(Mark One) | |
R | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2016 | |
or | |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from __________ to __________ | |
Commission file number 1-3950 |
Delaware | 38-0549190 |
(State of incorporation) | (I.R.S. Employer Identification No.) |
One American Road, Dearborn, Michigan | 48126 |
(Address of principal executive offices) | (Zip Code) |
Table of Contents | Page | ||
Part I - Financial Information | |||
Item 1 | Financial Statements | ||
Consolidated Income Statement | |||
Consolidated Statement of Comprehensive Income | |||
Consolidated Balance Sheet | |||
Condensed Consolidated Statement of Cash Flows | |||
Consolidated Statement of Equity | |||
Notes to the Financial Statements | |||
Report of Independent Registered Public Accounting Firm | |||
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Overview | |||
Results of Operations | |||
Liquidity and Capital Resources | |||
Credit Ratings | |||
Production Volumes | |||
Outlook | |||
GAAP Reconciliations of Non-GAAP Financial Measures | |||
Risk Factors | |||
Accounting Standards Issued But Not Yet Adopted | |||
Other Financial Information | |||
Item 3 | Quantitative and Qualitative Disclosures About Market Risk | ||
Automotive | |||
Financial Services | |||
Item 4 | Controls and Procedures | ||
Part II - Other Information | |||
Item 6 | Exhibits | ||
Signature | |||
Exhibit Index |
For the periods ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Third Quarter | First Nine Months | ||||||||||||||
(unaudited) | |||||||||||||||
Revenues | |||||||||||||||
Automotive | $ | 33,331 | $ | 35,818 | $ | 105,520 | $ | 102,723 | |||||||
Financial Services | 2,612 | 2,326 | 7,626 | 6,584 | |||||||||||
Total revenues | 35,943 | 38,144 | 113,146 | 109,307 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of sales | 30,446 | 31,213 | 93,075 | 90,011 | |||||||||||
Selling, administrative, and other expenses | 2,535 | 2,386 | 7,758 | 7,402 | |||||||||||
Financial Services interest, operating, and other expenses | 2,200 | 1,905 | 6,518 | 5,363 | |||||||||||
Total costs and expenses | 35,181 | 35,504 | 107,351 | 102,776 | |||||||||||
Interest expense on Automotive debt | 238 | 206 | 650 | 561 | |||||||||||
Non-Financial Services interest income and other income/(loss), net (Note 13) | 328 | 446 | 1,121 | 908 | |||||||||||
Financial Services other income/(loss), net (Note 13) | 132 | 97 | 305 | 241 | |||||||||||
Equity in net income of affiliated companies | 403 | 314 | 1,342 | 1,237 | |||||||||||
Income before income taxes | 1,387 | 3,291 | 7,913 | 8,356 | |||||||||||
Provision for/(Benefit from) income taxes | 426 | 1,099 | 2,525 | 2,849 | |||||||||||
Net income | 961 | 2,192 | 5,388 | 5,507 | |||||||||||
Less: Income/(Loss) attributable to noncontrolling interests | 4 | — | 9 | 2 | |||||||||||
Net income attributable to Ford Motor Company | $ | 957 | $ | 2,192 | $ | 5,379 | $ | 5,505 | |||||||
EARNINGS PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 15) | |||||||||||||||
Basic income | $ | 0.24 | $ | 0.55 | $ | 1.35 | $ | 1.39 | |||||||
Diluted income | 0.24 | 0.55 | 1.35 | 1.38 | |||||||||||
Cash dividends declared | 0.15 | 0.15 | 0.70 | 0.45 |
For the periods ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Third Quarter | First Nine Months | ||||||||||||||
