FORD MOTOR CREDIT CO LLC - FORM 10-Q

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EX-12 - EXHIBIT 12 - FORD MOTOR CREDIT CO LLC	a6497558ex12.htm
EX-15 - EXHIBIT 15 - FORD MOTOR CREDIT CO LLC	a6497558ex15.htm
EX-32.2 - EXHIBIT 32.2 - FORD MOTOR CREDIT CO LLC	a6497558ex32-2.htm
EX-31.2 - EXHIBIT 31.2 - FORD MOTOR CREDIT CO LLC	a6497558ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - FORD MOTOR CREDIT CO LLC	a6497558ex31-1.htm
EX-32.1 - EXHIBIT 32.1 - FORD MOTOR CREDIT CO LLC	a6497558ex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended September 30, 2010

[ ]	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 1-6368

Ford Motor Credit Company LLC

(Exact name of registrant as specified in its charter)

Delaware	38-1612444
(State of organization)	(I.R.S. employer identification no.)
One American Road, Dearborn, Michigan	48126
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (313) 322-3000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þYes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer þ

(Do not check if a smaller reporting company)

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes þ No

All of the limited liability company interests in the registrant (“Shares”) are held by an affiliate of the registrant. None of the Shares are publicly traded.

REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H (1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

EXHIBIT INDEX APPEARS AT PAGE 58

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

For the Periods Ended September 30, 2010 and 2009

(in millions)

	Third Quarter						Nine Months
	2010			2009			2010			2009
Financing revenue
Operating leases	$	741		$	1,168		$	2,593		$	3,854
Retail		561			750			1,778			2,266
Interest supplements and other support costs earned from affiliated companies		789			917			2,514			2,813
Wholesale		220			188			661			709
Other		15			18			47			60
Total financing revenue		2,326			3,041			7,593			9,702
Depreciation on vehicles subject to operating leases		(404	)		(842	)		(1,520	)		(3,200	)
Interest expense		(1,025	)		(1,259	)		(3,238	)		(3,969	)
Net financing margin		897			940			2,835			2,533
Other revenue
Insurance premiums earned, net		25			20			75			76
Other income, net (Note 13)		75			144			210			574
Total financing margin and other revenue		997			1,104			3,120			3,183
Expenses
Operating expenses		271			306			851			956
Provision for credit losses (Note 4)		(53	)		111			(255	)		893
Insurance expenses		13			10			42			47
Total expenses		231			427			638			1,896
Income before income taxes		766			677			2,482			1,287
Provision for income taxes		269			250			901			462
Income from continuing operations		497			427			1,581			825
Gain on disposal of discontinued operations (Note 12)		—			—			—			2
Net income	$	497		$	427		$	1,581		$	827

The accompanying notes are an integral part of the financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions)

	September 30,		December 31,
	2010		2009
ASSETS
Cash and cash equivalents	$	8,763	$	10,882
Marketable securities		11,537		6,864
Finance receivables, net (Note 2)		72,102		77,968
Net investment in operating leases (Note 3)		10,461		14,578
Notes and accounts receivable from affiliated companies		977		1,090
Derivative financial instruments (Note 11)		1,683		1,862
Other assets (Note 7)		3,096		4,100
Total assets	$	108,619	$	117,344

LIABILITIES AND SHAREHOLDER’S INTEREST
Liabilities
Accounts payable
Customer deposits, dealer reserves and other	$	1,266	$	1,082
Affiliated companies		1,478		1,145
Total accounts payable		2,744		2,227
Debt (Note 8)		88,473		96,333
Deferred income taxes		1,760		1,816
Derivative financial instruments (Note 11)		662		1,179
Other liabilities and deferred income (Note 7)		4,047		4,809
Total liabilities		97,686		106,364

Shareholder’s interest
Shareholder’s interest		5,274		5,149
Accumulated other comprehensive income		799		1,052
Retained earnings (Note 9)		4,860		4,779
Total shareholder’s interest		10,933		10,980
Total liabilities and shareholder’s interest	$	108,619	$	117,344

The following table includes assets to be used to settle the liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheet above. See Notes 5 and 6 for additional information on our VIEs:

	September 30,		December 31,
	2010		2009
Cash and cash equivalents	$	4,385	$	4,895
Finance receivables, net		52,827		57,353
Net investment in operating leases		6,783		10,246
Derivative financial instruments — assets		24		55
Debt		43,203		46,153
Derivative financial instruments — liabilities		327		528

The accompanying notes are an integral part of the financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Periods Ended September 30, 2010 and 2009

(in millions)

	Third Quarter				Nine Months
	2010		2009		2010			2009
Net income	$	497	$	427	$	1,581		$	827
Other comprehensive income/(loss), net of tax:
Foreign currency translation (a)		413		186		(253	)		585
Change in value of retained interests in securitized assets		0		1		0			(1	)
Total other comprehensive income/(loss)		413		187		(253	)		584
Comprehensive income	$	910	$	614	$	1,328		$	1,411

(a)

We recorded a $100 million and a $125 million out-of-period adjustment during the third quarter of 2010 and the first nine months of 2010, respectively, which decreased Accumulated other comprehensive income (foreign currency translation) and increased Shareholder’s interest. This adjustment did not impact our Total shareholder’s interest on our balance sheet. The impact on previously issued annual and interim financial statements was not material.

