Ford 2009 Annual Report Download - page 69

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Ford Motor Company | 2009 Annual Report 67
Wholesale and Dealer Loan Portfolio. The wholesale and dealer loan portfolio is evaluated by segmenting individual
loans into risk pools, which are determined by the risk characteristics of the loan (such as the amount of the loan, the
nature of collateral, and the financial status of the dealer). The risk pools are analyzed to determine if individual loans are
impaired, and an allowance is estimated for the expected loss of these loans.
Changes in Ford Credit's assumptions affect the Provision for credit and insurance losses on our statement of
operations and the allowance for credit losses contained within Finance receivables, net and Net investment in operating
leases on our balance sheet, in each case under the Financial Services sector.
ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED
For information on accounting standards issued but not yet adopted, see Note 3 of the Notes to the Financial
Statements.
AGGREGATE CONTRACTUAL OBLIGATIONS
We are party to many contractual obligations involving commitments to make payments to third parties. Most of these
are debt obligations incurred by our Financial Services sector. Long-term debt may have fixed or variable interest rates.
For long-term debt with variable rate interest, we estimate the future interest payments based on projected market interest
rates for various floating-rate benchmarks received from third parties. In addition, as part of our normal business practices,
we enter into contracts with suppliers for purchases of certain raw materials, components and services. These
arrangements may contain fixed or minimum quantity purchase requirements. We enter into such arrangements to
facilitate adequate supply of these materials and services. "Purchase obligations" are defined as off-balance sheet
agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all
significant terms.
The table below summarizes our contractual obligations as of December 31, 2009 (in millions):
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(a) Amount includes, prior to adjustment noted above, $1,641 million for the Automotive sector and $26.3 billion for the Financial Services sector for the
current portion of long-term debt. See Note 19 of the Notes to the Financial Statements for additional discussion.
(b) Automotive sector excludes unamortized debt discounts of $(4,578) million. Financial Services sector excludes unamortized debt discounts of
$(530) million and adjustments of $231 million related to designated fair value hedges of the debt.
(c) For the years 2010 – 2013, excludes deferred interest on our Subordinated Convertible Debentures; for all periods, excludes amortization of debt
discounts.
(d) Intersector elimination related to Ford's acquisition of Ford Credit debt securities. See Note 1 of the Notes to the Financial Statements for additional
detail.