Ford 2004 Annual Report Download - page 69

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6 7
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5. MARKETABLE, LOANED AND OTHER SECURITIES
Trading securities are recorded at fair value with unrealized gains and losses included in income. Available-for-sale
securities are recorded at fair value with net unrealized holding gains and losses reported, net of tax, in Accumulated other
comprehensive income. Held-to-maturity securities are recorded at amortized cost. Realized gains and losses are accounted for
using the specific identification method.
The fair value of substantially all securities is determined by quoted market prices. The estimated fair value of securities for
which there are no quoted market prices is based on similar types of securities that are traded in the market. Equity securities
that do not have readily determinable fair values are recorded at cost. Book value approximates fair value for all securities.
Expected maturities of debt securities may differ from contractual maturities because borrowers may have the right to call or
prepay obligations with or without penalty.
We loan certain securities from our portfolio to other institutions. Such securities are classified as Loaned securities on the
balance sheet. Collateral for the loaned securities, consisting of cash or other securities, is required to be maintained at a rate
of 102% of the market value of a loaned security. Ford received securities as collateral in the amount of $399 million and
$5.4 billion for 2004 and 2003, respectively. This collateral has not been pledged or sold. Cash collateral received is recorded
as an asset in Other current assets, offset by an obligation to return the collateral in Other payables. Income
received from loaning securities is recorded as Interest income and other non-operating income/(expense), net.
Investments in marketable and loaned securities at December 31 were as follows (in millions):
The proceeds and gains/(losses) from sales of available-for-sale securities were as follows (in millions):
2004 2003
Amortized Unrealized Book/Fair Amortized Unrealized Book/Fair
Cost Gains Losses Value Cost Gains Losses Value
Automotive sector
Trading $ 7,648 $ 12 $ 23 $ 7,637 $ 13,069 $ 69 $ 4 $ 13,134
Available-for-sale:
U.S. government and
agency 1,179 3 10 1,172 1,402 6 5 1,403
Other debt securities 548 1 9 540 448 4 6 446
Subtotal 1,727 4 19 1,712 1,850 10 11 1,849
Total $ 9,375 $ 16 $ 42 $ 9,349 $ 14,919 $ 79 $ 15 $ 14,983
Financial Services sector
Trading $ 560 $ - $ - $ 560 $ 501 $ - $ - $ 501
Available-for-sale:
Other debt securities 552 14 1 565 524 17 2 539
Equity 50 37 3 84 47 31 3 75
Subtotal 602 51 4 649 571 48 5 614
Held-to-maturity:
U.S. government 7 - - 7 8 - - 8
Total $ 1,169 $ 51 $ 4 $ 1,216 $ 1,080 $ 48 $ 5 $ 1,123
Proceeds Gains/(Losses)
2004 2003 2002 2004 2003 2002
Automotive sector $ 7,615 $ 8,673 $ 3,445 $ (12) $ 9 $ 24
Financial Services sector 787 703 479 6 14 6