The accompanying notes are an integral part of the financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Periods Ended September 30, 2010 and 2009

(in millions)

	Nine Months
	2010			2009
Cash flows from operating activities
Net income	$	1,581		$	827
Adjustments to reconcile net income to net cash provided by operations
Provision for credit losses		(255	)		893
Depreciation and amortization		1,813			3,667
Amortization of upfront interest supplements		(1,347	)		(1,321	)
Net change in deferred income taxes		(23	)		(675	)
Net change in other assets		1,608			2,091
Net change in other liabilities		431			251
All other operating activities		(267	)		(704	)
Net cash provided by operating activities		3,541			5,029
Cash flows from investing activities
Purchases of finance receivables (other than wholesale)		(17,195	)		(16,943	)
Collections of finance receivables (other than wholesale)		21,984			24,281
Purchases of operating lease vehicles		(3,790	)		(2,344	)
Liquidations of operating lease vehicles		6,493			5,798
Net change in wholesale receivables		747			9,687
Net change in notes receivable from affiliated companies		(29	)		161
Purchases of marketable securities		(38,026	)		(22,082	)
Proceeds from sales and maturities of marketable securities		33,415			21,112
Proceeds from sales of businesses		—			168
Settlements of derivatives		42			479
All other investing activities		23			54
Net cash provided by investing activities		3,664			20,371
Cash flows from financing activities
Proceeds from issuances of long-term debt		23,399			23,904
Principal payments on long-term debt		(30,115	)		(42,501	)
Change in short-term debt, net		(814	)		(5,666	)
Cash distributions (a)		(1,500	)		(400	)
All other financing activities		(165	)		(549	)
Net cash used in financing activities		(9,195	)		(25,212	)
Effect of exchange rate changes on cash and cash equivalents		(129	)		265
Cumulative correction of a prior period error (b)		—			(630	)

Total cash flows from operations		(2,119	)		(177	)

Cash and cash equivalents, beginning of period	$	10,882		$	15,473
Change in cash and cash equivalents		(2,119	)		(177	)
Cash and cash equivalents, end of period	$	8,763		$	15,296

(a)	See Note 9 for information regarding $1.1 billion of non-cash distributions in the first quarter of 2009.
(b)	In the first quarter of 2009, we recorded a $630 million cumulative adjustment to correct for the overstatement of cash and cash equivalents and certain accounts payable that originated in prior periods. The impact on previously issued annual and interim financial statements was not material.

The accompanying notes are an integral part of the financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Table of Contents

Note		Page
Note 1	Accounting Policies	6
Note 2	Finance Receivables	7
Note 3	Net Investment in Operating Leases	8
Note 4	Allowance for Credit Losses	9
Note 5	Transfers of Receivables	9
Note 6	Variable Interest Entities	13
Note 7	Other Assets and Other Liabilities and Deferred Income	15
Note 8	Debt	16
Note 9	Retained Earnings	17
Note 10	Fair Value Measurements	18
Note 11	Derivative Financial Instruments and Hedging Activities	25
Note 12	Divestitures and Other Actions	27
Note 13	Other Income	28
Note 14	Employee Separation Actions	29
Note 15	Segment Information	30
Note 16	Commitments and Contingencies	32

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information, and instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, these unaudited financial statements include all adjustments considered necessary for a fair statement of the results of operations and financial condition for interim periods for Ford Motor Credit Company LLC, its consolidated subsidiaries and consolidated VIEs in which Ford Motor Credit Company LLC is the primary beneficiary (collectively referred to herein as “Ford Credit”, “we”, “our” or “us”). Results for interim periods should not be considered indicative of results for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2009 (“2009 10-K Report”). We are an indirect, wholly owned subsidiary of Ford Motor Company (“Ford”).

We reclassified certain prior year amounts in our consolidated financial statements to conform to current year presentation.

Interest Supplements and Other Support Costs Earned from Affiliated Companies

As of January 1, 2008, to reduce ongoing obligations to us and to be consistent with general industry practice, Ford began paying interest supplements and residual value support to us at the time we purchase eligible contracts from dealers. Finance receivables are reported at their outstanding balance, including origination cost and late charges, net of unearned income and unearned interest supplements received from Ford and other affiliates. The amount of unearned interest supplements for finance receivables was about $2 billion and $1.9 billion at September 30, 2010 and December 31, 2009, respectively. Net investment in operating leases are recorded at cost and the vehicles are depreciated on a straight-line basis over the lease term to the estimated residual value. Unearned interest supplements and residual support payments received from Ford and other affiliates for investments in operating leases are recorded in Other liabilities and deferred income. The amount of unearned interest supplements and residual support payments for net investment in operating leases was $878 million and $1.1 billion at September 30, 2010 and December 31, 2009, respectively.

At September 30, 2010, in the United States and Canada, Ford is obligated to pay us $381 million of interest supplements (including supplements related to sold receivables) and $59 million of residual value support over the terms of the related finance contracts, compared with about $1 billion of interest supplements and $180 million of residual value support at December 31, 2009, in each case for contracts purchased prior to January 1, 2008. The unpaid interest supplements and residual value support obligations on these contracts will continue to decline as the contracts liquidate.

Provision for Income Taxes

The provision for income taxes is computed by applying our estimated annual effective tax rate to year-to-date income before taxes.

Accounting Standards Issued Not Yet Adopted

In July 2010, the Financial Accounting Standards Board (“FASB”) issued a new standard requiring expanded disclosures about the credit quality of financing receivables and the allowance for credit losses. The new standard requires disaggregation of disclosures by portfolio segment or by class of financing receivable, and provides additional implementation guidance for determining the level of disaggregation of information. The standard also requires new disclosures on credit quality indicators, past due information, and modifications of financing receivables. The standard is effective for us as of December 31, 2010.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 2. FINANCE RECEIVABLES

We offer a wide variety of automotive financing products to and through automotive dealers throughout the world. Our finance receivables fall into three categories:

•

Retail financing — purchasing retail installment sale and direct financing lease contracts from dealers for new and used vehicles with retail customers, daily rental companies, government entities, and fleet customers;

•

Wholesale financing — making loans to dealers to finance the purchase of vehicle inventory, also known as floorplan financing; and

•

Other financing — making loans to dealers for improvements to dealership facilities, working capital, and the purchase and financing of dealership real estate. Other financing also includes purchasing certain receivables generated by Ford, primarily in connection with the delivery of vehicle inventories from Ford, the sale of parts and accessories by Ford to dealers and other receivables generated by Ford.