(unaudited) | |||||||||||||||
Net income | $ | 961 | $ | 2,192 | $ | 5,388 | $ | 5,507 | |||||||
Other comprehensive income/(loss), net of tax (Note 12) | |||||||||||||||
Foreign currency translation | (184 | ) | (882 | ) | (306 | ) | (816 | ) | |||||||
Marketable securities | — | — | 6 | — | |||||||||||
Derivative instruments | 99 | 374 | 456 | 208 | |||||||||||
Pension and other postretirement benefits | 14 | 133 | 53 | 1 | |||||||||||
Total other comprehensive income/(loss), net of tax | (71 | ) | (375 | ) | 209 | (607 | ) | ||||||||
Comprehensive income | 890 | 1,817 | 5,597 | 4,900 | |||||||||||
Less: Comprehensive income/(loss) attributable to noncontrolling interests | 3 | 1 | 7 | 2 | |||||||||||
Comprehensive income attributable to Ford Motor Company | $ | 887 | $ | 1,816 | $ | 5,590 | $ | 4,898 |
September 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents (Note 4) | $ | 13,340 | $ | 14,272 | |||
Marketable securities (Note 4) | 20,825 | 20,904 | |||||
Financial Services finance receivables, net (Note 5) | 45,550 | 45,137 | |||||
Trade and other receivables, less allowances of $359 and $372 | 10,029 | 11,042 | |||||
Inventories (Note 7) | 10,219 | 8,319 | |||||
Other assets | 3,552 | 2,913 | |||||
Total current assets | 103,515 | 102,587 | |||||
Financial Services finance receivables, net (Note 5) | 49,614 | 45,554 | |||||
Net investment in operating leases | 29,196 | 27,093 | |||||
Net property | 32,257 | 30,163 | |||||
Equity in net assets of affiliated companies | 3,795 | 3,224 | |||||
Deferred income taxes | 9,475 | 11,509 | |||||
Other assets | 7,111 | 4,795 | |||||
Total assets | $ | 234,963 | $ | 224,925 | |||
LIABILITIES | |||||||
Payables | $ | 22,384 | $ | 20,272 | |||
Other liabilities and deferred revenue (Note 8) | 19,531 | 19,089 | |||||
Automotive debt payable within one year (Note 10) | 2,472 | 1,779 | |||||
Financial Services debt payable within one year (Note 10) | 44,801 | 41,196 | |||||
Total current liabilities | 89,188 | 82,336 | |||||
Other liabilities and deferred revenue (Note 8) | 23,652 | 23,457 | |||||
Automotive long-term debt (Note 10) | 10,675 | 11,060 | |||||
Financial Services long-term debt (Note 10) | 79,276 | 78,819 | |||||
Deferred income taxes | 577 | 502 | |||||
Total liabilities | 203,368 | 196,174 | |||||
Redeemable noncontrolling interest | 96 | 94 | |||||
EQUITY | |||||||
Common Stock, par value $.01 per share (3,976 million shares issued of 6 billion authorized) | 40 | 40 | |||||
Class B Stock, par value $.01 per share (71 million shares issued of 530 million authorized) | 1 | 1 | |||||
Capital in excess of par value of stock | 21,598 | 21,421 | |||||
Retained earnings | 17,013 | 14,414 | |||||
Accumulated other comprehensive income/(loss) (Note 12) | (6,046 | ) | (6,257 | ) | |||
Treasury stock | (1,122 | ) | (977 | ) | |||
Total equity attributable to Ford Motor Company | 31,484 | 28,642 | |||||
Equity attributable to noncontrolling interests | 15 | 15 | |||||
Total equity | 31,499 | 28,657 | |||||
Total liabilities and equity | $ | 234,963 | $ | 224,925 |
The following table includes assets to be used to settle liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheet above. | |||||||
September 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 2,318 | $ | 3,949 | |||
Financial Services finance receivables, net | 47,627 | 45,902 | |||||
