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Notes to the Financial Statements
NOTE 11. FINANCE RECEIVABLES — FINANCIAL SERVICES SECTOR (Continued)
At December 31, 2005, finance receivables included $1.6 billion owed by the three customers with the largest receivables
balances.
Future maturities of total finance receivables, including minimum lease rentals are $74.3 billion for 2006, $20.5 billion for
2007, $10.9 billion for 2008, and $7.1 billion thereafter. Experience indicates that a substantial portion of the portfolio generally is
repaid before the contractual maturity dates.
Included in retail receivables above are investments in direct financing leases. The net investment at December 31 was as
follows (in millions):
2005 2004
Total minimum lease rentals to be received ............................................................................................................................................. $ 3,978 $ 4,972
Less: Unearned income........................................................................................................................................................................... (555) (758)
Loan origination costs............................................................................................................................................................................... 41 50
Estimated residual values.......................................................................................................................................................................... 2,394 3,367
Less: Allowance for credit losses ........................................................................................................................................................... (59) (82)
Net investment in direct financing leases ................................................................................................................................................. $ 5,799 $ 7,549
The investment in direct financing leases relates to the leasing of vehicles, various types of transportation and other equipment
and facilities. Future maturities of minimum lease rentals, as included above, are $1.7 billion for 2006, $1.1 billion for 2007, about
$800 million for 2008, and about $400 million thereafter.
NOTE 12. NET INVESTMENT IN OPERATING LEASES
The net investment in operating leases at December 31 was as follows (in millions):
2005 2004
Financial Services Sector
Vehicles and other equipment, at cost ...................................................................................................................................................... $ 29,489 $ 30,799
Accumulated depreciation......................................................................................................................................................................... (6,344) (7,842)
Allowances for credit losses ..................................................................................................................................................................... (194) (305)
Total Financial Services.......................................................................................................................................................................... 22,951 22,652
Automotive Sector
Vehicles, net of depreciation .................................................................................................................................................................... 4,148 2,912
Total.................................................................................................................................................................................................... $ 27,099 $ 25,564
Financial Services Sector
Included in net investment in operating leases at December 31, 2005 were interests in operating leases and the related vehicles
of $6.5 billion that have been transferred for legal purposes to consolidated securitization SPEs and are available only for
repayment of debt issued by those entities, and to pay other securitization investors and other participants; they are not available to
pay our other obligations or the claims of our other creditors.
The amounts contractually due for minimum rentals on operating leases are $3.5 billion for 2006, $3.0 billion for 2007,
$1.8 billion for 2008, $441 million for 2009, $75 million for 2010, and $285 million thereafter.
Assets subject to operating leases are depreciated primarily on the straight-line method over the term of the lease to reduce the
asset to its estimated residual value. Estimated residual values are based on assumptions for used vehicle prices at lease
termination and the number of vehicles that are expected to be returned. Operating lease depreciation expense (which includes
gains and losses on disposal of assets) was $5.7 billion in 2005, $6.4 billion in 2004, and $8.5 billion in 2003.
Ford Motor Company Annual Report 2005 74 Ford Motor Company Annual Report 2005 75