Finance receivables, net

Net finance receivables at September 30, 2010 and December 31, 2009 were as follows (in millions):

	September 30, 2010			December 31, 2009
Retail (including direct financing leases)	$	51,110		$	56,308
Wholesale		21,449			22,453
Other		2,408			2,474
Total finance receivables, net of unearned income (a)(b)		74,967			81,235
Less: Unearned interest supplements		(1,997	)		(1,932	)
Less: Allowance for credit losses		(868	)		(1,335	)
Finance receivables, net	$	72,102		$	77,968

Net finance receivables subject to fair value (c)	$	70,415		$	75,584
Fair value		72,333			76,807

(a)

At September 30, 2010 and December 31, 2009, includes $570 million and $647 million, respectively, of primarily wholesale receivables with entities that are reported as consolidated subsidiaries of Ford. The consolidated subsidiaries include dealerships that are partially owned by Ford and consolidated as VIEs and also certain overseas affiliates. The associated vehicles that are being financed by us are reported as inventory on Ford’s balance sheet.

(b)

At September 30, 2010 and December 31, 2009, includes finance receivables of $57.5 billion and $64.4 billion, respectively, that have been sold for legal purposes in securitization transactions but continue to be included in our consolidated financial statements, of which $108 million is reported as inventory by Ford at September 30, 2010. The receivables are available only for payment of the debt and other obligations issued or arising in the securitization transactions; they are not available to pay our other obligations or the claims of our other creditors. We hold the right to the excess cash flows not needed to pay the debt and other obligations issued or arising in each of these securitization transactions. Refer to Note 5 for additional information.

(c)	At September 30, 2010 and December 31, 2009, excludes $1.7 billion and $2.4 billion, respectively, of certain receivables (primarily direct financing leases) that are not subject to fair value disclosure requirements. See Note 10 for fair value methodology.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 3. NET INVESTMENT IN OPERATING LEASES

Net investment in operating leases consists primarily of lease contracts for new and used vehicles with retail customers, daily rental companies, government entities and fleet customers with terms of 60 months or less.

Net investment in operating leases

Net investment in operating leases at September 30, 2010 and December 31, 2009 were as follows (in millions):

	September 30, 2010			December 31, 2009
Vehicles, at cost, including initial direct costs	$	15,124		$	20,983
Less: Accumulated depreciation		(4,558	)		(6,191	)
Net investment in operating leases before allowance for credit losses (a)		10,566			14,792
Less: Allowance for credit losses		(105	)		(214	)
Net investment in operating leases	$	10,461		$	14,578

(a)

At September 30, 2010 and December 31, 2009, includes net investment in operating leases of about $6.8 billion and $10.4 billion, respectively, that have been included in securitization transactions but continue to be included in our consolidated financial statements. These net investment in operating leases are available only for payment of the debt and other obligations issued or arising in the securitization transactions; they are not available to pay our other obligations or the claims of our other creditors until the associated debt or other obligations are satisfied. Refer to Note 5 for additional information.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 4. ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is our estimate of the probable credit losses inherent in finance receivables and operating leases at the date of the balance sheet. Consistent with our normal practices and policies, we assess the adequacy of our allowance for credit losses quarterly and regularly evaluate the assumptions and models used in establishing the allowance. Because credit losses can vary substantially over time, estimating credit losses requires a number of assumptions about matters that are uncertain.

Allowance for Credit Losses

Following is an analysis of the allowance for credit losses related to finance receivables, investment in direct financing leases, and investment in operating leases for the periods ended September 30 (in millions):

	Third Quarter						Nine Months
	2010			2009			2010			2009
Balance, beginning of period	$	1,104		$	1,846		$	1,549		$	1,668
Provision for credit losses		(53	)		111			(255	)		893
Total charge-offs and recoveries
Charge-offs		(189	)		(346	)		(637	)		(1,172	)
Recoveries		94			106			323			315
Net charge-offs		(95	)		(240	)		(314	)		(857	)
Other changes, principally amounts related to translation adjustments and finance receivables sold		17			(2	)		(7	)		11
Balance, end of period	$	973		$	1,715		$	973		$	1,715

The allowance for credit losses is estimated using a combination of models and management judgment, and is based on such factors as portfolio quality, historical loss performance, and receivable levels. At September 30, 2010, our allowance for credit losses includes about $10 million which was based on management’s judgment regarding higher retail loss assumptions in Spain compared with historical trends used in our models. At September 30, 2009, our allowance for credit losses included about $260 million which was based on management’s judgment regarding higher retail installment and lease repossession assumptions and higher wholesale and dealer loan default assumptions.

NOTE 5. TRANSFERS OF RECEIVABLES

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

We adopted the FASB’s new accounting standard related to transfers of financial assets on January 1, 2010. The standard requires greater transparency about transfers of financial assets and a company’s continuing involvement in the transferred financial assets. The standard also removes the concept of a qualifying special-purpose entity from GAAP and changes the requirements for derecognizing financial assets. This new standard did not have a material impact on our financial condition, results of operations and financial statement disclosures.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

On-Balance Sheet Securitization Transactions

We transfer finance receivables and net investments in operating leases in securitization transactions to fund operations and to maintain liquidity. The majority of our securitization transactions are recorded as asset-backed debt and the associated assets are not derecognized and continue to be included in our financial statements.