Net investment in operating leases | 9,951 | 13,309 | |||||
Other assets | 7 | 85 | |||||
LIABILITIES | |||||||
Other liabilities and deferred revenue | $ | 10 | $ | 19 | |||
Debt | 39,123 | 43,086 |
For the periods ended September 30, | |||||||
2016 | 2015 | ||||||
First Nine Months | |||||||
(unaudited) | |||||||
Cash flows from operating activities | |||||||
Net cash provided by/(used in) operating activities | $ | 16,994 | $ | 14,078 | |||
Cash flows from investing activities | |||||||
Capital spending | (4,912 | ) | (5,358 | ) | |||
Acquisitions of finance receivables and operating leases | (43,746 | ) | (43,762 | ) | |||
Collections of finance receivables and operating leases | 30,254 | 28,632 | |||||
Purchases of equity and debt securities | (22,049 | ) | (29,493 | ) | |||
Sales and maturities of equity and debt securities | 22,022 | 32,874 | |||||
Settlements of derivatives | 330 | 26 | |||||
Other | 43 | 417 | |||||
Net cash provided by/(used in) investing activities | (18,058 | ) | (16,664 | ) | |||
Cash flows from financing activities | |||||||
Cash dividends | (2,780 | ) | (1,785 | ) | |||
Purchases of Common Stock | (145 | ) | (129 | ) | |||
Net changes in short-term debt | 1,200 | 844 | |||||
Proceeds from issuance of other debt | 31,956 | 35,876 | |||||
Principal payments on other debt | (30,019 | ) | (27,366 | ) | |||
Other | (44 | ) | (303 | ) | |||
Net cash provided by/(used in) financing activities | 168 | 7,137 | |||||
Effect of exchange rate changes on cash and cash equivalents | (36 | ) | (622 | ) | |||
Net increase/(decrease) in cash and cash equivalents | $ | (932 | ) | $ | 3,929 | ||
Cash and cash equivalents at January 1 | $ | 14,272 | $ | 10,757 | |||
Net increase/(decrease) in cash and cash equivalents | (932 | ) | 3,929 | ||||
Cash and cash equivalents at September 30 | $ | 13,340 | $ | 14,686 |
Equity Attributable to Ford Motor Company | |||||||||||||||||||||||||||||||
Capital Stock | Cap. in Excess of Par Value of Stock | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) (Note 12) | Treasury Stock | Total | Equity Attributable to Non-controlling Interests | Total Equity | ||||||||||||||||||||||||
Balance at December 31, 2015 | $ | 41 | $ | 21,421 | $ | 14,414 | $ | (6,257 | ) | $ | (977 | ) | $ | 28,642 | $ | 15 | $ | 28,657 | |||||||||||||
Net income | — | — | 5,379 | — | — | 5,379 | 9 | 5,388 | |||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | — | — | 211 | — | 211 | (2 | ) | 209 | ||||||||||||||||||||||
Common stock issued (including share-based compensation impacts) | — | 177 | — | — | — | 177 | — | 177 | |||||||||||||||||||||||
Treasury stock/other | — | — | — | — | (145 | ) | (145 | ) | (2 | ) | (147 | ) | |||||||||||||||||||
Cash dividends declared | — | — | (2,780 | ) | — | — | (2,780 | ) | (5 | ) | (2,785 | ) | |||||||||||||||||||
Balance at September 30, 2016 | $ | 41 | $ | 21,598 | $ | 17,013 | $ | (6,046 | ) | $ | (1,122 | ) | $ | 31,484 | $ | 15 | $ | 31,499 | |||||||||||||
Balance at December 31, 2014 | $ | 40 | $ | 21,089 | $ | 9,422 | $ | (5,265 | ) | $ | (848 | ) | $ | 24,438 | $ | 27 | $ | 24,465 | |||||||||||||
Net income | — | — | 5,505 | — | — | 5,505 | 2 | 5,507 | |||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | — | — | (607 | ) | — | (607 | ) | — | (607 | ) | ||||||||||||||||||||
