Form 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2008
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 1-3950
FORD MOTOR COMPANY TAX-EFFICIENT
SAVINGS PLAN FOR HOURLY EMPLOYEES
(Full title of the plan)
FORD MOTOR COMPANY
One American Road
Dearborn, Michigan 48126
(Name of the issuer of the securities held
pursuant to the plan and the address of
its principal executive office)
Required Information
Financial Statements and Schedules
Statement of Net Assets Available for Benefits, as of December 31, 2008 and December 31,
2007.
Statement of Changes in Net Assets Available for Benefits for the year ended December 31,
2008.
Schedule I — Schedule of Assets Held at End of Year as of December 31, 2008.
EXHIBITS
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Description |
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Method of Filing |
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| Exhibit 23
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Consent of Plante & Moran, PLLC
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Filed with this Report |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Ford
Motor Company Tax-Efficient Savings Plan for Hourly Employees Committee has duly caused this Annual
Report to be signed on its behalf by the undersigned hereunto duly authorized.
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FORD MOTOR COMPANY TAX-EFFICIENT
SAVINGS PLAN
FOR HOURLY EMPLOYEES
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| Date: June 26, 2009 |
By: |
/s/ Richard M. Popp
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Richard M. Popp, Member |
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Ford Motor Company Tax-Efficient Savings
Plan for Hourly Employees Committee |
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2
EXHIBIT INDEX
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Description |
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| Exhibit 23
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Consent of Plante & Moran, PLLC |
3
Ford Motor Company
Tax-Efficient Savings Plan for
Hourly Employees
Financial Report
December 31, 2008
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Contents
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of
the Ford Motor Company Tax-Efficient
Savings Plan for Hourly Employees
We have audited the accompanying statement of net assets available for benefits of the Ford Motor
Company Tax-Efficient Savings Plan for Hourly Employees as of December 31, 2008 and 2007 and the
related statement of changes in net assets available for benefits for the year ended December 31,
2008. These financial statements are the responsibility of the Plan’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement. The
Plan is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets of the Plan as of December 31, 2008 and 2007 and the changes in net assets
for the year ended December 31, 2008 in conformity with accounting principles generally accepted in
the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental schedule of assets held at end of year as of December 31, 2008
is presented for the purpose of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department of Labor’s Rules
and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan’s management. This
supplemental schedule has been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Plante & Moran, PLLC
Southfield, Michigan
June 24, 2009
1
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Statement of Net Assets Available for Benefits
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December 31 |
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2008 |
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2007 |
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Assets |
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Participant-directed Investments (Note 4): |
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Investment in Ford Defined Contribution Plans
Master Trust (Note 3) |
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$ |
2,291,113,695 |
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$ |
3,505,037,422 |
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Participant loans |
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159,362,416 |
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175,629,288 |
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Net Assets Reflecting All Investments at Fair Value |
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2,450,476,111 |
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3,680,666,710 |
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Adjustment from Fair Value to Contract Value for
Fully Benefit-Responsive Investment Contracts |
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33,186,475 |
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1,814,262 |
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Net Assets Available for Benefits |
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$ |
2,483,662,586 |
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$ |
3,682,480,972 |
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See Notes to Financial Statements.
2
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2008
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Additions |
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Employee contributions |
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$ |
185,818,098 |
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Net investment loss from interest in Ford Defined Contribution
Plans Master Trust (Note 3) |
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(991,012,209 |
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Interest on participant loans |
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10,081,980 |
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Total additions — net |
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(795,112,131 |
) |
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Deductions |
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Withdrawal of participants’ accounts |
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(403,359,805 |
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Administrative expenses |
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(346,450 |
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Total deductions |
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(403,706,255 |
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Net Decrease in Net Assets Available for Benefits |
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(1,198,818,386 |
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Net Assets Available for Benefits |
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Beginning of year |
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3,682,480,972 |
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End of year |
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$ |
2,483,662,586 |
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See Notes to Financial Statements.
3
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 1 — Description of the Plan
The following description of the Ford Motor Company Tax-Efficient Savings Plan for Hourly
Employees (the “Plan”) provides only general information. Participants should refer to the
provisions of the Plan, which are governed in all respects by the detailed terms and
conditions contained in the Tax-Efficient Savings Agreement and Plan in Volume III of the
agreement between the UAW and the Ford Motor Company (the “Company”) dated November 3, 2007.