The finance receivables and net investment in operating leases that have been included in securitization transactions are only available for payment of the debt and other obligations issued or arising in the securitization transactions. Cash and cash equivalents and marketable securities balances relating to securitization transactions are used only to support the on-balance sheet securitization transactions. We hold the right to the excess cash flows not needed to pay the debt and other obligations issued or arising in each of these securitization transactions. The asset-backed debt has been issued either directly by us or by consolidated entities.

Most of these securitization transactions utilize VIEs. Refer to Note 6 for more information concerning VIEs. The following table shows the assets and the liabilities related to our securitization transactions that were included in our financial statements at September 30, 2010 and December 31, 2009 (in billions):

	September 30, 2010
	Cash and Cash Equivalents and Marketable Securities (a)		Finance Receivables & Net Investment in Operating Leases (b)						Related Debt
	Cash and Cash Equivalents and Marketable Securities (a)		Before Allowance for Credit Losses		Allowance for Credit Losses		After Allowance for Credit Losses		Related Debt
VIE (c)
Retail	$	3.1	$	37.3	$	0.5	$	36.8	$	30.0
Wholesale		0.4		16.0		0.0		16.0		9.5
Finance receivables		3.5		53.3		0.5		52.8		39.5
Net investment in operating leases		0.9		6.8		0.0		6.8		3.7
Total	$	4.4	$	60.1	$	0.5	$	59.6	$	43.2

Non-VIE
Retail	$	0.3	$	2.0	$	0.0	$	2.0	$	2.2
Wholesale		0.0		2.2		0.0		2.2		1.6
Finance receivables		0.3		4.2		0.0		4.2		3.8
Net investment in operating leases		—		—		—		—		—
Total (d)	$	0.3	$	4.2	$	0.0	$	4.2	$	3.8

Total securitization transactions
Retail	$	3.4	$	39.3	$	0.5	$	38.8	$	32.2
Wholesale		0.4		18.2		0.0		18.2		11.1
Finance receivables		3.8		57.5		0.5		57.0		43.3
Net investment in operating leases		0.9		6.8		0.0		6.8		3.7
Total	$	4.7	$	64.3	$	0.5	$	63.8	$	47.0

(a)	Includes marketable securities totaling $116 million which are pledged as collateral in a funding arrangement with the European Central Bank (“ECB”).

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

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

(d)

Certain debt issued by the VIEs to affiliated companies served as collateral for accessing the ECB open market operations program. This external funding of $427 million at September 30, 2010 was not reflected as debt of the VIEs and is reflected as non-VIE debt above. The finance receivables backing this external funding are reflected in VIE finance receivables.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

	December 31, 2009
			Finance Receivables & Net Investment in Operating Leases (a)
	Cash and Cash Equivalents		Before Allowance for Credit Losses		Allowance for Credit Losses		After Allowance for Credit Losses		Related Debt
VIE (b)
Retail	$	3.1	$	41.7	$	0.8	$	40.9	$	31.2
Wholesale		0.5		16.5		0.0		16.5		8.4
Finance receivables		3.6		58.2		0.8		57.4		39.6
Net investment in operating leases		1.3		10.4		0.2		10.2		6.6
Total	$	4.9	$	68.6	$	1.0	$	67.6	$	46.2

Non-VIE
Retail	$	0.3	$	3.2	$	0.1	$	3.1	$	4.5
Wholesale		0.0		3.0		0.0		3.0		2.2
Finance receivables		0.3		6.2		0.1		6.1		6.7
Net investment in operating leases		—		—		—		—		—
Total (c)	$	0.3	$	6.2	$	0.1	$	6.1	$	6.7

Total securitization transactions
Retail	$	3.4	$	44.9	$	0.9	$	44.0	$	35.7
Wholesale		0.5		19.5		0.0		19.5		10.6
Finance receivables		3.9		64.4		0.9		63.5		46.3
Net investment in operating leases		1.3		10.4		0.2		10.2		6.6
Total	$	5.2	$	74.8	$	1.1	$	73.7	$	52.9

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

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

(c)

Certain debt issued by the VIEs to affiliated companies served as collateral for accessing the ECB open market operations program. This external funding of $1.8 billion at December 31, 2009 was not reflected as debt of the VIEs and is reflected as non-VIE debt above. The finance receivables backing this external funding are reflected in VIE finance receivables.

The financial performance related to our securitization transactions for the periods ended September 30 were as follows (in millions):

	Third Quarter
	2010						2009
	Derivative Expense		Interest Expense		Total		Derivative Expense/ (Income)			Interest Expense		Total
VIE	$	90	$	297	$	387	$	272		$	408	$	680
Non-VIE		5		49		54		(10	)		66		56
Total	$	95	$	346	$	441	$	262		$	474	$	736

	Nine Months
	2010						2009
	Derivative Expense		Interest Expense		Total		Derivative Expense/ (Income)			Interest Expense		Total
VIE	$	237	$	971	$	1,208	$	281		$	1,306	$	1,587
Non-VIE		13		183		196		(8	)		243		235
Total	$	250	$	1,154	$	1,404	$	273		$	1,549	$	1,822

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

Certain of our securitization entities enter into derivative transactions to mitigate interest rate exposure, primarily resulting from fixed-rate assets securing floating-rate debt and, in certain instances, currency exposure resulting from assets in one currency and debt in another currency. Refer to Note 10 regarding the fair value of derivatives. In many instances, the counterparty enters into offsetting derivative transactions with us to mitigate their interest rate risk resulting from derivatives with our securitization entities. Our exposures based on the fair value of derivative instruments related to securitization programs at September 30, 2010 and December 31, 2009 were as follows (in millions):