Common stock issued (including share-based compensation impacts) | 1 | 265 | — | — | — | 266 | — | 266 | |||||||||||||||||||||||
Treasury stock/other | — | — | — | — | (129 | ) | (129 | ) | (4 | ) | (133 | ) | |||||||||||||||||||
Cash dividends declared | — | — | (1,785 | ) | — | — | (1,785 | ) | (6 | ) | (1,791 | ) | |||||||||||||||||||
Balance at September 30, 2015 | $ | 41 | $ | 21,354 | $ | 13,142 | $ | (5,872 | ) | $ | (977 | ) | $ | 27,688 | $ | 19 | $ | 27,707 |
Footnote | Page | |
Note 1 | Presentation | |
Note 2 | New Accounting Standards | |
Note 3 | Segment Information | |
Note 4 | Cash, Cash Equivalents, and Marketable Securities | |
Note 5 | Financial Services Finance Receivables | |
Note 6 | Financial Services Allowance for Credit Losses | |
Note 7 | Inventories | |
Note 8 | Other Liabilities and Deferred Revenue | |
Note 9 | Retirement Benefits | |
Note 10 | Debt | |
Note 11 | Derivative Financial Instruments and Hedging Activities | |
Note 12 | Accumulated Other Comprehensive Income/(Loss) | |
Note 13 | Other Income/(Loss) | |
Note 14 | Income Taxes | |
Note 15 | Capital Stock and Earnings Per Share | |
Note 16 | Commitments and Contingencies |
Standard | Effective Date | ||
2015-16 | Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments | January 1, 2016 | |
2015-09 | Insurance - Disclosures about Short-Duration Contracts | January 1, 2016 | |
2015-05 | Internal-Use Software - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement | January 1, 2016 | |
2015-02 | Consolidation - Amendments to the Consolidation Analysis | January 1, 2016 | |
2015-01 | Extraordinary and Unusual Items - Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items | January 1, 2016 | |
2014-12 | Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period | January 1, 2016 |
Automotive | Financial Services | All Other | Special Items | Adjustments | Total | ||||||||||||||||||
Third Quarter 2016 | |||||||||||||||||||||||
Revenues | $ | 33,331 | $ | 2,612 | $ | — | $ | — | $ | — | $ | 35,943 | |||||||||||
Pre-tax results - income/(loss) | 1,084 | 552 | (223 | ) | (26 | ) | — | 1,387 | |||||||||||||||
Equity in net income/(loss) of affiliated companies | 395 | 8 | — | — | — | 403 | |||||||||||||||||
Cash, cash equivalents, and marketable securities | 24,300 | 9,855 | 10 | — | — | 34,165 | |||||||||||||||||
Total assets | 97,269 | 142,979 | 67 | — | (5,352 | ) | (a) | 234,963 | |||||||||||||||
Debt | 13,147 | 124,077 | — | — | — | 137,224 | |||||||||||||||||
Operating cash flows | (1,954 | ) | 5,953 | — | — | 1,161 | (b) | 5,160 | |||||||||||||||
Third Quarter 2015 | |||||||||||||||||||||||
Revenues | $ | 35,818 | $ | 2,326 | $ | — | $ | — | $ | — | $ | 38,144 | |||||||||||
Pre-tax results - income/(loss) | 2,762 | 526 | (163 | ) | 166 | — | 3,291 | ||||||||||||||||
Equity in net income/(loss) of affiliated companies | 306 | 8 | — | — | — | 314 | |||||||||||||||||
Cash, cash equivalents, and marketable securities | 22,177 | 9,670 | — | — | — | 31,847 | |||||||||||||||||
Total assets | 92,873 | 130,626 | — | — | (3,921 | ) | (a) | 219,578 | |||||||||||||||
Debt | 12,798 | 113,627 | — | — | — | 126,425 | |||||||||||||||||
Operating cash flows | 2,787 | 2,167 | — | — | 1,501 | (b) | 6,455 | ||||||||||||||||
Automotive | Financial Services | All Other | Special Items | Adjustments | Total | ||||||||||||||||||
