2015 Q4 Form 10-K Financial Statement

#000003799617000013 Filed on February 09, 2017

View on sec.gov

Income Statement

Concept 2015 Q4 2015 Q3 2015 Q1
Revenue $40.25B $38.14B $33.90B
YoY Change 12.21% 9.23% -5.51%
Cost Of Revenue $33.85B $31.21B $28.47B
YoY Change 1.89% 3.36% -8.22%
Gross Profit $6.399B $6.931B $5.428B
YoY Change 141.93% 46.75% 11.8%
Gross Profit Margin 15.9% 18.17% 16.01%
Selling, General & Admin $3.941B $2.386B $3.465B
YoY Change -26.8% -31.52% 2.76%
% of Gross Profit 61.59% 34.43% 63.84%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization
YoY Change
% of Gross Profit
Operating Expenses $4.059B $2.386B $3.465B
YoY Change -25.82% -31.52% 2.76%
Operating Profit $2.340B $4.545B $1.963B
YoY Change -182.77% 266.83% 32.37%
Interest Expense $378.0M $206.0M $297.0M
YoY Change -181.47% -22.85% 18.8%
% of Operating Profit 16.15% 4.53% 15.13%
Other Income/Expense, Net $402.0M $278.0M $239.0M
YoY Change 58.27% 6.11% -3.63%
Pretax Income $1.896B $3.291B $1.779B
YoY Change -147.84% 161.81% 12.31%
Income Tax $469.0M $1.099B $625.0M
% Of Pretax Income 24.74% 33.39% 35.13%
Net Earnings $1.868B $2.192B $1.153B
YoY Change -174.22% 115.11% -6.41%
Net Earnings / Revenue 4.64% 5.75% 3.4%
Basic Earnings Per Share $0.55 $0.29
Diluted Earnings Per Share $663.4K $0.55 $0.29
COMMON SHARES
Basic Shares Outstanding 3.969B shares 3.963B shares
Diluted Shares Outstanding 3.999B shares 4.001B shares

Balance Sheet

Concept 2015 Q4 2015 Q3 2015 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $35.18B $31.85B $33.10B
YoY Change 12.92% -6.23% -9.39%
Cash & Equivalents $14.27B $14.69B $12.37B
Short-Term Investments $20.90B $17.16B $20.73B
Other Short-Term Assets $2.913B
YoY Change
Inventory $8.319B $9.496B $9.519B
Prepaid Expenses
Receivables $11.04B $26.91B $23.91B
Other Receivables $102.0B $98.58B $92.17B
Total Short-Term Assets $102.6B $166.8B $158.7B
YoY Change -33.84% 6.06% 2.2%
LONG-TERM ASSETS
Property, Plant & Equipment $30.16B $30.14B $29.61B
YoY Change 0.12% 0.3% 4.1%
Goodwill $6.000M
YoY Change
Intangibles
YoY Change
Long-Term Investments $3.224B $3.505B $3.628B
YoY Change -3.96% 12.96% -8.89%
Other Assets $4.795B $18.96B $20.43B
YoY Change -76.12% 3.09% 5.49%
Total Long-Term Assets $122.3B $52.75B $53.74B
YoY Change 128.42% 2.34% 3.76%
TOTAL ASSETS
Total Short-Term Assets $102.6B $166.8B $158.7B
Total Long-Term Assets $122.3B $52.75B $53.74B
Total Assets $224.9B $219.6B $212.4B
YoY Change 7.82% 5.14% 2.59%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $19.40B $21.46B $20.80B
YoY Change 1.27% 6.4% -2.78%
Accrued Expenses $2.137B $1.919B $1.866B
YoY Change -17.9% -24.75% -18.76%
Deferred Revenue
YoY Change
Short-Term Debt $12.94B $12.21B $11.93B
YoY Change 12.42% -3.64% -17.6%
Long-Term Debt Due $30.06B $28.43B $26.77B
YoY Change 8.66% 1.08% 9.68%
Total Short-Term Liabilities $82.34B $80.23B $77.47B
YoY Change 7.29% 0.45% 0.37%
LONG-TERM LIABILITIES
Long-Term Debt $89.86B $85.78B $84.07B
YoY Change 12.32% 9.43% 7.63%
Other Long-Term Liabilities $23.46B $25.31B $25.24B
YoY Change -11.46% 7.75% 4.94%
Total Long-Term Liabilities $23.46B $111.1B $109.3B
YoY Change -77.97% 9.04% 6.99%
TOTAL LIABILITIES
Total Short-Term Liabilities $82.34B $80.23B $77.47B
Total Long-Term Liabilities $23.46B $111.1B $109.3B
Total Liabilities $196.2B $191.9B $187.3B
YoY Change 6.73% 5.22% 4.09%
SHAREHOLDERS EQUITY
Retained Earnings $14.41B $27.49B $24.89B
YoY Change 52.98% 9.73% 4.21%
Common Stock $21.42B $21.35B $21.27B
YoY Change 1.57% -1.5% -1.27%
Preferred Stock
YoY Change
Treasury Stock (at cost) $977.0M $977.0M $848.0M
YoY Change 15.21% -60.45% 67.59%
Treasury Stock Shares
Shareholders Equity $28.64B $27.69B $25.05B
YoY Change
Total Liabilities & Shareholders Equity $224.9B $219.4B $212.4B
YoY Change 7.82% 5.07% 2.56%

Cashflow Statement

Concept 2015 Q4 2015 Q3 2015 Q1
OPERATING ACTIVITIES
Net Income $1.868B $2.192B $1.153B
YoY Change -174.22% 115.11% -6.41%
Depreciation, Depletion And Amortization
YoY Change
Cash From Operating Activities $2.092B $6.455B $2.413B
YoY Change -3.51% 20.23% 8.69%
INVESTING ACTIVITIES
Capital Expenditures -$1.838B -$1.825B -$1.800B
YoY Change -14.67% -2.98% 18.73%
Acquisitions
YoY Change
Other Investing Activities -$7.660B -$5.889B -$117.0M
YoY Change 126.9% 190.38% 17.0%
Cash From Investing Activities -$9.498B -$7.714B -$4.960B
YoY Change 71.75% 97.34% -12.4%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 7.185B 3.396B 4.584B
YoY Change 611.39% 455.81% 130.58%
NET CHANGE
Cash From Operating Activities 2.092B 6.455B 2.413B
Cash From Investing Activities -9.498B -7.714B -4.960B
Cash From Financing Activities 7.185B 3.396B 4.584B
Net Change In Cash -221.0M 2.137B 2.037B
YoY Change -90.6% 3.19% -240.1%
FREE CASH FLOW
Cash From Operating Activities $2.092B $6.455B $2.413B
Capital Expenditures -$1.838B -$1.825B -$1.800B
Free Cash Flow $3.930B $8.280B $4.213B
YoY Change -9.07% 14.21% 12.77%

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CY2016Q4 us-gaap Guarantee Obligations Current Carrying Value
GuaranteeObligationsCurrentCarryingValue
23000000 USD
CY2015Q4 us-gaap Guarantee Obligations Maximum Exposure
GuaranteeObligationsMaximumExposure
284000000 USD
CY2016Q4 us-gaap Guarantee Obligations Maximum Exposure
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177000000 USD
CY2015 us-gaap Impairment Of Intangible Assets Excluding Goodwill