	September 30, 2010
	Derivative Asset						Derivative Liability
	Securitization Entities		Ford Credit (Excluding Securitization Entities)		Total		Securitization Entities		Ford Credit (Excluding Securitization Entities)		Total
VIE	$	24	$	—	$	24	$	327	$	—	$	327
Non-VIE		8		230		238		29		44		73
Total	$	32	$	230	$	262	$	356	$	44	$	400


	December 31, 2009
	Derivative Asset						Derivative Liability
	Securitization Entities		Ford Credit (Excluding Securitization Entities)		Total		Securitization Entities		Ford Credit (Excluding Securitization Entities)		Total
VIE	$	55	$	—	$	55	$	528	$	—	$	528
Non-VIE		14		383		397		51		27		78
Total	$	69	$	383	$	452	$	579	$	27	$	606

Off-Balance Sheet Securitization Transactions

We recognized a loss of $49 million in the third quarter of 2009, and income of $1 million and a loss of $30 million in the first nine months of 2010 and 2009, respectively, of investment and other income related to the sales of receivables. Third quarter of 2009 includes a $52 million valuation allowance for Australian finance receivables classified as held-for-sale at September 30, 2009. These amounts are included in Other income, net. Also, we received cash flows of $26 million and $60 million in the first nine months of 2010 and 2009, respectively, related to the net change in retained interests in securitized assets. These amounts are included in All other investing activities in our consolidated statement of cash flows.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 6. VARIABLE INTEREST ENTITIES

We adopted the FASB’s new accounting standard on VIEs on January 1, 2010. The standard requires ongoing assessments of whether an entity is the primary beneficiary of a VIE and enhancements to the disclosures about an entity’s involvement with a VIE. This standard requires the consolidation of a VIE if an entity has both (i) the power to direct the activities of the VIE, and (ii) the obligation to absorb losses or the right to receive residual returns that could potentially be significant to the VIE. Conversely, the standard does not permit consolidation if these two tests are not met. This new standard did not result in any deconsolidation of entities or additional consolidation of entities.

A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. Nearly all of our VIEs are special purpose entities used for our on-balance sheet securitizations.

If we determine that we have operating power and the obligation to absorb losses or receive benefits, we consolidate the VIE as the primary beneficiary and, if not, we do not consolidate. We have operating power when we have the ability to exercise discretion in the servicing of financial assets, issue additional debt, exercise a unilateral call option, add assets to revolving structures, or control investment decisions.

Assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against our general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on our general assets; rather, they represent claims against the specific assets of the consolidated VIEs.

VIEs of which we are the primary beneficiary

We use special purpose entities to issue asset-backed securities in transactions to public and private investors, bank conduits and government-sponsored entities or others who obtain funding from government programs. We have deemed most of these special purpose entities to be VIEs. The asset-backed securities are secured by finance receivables and interests in net investments in operating leases. The assets continue to be consolidated by us. We retain interests in our securitization transactions, including senior and subordinated securities issued by the VIEs, rights to cash held for the benefit of the securitization investors, such as cash reserves, and residual interests.

The transactions create and pass along risks to the variable interest holders, depending on the assets securing the debt and the specific terms of the transactions. We aggregate and analyze our transactions based on the risk profile of the product and the type of funding structure, including:

•

Retail transactions — consumer credit risk and pre-payment risk, which are driven by the ability of the customer to pay, as well as the timing of the customer payments;

•

Wholesale transactions — dealer credit risk and Ford risk, as the receivables owned by the VIEs primarily arise from the financing provided by us to Ford-franchised dealers; therefore, the collections depend upon the sale of Ford vehicles; and

•

Net investment in operating lease transactions — vehicle residual value risk, consumer credit risk and pre-payment risk.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 6. VARIABLE INTEREST ENTITIES (Continued)

As residual interest holder, we are exposed to the underlying residual and credit risk of the collateral, and are exposed to interest rate risk in some transactions. The amount of risk absorbed by our residual interests is generally represented by and limited to the amount of overcollateralization of our assets securing the debt and any cash reserves.

We have no obligation to repurchase or replace any securitized asset that subsequently becomes delinquent in payment or otherwise is in default, except under standard representations and warranties such as good and marketable title to the assets, or when certain changes are made to the underlying asset contracts. Securitization investors have no recourse to us or our other assets for credit losses on the securitized assets and have no right to require us to repurchase the investments. We do not guarantee any asset-backed securities and generally have no obligation to provide liquidity or contribute cash or additional assets to the VIEs. We may be required to support the performance of certain securitization transactions, however, by increasing cash reserves.

Although not contractually required, we regularly support our wholesale securitization programs by repurchasing receivables of a dealer from the VIEs when the dealer’s performance is at risk, which transfers the corresponding risk of loss from the VIE to us. In order to continue to fund the wholesale receivables, we also may contribute additional cash or wholesale receivables if the collateral falls below the required levels. The balances of cash related to these contributions were zero at September 30, 2010 and December 31, 2009, and ranged from zero to $1,361 million during the first nine months of 2010. In addition, while not contractually required, we may purchase the commercial paper issued by our FCAR asset-backed commercial paper program.

VIEs that are exposed to interest rate or currency risk have reduced their risks by entering into derivatives. In certain instances, we have entered into offsetting derivative transactions with the VIE to protect the VIE from the risks that are not mitigated through the derivative transactions between the VIE and its external counterparty. In other instances, we have entered into derivative transactions with the counterparty to protect the counterparty from risks absorbed through their derivative transactions with the VIEs. See Note 11 for additional information regarding our derivatives.

Refer to Note 5 for information on the financial position and financial performance of our VIEs.

