FORD MOTOR CO | 2013 | FY | 3

 NET INVESTMENT IN OPERATING LEASES

Net investment in operating leases on our balance sheet consists primarily of lease contracts for vehicles with retail customers, daily rental companies, government entities, and fleet customers. Assets subject to operating leases are depreciated using the straight-line method over the term of the lease to reduce the asset to its estimated residual value. Estimated residual values are based on assumptions for used vehicle prices at lease termination and the number of vehicles that are expected to be returned.

The net investment in operating leases was as follows (in millions):
 
December 31,
2013
 
December 31,
2012
Automotive Sector
 
 
 
Vehicles, net of depreciation
$
1,384

 
$
1,415

Financial Services Sector
 

 
 

Vehicles and other equipment, at cost (a)
21,738

 
16,258

Accumulated depreciation
(3,115
)
 
(2,347
)
Allowance for credit losses
(23
)
 
(23
)
Total Financial Services sector
18,600

 
13,888

Total Company
$
19,984

 
$
15,303

__________
(a)
Includes Ford Credit’s operating lease assets of $8.1 billion and $6.3 billion at December 31, 2013 and 2012, respectively, for which the related cash flows have been used to secure certain lease securitization transactions.  Cash flows associated with the net investment in operating leases are available only for payment of the debt or other obligations issued or arising in the securitization transactions; they are not available to pay other obligations or the claims of other creditors.











NOTE 7.  NET INVESTMENT IN OPERATING LEASES (Continued)

Financial Services Sector

Operating lease depreciation expense (which includes gains and losses on disposal of assets) for the years ended December 31 was as follows (in millions):
 
2013
 
2012
 
2011
Operating lease depreciation expense
$
2,411

 
$
1,795

 
$
1,140



Included in Financial Services revenues are rents on operating leases. The amounts contractually due for minimum rentals on operating leases as of December 31, 2013 are as follows (in millions):
 
2014
 
2015
 
2016
 
2017
 
Thereafter
 
Total
Minimum rentals on operating leases
$
2,618

 
$
2,217

 
$
1,578

 
$
221

 
$
49

 
$
6,683

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