ImpairmentOfIntangibleAssetsExcludingGoodwill
0 USD
CY2016 us-gaap Impairment Of Intangible Assets Excluding Goodwill
ImpairmentOfIntangibleAssetsExcludingGoodwill
0 USD
CY2015 us-gaap Impairment Of Long Lived Assets Held For Use
ImpairmentOfLongLivedAssetsHeldForUse
0 USD
CY2016 us-gaap Impairment Of Long Lived Assets Held For Use
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CY2015 us-gaap Income Loss From Continuing Operations Before Income Taxes Domestic
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5374000000 USD
CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Domestic
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5266000000 USD
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1234000000 USD
CY2015Q1 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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1779000000 USD
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3286000000 USD
CY2015Q3 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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3291000000 USD
CY2015Q4 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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1896000000 USD
CY2015 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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10252000000 USD
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3651000000 USD
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2875000000 USD
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1387000000 USD
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CY2015 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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6796000000 USD
CY2014 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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1530000000 USD
CY2014 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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1234000000 USD
CY2015 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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10252000000 USD
CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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6796000000 USD
CY2015Q1 us-gaap Income Loss From Continuing Operations Per Basic Share
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0.29
CY2015Q2 us-gaap Income Loss From Continuing Operations Per Basic Share
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CY2015Q3 us-gaap Income Loss From Continuing Operations Per Basic Share
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0.55
CY2015Q4 us-gaap Income Loss From Continuing Operations Per Basic Share
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0.47
CY2016Q1 us-gaap Income Loss From Continuing Operations Per Basic Share
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0.62
CY2016Q2 us-gaap Income Loss From Continuing Operations Per Basic Share
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0.50
CY2016Q3 us-gaap Income Loss From Continuing Operations Per Basic Share
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0.24
CY2016Q4 us-gaap Income Loss From Continuing Operations Per Basic Share
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CY2015Q1 us-gaap Income Loss From Continuing Operations Per Diluted Share
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0.29
CY2015Q2 us-gaap Income Loss From Continuing Operations Per Diluted Share
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0.54
CY2015Q3 us-gaap Income Loss From Continuing Operations Per Diluted Share
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0.55
CY2015Q4 us-gaap Income Loss From Continuing Operations Per Diluted Share
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CY2016Q1 us-gaap Income Loss From Continuing Operations Per Diluted Share
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1818000000 USD
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IncomeLossFromEquityMethodInvestments
1780000000 USD
CY2014 us-gaap Income Loss From Equity Method Investments Net Of Dividends Or Distributions
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333000000 USD
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178000000 USD
CY2014 us-gaap Income Tax Expense Benefit
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740000000 USD
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936000000 USD
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1155000000 USD
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815000000 USD
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5729000000 USD
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6595000000 USD
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2896000000 USD
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940000000 USD
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2800000000 USD
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3423000000 USD
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16170000000 USD
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11000000 USD
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2160000000 USD
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2192000000 USD
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1970000000 USD
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957000000 USD