VIEs of which we are not the primary beneficiary

We have an investment in Forso Nordic AB, a joint venture determined to be a VIE of which we are not the primary beneficiary. The joint venture provides consumer and dealer financing in its local markets and is financed by external debt and additional subordinated interest provided by our joint venture partner. The operating agreement indicates that the power to direct economically significant activities is shared with our joint venture partner, and the obligation to absorb losses or right to receive benefits resides primarily with our joint venture partner. Our investment in the joint venture is accounted for as an equity method investment and is included in Other assets. Our maximum exposure to any potential losses associated with this VIE is limited to our equity investment, and amounted to $73 million and $67 million at September 30, 2010 and December 31, 2009, respectively.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 7. OTHER ASSETS AND OTHER LIABILITIES AND DEFERRED INCOME

Other assets and other liabilities and deferred income consist of various balance sheet items that are combined for financial statement presentation due to their respective materiality compared with other individual asset and liability items. This footnote provides more information contained within the combined items.

Other assets at September 30, 2010 and December 31, 2009 were as follows (in millions):

	September 30, 2010		December 31, 2009
Accrued interest, rents and other non-finance receivables	$	920	$	1,070
Collateral held for resale, at net realizable value		462		624
Deferred charges		336		665
Restricted cash (a)		304		308
Investment in used vehicles held for resale at net realizable value		240		458
Prepaid reinsurance premiums and other reinsurance receivables		235		275
Property and equipment, net of accumulated depreciation of $365 and $348 at
September 30, 2010 and December 31, 2009, respectively		150		177
Investment in non-consolidated affiliates		129		123
Other		320		400
Total other assets	$	3,096	$	4,100

(a)	Includes cash collateral required to be held against loans with the European Investment Bank as well as cash held to meet certain local governmental and regulatory reserve requirements.

Other liabilities and deferred income at September 30, 2010 and December 31, 2009 were as follows (in millions):

	September 30, 2010		December 31, 2009
Interest payable	$	1,006	$	1,007
Deferred interest supplements and residual support payments on net investment in operating leases		878		1,074
Income taxes payable to Ford and affiliated companies (a)(b)		791		1,352
Unrecognized tax benefits		745		596
Unearned insurance premiums		261		315
Other		366		465
Total other liabilities and deferred income	$	4,047	$	4,809

(a)

During the second quarter of 2010, we purchased $1.3 billion principal amount of Ford’s Amortizing Guaranteed Secured Notes (“VEBA Note A”) issued to the UAW Retiree Medical Benefits Trust for $1.3 billion and immediately transferred the note to Ford in satisfaction of $1.3 billion of our tax liabilities to Ford.

(b)	In accordance with our intercompany tax sharing agreement with Ford.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 8. DEBT

We have an asset-backed commercial paper program in the United States with qualified institutional investors. We also obtain other short-term funding from the issuance of demand notes to retail investors through our floating rate demand notes program. We have certain asset-backed securitization programs that issue short-term debt securities that are sold to institutional investors. Bank borrowings by several of our international affiliates in the ordinary course of business are an additional source of short-term funding.

We obtain long-term debt funding through the issuance of a variety of unsecured and asset-backed debt securities in the United States and international capital markets. We also sponsor a number of asset-backed securitization programs that issue long-term debt securities that are sold to institutional investors in the United States and international capital markets.

Debt

At September 30, 2010 and December 31, 2009, debt was as follows (in millions):

	Interest Rates
	Average Contractual (a)				Weighted-Average (b)				September 30,			December 31,
	2010		2009		2010		2009		2010			2009
Short-term debt
Asset-backed commercial paper (c)		0.5%		0.9%					$	6,689		$	6,369
Ford Interest Advantage (d)		1.9%		2.7%						4,551			3,680
Other asset-backed short-term debt (c)		2.4%		2.6%						2,402			4,482
Other short-term debt (e)		5.1%		4.2%						874			891
Total short-term debt		1.6%		2.0%		2.0%		3.0%		14,516			15,422
Long-term debt
Senior indebtedness
Notes payable within one year (e)										6,323			7,053
Notes payable after one year (e)										29,722			32,124
Asset-backed debt (c)
Notes payable within one year										18,461			18,952
Notes payable after one year										19,465			23,076
Unamortized discount										(435	)		(525	)
Fair value adjustments (f)										421			231
Total long-term debt (g)		5.4%		5.4%		5.0%		5.1%		73,957			80,911
Total debt		4.7%		4.8%		4.5%		4.8%	$	88,473		$	96,333

Fair value of debt (h)									$	92,335		$	97,962

(a)	Third quarter of 2010 and fourth quarter of 2009 average contractual rates exclude the effects of derivatives and facility fees.

(b)	Third quarter of 2010 and fourth quarter of 2009 weighted-average rates include the effects of derivatives and facility fees.

(c)	Obligations issued in securitizations that are payable only out of collections on the underlying securitized assets and related enhancements. Refer to Note 5 for information regarding on-balance sheet securitization transactions.

(d)	The Ford Interest Advantage program consists of our floating rate demand notes.

(e)	Includes debt with affiliated companies as indicated in the table below.

(f)	Adjustments related to designated fair value hedges of unsecured debt.

(g)	Average contractual and weighted-average interest rates for total long-term debt reflect the rates for both notes payable within one year and notes payable after one year.

(h)

Fair value of debt reflects interest accrued but not yet paid of about $1 billion and $1.1 billion at September 30, 2010 and December 31, 2009, respectively. Interest accrued is reported in Other liabilities and deferred income and Accounts payable – Affiliated companies. See Note 10 for fair value methodology.