The Plan was established effective January 1, 1985.
Type and Purpose of the Plan — The Plan is a defined contribution plan established to
encourage and facilitate systematic savings and investment by eligible hourly employees of
the Company and to provide them with an opportunity to become stockholders of the Company.
The Plan includes provisions for voting shares of company stock. It is subject to certain
provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA),
applicable to defined contribution pension plans.
Eligibility and Vesting — Hourly employees are eligible to participate in the Plan three
months after their original date of hire. Certain other part-time and temporary employees
may also be eligible to participate in the Plan. Participation in the Plan is voluntary.
Employees are immediately 100 percent vested in their contributions to the Plan.
Contributions — Participants can contribute to the Plan on both a pre-tax and after-tax
basis, subject to federal tax law limits. Participants may also elect to contribute all, or
a portion, of their distributions under the Company’s Profit Sharing Plan to the Plan on a
pre-tax basis. Pre-tax contributions are excluded from participant’s federal and most state
and local taxable income.
Subject to provisions of the Plan, participants may elect to roll over amounts from other
qualifying plans or arrangements in accordance with the Internal Revenue Code of 1986, as
amended (the “Code”). For the year ended December 31, 2008, transfers from other qualifying
plans or arrangements amounted to approximately $33,200,000, which are included in employee
contributions in the statement of changes in net assets available for benefits. Included in
rollover contributions for the year ended December 31, 2008 were rollovers of special
incentive payments distributed from the Ford UAW Retirement Plan.
Activity for participants in the Ford Stock Fund who have elected to receive dividends paid
in the form of cash instead of purchasing additional shares is reported in the statement of
changes in net assets available for benefits. No dividends were declared or paid by the
Company during the year ended December 31, 2008.
4
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 1 — Description of the Plan (Continued)
Effective November 3, 2007, the Company will contribute an amount equal to $1.00 for every
compensated hour to eligible employees hired or rehired on or after November 19, 2007. No
new eligible hourly employees were hired on or after November 19, 2007, therefore no new
contributions were made under this agreement.
Participant Accounts — A participant’s account balance is comprised of employee contributions
and investment income earned from the individual investment options selected by the
participant. Certain investment options will charge a fee on short-term transfers which is
paid from the participant’s account. The benefit to which a participant is entitled is
determined from the participant’s vested account balance.
Distributions — Pre-tax assets may not be withdrawn by participants until the termination of
their employment or until they reach 59-1/2 years of age, except in the case of personal
financial hardship. After-tax assets can be withdrawn at any time without restriction.
Distribution options include lump-sum, partial or installment payments. Eligible rollover
distributions can be rolled over to an IRA or another employer’s eligible plan.
Master Trust Investment Options and Participation — Participant contributions are invested in
accordance with the participant’s election in one or more investments, which are held in the
Ford Defined Contribution Plans Master Trust (the “Master Trust”) (see Note 3).
Transfers of Assets — The Plan permits the transfer of assets among investment options held
by the Master Trust, subject to certain trading restrictions imposed on some of the
investment options.
Participant Loans — The Plan permits loans to participants from both their pre-tax and
after-tax accounts. Monthly loan interest rates are based on the prime rate published in The
Wall Street Journal on the last business day of the prior month.
A participant is eligible to take out one loan per calendar year, and to have only four loans
outstanding at any one time. Regular loans may be for a minimum of one year, but not
exceeding five years. Home loans may be for a period of ten years.
5
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 1 — Description of the Plan (Continued)
Party-in-Interest Transactions — Certain Master Trust investment options are mutual funds and
other investment products managed by Fidelity Management and Research Company, which is a
wholly owned subsidiary of FMR Corp. Fidelity Management Trust Company, also a wholly owned
subsidiary of FMR Corp., is the trustee as defined by the Plan. Fidelity Investments
Institutional Operations Company, Inc., also a wholly owned subsidiary of FMR Corp., is the
third party administrator for the Plan. Additionally, Barclays Global Investors, Evercore
Trust Company, N.A. and Comerica are paid investment management fees by the Company on behalf
of the Plan. Fees paid to these entities for trustee, administrative, and other fees qualify
as party-in-interest transactions.
