrade Exchange Linked(“FUEL”)notes.For more information visit 34 Ford Motor Company|2013 Annual Report Managements Discussi

287、on and Analysis of Financial Condition and Results of Operations(Continued)Ford Credits receivables,including finance receivables and operating leases,at December 31 were as follows(in billions):20132012Net Receivables Finance receivables-North America Consumer-Retail financing$40.9$39.5Non-Consumer

288、 Dealer financing(a)22.119.5 Other1.01.1Total finance receivables-North America(b)64.060.1Finance receivables-InternationalConsumer-Retail financing10.89.0Non-ConsumerDealer financing(a)8.37.5Other0.40.4Total finance receivables-International(b)19.516.9Unearned interest supplements (1.5)(1.5)Allowan

289、ce for credit losses (0.4)(0.4)Finance receivables,net 81.675.1Net investment in operating leases(b)(c)18.313.6Total net receivables$99.9$88.7 Managed ReceivablesTotal net receivables$99.9$88.7Unearned interest supplements and residual support3.12.6Allowance for credit losses0.40.4Other,primarily ac

290、cumulated supplemental depreciationTotal managed receivables(d)$103.4$91.7_(a)Dealer financing primarily includes wholesale loans to dealers to finance the purchase of vehicle inventory.(b)At December 31,2013 and 2012,includes consumer receivables before allowance for credit losses of$27.7 billion a

291、nd$29.3 billion,respectively,and non-consumer receivables before allowance for credit losses of$23.9 billion and$21.6 billion,respectively,that have been sold for legal purposes in securitization transactions but continue to be reported in Ford Credits consolidated financial statements.In addition,a

292、t December 31,2013 and 2012,includes net investment in operating leases before allowance for credit losses of$8.1 billion and$6.3 billion,respectively,that have been included in securitization transactions but continue to be reported in Ford Credits financial statements.The receivables and net inves

293、tment in operating leases are available only for payment of the debt issue by,and other obligations of,the securitization entities that are parties to those securitization transactions;they are not available to pay Ford Credits other obligations or the claims of its other creditors.Ford Credit holds

294、 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.See Note 16 of the Notes to the Financial Statements for more information regarding securitization transactions.

295、(c)Beginning in the fourth quarter,Ford Credit changed its accounting method to include unearned interest supplements and residual support in Net investment in operating leases.These amounts are amortized to Depreciation on vehicles subject to operating leases.The prior period was revised to conform

296、 to current year presentation.There is no change to profit before income tax or net income.(d)The prior period was revised to conform to current year presentation.Managed receivables at December 31,2013 increased from year-end 2012,driven by increases in non-consumer and consumer finance receivables

297、 in all operations and increases in leasing in North America.Ford Motor Company|2013 Annual Report 35Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Credit Losses.The charts below detail annual trends of charge-offs(credit losses,net of recoveries),loss

298、-to-receivables(“LTR”)ratios(charge-offs divided by average managed receivables),credit loss reserve,and Ford Credits credit loss reserve as a percentage of end-of-period(“EOP”)managed receivables:Ford Credits charge-offs were up from its record-low in 2012,primarily reflecting higher severity and l

299、ower recoveries in North America,and higher losses in International.The LTR ratio was up 2 basis points from 2012 and is Ford Credits second lowest on record.The credit loss reserve and the reserve as a percentage of EOP receivables were both lower than a year ago,reflecting the continuation of low

300、charge-offs.In purchasing retail finance and operating lease contracts,Ford Credit uses a proprietary scoring system that classifies contracts using several factors,such as credit bureau information,consumer credit risk scores(e.g.,FICO score),and contract characteristics.In addition to Ford Credits

301、 proprietary scoring system,it considers other factors,such as employment history,financial stability,and capacity to pay.At December 31,2013 and 2012,Ford Credit classified between 5%and 6%of the outstanding U.S.retail finance and operating lease contracts in its portfolio as high risk at contract

302、inception.For additional discussion,see“Critical Accounting Estimates-Allowance for Credit Losses”below.Residual Risk.Ford Credit is exposed to residual risk on operating leases and similar balloon payment products where the customer may return the financed vehicle to Ford Credit.Residual risk is th