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4596000000 USD
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1231000000 USD
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275000000 USD
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340000000 USD
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460000000 USD
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81000000 USD
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1510000000 USD
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0 USD
CY2016 us-gaap Other Than Temporary Impairment Losses Investments Availableforsale Securities
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0 USD
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2380000000 USD
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807000000 USD
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1360000000 USD
CY2015 us-gaap Product Warranty Accrual Warranties Issued
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2046000000 USD
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4960000000 USD
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3286000000 USD
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2326000000 USD
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274000000 USD
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438000000 USD
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94000000 USD
CY2016Q4 us-gaap Redeemable Noncontrolling Interest Equity Carrying Amount
RedeemableNoncontrollingInterestEquityCarryingAmount
96000000 USD
CY2014 us-gaap Repayments Of Other Debt
RepaymentsOfOtherDebt
28859000000 USD
CY2015 us-gaap Repayments Of Other Debt
RepaymentsOfOtherDebt
33358000000 USD
CY2016 us-gaap Repayments Of Other Debt
RepaymentsOfOtherDebt
38797000000 USD
CY2014 us-gaap Research And Development Expense
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6700000000 USD
CY2015 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
6700000000 USD
CY2016 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
7300000000 USD
CY2015Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
14414000000 USD
CY2016Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
15634000000 USD
CY2014 us-gaap Revenues
Revenues
144077000000 USD
CY2015Q1 us-gaap Revenues
Revenues
33900000000 USD
CY2015Q2 us-gaap Revenues
Revenues
37263000000 USD
CY2015Q3 us-gaap Revenues
Revenues
38144000000 USD
CY2015Q4 us-gaap Revenues
Revenues
40251000000 USD
CY2015 us-gaap Revenues
Revenues
149558000000 USD
CY2016Q1 us-gaap Revenues
Revenues
37718000000 USD
CY2016Q2 us-gaap Revenues
Revenues
39485000000 USD
CY2016Q3 us-gaap Revenues
Revenues
35943000000 USD
CY2016Q4 us-gaap Revenues
Revenues
38654000000 USD
CY2016 us-gaap Revenues
Revenues
151800000000 USD
CY2014 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
11842000000 USD
CY2015 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
10502000000 USD
CY2016 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
12196000000 USD
CY2014 us-gaap Share Based Compensation
ShareBasedCompensation
180000000 USD
CY2015 us-gaap Share Based Compensation
ShareBasedCompensation
199000000 USD
CY2016 us-gaap Share Based Compensation
ShareBasedCompensation
210000000 USD
CY2015 us-gaap Standard And Extended Product Warranty Accrual Foreign Currency Translation Gain Loss
StandardAndExtendedProductWarrantyAccrualForeignCurrencyTranslationGainLoss
-232000000 USD
CY2016 us-gaap Standard And Extended Product Warranty Accrual Foreign Currency Translation Gain Loss
StandardAndExtendedProductWarrantyAccrualForeignCurrencyTranslationGainLoss
2000000 USD
CY2015Q4 us-gaap Stockholders Equity
StockholdersEquity
28642000000 USD
CY2016Q4 us-gaap Stockholders Equity
StockholdersEquity
29170000000 USD
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26173000000 USD
CY2014Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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24465000000 USD
CY2015Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
28657000000 USD
CY2016Q4 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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29187000000 USD
CY2016Q4 us-gaap Tax Credit Carryforward Amount
TaxCreditCarryforwardAmount
5900000000 USD
CY2015Q4 us-gaap Treasury Stock Value
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977000000 USD
CY2016Q4 us-gaap Treasury Stock Value
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1122000000 USD
CY2014Q4 us-gaap Unrecognized Tax Benefits
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1286000000 USD
CY2015Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
1601000000 USD
CY2016Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
1586000000 USD
CY2015 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions
24000000 USD
CY2016 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions
67000000 USD
CY2015 us-gaap Unrecognized Tax Benefits Decreases Resulting From Settlements With Taxing Authorities
UnrecognizedTaxBenefitsDecreasesResultingFromSettlementsWithTaxingAuthorities
65000000 USD
CY2016 us-gaap Unrecognized Tax Benefits Decreases Resulting From Settlements With Taxing Authorities
UnrecognizedTaxBenefitsDecreasesResultingFromSettlementsWithTaxingAuthorities
23000000 USD
CY2015 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