Note 2 — Summary of Significant Accounting Policies
Basis of Accounting — The financial statements of the Plan are prepared under the accrual
method of accounting. The Financial Accounting Standards Board Staff Position EAAG INV-1 and
SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain
Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution
Health and Welfare and Pension Plans, requires the Statement of Net Assets Available for
Benefits present the fair value of the investment contracts as well as the adjustment of the
fully benefit-responsive investment contracts from fair value to contract value. The related
activity is presented at contract value in the Statement of Changes in Net Assets Available
for Benefits.
6
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 2 — Summary of Significant Accounting Policies (Continued)
Investments
— The investments in the Ford Stock Fund, mutual funds and money market funds are
valued on the basis of quoted year-end market prices. The Interest Income Fund, which
invests in fully-benefit responsive synthetic investment contracts, is stated at contract value. Contract value
represents investments at cost, plus accrued interest income, less amounts withdrawn to pay
benefits. The common and commingled institution
pool investments are stated at the aggregate
market value of the individual collective pools included in each respective fund, based on
the fair value of the underlying assets. The fair value of the Interest Income Fund is based
on the fair value of underlying assets. The investments held by the Interest Income Fund
include government securities, corporate bonds, asset-backed securities, and mortgage-backed
securities and are valued using quoted market prices and/or other market data for the same or
comparable instruments and transactions in establishing the prices, discounted cash flow
models and other pricing models. These models are primarily industry-standard models that
consider various assumptions, including time value and yield curve as well as other relevant
economic measures. The fair value of wrapper contracts
provided by a security-backed contract issuer is the present value of the difference between
the current wrapper fee
and the contracted wrapper fee. Participant loans are valued at cost, which approximates
fair value.
The fair value of the Plan’s interest in the Master Trust is based on the beginning of the
year value of the Plan’s interest in the trust, plus actual contributions and allocated
investment income, less actual distributions and allocated administrative expense (Note 3).
The average S&P and Moody’s credit quality ratings for the underlying investments of the
Interest Income Fund were the equivalent of AA/Aa3 or higher during 2008.
The methods described above may produce a fair value calculation that may not be indicative
of net realizable value or reflective of future fair values. Furthermore, while the Plan
believes its valuation methods are appropriate and consistent with other market participants,
the use of different methodologies or assumptions to determine the fair value of certain
financial instruments could result in a different fair value measurement at the reporting
date.
7
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 2 — Summary of Significant Accounting Policies (Continued)
Purchases and sales of investments by the Master Trust are reflected on a trade-date basis.
Dividend income is recorded on the ex-dividend date. Income from other investments of the
Master Trust is recorded as earned on an accrual basis.
Investment Contracts — The Master Trust, through its investment in the Interest Income Fund,
invests in synthetic investment contracts (synthetic GICs). A synthetic GIC is a wrap
contract paired with an underlying investment or investments, usually a portfolio of
high-quality, short to intermediate term fixed income securities and
money market accounts.
The Master Trust purchases a wrap contract from insurance companies and financial services
institutions.
A synthetic GIC contract credits a stated interest rate for a specified period of time.
Investment gains and losses are amortized over the expected duration through the calculation
of the interest rate applicable to the Master Trust on a prospective basis. Synthetic GICs
provide for a variable crediting rate, which resets on some periodic basis. Until 2009, the
crediting rate set by the wrap contracts included the short-term investments
(money market account) used for benefit responsive events and the crediting rate reset
annually. Beginning 2009, the crediting rate will reset quarterly. The quarterly crediting
rate set by the wrap contracts does not include the short-term investments (e.g., money
market account) used for benefit responsive events. While the issuer of the wrap contract
provides assurance that future adjustments to the crediting rate cannot result in a crediting
rate less than zero, the actual quarterly interest rate credited to the Master Trust is
impacted by the current yield of the short-term investments used for benefit responsive
events. The crediting rate is primarily based on
the current yield-to-maturity of the covered investments, plus or minus amortization of the
difference between the market value and contract value of the covered investments over the
duration of the covered investments at the time of computation.
The crediting rate is most impacted by the change in the annual effective yield to maturity
of the underlying securities, but is also affected by the differential between the contract
value and the market value of the covered investments. This difference is amortized over
the duration of the covered investments. Depending on the change in duration from reset
period to reset period, the magnitude of the impact to the crediting rate of the contract
to market difference is heightened or lessened. The crediting rate can be adjusted
periodically, but in no event is the crediting rate less than 0 percent.
