Ford 2004 Annual Report Download - page 70

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6 8
NOTES TO THE FINANCIAL STATEMENTS
The amortized cost and fair value of investments in available-for-sale and held-to-maturity securities by contractual maturity for
Automotive and Financial Service sectors at December 31, 2004 were as follows (in millions):
The fair value of the Company’s investments in an unrealized loss position at December 31, 2004, aggregated by investment
category and length of time that the investments have been in a continuous loss position, are as follows (in millions):
We also hold an additional $2.5 billion investment in marketable securities as of December 31, 2004 in a
Voluntary Employees Beneficiary Association trust (“VEBA”), which assets are used to fund certain employee benefit obligations
in the near term. These investments are recorded at fair value and classified as other assets in our balance sheet. At December
31, 2004, the fair value and unrealized loss of these assets that have been in a continuous loss position for less than twelve
months was $2 billion and $7 million, respectively, and the fair value and unrealized loss of these assets in a continuous loss
position for twelve months or greater was $7 million and $4 million, respectively.
Management has determined that the unrealized losses on our investments in debt and equity securities at December 31, 2004
are temporary in nature. Factors considered in determining whether a loss is temporary include the length of time and extent to
which fair value has been below cost, the financial condition and near-term prospects of the issuer and our ability and intent to
hold the investment for a period of time sufficient to allow for any anticipated recovery.
NOTE 6. INVENTORIES – AUTOMOTIVE SECTOR
Inventories at December 31 were as follows (in millions):
Inventories are stated at lower of cost or market. About one-fourth of inventories were determined under the last-in,
first-out method.
NOTE 5. Marketable, Loaned and Other Securities (Continued)
Contractual Maturity
Automotive Financial Services
Available-for-Sale Available-for-Sale Held-to-Maturity
Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
1 year $ 52 $ 52 $ 8 $ 8 $ 1 $ 1
2-5 years 1,218 1,209 212 212 4 4
6-10 years 211 205 80 85 - -
11 years and later 246 246 69 73 2 2
Mortgage-backed
securities - - 184 187 - -
Equity securities - - 49 84 - -
Total $ 1,727 $ 1,712 $ 602 $ 649 $ 7 $ 7
Description of Securities
Less Than 12 Months 12 Months or Greater Total
Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses
Automotive sector
U.S. government and agency $ 737 $ 7 $ 76 $ 3 $ 813 $ 10
Other debt securities 435 4 11 5 446 9
Total $ 1,172 $ 11 $ 87 $ 8 $ 1,259 $ 19
Financial Services sector
Other debt securities $ 186 $ 1 $ 17 $ - $ 203 $ 1
Equity securities 2 - 4 3 6 3
Total $ 188 $ 1 $ 21 $ 3 $ 209 $ 4
2004 2003
Raw materials, work-in-process and supplies $ 3,968 $ 3,813
Finished products 7,799 6,334
Total inventories at FIFO 11,767 10,147
Less LIFO adjustment (1,001) (996)
Total inventories $ 10,766 $ 9,151