91000000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
69000000 USD
CY2015 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
330000000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
12000000 USD
CY2015Q4 us-gaap Unrecognized Tax Benefits Interest On Income Taxes Accrued
UnrecognizedTaxBenefitsInterestOnIncomeTaxesAccrued
93000000 USD
CY2016Q4 us-gaap Unrecognized Tax Benefits Interest On Income Taxes Accrued
UnrecognizedTaxBenefitsInterestOnIncomeTaxesAccrued
67000000 USD
CY2015 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
7000000 USD
CY2016 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
3000000 USD
CY2015Q4 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
1500000000 USD
CY2016Q4 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
1500000000 USD
CY2013Q4 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
2420000000 USD
CY2014Q4 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
2697000000 USD
CY2015Q4 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
2865000000 USD
CY2016Q4 us-gaap Valuation Allowances And Reserves Balance
ValuationAllowancesAndReservesBalance
2045000000 USD
CY2014 us-gaap Valuation Allowances And Reserves Charged To Cost And Expense
ValuationAllowancesAndReservesChargedToCostAndExpense
536000000 USD
CY2015 us-gaap Valuation Allowances And Reserves Charged To Cost And Expense
ValuationAllowancesAndReservesChargedToCostAndExpense
538000000 USD
CY2016 us-gaap Valuation Allowances And Reserves Charged To Cost And Expense
ValuationAllowancesAndReservesChargedToCostAndExpense
751000000 USD
CY2014 us-gaap Valuation Allowances And Reserves Deductions
ValuationAllowancesAndReservesDeductions
259000000 USD
CY2015 us-gaap Valuation Allowances And Reserves Deductions
ValuationAllowancesAndReservesDeductions
370000000 USD
CY2016 us-gaap Valuation Allowances And Reserves Deductions
ValuationAllowancesAndReservesDeductions
1571000000 USD
CY2014 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
3958000000 shares
CY2015 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
4002000000 shares
CY2016 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
3999000000 shares
CY2014 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
3912000000 shares
CY2015 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
3969000000 shares
CY2016 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
3973000000 shares
CY2016 us-gaap Advertising Cost Policy Expensed Advertising Cost
AdvertisingCostPolicyExpensedAdvertisingCost
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">advertising costs are reported in </font><font style="font-family:Arial;font-size:10pt;font-style:italic;">Selling, administrative, and other expenses</font><font style="font-family:Arial;font-size:10pt;">.</font></div></div><div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Advertising costs are expensed as incurred.</font></div></div>
CY2016 us-gaap Comparability Of Prior Year Financial Data
ComparabilityOfPriorYearFinancialData
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Change in presentation.</font><font style="font-family:Arial;font-size:10pt;"> Our core Automotive business includes the designing, manufacturing, marketing, and servicing of a full line of Ford cars, trucks, SUVs, and electrified vehicles, as well as Lincoln luxury vehicles. We provide vehicle-related financing and leasing activities through Ford Motor Credit Company LLC (&#8220;Ford Credit&#8221;). At the same time, we are pursuing emerging opportunities in connectivity, mobility, autonomous vehicles, the customer experience, and data and analytics. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Prior to the second quarter of 2016, we presented our financial statements on both a consolidated basis and on a &#8220;sector&#8221; basis for our Automotive and Financial Services sectors. With our expansion into mobility services, including the formation in March 2016 of the Ford Smart Mobility LLC subsidiary, we reevaluated our disclosures and concluded we should eliminate our two-sector financial presentation and, reflecting the manner in which our Chief Operating Decision Maker manages our business, changed our segment presentation beginning with the second quarter of 2016 to be Automotive, Financial Services, and All Other. See Note </font><font style="font-family:Arial;font-size:10pt;">4</font><font style="font-family:Arial;font-size:10pt;"> for a description of our segment presentation. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">In addition, as a result of the elimination of our two-sector financial presentation, at June 30, 2016 we changed the presentation of our consolidated balance sheet and certain notes to the consolidated financial statements to classify our assets and liabilities as current or non-current. We reclassified certain prior year amounts in our consolidated financial statements to conform to the current year presentation.</font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div></div>
CY2016 us-gaap Financing Receivable Allowance For Credit Losses Policy For Uncollectible Amounts
FinancingReceivableAllowanceForCreditLossesPolicyForUncollectibleAmounts
