Ford 2009 Annual Report Download - page 111

Notes to the Financial Statements
Ford Motor Company | 2009 Annual Report 109
NOTE 13. VARIABLE INTEREST ENTITIES (Continued)
Ford Credit has no obligation to repurchase or replace any securitized asset that subsequently becomes delinquent in
payment or otherwise is in default. Securitization investors have no recourse to Ford Credit or its other assets for credit
losses on the securitized assets, and have no right to require Ford Credit to repurchase the investments. Although not
contractually required, Ford Credit regularly supports their wholesale securitization programs by repurchasing receivables
of a dealer from the VIEs when the dealer's performance is at risk, which transfers the corresponding risk of loss from the
VIE to Ford Credit. In order to continue to fund the wholesale receivables, Ford Credit also may contribute additional cash
or wholesale receivables if the collateral falls below the required level. The cash contributions were $0 and $179 million at
December 31, 2009 and 2008, respectively, and ranged from $0 to $1.4 billion and $0 to $2.2 billion during 2009 and
2008, respectively. In addition, while not contractually required, Ford Credit may purchase the commercial paper issued
by Ford Credit's FCAR Owner Trust retail securitization program.
During 2009, Ford Credit elected to provide additional enhancements or repurchase specific senior or subordinated
notes in order to address market conditions. From time to time, Ford Credit renegotiates the terms of its funding
commitments and may reallocate the commitments globally. Ford Credit does not guarantee any asset-backed securities
and generally has no obligation to provide liquidity or contribute cash or additional assets to the VIEs. In certain
securitization transactions, Ford Credit has dynamic enhancements where Ford Credit is required to support the
performance of the securitization transactions by purchasing additional subordinated notes or increasing cash reserves.
VIEs that are exposed to interest rate or currency risk have reduced their exposure by entering into derivatives. In
certain instances, Ford Credit has entered into offsetting derivative transactions with the VIE to protect the VIE from these
risks that are not mitigated through derivative transactions between the VIE and its counterparty. See Note 26 for
additional information regarding Ford Credit's derivatives.
Finance receivables and net investment in operating leases that secure the debt of the VIE remain on Ford Credit's
balance sheet and therefore are not included in the VIE assets shown in the following table. As of December 31, 2009,
the carrying values of the assets were $41.7 billion of retail receivables, $16.5 billion of wholesale receivables, and
$10.4 billion of net investment in operating leases. As of December 31, 2008, the carrying values of the assets were
$41.9 billion of retail receivables, $19.6 billion of wholesale receivables, and $15.6 billion of net investment in operating
leases.
The total consolidated VIE assets and liabilities that support Ford Credit's securitization transactions reflected on our
December 31 balance sheet are as follows (in millions):
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Ford Credit's exposure based on the fair value of derivative instruments related to securitization programs at
December 31 is as follows (in millions):
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