Ford 2010 Annual Report Download - page 40

Download and view the complete annual report

Please find page 40 of the 2010 Ford annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 184

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184

Management’s Discussion and Analysis of Financial Condition and Results of Operations
38 Ford Motor Company | 2010 Annual Report
Ford Credit's finance receivables and operating leases are shown below (in billions):
December 31
December 31December 31
December 31,
,,,
2010
20102010
2010
December 31,
December 31,December 31,
December 31,
2009
20092009
2009
2010
20102010
2010
Over/(Under)
Over/(Under)Over/(Under)
Over/(Under)
2009
20092009
2009
Receivables
Receivables Receivables
Receivables –
––– On
On On
On-
---Balance Sheet
Balance SheetBalance Sheet
Balance Sheet
Finance receivables
Consumer
Retail installment and direct financing leases................................................................
...............
$ 49.7 $ 56.3 $ (6.6)
Non-Consumer
Wholesale ................................................................................................
................................
22.0 22.4 (0.4)
Dealer Loan and other ................................................................................................
.................
2.3 2.4 (0.1)
Unearned interest supplements ................................................................
................................
(1.9) (1.9) —
Allowance for credit losses................................................................................................
.............
(0.8) (1.3) 0.5
Finance receivables, net ................................................................................................
..............
71.3 77.9 (6.6)
Net investment in operating leases ................................................................
................................
10.0 14.6 (4.6)
Total receivables – on-balance sheet (a)(b) ................................................................
..........
$ 81.3 $ 92.5 $ (11.2)
Memo:
Total receivables – managed (c) ................................................................
................................
$ 83.2 $ 94.5 $ (11.3)
Total receivables – serviced (d)................................................................
................................
83.2 94.6 (11.4)
__________
(a) At December 31, 2010 and 2009, includes consumer receivables before allowance for credit losses of $35.8 billion and $44.9 billion, respectively,
and non-consumer receivables before allowance for credit losses of $18.7 billion and $19.5 billion, respectively, that have been sold for legal
purposes in securitization transactions but continue to be included in Ford Credit's financial statements. In addition, at December 31, 2010 and
2009, includes net investment in operating leases before allowance for credit losses of $6.2 billion and $10.4 billion, respectively that have been
included in securitization transactions but continue to be included in Ford Credit's financial statements. These underlying securitized assets are
available only for payment of the debt and other obligations issued or arising in the securitization transactions; they are not available to pay Ford
Credit's other obligations or the claims of its other creditors. Ford Credit holds the right to the excess cash flows not needed to pay the debt and
other obligations issued or arising in each of these securitization transactions. See Note 19 of the Notes to the Financial Statements for more
information regarding securitization transactions.
(b) Includes allowance for credit losses of $854 million and $1.5 billion at December 31, 2010 and 2009, respectively.
(c) Includes on-balance sheet receivables, excluding unearned interest supplements related to finance receivables of about $1.9 billion at
December 31, 2010 and 2009, respectively; and includes off-balance sheet retail receivables of about $100 million at December 31, 2009.
(d) Includes managed receivables and receivables sold in whole-loan sale transactions where Ford Credit retains no interest, but which it continues to
service of about $100 million at December 31, 2009.
The decrease in receivables from year-end 2009 primarily reflects the discontinuation of financing for Jaguar, Land
Rover, Mazda, and Volvo, and lower industry volumes in recent years. At December 31, 2010, the Jaguar, Land Rover,
Mazda and Volvo financing portfolio represented about 4% of Ford Credit's managed receivables. In addition, the
Mercury financing portfolio represented about 3% of Ford Credit's managed receivables at December 31, 2010. The
percentages for each of these brands will decline over time.
The following table shows Ford Credit's worldwide charge-offs (credit losses net of recoveries) for the various
categories of financing during the periods indicated. Shown below are the loss-to-receivables ratios, which equal charge-
offs on an annualized basis divided by the average amount of receivables outstanding for the period, excluding the
allowance for credit losses and unearned interest supplements related to finance receivables (in millions except ratios):
2010
20102010
2010
2009
20092009
2009
2010
2010 2010
2010
Over/(Under)
Over/(Under) Over/(Under)
Over/(Under)
2009
20092009
2009
Charge
ChargeCharge
Charge-
---offs
offs offs
offs –
––– On
OnOn
On-
---Balance Sheet
Balance SheetBalance Sheet
Balance Sheet (in millions)
(in millions) (in millions)
(in millions)
Retail installment and lease ................................................................
................................
$ 416 $ 989 $ (573)
Wholesale................................................................................................
................................
(5) 94 (99)
Dealer Loan and other ................................................................
................................
4 12 (8)
Total charge-offs – on-balance sheet ................................................................
................................
$ 415 $ 1,095 $ (680)
Loss
LossLoss
Loss-
---to
toto
to-
---Receivables Ratios
Receivables RatiosReceivables Ratios
Receivables Ratios
–
––– On
OnOn
On-
---Balance Sheet
Balance SheetBalance Sheet
Balance Sheet
Retail installment and lease ................................................................
................................
0.65% 1.25% (0.60) pts.
Wholesale................................................................................................
................................
(0.03) 0.45 (0.48)
Total loss-to-receivables ratio (including dealer loan and other) – on-balance
sheet................................................................................................
................................
0.47% 1.07% (0.60) pts.
Memo:
Total charge-offs – managed (in millions)................................................................
........................
$ 415 $ 1,100 $ (685)
Total loss-to-receivables ratio (including dealer loan and other) – managed
................................
0.47% 1.07% (0.60) pts.