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">The allowance for credit losses represents our estimate of the probable credit loss inherent in finance receivables as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly and the assumptions and models used in establishing the allowance are evaluated regularly. Because credit losses may vary substantially over time, estimating credit losses requires a number of assumptions about matters that are uncertain. The majority of credit losses are attributable to Ford Credit&#8217;s consumer receivables portfolio. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Additions to the allowance for credit losses are made by recording charges to </font><font style="font-family:Arial;font-size:10pt;font-style:italic;">Financial Services interest, operating, and other expenses</font><font style="font-family:Arial;font-size:10pt;"> on the income statement. The uncollectible portion of finance receivables are charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is&#160;</font><font style="font-family:Arial;font-size:10pt;color:#000000;text-decoration:none;">120</font><font style="font-family:Arial;font-size:10pt;">&#160;days delinquent, taking into consideration the financial condition of the customer, borrower, or lessee, the value of the collateral, recourse to guarantors, and other factors. </font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">In the event we repossess the collateral, the receivable is charged off and we record the collateral at its estimated fair value less costs to sell and report it in </font><font style="font-family:Arial;font-size:10pt;font-style:italic;">Other assets</font><font style="font-family:Arial;font-size:10pt;"> on the balance sheet. Charge-offs on finance receivables include uncollected amounts related to principal, interest, late fees, and other allowable charges. Recoveries on finance receivables previously charged off as uncollectible, are credited to the allowance for credit losses.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;font-weight:bold;">Consumer </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We estimate the allowance for credit losses on our consumer receivables using a combination of measurement models and management judgment. The models consider factors such as historical trends in credit losses and recoveries (including key metrics such as delinquencies, repossessions, and bankruptcies), the composition of the present portfolio (including vehicle brand, term, risk evaluation, and new/used vehicles), trends in historical used vehicle values, and economic conditions. Estimates from these models rely on historical information and may not fully reflect losses inherent in the present portfolio. Therefore, we may adjust the estimate to reflect management judgment regarding observable changes in recent economic trends and conditions, portfolio composition, and other relevant factors.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We make projections of two key assumptions to assist in estimating the consumer allowance for credit losses:</font></div><div style="line-height:120%;text-align:left;text-indent:20px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:24px;"><font style="font-family:Arial;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Frequency - number of finance receivables contracts that are expected to default over the loss emergence period, measured as repossessions; and</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:24px;"><font style="font-family:Arial;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Loss severity - expected difference between the amount a customer owes when the finance contract is charged off and the amount received, net of expenses from selling the repossessed vehicle</font></div></td></tr></table><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Collective Allowance for Credit Losses.</font><font style="font-family:Arial;font-size:10pt;"> The collective allowance is evaluated primarily using a collective loss-to-receivables (&#8220;LTR&#8221;) model that, based on historical experience, indicates credit losses have been incurred in the portfolio even though the particular accounts that are uncollectible cannot be specifically identified. The LTR model is based on the most recent years of history. Each LTR is calculated by dividing credit losses by average finance receivables excluding unearned interest supplements and allowance for credit losses. An average LTR is calculated for each product and multiplied by the end-of-period balances for that given product. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">NOTE&#160;8.</font><font style="font-family:Arial;font-size:10pt;font-weight:bold;"> </font><font style="font-family:Arial;font-size:10pt;font-weight:bold;">FINANCIAL SERVICES ALLOWANCE FOR CREDIT LOSSES</font><font style="font-family:Arial;font-size:10pt;font-weight:bold;"> </font><font style="font-family:Arial;font-size:10pt;font-style:italic;font-weight:bold;">(Continued)</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Our largest markets also use a loss projection model to estimate losses inherent in the portfolio. The loss projection model applies recent monthly performance metrics, stratified by contract type (retail or lease), contract term (e.g.,&#160;60</font><font style="font-family:Arial;font-size:10pt;font-weight:bold;">&#8209;</font><font style="font-family:Arial;font-size:10pt;">month), and risk rating to our active portfolio to estimate the losses that have been incurred.