	September 30,		December 31,
		2010		2009
Debt with affiliated companies
Other short-term debt	$	395	$	403
Notes payable within one year		163		40
Notes payable after one year		115		121
Total debt with affiliated companies	$	673	$	564

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 8. DEBT (Continued)

Debt Repurchases. From time to time and based on market conditions, we may repurchase some of our outstanding debt. If we have excess liquidity and it is an economically favorable use of our available cash, we may repurchase debt at a price lower or higher than its carrying value, resulting in a gain or loss on extinguishment.

Through private market transactions, we repurchased unsecured debt and asset-backed notes for an aggregate principal amount of about $1 billion and about $3 billion in the third quarter of 2010 and the first nine months of 2010, respectively. As a result, we recorded pre-tax losses of $26 million and $86 million, net of unamortized premiums and discounts, in Other income, net in the third quarter of 2010 and the first nine months of 2010, respectively.

We repurchased unsecured debt for an aggregate principal amount of $1.5 billion and $2.5 billion in the third quarter of 2009 and the first nine months of 2009, respectively. As a result, we recorded a pre-tax loss of $4 million and a pre-tax gain of $18 million, net of unamortized premiums and discounts, in Other income, net in the third quarter of 2009 and the first nine months of 2009, respectively.

Debt Maturities. Short-term and long-term debt matures at various dates through 2048. Maturities are as follows (in millions):

	2010 (a)		2011 (b)		2012			2013			2014			Thereafter (c)			Total
Unsecured debt maturities	$	5,454	$	9,889	$	7,081		$	5,371		$	3,653		$	10,022		$	41,470
Asset-backed debt maturities		11,565		18,415		11,018			3,604			914			1,501			47,017
Unamortized discount (d)		1		—		(141	)		(58	)		(168	)		(69	)		(435	)
Fair value adjustments (d)		—		50		106			103			57			105			421
Total debt maturities	$	17,020	$	28,354	$	18,064		$	9,020		$	4,456		$	11,559		$	88,473

(a)	Includes about $11 billion for short-term and about $6 billion for long-term debt.

(b)	Includes $3.5 billion for short-term and $24.9 billion for long-term debt.

(c)	Approximately $8.7 billion of unsecured debt matures between 2015 and 2020 with the remaining balance maturing after 2030.

(d)	Unamortized discount and fair value adjustments are presented based on maturity date of related debt.

NOTE 9. RETAINED EARNINGS

The following table summarizes earnings retained for use in the business for the periods ended September 30 (in millions):

	Third Quarter						Nine Months
	2010			2009			2010			2009
Retained earnings, beginning balance	$	5,363		$	4,331		$	4,779		$	4,985
Net income		497			427			1,581			827
Distributions		(1,000	)		(431	)		(1,500	)		(1,485	)
Retained earnings, ending balance	$	4,860		$	4,327		$	4,860		$	4,327

In the third quarter of 2009, we made a cash distribution of $400 million and a non-cash distribution of $31 million for our ownership interest in AB Volvofinans to our parent, Ford Holdings LLC.

In the first quarter of 2009, a plan was announced to restructure Ford’s debt through a combination of a conversion offer by Ford and tender offers by us. As part of this debt restructuring, we commenced a cash tender offer for Ford’s secured term loan under Ford’s secured credit agreement, pursuant to which we purchased from lenders $2.2 billion principal amount of term loan for an aggregate cost of about $1.1 billion (including transaction costs). This transaction settled on March 27, 2009, following which we distributed the term loan to our parent, Ford Holdings LLC, whereupon it was forgiven. The transaction is reflected in the table above as a $1,054 million distribution in the first nine months of 2009, which consists of the fair value of the term loan purchased plus transaction expenses.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 10. FAIR VALUE MEASUREMENTS

Certain assets and liabilities are presented on our financial statements at fair value. Assets and liabilities measured at fair value on a recurring basis on our balance sheet include cash equivalents, marketable securities, derivative financial instruments and retained interests in securitized assets. Assets and liabilities measured at fair value on a recurring basis for disclosure purposes only include finance receivables and debt. The fair value of these items are presented together with the related carrying value in Notes 2 and 8, respectively. Assets and liabilities measured at fair value on a nonrecurring basis vary based on specific circumstances such as impairments.

We adopted the FASB’s new accounting standard on fair value measurements on January 1, 2010. The standard requires both new disclosures and clarifies existing disclosures. The standard also requires a greater level of disaggregated information in the fair value hierarchy as well as expands disclosures about valuation techniques and inputs to measure fair value, as defined below.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value should be based on assumptions that market participants would use, including a consideration of non-performance risk. In determining fair value, we use various valuation methodologies and prioritize the use of observable inputs. We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market:

•

Level 1 — inputs include quoted prices for identical instruments and are the most observable.

•

Level 2 — inputs include quoted prices for similar assets and observable inputs such as interest rates, currency exchange rates and yield curves.

•

Level 3 — inputs include data not observable in the market and reflect management’s judgments about the assumptions market participants would use in pricing the asset or liability.

The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our hierarchy assessment.