First Nine Months 2016 | |||||||||||||||||||||||
Revenues | $ | 105,520 | $ | 7,626 | $ | — | $ | — | $ | — | $ | 113,146 | |||||||||||
Pre-tax results - income/(loss) | 7,380 | 1,436 | (573 | ) | (330 | ) | — | 7,913 | |||||||||||||||
Equity in net income/(loss) of affiliated companies | 1,319 | 23 | — | — | — | 1,342 | |||||||||||||||||
Operating cash flows | 4,917 | 8,761 | — | — | 3,316 | (b) | 16,994 | ||||||||||||||||
First Nine Months 2015 | |||||||||||||||||||||||
Revenues | $ | 102,723 | $ | 6,584 | $ | — | $ | — | $ | — | $ | 109,307 | |||||||||||
Pre-tax results - income/(loss) | 7,246 | 1,486 | (542 | ) | 166 | — | 8,356 | ||||||||||||||||
Equity in net income/(loss) of affiliated companies | 1,213 | 24 | — | — | — | 1,237 | |||||||||||||||||
Operating cash flows | 5,199 | 5,329 | — | — | 3,550 | (b) | 14,078 |
(a) | Includes eliminations of intersegment transactions occurring in the ordinary course of business and deferred tax netting. |
(b) | We measure and evaluate our Automotive segment operating cash flow on a different basis than Net cash provided by/(used in) operating activities in our consolidated statement of cash flows. Automotive segment operating cash flow includes additional elements management considers to be related to our Automotive operating activities, primarily capital spending and non-designated derivatives, and excludes outflows for funded pension contributions, separation payments, and other items that are considered operating cash flows under U.S. GAAP. The table below quantifies these reconciling adjustments to Net cash provided by/(used in) operating activities for the periods ended September 30 (in millions): |
Third Quarter | First Nine Months | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Automotive capital spending | $ | 1,696 | $ | 1,819 | $ | 4,879 | $ | 5,324 | ||||||||
Net cash flows from non-designated derivatives | (246 | ) | 119 | (322 | ) | 90 | ||||||||||
Funded pension contributions | (246 | ) | (89 | ) | (835 | ) | (942 | ) | ||||||||
Separation payments | (40 | ) | (90 | ) | (198 | ) | (600 | ) | ||||||||
Other | (3 | ) | (258 | ) | (208 | ) | (322 | ) | ||||||||
Total operating cash flow adjustments | $ | 1,161 | $ | 1,501 | $ | 3,316 | $ | 3,550 |
September 30, 2016 | |||||||||||||||||
Fair Value Level | Automotive | Financial Services | All Other | Consolidated | |||||||||||||
Cash and cash equivalents | |||||||||||||||||
U.S. government | 1 | $ | 599 | $ | — | $ | — | $ | 599 | ||||||||
U.S. government agencies | 2 | — | 4 | — | 4 | ||||||||||||
Non-U.S. government and agencies | 2 | 551 | 280 | — | 831 | ||||||||||||
Corporate debt | 2 | 60 | 50 | — | 110 | ||||||||||||
Total marketable securities classified as cash equivalents | 1,210 | 334 | — | 1,544 | |||||||||||||
Cash, time deposits, and money market funds | 6,445 | 5,341 | 10 | 11,796 | |||||||||||||
Total cash and cash equivalents | $ | 7,655 | $ | 5,675 | $ | 10 | $ | 13,340 | |||||||||
Marketable securities | |||||||||||||||||
U.S. government | 1 | $ | 3,982 | $ | 1,724 | $ | — | $ | 5,706 | ||||||||
U.S. government agencies | 2 | 3,284 | 1,354 | — | 4,638 | ||||||||||||
Non-U.S. government and agencies | 2 | 5,423 | 520 | — | 5,943 | ||||||||||||
Corporate debt | 2 | 3,709 | 540 | — | 4,249 | ||||||||||||
Equities | 1 | 198 | — | — | 198 | ||||||||||||
