Ford 2007 Annual Report Download - page 32

Management’s Discussion and Analysis of Financial Condition and Results of Operations
30 Ford Motor Company | 2007 Annual Report
The weighted-average maturity of our total Automotive debt is approximately 16 years, and is measured based on the
maturity dates of our debt or the first date of any put option available to the owners of our debt. About $3 billion of debt
matures by December 31, 2012, and about $15 billion matures or has a put option by December 31, 2017. For additional
information on debt, see Note 16 of the Notes to the Financial Statements.
For a discussion of the impact of the agreement with the UAW to fund and discharge retiree health care liabilities on
our debt and cash, see "Overview."
Credit Facilities.* At December 31, 2007, we had $13.1 billion of contractually-committed credit facilities with financial
institutions, including $11.5 billion pursuant to a senior secured credit facility (the "Credit Agreement") established in
December 2006, $1.1 billion of global Automotive unsecured credit facilities, and about $500 million of local credit facilities
available to foreign Automotive affiliates. At December 31, 2007, $11.9 billion of these facilities were available for use. Of
the lines available for use, 95% (or $11.3 billion) are committed through December 15, 2011, and the remainder are
committed for a shorter period of time. For further discussion of our committed credit facilities, see Note 16 of the Notes
to the Financial Statements.
During the period 2007 through 2009, we expect cumulative Automotive operating-related cash outflows of about
$7 billion to $8 billion, and cumulative cash expenditures for restructuring actions of $5 billion to $6 billion. This cash
outflow primarily reflects the cash impact of accelerating interest supplement and lease support payments to Ford Credit
beginning in 2008 (about $5 billion) described in "Outlook," anticipated operating losses in our Automotive sector through
2008, and cash expenditures incurred in connection with personnel separations. It also reflects our expectation to
continue to invest in new products throughout this period at about the same level as we have during the past few years at
$6 billion to $7 billion annually.
Pension Plan Contributions. Our policy for funded plans is to contribute annually, at a minimum, amounts required by
applicable laws, regulations, and union agreements. We do from time to time make contributions beyond those legally
required.
In 2007, we made $1.6 billion of cash contributions to our funded pension plans. During 2008, we expect to contribute
to our worldwide pension plans (including Jaguar and Land Rover plans) $2.3 billion from available Automotive cash and
cash equivalents. This amount includes about $400 million of benefit payments paid directly by us for unfunded plans.
Based on current assumptions and regulations, we do not expect to have a legal requirement to fund our major U.S.
pension plans in 2008.
For a further discussion of our pension plans, see Note 24 of the Notes to the Financial Statements.
Financial Services Sector
Ford Credit
Ford Credit's funding strategy is to maintain a high level of liquidity by having a substantial cash balance and
committed funding capacity, allowing it to meet its short-term funding obligations. As a result of lower credit ratings over
the past few years, its unsecured funding costs have increased over time. While Ford Credit continues to access the
unsecured debt market when it makes sense to do so, Ford Credit has increased its use of securitization funding as it is
presently more cost effective than unsecured funding and allows Ford Credit access to a broad investor base. Ford Credit
plans to meet a significant portion of its 2008 funding requirements through securitizations, and to continue to diversify its
asset-backed funding by asset class and region. In addition, Ford Credit has various alternative business arrangements
for select products and markets that reduce its funding requirements while allowing it to support us (e.g., Ford Credit's
partnering in Brazil for retail financing and FCE Bank plc's ("FCE") partnering with various financial institutions in Europe
for full service leasing and retail financing). Ford Credit is continuing to pursue and execute such alternative business
arrangements.
__________
h!H4,N56!37)5E565,0!*3!*:4!S'\0!74,!,8)E:N,N!70!Y,!N*!(*6!)*(64*E!6P,54!:0,<!