303、e possibility that the amount Ford Credit obtains from returned vehicles will be less than its estimate of the expected residual value for the vehicle.Ford Credit estimates the expected residual value by evaluating recent auction values,return volumes for its leased vehicles,industry-wide used vehic

304、le prices,marketing incentive plans,and vehicle quality data.Changes in expected residual values impact the depreciation expense,which is recognized on a straight-line basis over the life of the lease.For additional discussion,see“Critical Accounting Estimates-Accumulated Depreciation on Vehicles Su

305、bject to Operating Leases”below.North America Retail Operating Lease ExperienceFord Credit uses various statistics to monitor its residual risk:Placement volume measures the number of leases Ford Credit purchases in a given period;Termination volume measures the number of vehicles for which the leas

306、e has ended in a given period;and Return volume reflects the number of vehicles returned to Ford Credit by customers at lease end.For more information visit 36 Ford Motor Company|2013 Annual Report Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)North A

307、merica accounted for 99%of Ford Credits total operating leases at December 31,2013.The following table shows operating lease placement,termination,and return volumes for this operation for the years ending December 31(in thousands,except for percentages):201320122011Placements365257219Terminations17

308、4126246Returns11776144Memo:Return Rates67%60%59%In 2013,placement volumes were up 108,000 units compared with 2012,primarily reflecting changes in Fords marketing programs and higher industry sales.Termination volumes increased by 48,000 units compared with 2012,reflecting higher placements in 2011

309、relative to prior years.Return volumes increased 41,000 units compared with 2012,reflecting higher terminations and higher return rates.U.S.Ford and Lincoln Brand Operating Lease Experience.The following charts show annual return volumes and auction values at incurred vehicle mix for vehicles return

310、ed in the respective periods.In 2013,Ford Credits U.S.lease originations represented about 18%of total U.S.retail sales of Ford and Lincoln brand vehicles,and the U.S.operatinglease portfolio accounted for about 88%of Ford Credits total net investment in operating leases at December 31,2013.Ford Cre

311、dits lease return volumes in 2013 were up significantly from 2012,reflecting primarily the higher lease placements in 2011 relative to prior years.Its 2013 lease return rate was 71%,up 9 percentage points compared with 2012 reflecting lower auction values.In 2013,Ford Credits auction values for both

312、 24-month and 36-month vehicles declined,consistent with industry trends.Ford Credits worldwide net investment in operating leases was$18.3 billion at the end of 2013,up from$13.6 billion in 2012.Ford Motor Company|2013 Annual Report 37Managements Discussion and Analysis of Financial Condition and R

313、esults of Operations(Continued)2012 Compared with 2011The chart below details the change in Ford Credits 2012 pre-tax results compared with 2011 by causal factor.The unfavorable lease residual performance primarily reflected lower residual gains,driven by lower termination and return volumes and low

314、er per-unit gains.On average,vehicles were sold at gains in 2011 and 2012,but Ford Credit had fewer lease vehicles returned.For 2012,the lower return volume and smaller per-unit gains resulted in$523 million adverse residual performance when compared to 2011.Lower financing margin is more than expla

315、ined by a reduction in revenue from consumer finance receivables and operating leases in North America.This decline reflected the run-off of higher yielding consumer finance receivables and operating leases originated in prior years and the origination in more recent years of lower yielding assets.I

316、nterest expense as a percent of average receivables decreased,but at a lower rate.LIQUIDITY AND CAPITAL RESOURCESAutomotive SectorOur Automotive liquidity strategy includes ensuring that we have sufficient liquidity available with a high degree of certainty throughout the business cycle by generatin

317、g cash from operations and maintaining access to other sources of funding.We target to have an average ongoing Automotive gross cash balance of about$20 billion.We expect to have periods when we will be above or below this amount due to(i)future cash flow expectations such as for pension contributio

318、ns,debt maturities,capital investments,or restructuring requirements,(ii)short-term timing differences,and(iii)changes in the global economic environment.In addition,we also target to maintain a revolving credit facility for our Automotive business of up to about$10 billion to protect against exogen