Other marketable securities | 2 | 49 | 42 | — | 91 | ||||||||||||
Total marketable securities | $ | 16,645 | $ | 4,180 | $ | — | $ | 20,825 | |||||||||
December 31, 2015 | |||||||||||||||||
Fair Value Level | Automotive | Financial Services | All Other | Consolidated | |||||||||||||
Cash and cash equivalents | |||||||||||||||||
U.S. government | 1 | $ | 115 | $ | — | $ | — | $ | 115 | ||||||||
U.S. government agencies | 2 | 22 | — | — | 22 | ||||||||||||
Non-U.S. government and agencies | 2 | 173 | 266 | — | 439 | ||||||||||||
Corporate debt | 2 | 20 | — | — | 20 | ||||||||||||
Total marketable securities classified as cash equivalents | 330 | 266 | — | 596 | |||||||||||||
Cash, time deposits, and money market funds | 5,056 | 8,620 | — | 13,676 | |||||||||||||
Total cash and cash equivalents | $ | 5,386 | $ | 8,886 | $ | — | $ | 14,272 | |||||||||
Marketable securities | |||||||||||||||||
U.S. government | 1 | $ | 1,623 | $ | 298 | $ | — | $ | 1,921 | ||||||||
U.S. government agencies | 2 | 5,240 | 1,169 | — | 6,409 | ||||||||||||
Non-U.S. government and agencies | 2 | 7,451 | 832 | — | 8,283 | ||||||||||||
Corporate debt | 2 | 3,279 | 384 | — | 3,663 | ||||||||||||
Equities | 1 | 240 | — | — | 240 | ||||||||||||
Other marketable securities | 2 | 348 | 40 | — | 388 | ||||||||||||
Total marketable securities | $ | 18,181 | $ | 2,723 | $ | — | $ | 20,904 |
September 30, 2016 | |||||||||||||||||||||||
Fair Value of Securities with Contractual Maturities: | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Less than 1 Year | 1-5 Years | ||||||||||||||||||
Automotive | |||||||||||||||||||||||
U.S. government | $ | 447 | $ | — | $ | — | $ | 447 | $ | — | $ | 447 | |||||||||||
U.S. government agencies | 100 | — | — | 100 | — | 100 | |||||||||||||||||
Non-U.S. government and agencies | 77 | — | — | 77 | — | 77 | |||||||||||||||||
Corporate debt | 337 | — | — | 337 | 247 | 90 | |||||||||||||||||
Total | $ | 961 | $ | — | $ | — | $ | 961 | $ | 247 | $ | 714 | |||||||||||
December 31, 2015 | |||||||||||||||||||||||
Fair Value of Securities with Contractual Maturities: | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Less than 1 Year | 1-5 Years | ||||||||||||||||||
Automotive | |||||||||||||||||||||||
U.S. government | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
U.S. government agencies | — | — | — | — | — | — | |||||||||||||||||
Non-U.S. government and agencies | 82 | — | (12 | ) | 70 | — | 70 | ||||||||||||||||
Corporate debt | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 82 | $ | — | $ | (12 | ) | $ | 70 | $ | — | $ | 70 |
September 30, 2016 | December 31, 2015 | ||||||
Consumer | |||||||
Retail financing, gross | $ | 67,894 | $ | 62,068 | |||
Unearned interest supplements | (2,785 | ) | (2,119 | ) | |||
Consumer finance receivables | 65,109 | 59,949 | |||||
Non-Consumer | |||||||
Dealer financing | 30,533 | 31,115 | |||||
Non-Consumer finance receivables | 30,533 | 31,115 | |||||
Total recorded investment | $ | 95,642 | $ | 91,064 | |||
Recorded investment in finance receivables | $ | 95,642 | $ | 91,064 | |||
Allowance for credit losses | (478 | ) | (373 | ) | |||
Finance receivables, net | $ | 95,164 | $ | 90,691 | |||
Current portion | $ | 45,550 | $ | 45,137 | |||
Non-current portion | 49,614 | 45,554 | |||||
Finance receivables, net | $ | 95,164 | $ | 90,691 | |||