Certain events limit the ability of the Master Trust to transact at contract value with the
insurance company and the financial institution issuer. Such events include the following:
(i) material amendments to the plan documents (including complete or partial plan
termination or merger with another plan); (ii) changes to the Plan’s prohibition on
competing investment options or deletion of equity wash provisions; (iii) bankruptcy of the
plan sponsor or other plan sponsor events (e.g. divestitures or spin-offs of a subsidiary)
which cause a significant withdrawal from the Plan; (iv) the failure of the trust to
qualify for exemption from federal income taxes or any required prohibited transaction
exemption under ERISA (v) any change in law, regulation, ruling, administrative or judicial
position, or accounting requirement, applicable to the Interest Income Fund or the Plan; or
(vi) the delivery of any communication to plan participants designed to influence a
participant not to invest in the Interest Income Fund. The plan administrator does not
believe that the
occurrence of any such event, which would limit the Master Trust’s ability to transact at
contract value with participants, is probable.
8
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 2 — Summary of Significant Accounting Policies (Continued)
The synthetic investment contracts generally impose conditions on both the Master Trust and
the issuer. If an event of default occurs and is not cured, the non-defaulting party may
terminate the contract. The following may cause the Master Trust to be in default: a
breach of material obligation under the contract; a material misrepresentation; or a
material amendment to the plan agreement. The issuer may be in default if it breaches a
material obligation under the investment contract; makes a material misrepresentation; has
a decline in its long term credit rating below a threshold set forth in the contract; is
acquired or reorganized and the successor issuer does not satisfy the investment or credit
guidelines applicable to issuers. If, in the event of default of an issuer, the Master
Trust were unable to obtain a replacement investment contract, withdrawing plans may
experience losses if the value of the Master Trust’s assets no longer covered by the
contract is below contract value. The Master Trust may seek to
add additional issuers over time to diversify the Master Trust’s exposure to such risk, but
there is no assurance the Master Trust may be able to do so. The combination of the
default of an issuer and an inability to obtain a replacement agreement could render the
Master Trust unable to achieve its objective of maintaining a stable contract value. The
terms of an investment contract generally provide for settlement of payments only upon
termination of the contract or total liquidation of the covered investments. Generally,
payments will be made pro-rata, based on the percentage of investments covered by each
issuer. Contract termination occurs whenever the contract value or market value of the
covered investments reaches zero or upon certain events of default.
9
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 2 — Summary of Significant Accounting Policies (Continued)
If the contract terminates due to issuer default (other than a default occurring because of
a decline in its rating), the issuer will generally be required to pay to the Master Trust
the excess, if any, of contract value over market value on the date of termination. If a
synthetic GIC terminates due to a decline in the ratings of the issuer, the issuer may be
required to pay to the Master Trust the cost of acquiring a replacement contract (i.e.
replacement cost) within the meaning of the contract. If the contract terminates when the
market value equals zero, the issuer will pay the excess of contract value over market
value to the Master Trust to the extent necessary for the Master Trust to satisfy
outstanding contract value withdrawal requests. Contract termination also may occur by
either party upon election and notice.
Since synthetic GICs are fully benefit-responsive, contract value is the relevant
measurement attribute for that portion of the net assets available for benefits
attributable to the synthetic GICs. Contract value represents contributions made under the
contract, plus earnings, less participant withdrawals and administrative expenses.
Participants may ordinarily direct the withdrawal or transfer of all or a portion of their
investment at contract value.
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2008 |
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2007 |
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Average yield for synthetic GICs |
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Based on actual earnings |
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4.72 |
% |
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4.93 |
% |
Based on interest rate credited to participants |
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4.84 |
% |
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4.22 |
% |
Contributions — Contributions to the Plan from participants are recorded in the period that
payroll deductions are made from Plan participants.
Payment of Benefits — Benefits are recorded when paid.
10
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 2 — Summary of Significant Accounting Policies (Continued)
Use of Estimates — The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires plan management to
make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of additions and deductions during the reporting period. Actual
results could differ from those estimates.