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">The loss emergence period (&#8220;LEP&#8221;) is an assumption within our models and represents the average amount of time between when a loss event first occurs and when it is charged off. This time period starts when the consumer begins to experience financial difficulty. It is evidenced, typically through delinquency, before eventually resulting in a charge-off. The LEP is a multiplier in the calculation of the collective consumer allowance for credit losses.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">For accounts greater than </font><font style="font-family:Arial;font-size:10pt;color:#000000;text-decoration:none;">120 days</font><font style="font-family:Arial;font-size:10pt;"> past due, the uncollectible portion is charged off such that the remaining recorded investment is equal to the estimated fair value of the collateral less costs to sell.</font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Specific Allowance for Impaired Receivables</font><font style="font-family:Arial;font-size:10pt;">. Consumer receivables involved in TDRs are specifically assessed for impairment. A specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the contract&#8217;s original effective interest rate or the fair value of any collateral adjusted for estimated costs to sell. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">After establishing the collective and specific allowance for credit losses, if management believes the allowance does not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant factors, an adjustment is made based on management judgment.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;font-weight:bold;">Non-Consumer </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We estimate the allowance for credit losses for non-consumer receivables based on historical LTR ratios, expected future cash flows, and the fair value of collateral. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Collective Allowance for Credit Losses</font><font style="font-family:Arial;font-size:10pt;">. We estimate an allowance for non-consumer receivables that are not specifically identified as impaired using a LTR model for each financing product based on historical experience. This LTR is an average of the most recent historical experience and is calculated consistent with the consumer receivables LTR approach. All accounts that are specifically identified as impaired are excluded from the calculation of the non-specific or collective allowance. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-style:italic;">Specific Allowance for Impaired Receivables</font><font style="font-family:Arial;font-size:10pt;">. Dealer financing is evaluated by segmenting individual loans by the risk characteristics of the loan (such as the amount of the loan, the nature of the collateral, and the financial status of the debtor). The loans are analyzed to determine whether individual loans are impaired, and a specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the loan&#8217;s original effective interest rate or the fair value of the collateral adjusted for estimated costs to sell.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">After establishing the collective and the specific allowance for credit losses, if management believes the allowance does not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant factors, an adjustment is made based on management judgment.</font></div></div>
CY2016 us-gaap Guarantees Indemnifications And Warranties Policies
GuaranteesIndemnificationsAndWarrantiesPolicies
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Guarantees and Indemnifications</font></div><div style="line-height:120%;text-align:left;font-size:8pt;"><font style="font-family:Arial;font-size:8pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Guarantees and indemnifications are recorded at fair value at their inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we will be required to perform under guarantee or indemnity, the amount of probable payment is recorded.</font></div><div style="line-height:120%;font-size:8pt;"><font style="font-family:Arial;font-size:8pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We guarantee debt and lease obligations of certain joint ventures, as well as certain financial obligations of outside third parties, including suppliers, to support our business and economic growth. Expiration dates vary through 2033, and guarantees will terminate on payment and/or cancellation of the underlying obligation. A payment by us would be triggered by failure of the joint venture or other third party to fulfill its obligation covered by the guarantee. In some circumstances, we are entitled to recover from a third party amounts paid by us under the guarantee. However, our ability to enforce these rights is sometimes stayed until the guaranteed party is paid in full, and may be limited in the event of insolvency of the third party or other circumstances. </font></div><div style="line-height:120%;text-align:left;font-size:8pt;"><font style="font-family:Arial;font-size:8pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction, such as the sale of a business. These indemnifications might include and are not limited to claims relating to any of the following: environmental, tax, and shareholder matters; intellectual property rights; power generation contracts; governmental regulations and employment-related matters; dealer, supplier, and other commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities generally would be triggered by a breach of terms of the contract or by a third-party claim. While some of these indemnifications are limited in nature, many of them do not limit potential payment. Therefore, we are unable to estimate a maximum amount of future payments that could result from claims made under these unlimited indemnities.