Net finance receivables subject to fair value (a) | $ | 93,033 | $ | 88,876 | |||
Fair value | 94,327 | 90,048 |
(a) | At September 30, 2016 and December 31, 2015, excludes $2.1 billion and $1.8 billion, respectively, of certain receivables (primarily direct financing leases) that are not subject to fair value disclosure requirements. The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy. |
September 30, 2016 | December 31, 2015 | ||||||
Consumer | |||||||
31-60 days past due | $ | 652 | $ | 708 | |||
61-90 days past due | 112 | 108 | |||||
91-120 days past due | 36 | 27 | |||||
Greater than 120 days past due | 39 | 38 | |||||
Total past due | 839 | 881 | |||||
Current | 64,270 | 59,068 | |||||
Consumer finance receivables | 65,109 | 59,949 | |||||
Non-Consumer | |||||||
Total past due | 71 | 116 | |||||
Current | 30,462 | 30,999 | |||||
Non-Consumer finance receivables | 30,533 | 31,115 | |||||
Total recorded investment | $ | 95,642 | $ | 91,064 |
• | Pass – current to 60 days past due |
• | Special Mention – 61 to 120 days past due and in intensified collection status |
• | Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral less costs to sell |
• | Group I – strong to superior financial metrics |
• | Group II – fair to favorable financial metrics |
• | Group III – marginal to weak financial metrics |
• | Group IV – poor financial metrics, including dealers classified as uncollectible |
September 30, 2016 | December 31, 2015 | ||||||
Dealer Financing | |||||||
Group I | $ | 23,162 | $ | 22,146 | |||
Group II | 5,847 | 7,175 | |||||
Group III | 1,399 | 1,683 | |||||
Group IV | 125 | 111 | |||||
Total recorded investment | $ | 30,533 | $ | 31,115 |
Third Quarter 2016 | First Nine Months 2016 | ||||||||||||||||||||||
Consumer | Non-Consumer | Total | Consumer | Non-Consumer | Total | ||||||||||||||||||
Allowance for credit losses | |||||||||||||||||||||||
Beginning balance | $ | 432 | $ | 17 | $ | 449 | $ | 357 | $ | 16 | $ | 373 | |||||||||||
Charge-offs | (108 | ) | (5 | ) | (113 | ) | (304 | ) | (7 | ) | (311 | ) | |||||||||||
Recoveries | 29 | 1 | 30 | 89 | 4 | 93 | |||||||||||||||||
Provision for credit losses | 112 | 1 | 113 | 323 | 1 | 324 | |||||||||||||||||
Other (a) | (1 | ) | — | (1 | ) | (1 | ) | — | (1 | ) | |||||||||||||
Ending balance (b) | $ | 464 | $ | 14 | $ | 478 | $ | 464 | $ | 14 | $ | 478 | |||||||||||
Analysis of ending balance of allowance for credit losses | |||||||||||||||||||||||
Collective impairment allowance | $ | 445 | $ | 12 | $ | 457 | |||||||||||||||||
Specific impairment allowance | 19 | 2 | 21 | ||||||||||||||||||||
Ending balance (b) | 464 | 14 | 478 | ||||||||||||||||||||
Analysis of ending balance of finance receivables | |||||||||||||||||||||||
Collectively evaluated for impairment | 64,743 | 30,393 | 95,136 | ||||||||||||||||||||
Specifically evaluated for impairment | 366 | 140 | 506 | ||||||||||||||||||||
Recorded investment | 65,109 | 30,533 | 95,642 | ||||||||||||||||||||
Ending balance, net of allowance for credit losses | $ | 64,645 | $ | 30,519 | $ | 95,164 |
(a) | Primarily represents amounts related to translation adjustments. |
(b) | Total allowance, including reserves for operating leases, was $541 million. |
Third Quarter 2015 | First Nine Months 2015 | ||||||||||||||||||||||