Risks and Uncertainties — The Master Trust’s invested assets consist of company stock,
equity and fixed income mutual funds, equity and fixed income commingled institutional
pools, and synthetic GIC investments. Investment securities are exposed to various risks,
such as interest rate, market, and credit.
Due to the level of risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term would materially affect
participants’ account balances and the amounts reported in the statement of net assets
available for benefits and the statement of changes in net assets available for benefits.
Reclassification
— Certain prior year amounts have been reclassified to conform to the
current year presentation.
11
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 3 — The Master Trust
The Company established the Master Trust pursuant to a trust agreement between the Company
and Fidelity Management Trust Company, as trustee, in order to permit the commingling of
trust assets of several employee benefit plans for investment and administrative purposes.
The assets of the Master Trust are held by Fidelity Management Trust Company.
Employee benefit plans participating in the Master Trust as of December 31, 2008 and 2007
include the following defined contribution plans:
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Ford Motor Company Savings and Stock Investment Plan for Salaried Employees |
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Ford Motor Company Tax-Efficient Savings Plan for Hourly Employees |
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Ford Retirement Plan |
All transfers to, withdrawals from, or other transactions regarding the Master Trust shall
be conducted in such a way that the proportionate interest in the Master Trust of each plan
and the fair market value of that interest may be determined at any time.
12
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 3 — The Master Trust (Continued)
The interest of each such plan shall be debited or credited (as the case may be) (i) for
the entire amount of every contribution received on behalf of such plan (including
participant contributions), every distribution, or other expense attributable solely to
such plan, and every other transaction relating only to such plan; and (ii) for its
proportionate share of every item of collected or accrued income, gain or loss, and general
expense, and of any other transactions attributable to the Master Trust or that investment
option as a whole.
A summary of the net assets of the Master Trust as of December 31, 2008 and 2007 is as
follows:
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2008 |
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2007 |
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Investments — fair value: |
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Ford Stock Fund: |
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Ford common stock |
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$ |
722,508,468 |
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$ |
1,823,248,743 |
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Money market fund |
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12,163,503 |
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31,041,384 |
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Mutual funds |
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2,734,327,904 |
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4,734,768,356 |
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Common and commingled institutional pools |
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880,186,914 |
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1,506,984,056 |
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Interest Income Fund: |
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Security-backed contracts |
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2,312,230,966 |
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1,905,417,277 |
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Wrapper contract |
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7,711,080 |
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— |
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Money market fund |
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196,416,197 |
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664,173,209 |
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Payables and unsettled trades |
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431,293 |
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1,847,043 |
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Total master trust net assets at fair value |
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6,865,976,325 |
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10,667,480,068 |
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Adjustment from fair value to contract value for
fully benefit-responsive investment contracts |
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79,481,012 |
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4,378,170 |
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Total master trust net assets |
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$ |
6,945,457,337 |
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$ |
10,671,858,238 |
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13
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 3 — The Master Trust (Continued)
During the year ended December 31, 2008, the Master Trust investment loss was comprised of
the following:
| |
|
|
|
|
Net appreciation (depreciation): |
|
|
|
|
Ford Stock Fund |
|
$ |
(1,188,362,786 |
) |
Mutual funds |
|
|
(1,768,637,621 |
) |
Common and commingled institutional pools |
|
|
(498,330,115 |
) |
Interest Income Fund |
|
|
42,473,905 |
|
|
|
|
|
|
|
|
|
|
Total net depreciation |
|
|
(3,412,856,617 |
) |
|
|
|
|
|
Interest and dividend income |
|
|
220,105,390 |
|
|
|
|
|
|
|
|
|
|
Total master trust investment loss |
|
$ |
(3,192,751,227 |
) |
|
|
|
|
The Ford Stock Fund is a unitized account that is comprised primarily of Ford Motor Company
common stock, except a small portion of the fund is invested in cash or a cash equivalent
or other short term investments to provide liquidity for daily activity.
The Ford Stock Fund consists of assets from the following sources: employee contributions
(including rollovers), employee loan repayments, exchanges into the fund from other
investment options, Company matching contributions (vested and unvested), earnings and
dividends. All participant assets are self-directed.
The Plan’s interest in the Master Trust represented approximately 34 and 33 percent of the
total assets in the Master Trust at both December 31, 2008 and 2007, respectively.
