Ford 2013 Annual Report Download - page 42

40 Ford Motor Company | 2013 Annual Report
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Credit Agreement. At December 31, 2013, lenders under our Amended and Restated Credit Agreement dated as of
November 24, 2009, as further amended (the “revolving credit facility”), had commitments totaling $10.7 billion with a
November 30, 2017 maturity date, and commitments totaling $50 million with a November 30, 2015 maturity date. The
revolving credit facility is unsecured and free of material adverse change clauses, restrictive financial covenants (for
example, debt-to-equity limitations and minimum net worth requirements), and credit rating triggers that could limit our
ability to obtain funding. The revolving credit facility contains a liquidity covenant that requires us to maintain a minimum
of $4 billion in aggregate of domestic cash, cash equivalents, and loaned and marketable securities and/or availability
under the revolving credit facility. If our senior, unsecured, long-term debt does not maintain at least two investment grade
ratings from Fitch, Moody’s, and S&P (each as defined under “Total Company” below), the guarantees of certain
subsidiaries will be required.
At December 31, 2013, the utilized portion of the revolving credit facility was $83 million, representing amounts
utilized as letters of credit. Less than 4.5% of the commitments in the revolving credit facilities are from financial
institutions based in Italy and Spain. There are no commitments from financial institutions based in Greece, Ireland, or
Portugal.
U.S. Department of Energy (“DOE”) Advanced Technology Vehicle Manufacturer (“ATVM”) Incentive Program. In
September 2009, we entered into a Loan Arrangement and Reimbursement Agreement (“Arrangement Agreement”) with
the DOE, under which we borrowed through multiple draws $5.9 billion to finance certain costs for fuel-efficient,
advanced-technology vehicles. At December 31, 2013, an aggregate of $5 billion was outstanding. The principal amount
of the ATVM loan bears interest at a blended rate based on the U.S. Treasury yield curve at the time each draw was made
(with the weighted-average interest rate on all such draws being about 2.3% per annum). The ATVM loan is repayable in
equal quarterly installments of $148 million, which began in September 2012 and will end in June 2022.
European Investment Bank (“EIB”) Credit Facilities. On December 21, 2009, Ford Romania, our operating subsidiary
in Romania, entered into a credit facility for an aggregate amount of €400 million (equivalent to $551 million at
December 31, 2013) with the EIB (the “EIB Romania Facility”), and on July 12, 2010, Ford Motor Company Limited, our
operating subsidiary in the United Kingdom (“Ford of Britain”), entered into a credit facility for an aggregate amount of
£450 million (equivalent to $744 million at December 31, 2013) with the EIB (the “EIB United Kingdom Facility”). The
facilities were fully drawn at December 31, 2013. Loans under the EIB Romania Facility and the EIB United Kingdom
Facility bear interest at a fixed rate of 4.44% and 4% per annum, respectively. Proceeds of loans drawn under the EIB
Romania Facility have been used to fund upgrades to a vehicle plant in Romania, and proceeds of loans drawn under the
EIB United Kingdom Facility have been used to fund costs for the research and development of fuel-efficient engines and
commercial vehicles with lower emissions, and upgrades to an engine manufacturing plant in the United Kingdom. The
loans under each facility are five-year, non-amortizing loans secured by respective guarantees from the governments of
Romania and the United Kingdom for approximately 80% and from us for approximately 20% of the outstanding principal
amounts. Ford Romania and Ford of Britain have each pledged fixed assets, receivables and/or inventory to the
governments of Romania and the United Kingdom as collateral, and we have pledged 50% of the shares of Ford Romania
to the government of Romania and guaranteed Ford of Britain’s obligations to the government of the United Kingdom.
Export-Import Bank of the United States (“Ex-Im”) and Private Export Funding Corporation (“PEFCO”) Secured
Revolving Loan. At December 31, 2013, this working capital facility, which supports vehicle exports from the United
States, was fully drawn at $300 million. The facility was renewed on June 15, 2013 and will renew annually until
June 15, 2015, provided that no payment or bankruptcy default exists and Ex-Im continues to have a perfected security
interest in the collateral, which consists of vehicles in transit in the United States to be exported to Canada, Mexico, and
other select markets.
Other Automotive Credit Facilities. At December 31, 2013, we had $802 million of local credit facilities available to
non-U.S. Automotive affiliates, of which $99 million had been utilized.