Consumer | Non-Consumer | Total | Consumer | Non-Consumer | Total | ||||||||||||||||||
Allowance for credit losses | |||||||||||||||||||||||
Beginning balance | $ | 322 | $ | 13 | $ | 335 | $ | 305 | $ | 16 | $ | 321 | |||||||||||
Charge-offs | (85 | ) | (2 | ) | (87 | ) | (235 | ) | (3 | ) | (238 | ) | |||||||||||
Recoveries | 29 | 1 | 30 | 90 | 4 | 94 | |||||||||||||||||
Provision for credit losses | 80 | 2 | 82 | 190 | (2 | ) | 188 | ||||||||||||||||
Other (a) | (4 | ) | — | (4 | ) | (8 | ) | (1 | ) | (9 | ) | ||||||||||||
Ending balance (b) | $ | 342 | $ | 14 | $ | 356 | $ | 342 | $ | 14 | $ | 356 | |||||||||||
Analysis of ending balance of allowance for credit losses | |||||||||||||||||||||||
Collective impairment allowance | $ | 323 | $ | 12 | $ | 335 | |||||||||||||||||
Specific impairment allowance | 19 | 2 | 21 | ||||||||||||||||||||
Ending balance (b) | 342 | 14 | 356 | ||||||||||||||||||||
Analysis of ending balance of finance receivables | |||||||||||||||||||||||
Collectively evaluated for impairment | 58,749 | 26,311 | 85,060 | ||||||||||||||||||||
Specifically evaluated for impairment | 375 | 129 | 504 | ||||||||||||||||||||
Recorded investment | 59,124 | 26,440 | 85,564 | ||||||||||||||||||||
Ending balance, net of allowance for credit losses | $ | 58,782 | $ | 26,426 | $ | 85,208 |
(a) | Primarily represents amounts related to translation adjustments. |
(b) | Total allowance, including reserves for operating leases, was $403 million. |
September 30, 2016 | December 31, 2015 | ||||||
Raw materials, work-in-process, and supplies | $ | 4,335 | $ | 4,005 | |||
Finished products | 6,823 | 5,254 | |||||
Total inventories under FIFO | 11,158 | 9,259 | |||||
LIFO adjustment | (939 | ) | (940 | ) | |||
Total inventories | $ | 10,219 | $ | 8,319 |
September 30, 2016 | December 31, 2015 | ||||||
Current | |||||||
Dealer and dealers’ customer allowances and claims | $ | 9,050 | $ | 8,122 | |||
Deferred revenue | 4,715 | 4,675 | |||||
Employee benefit plans | 1,505 | 1,562 | |||||
Accrued interest | 761 | 840 | |||||
OPEB | 357 | 354 | |||||
Pension (a) | 268 | 249 | |||||
Other | 2,875 | 3,287 | |||||
Total current other liabilities and deferred revenue | $ | 19,531 | $ | 19,089 | |||
Non-current | |||||||
Pension (a) | $ | 9,024 | $ | 9,543 | |||
OPEB | 5,362 | 5,347 | |||||
Dealer and dealers’ customer allowances and claims | 3,146 | 2,731 | |||||
Deferred revenue | 3,639 | 3,285 | |||||
Employee benefit plans | 1,112 | 1,041 | |||||
Other | 1,369 | 1,510 | |||||
Total non-current other liabilities and deferred revenue | $ | 23,652 | $ | 23,457 |
(a) | Balances at September 30, 2016 reflect pension liabilities at December 31, 2015, updated for service and interest cost, expected return on assets, separation expense, actual benefit payments, and cash contributions. The discount rate and rate of expected return assumptions are unchanged from year-end 2015. Included in Other assets are pension assets of $2.3 billion and $1.6 billion at September 30, 2016 and December 31, 2015, respectively. |
Third Quarter | |||||||||||||||||||||||
Pension Benefits | |||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Worldwide OPEB | |||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Service cost | $ | 128 | $ | 147 | $ | 116 | $ | 133 | $ | 13 | $ | 15 | |||||||||||
Interest cost | 381 | 454 | 190 |