</font></div></div><div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Warranty and Field Service Actions</font></div><div style="line-height:120%;text-align:left;font-size:8pt;"><font style="font-family:Arial;font-size:8pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We accrue obligations for warranty costs and field service actions (i.e., safety recalls, emission recalls, and other product campaigns) at the time of sale using a patterned estimation model that includes historical information regarding the nature, frequency, and average cost of claims for each vehicle line by model year. Warranty and field service action obligations are reported in </font><font style="font-family:Arial;font-size:10pt;font-style:italic;">Other liabilities and deferred revenue</font><font style="font-family:Arial;font-size:10pt;">. We reevaluate the adequacy of our accruals on a regular basis. </font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:8pt;"><font style="font-family:Arial;font-size:8pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We recognize the benefit from a recovery of the costs associated with our warranty and field service actions when specifics of the recovery have been agreed with our supplier and the amount of the recovery is virtually certain. Recoveries are reported in </font><font style="font-family:Arial;font-size:10pt;font-style:italic;">Trade and other receivables</font><font style="font-family:Arial;font-size:10pt;"> and</font><font style="font-family:Arial;font-size:10pt;font-style:italic;"> Other assets.</font></div></div>
CY2016 us-gaap Revenue Recognition Accounting Policy Gross And Net Revenue Disclosure
RevenueRecognitionAccountingPolicyGrossAndNetRevenueDisclosure
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Presentation of Sales and Sales-Related Taxes</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We collect and remit taxes required by various governmental authorities that are both imposed on and concurrent with revenue-producing transactions between us and our customers. These taxes may include, but are not limited to, sales, use, value-added, and excise taxes. We report the collection of these taxes on a net basis (excluded from revenues).</font></div></div>
CY2016 us-gaap Revenue Recognition Incentives
RevenueRecognitionIncentives
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Sales and Marketing Incentives</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Sales and marketing incentives generally are recognized as reductions in </font><font style="font-family:Arial;font-size:10pt;font-style:italic;">Automotive revenues</font><font style="font-family:Arial;font-size:10pt;">. The incentives generally take the form of cash payments to dealers and dealers&#8217; customers. The reduction to revenue is accrued at the later of the date the related vehicle is sold or the date the incentive program is both approved and communicated. We generally estimate these accruals using incentive programs that are approved as of the balance sheet date and are expected to be effective at the beginning of the subsequent period.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div></div>
CY2016 us-gaap Revenue Recognition Revenue Reductions
RevenueRecognitionRevenueReductions
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Finance and Lease Incentives</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We offer special financing and lease incentives to customers who choose to finance or lease Ford or Lincoln brand vehicles with Ford Credit. The estimated cost for these incentives is recorded as a reduction to </font><font style="font-family:Arial;font-size:10pt;font-style:italic;">Automotive revenues</font><font style="font-family:Arial;font-size:10pt;"> when the vehicle is sold to the dealer. Ford Credit records a reduction to the finance receivable or reduces the cost of the vehicle operating lease when it records the underlying finance contract and we transfer to it the amount of the incentive on behalf of the dealer&#8217;s customer. See Note </font><font style="font-family:Arial;font-size:10pt;">1</font><font style="font-family:Arial;font-size:10pt;"> for additional information regarding transactions between Automotive and Financial Services. </font></div></div>
CY2016 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">The preparation of financial statements requires us to make estimates and assumptions that affect our results. Estimates are used to account for certain items such as marketing accruals, warranty costs, employee benefit programs, etc.&#160;&#160;Estimates are based on assumptions that we believe are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.</font></div></div>

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