319、ous shocks.As discussed below,we currently have total commitments of$10.7 billion under our revolving credit facility.We assess the appropriate long-term target for total Automotive liquidity,comprised of gross cash and the revolving credit facility,to be about$30 billion,which is an amount we belie

320、ve is sufficient to support our business priorities and to protect our business.Our Automotive gross cash and Automotive liquidity targets could be reduced over time based on improved operating performance and changes in our risk profile.For a discussion of risks to our liquidity,see“Item 1A.Risk Fa

321、ctors,”of our Annual Report on Form 10-K for year ended December 31,2013,as well as Note 29 of the Notes to the Financial Statements regarding commitments and contingencies that could impact our liquidity.For more information visit 38 Ford Motor Company|2013 Annual Report Managements Discussion and

322、Analysis of Financial Condition and Results of Operations(Continued)Gross Cash.Automotive gross cash includes cash and cash equivalents and marketable securities,net of any securities-in-transit.Gross cash is detailed below as of the dates shown(in billions):December 31,December 31,December 31,20132

323、0122011Cash and cash equivalents$5.0$6.2$7.9Marketable securities20.118.215.0Total cash,marketable securities,and loaned securities25.124.422.9Securities-in-transit(a)(0.3)(0.1)Gross cash$24.8$24.3$22.9_(a)The purchase or sale of marketable securities for which the cash settlement was not made by pe

324、riod-end and a payable or receivable was recorded on the balance sheet.Our cash,cash equivalents,and marketable securities are held primarily in highly liquid investments,which provide for anticipated and unanticipated cash needs.Our cash,cash equivalents,and marketable securities primarily include

325、U.S.Department of Treasury obligations,federal agency securities,bank time deposits with investment-grade institutions,corporate investment-grade securities,commercial paper rated A-1/P-1 or higher,and debt obligations of a select group of non-U.S.governments,non-U.S.governmental agencies,and supran

326、ational institutions.The average maturity of these investments ranges from about 90 days to up to about one year,and is adjusted based on market conditions and liquidity needs.We monitor our cash levels and average maturity on a daily basis.Within our Automotive gross cash portfolio,we did not hold

327、investments in government obligations of Greece,Ireland,Italy,Portugal,or Spain at December 31,2013.In managing our business,we classify changes in Automotive gross cash into operating-related and other items(which includes the impact of certain special items,contributions to funded pension plans,ce

328、rtain tax-related transactions,acquisitions and divestitures,capital transactions with the Financial Services sector,dividends paid to shareholders,and otherprimarily financing-related).Our key liquidity metrics are operating-related cash flow(which best represents the ability of our Automotive oper

329、ations to generate cash),Automotive gross cash,and Automotive liquidity.Automotive gross cash and liquidity as of the dates shown were as follows(in billions):December 31,2013December 31,2012Gross cash$24.8$24.3Available credit lines Revolving credit facility,unutilized portion10.79.5Local lines ava

330、ilable to foreign affiliates,unutilized portion0.70.7Automotive liquidity$36.2$34.5We believe the cash flow analysis reflected in the table below is useful to investors because it includes in operating-related cash flow elements that we consider to be related to our Automotive operating activities(e

331、.g.,capital spending)and excludes cash flow elements that we do not consider to be related to the ability of our operations to generate cash.This differs from a cash flow statement prepared in accordance with generally accepted accounting principles in the United States(“GAAP”)and differs from Net c

332、ash provided by/(used in)operating activities,the most directly comparable GAAP financial measure.Ford Motor Company|2013 Annual Report 39Managements Discussion and Analysis of Financial Condition and Results of Operations(Continued)Changes in Automotive gross cash are summarized below(in billions):

333、201320122011Gross cash at end of period$24.8$24.3$22.9Gross cash at beginning of period24.322.920.5Change in gross cash$0.5$1.4$2.4Automotive income before income taxes(excluding special items)$6.9$6.3$6.3Capital spending(6.6)(5.5)(4.3)Depreciation and tooling amortization4.13.73.6Changes in working capital(a)(0.4)(2.3)0.3Other/Timing differences(b)2.11.2(0.3)Automotive operating-related cash flow