Ford 2002 Annual Report Download - page 77

73
NOTES TO FINANCIAL STATEMENTS
NOTE 8. FINANCE RECEIVABLES — FINANCIAL SERVICES SECTOR
Net finance receivables at December 31 were as follows (in millions):
2002 2001
Retail $ 63,141 $ 78,607
Wholesale 16,827 15,785
Other finance receivables 11,073 10,337
Total finance receivables 91,041 104,729
Allowance for credit losses (2,630) (2,283)
Other 314 267
Net finance and other receivables $ 88,725 $ 102,713
Finance receivables that originated outside the U.S. were $41.5 billion and $41.6 billion at December 31, 2002 and 2001,
respectively. Other finance receivables consisted primarily of real estate, commercial, and other collateralized loans and
accrued interest. Included in other finance receivables at both December 31, 2002 and 2001 were $1.6 billion of accounts
receivable purchased by certain Financial Services sector operations from Automotive sector operations.
Future maturities, exclusive of SFAS No. 133, of total finance receivables are as follows (in millions): 2003 —$54,077;
2004— $17,912; 2005 — $8,124; thereafter—$10,115. Experience indicates that a substantial portion of the portfolio
generally is repaid before the contractual maturity dates.
The Financial Services sector has sold receivables to special purpose entities (SPE). At December 31, 2002, the number
of these SPEs and the amount of assets held were as follows (in billions):
Number of SPEs 2002
Ford Credit
Retail finance receivables 55 $ 48.9
Wholesale finance receivables 1 22.4
Total Ford Credit 56 71.3
Automotive receivables 1 0.1
Total 57 $ 71.4
Retained interests in sold receivables were as follows (in millions):
2002 2001
Wholesale receivables sold to securitization entities $ 12,454 $ 7,586
Subordinated securities 2,845 2,039
Interest-only strips 1,696 1,235
Restricted cash held for the benefit of securitization entities 623 377
Senior securities -1,311
Total $ 17,618 $ 12,548
Retained interests in sold wholesale receivables were $11.4 billion and $6.5 billion as of December 31, 2002 and 2001,
respectively. These primarily represent our undivided interest in wholesale receivables that are available to support the
issuance of additional securities by the securitization entity; the balance represents credit enhancements. Subordinated
securities, interest-only strips and restricted cash are credit enhancement assets. Interest only strips represent the present
value of monthly collections on the sold receivables in excess of amounts needed by the SPE (securitization trust) to pay
interest and principal to investors and servicing fees to Ford Credit. Investments in subordinated securities and restricted
cash are senior to interest only strips.
Finance receivables subject to fair value at December 31, 2002 and 2001 were (in millions) $88,357 and $103,710,
respectively. The fair value of these finance receivables at December 31, 2002 and 2001 was (in millions) $89,885
and $103,864, respectively.
Net investment in direct financing leases at December 31 was as follows (in millions):
2002 2001
Total minimum lease rentals to be received $ 5,665 $ 5,183
Less: Unearned income (1,049) (997)
Loan origination costs 37 49
Estimated residual values 3,689 3,288
Less: Allowance for credit losses (37) (46)
Net investment in direct financing leases $ 8,305 $ 7,477
The investment in direct financing leases relates to the leasing of vehicles, various types of transportation and
other equipment, and facilities. Minimum direct financing lease rentals are contractually due as follows (in millions):
2003—$1,983; 2004—$1,636; 2005 — $1,286; thereafter—$760.