Ford 2002 Annual Report Download - page 71

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67
NOTES TO FINANCIAL STATEMENTS
The following table illustrates the effect on net income and amounts per share if we had applied the fair value recognition
provisions of SFAS No. 123 to stock-based employee compensation in prior years (in millions):
2002 2001 2000
Income/(loss) attributable to Common and Class B
Stock after preferred stock dividends of $15 million
in 2002, 2001 and 2000 — as reported $ (995) $ (5,468) $ 3,452
Deduct: Total stock-based employee compensation
expense determined under fair value method for all
awards, net of related tax effects (179) (162) (128)
Pro forma net income/(loss) $ (1,174) $ (5,630) $ 3,324
Amounts per share:
Basic— as reported $ (0.55) $ (3.02) $ 2.34
Basic— pro forma (0.65) (3.11) 2.25
Diluted— as reported $ (0.54) $ (3.02) $ 2.30
Diluted— pro forma (0.64) (3.11) 2.22
TRANSACTIONS BETWEEN AUTOMOTIVE AND FINANCIAL SERVICES SECTORS
Intersector transactions occur in the ordinary course of business. The company and Ford Credit formally documented
certain long-standing business practices in a 2001 agreement. Additional details on certain transactions and the effect
on each sector’s balance sheet at December 31 is shown below (in billions):
2002 2001
Financial Financial
Automotive Services Automotive Services
Finance receivables net a/ $3.5 $4.7
Net investment in operating leases b/ 4.0 4.2
Other assets c/ 1.5 0.9
Intersector non-current receivables/(payables) d/ $ (4.8) 4.8 $ (3.7) 3.7
Intersector current receivables/(payables) e/ 1.1 (1.1) 0.9 (0.9)
a/ Automotive receivables (generated primarily from vehicle and parts sales to third parties) sold to Ford Credit.
b/ Primarily Ford Credit vehicles leased to employees of the company ($1.0 billion in 2002 and $1.2 billion in 2001)
and Automotive vehicles sold to Hertz for rental ($3.0 billion in 2002 and 2001).
c/ Primarily used vehicles purchased by Ford Credit on behalf of the company pursuant to Ford Automotive’s obligation to repurchase
such vehicles from daily rental car companies, including Hertz. These vehicles are subsequently sold at auction by Ford Credit.
d/ Reflects amounts due Ford Credit from Automotive under a tax sharing agreement.
e/ Net result of all other transactions.
Periodically, Ford Credit receives interest supplements and other support cost payments from Automotive for providing
special vehicle financing for low-interest-rate marketing programs. Ford Credit records these transactions as revenue over
the life of the contract. Amounts recorded as revenue by the Financial Services sector, and billed to the Automotive sector,
were $3.7 billion in 2002, $4.1 billion in 2001, and $3.5 billion in 2000. The Automotive sector records the estimated costs
for these sales incentive programs as “Marketing Incentives.”