14
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 3 — The Master Trust (Continued)
A summary of net assets of the Plan in the Master Trust as of December 31, 2008 and 2007 is
as follows:
| |
|
|
|
|
|
|
|
|
| |
|
2008 |
|
|
2007 |
|
Investments — fair value: |
|
|
|
|
|
|
|
|
Ford Stock Fund: |
|
|
|
|
|
|
|
|
Ford common stock |
|
$ |
292,293,686 |
|
|
$ |
743,187,579 |
|
Money market fund |
|
|
4,865,401 |
|
|
|
14,394,051 |
|
Mutual funds |
|
|
713,980,954 |
|
|
|
1,270,831,077 |
|
Common and commingled institutional pools |
|
|
229,149,335 |
|
|
|
411,208,093 |
|
Interest Income Fund: |
|
|
|
|
|
|
|
|
Security-backed contracts |
|
|
965,448,150 |
|
|
|
789,582,349 |
|
Wrapper contract |
|
|
3,219,682 |
|
|
|
— |
|
Money market fund |
|
|
82,011,554 |
|
|
|
275,225,510 |
|
Payables and unsettled trades |
|
|
144,933 |
|
|
|
608,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total — fair value |
|
|
2,291,113,695 |
|
|
|
3,505,037,422 |
|
|
|
|
|
|
|
|
|
|
Adjustment from fair value to contract value for
fully benefit-responsive investment contracts |
|
|
33,186,475 |
|
|
|
1,814,262 |
|
|
|
|
|
|
|
|
| |
Total |
|
$ |
2,324,300,170 |
|
|
$ |
3,506,851,684 |
|
|
|
|
|
|
|
|
During the year ended December 31, 2008, the plan investment loss from the Master Trust was
comprised of the following:
| |
|
|
|
|
Net appreciation (depreciation): |
|
|
|
|
Ford Stock Fund |
|
$ |
(481,643,266 |
) |
Mutual funds |
|
|
(466,018,371 |
) |
Common and commingled institutional pools |
|
|
(130,650,561 |
) |
Interest Income Fund |
|
|
17,637,902 |
|
|
|
|
|
|
|
|
|
|
Total net depreciation |
|
|
(1,060,674,296 |
) |
|
|
|
|
|
Interest and dividend income |
|
|
69,662,087 |
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
(991,012,209 |
) |
|
|
|
|
15
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 4 — Fair Value Disclosures
The Plan adopted Statement of Financial Accounting Standards No. 157, Fair Value
Measurements (SFAS 157), on January 1, 2008. SFAS 157 defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value measurements.
SFAS 157 defines fair value as 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. The provisions of SFAS 157
became effective prospectively for periods beginning January 1, 2008 for financial assets.
The implementation of the provisions of SFAS 157 for financial assets as of January 1, 2008
did not have a material impact on the Plan’s financial statements.
In determining fair value, various valuation techniques are utilized and observable inputs
are prioritized. The availability of observable inputs varies from instrument to instrument
and depends on a variety of factors including the type of instrument, whether the
instrument is actively traded, and other characteristics particular to the transaction. For
many financial instruments, pricing inputs are readily observable in the market, the
valuation methodology used is widely accepted by market participants, and the valuation
does not require significant management discretion. For other financial instruments,
pricing inputs are less observable in the marketplace and may require management judgment.
16
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 4 — Fair Value Disclosures (Continued)
The inputs used to measure fair value are assessed 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 in active markets for identical instruments and are the most
observable. Level 2 inputs include quoted prices for similar assets and inputs such as
interest rates and yield curves that are observable at commonly quoted intervals. Level 3
inputs are not observable in the
market and include management’s judgments about the assumptions market participants would
use in pricing the asset. In instances where inputs used to measure fair value fall into
different levels of the fair value hierarchy, fair value measurements in their entirety are
categorized based on the lowest level input that is significant to the valuation. The
Plan’s assessment of the significance of particular inputs to these fair value measurements
requires judgment and considers factors specific to each asset.