Valuation Methodologies

Cash, Cash Equivalents and Marketable Securities. Cash and all highly liquid investments with a maturity of 90 days or less at the date of purchase are classified as Cash and cash equivalents. Investments in securities with a maturity date greater than 90 days at the date of purchase are classified as Marketable securities. Cash on hand, time deposits, certificates of deposit, and money market accounts are reported at par value, which approximates fair value. For other investment securities, we generally measure fair value based on a market approach using prices obtained from pricing services. We review all pricing data for reasonability and observability of inputs. Pricing methodologies and inputs to valuation models used by the pricing services depend on the security type (i.e., asset class). Where possible, fair values are generated using market inputs including quoted prices (the closing price in an exchange market), bid prices (the price at which a dealer stands ready to purchase) and other market information. For securities that are not actively traded, the pricing services obtain quotes for similar fixed-income securities or utilize matrix pricing, benchmark curves or other factors to determine fair value. In certain cases, when observable pricing data is not available, we estimate the fair value of investment securities based on an income approach using industry standard valuation models and estimates regarding non-performance risk.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 10. FAIR VALUE MEASUREMENTS (Continued)

Derivative Financial Instruments. Our derivatives are over-the-counter customized derivative transactions and are not exchange traded. We estimate the fair value of these instruments based on an income approach using industry standard valuation models. These models project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates, foreign exchange rates and the contractual terms of the derivative instruments. The discount rate used is the relevant interbank deposit rate (e.g., LIBOR) plus an adjustment for non-performance risk. The adjustment reflects the full credit default swap (“CDS”) spread applied to a net exposure, by counterparty. We use our counterparty’s CDS spread when we are in a net asset position and our own CDS spread when we are in a net liability position.

In certain cases, market data is not available and we use management judgment to develop assumptions which are used to determine fair value. This includes situations for longer-dated instruments where market data is less observable. Also, for interest rate swaps and cross-currency interest rate swaps used in securitization transactions, the notional amount of the swap is adjusted for actual payments on the securitized contracts. We use management judgment to estimate the timing and amount of the remaining swap cash flows based on historical pre-payment speeds.

Retained Interests in Securitized Assets. We estimate the fair value of retained interests based on an income approach using internal valuation models. These models project future cash flows of the monthly collections on the sold finance receivables in excess of amounts needed for payment of the debt and other obligations issued or arising in the securitization transactions. The projected cash flows are discounted to a present value based on market inputs and our own assumptions regarding credit losses, pre-payment speed and the discount rate.

Finance Receivables. We generally estimate the fair value of finance receivables based on an income approach using internal valuation models. These models project future cash flows of financing contracts based on scheduled contract payments (including principal and interest). The projected cash flows are discounted to a present value based on market inputs and our own assumptions regarding credit losses, pre-payment speed and the discount rate. Our assumptions regarding pre-payment speed and credit losses are based on historical performance.

Debt. We estimate the fair value of debt based on a market approach using quoted market prices or current market rates for similar debt with approximately the same remaining maturities, where possible. Where market prices are not available, we estimate fair value based on an income approach using discounted cash flow models. These models project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates, our own credit risk and the contractual terms of the debt instruments. For asset-backed debt issued in securitization transactions, the actual principal payments are based on the receipts from the securitized contracts. We use management judgment to estimate the timing and amount of the remaining cash flows based on historical pre-payment speeds.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 10. FAIR VALUE MEASUREMENTS (Continued)

Input Hierarchy

The following tables summarize the fair values by input hierarchy for financial instruments measured at fair value on a recurring basis at September 30, 2010 and December 31, 2009 (in millions):

	September 30, 2010
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents — financial instruments
U.S. government	$	125	$	—	$	—	$	125
Government-sponsored enterprises		—		—		—		—
Corporate debt		—		400		—		400
Government — non U.S.		—		241		—		241
Total cash equivalents — financial instruments (a)		125		641		—		766
Marketable securities
U.S. government		3,761		—		—		3,761
Government-sponsored enterprises		—		5,114		—		5,114
Corporate debt (b)		—		1,695		7		1,702
Mortgage-backed		—		232		—		232
Government — non U.S.		—		589		—		589
Other liquid investments (c)		—		139		—		139
Total marketable securities		3,761		7,769		7		11,537
Derivative financial instruments
Interest rate contracts		—		1,302		241		1,543
Foreign exchange forward contracts		—		83		—		83
Cross currency interest rate swap contracts		—		57		—		57
Total derivative financial instruments		—		1,442		241		1,683
Retained interests in securitized assets (d)		—		—		—		—
Total assets at fair value	$	3,886	$	9,852	$	248	$	13,986

Liabilities
Derivative financial instruments
Interest rate contracts	$	—	$	147	$	300	$	447
Foreign exchange forward contracts		—		17		—		17
Cross currency interest rate swap contracts		—		122		76		198
Total derivative financial instruments		—		286		376		662
Total liabilities at fair value	$	—	$	286	$	376	$	662

(a)	Excludes $5.8 billion of time deposits, certificates of deposit, money market accounts, and other cash equivalents reported at par value, which approximates fair value. In addition to these cash equivalents, we also had cash on hand totaling $2.2 billion.

(b)	Includes notes issued by supranational institutions.

(c)	Includes certificates of deposits and time deposits with maturities greater than 90 days at the date of purchase.

(d)	Retained interests in securitized assets are reported in Other assets.

Item 1. Financial Statements (Continued)

FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS (Continued)

NOTE 10. FAIR VALUE MEASUREMENTS (Continued)

	December 31, 2009
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents — financial instruments
U.S. government	$	75	$	—	$	—	$	75
Government-sponsored enterprises		—		400		—		400
Corporate debt		—		75		—		75
Government — non U.S.		—		29		—		29
Total cash equivalents — financial instruments (a)		75		504		—		579
Marketable securities
U.S. government		5,256		—		—		5,256
Government-sponsored enterprises		—		1,098		—		1,098
Corporate debt		—		159		4		163
Mortgage-backed		—		237		—		237
Government — non U.S.		—		65		—		65
Other liquid investments (b)		—		45		—		45
Total marketable securities		5,256		1,604		4		6,864
Derivative financial instruments
Interest rate contracts		—		1,230		407		1,637
Foreign exchange forward contracts		—		22		—		22
Cross currency interest rate swap contracts		—		203		—

FORD MOTOR CREDIT CO LLC - FORM 10-Q - November 8, 2010

Attached files