17
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 4 — Fair Value Disclosures (Continued)
Disclosures concerning assets measured at fair value on a recurring basis are as follows
Assets Measured at Fair Value at December 31, 2008
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quoted Prices |
|
|
|
|
|
|
|
|
|
|
| |
|
in Active |
|
|
Significant |
|
|
Significant |
|
|
|
|
| |
|
Markets for |
|
|
Other |
|
|
Unobservable |
|
|
Balance at |
|
| |
|
Identical Assets |
|
|
Observable Inputs |
|
|
Inputs |
|
|
December 31, |
|
| |
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
2008 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Trust Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ford common stock |
|
$ |
722,508,468 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
722,508,468 |
|
Mutual funds |
|
|
2,734,327,904 |
|
|
|
— |
|
|
|
— |
|
|
|
2,734,327,904 |
|
Money market fund |
|
|
12,163,503 |
|
|
|
196,416,197 |
|
|
|
— |
|
|
|
208,579,700 |
|
Common and commingled
institutional pools |
|
|
— |
|
|
|
880,186,914 |
|
|
|
— |
|
|
|
880,186,914 |
|
Security-backed contracts |
|
|
— |
|
|
|
2,319,942,046 |
|
|
|
— |
|
|
|
2,319,942,046 |
|
Non-Master Trust Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant loans |
|
|
— |
|
|
|
— |
|
|
|
159,362,416 |
|
|
|
159,362,416 |
|
The following table summarizes the changes in Level 3 investment assets measured at fair
value on a recurring basis for the year ended December 31, 2008.
| |
|
|
|
|
| |
|
Participant |
|
| |
|
Loans |
|
Balance, beginning of year |
|
$ |
175,629,288 |
|
Issuances, settlements and repayments — net |
|
|
(16,266,872 |
) |
|
|
|
|
Balance, end of year |
|
$ |
159,362,416 |
|
|
|
|
|
18
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 5 — Tax Status
The Internal Revenue Service (IRS) has determined and informed the Company by letter dated
July 8, 2003, that the Plan is designed in accordance with applicable sections of the Code.
The Plan has since been amended and restated through December 15, 2008. The Company
believes that the Plan is currently designed and being operated in
compliance with the Code. Therefore, no provision for income taxes has been included in the
Plan’s financial statements.
Note 6 — Administration of Plan Assets
The Master Trust assets are held by the Trustee of the Plan, Fidelity Management Trust
Company. The assets of the Interest Income Fund (“Fund”) are held by the Fund’s custodian,
The Northern Trust Company.
Certain administrative functions are performed by officers or employees of the Company or
its subsidiaries. No such officer or employee receives compensation from the Plan, nor
does the Company allocate any costs to the Plan.
19
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 2008 and 2007
Note 7 — Plan Termination
The Company, by action of the Board of Directors, may terminate the Plan at any time.
Termination of the Plan would not affect the rights of a participant as to the continuance
of investment, distribution or withdrawal of the securities, cash and cash value of the
Ford Stock Fund units in the account of the participant as of the effective date of such
termination. In the event of termination, all loans would become due immediately upon such
termination. There are currently no plans to terminate the Plan.
Note 8 — Reconciliation to Form 5500
The net assets on the financial statements differ from the net assets on the Form 5500 due
to the synthetic GICs held in the Master Trust being recorded at contract value on the
financial statements and at fair value on Form 5500. The net assets on the financial
statements were higher than those on Form 5500 at December 31, 2008 and 2007 by $33,186,475
and $1,814,262, respectively. Additionally, the investment loss on the Form 5500 for the
year ended December 31, 2008 is higher than the financial statements by $31,372,213.
20
Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees
Schedule of Assets Held at End of Year
Form 5500, Schedule H, Item 4i
EIN 38-0549190, Plan 025
December 31, 2008
| |
|
|
|
|
|
|
|
|
|
|
| |
|
(c) |
|
|
|
|
|
|
| (a)(b) |
|
Description of Investment, Including |
|
|
|
|
|
|
| Identity of Issuer, Lessor, |
|
Maturity Date, Rate of Interest, Collateral, |
|
(d) |
|
|
(e) |
|
| Borrower, or Similar Party |
|
Par, or Maturity Value |
|
Cost |
|
|
Current Value |
|
| |
|
|
|
|
|
|
|
|
|
|
| * Participants |
|
Participant loans bearing interest at rates
ranging from 4.0 percent to 9.5 percent |
|
|
— |
|
|
$ |
159,362,416 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
| * |
|
Denotes party in interest |