Ford 2004 Annual Report Download - page 34

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The following table shows actual credit losses net of recoveries, which are referred to as charge-offs, for Ford Credit’s
worldwide on-balance sheet, reacquired, securitized off-balance sheet and managed receivables, for the various categories
of financing during the periods indicated. Reacquired receivables reflect the amount of receivables that resulted from the
accounting consolidation of FCAR Owner Trust (“FCAR”) in the second quarter of 2003. The loss-to-receivables ratios, which
equal charge-offs divided by the average amount of net receivables outstanding for the period, are shown for the on-balance
sheet and managed portfolios.
In 2004, charge-offs for Ford Credit’s on-balance sheet and its securitized off-balance sheet receivables declined from a
year ago primarily reflecting fewer repossessions and a lower average loss per repossession in its U.S. retail installment
and operating lease portfolio. These improvements resulted from Ford Credit’s emphasis on purchasing higher quality retail
installment and lease contracts and enhancements to its collection practices. The on-balance sheet loss-to-receivables ratio
decreased primarily reflecting improvements in charge-offs as described above.
3 2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
2004
Over/(Under)
20032004 2003
Charge-offs (in millions)
On-Balance Sheet
Retail installment and lease $ 1,281 $ 1,737 $ (456)
Wholesale 43 148 (105)
Other 3 6 (3)
Total on-balance sheet (excluding reacquired receivables) 1,327 1,891 (564)
Reacquired Receivables (retail) 74 92 (18)
Total on-balance sheet (including reacquired receivables) $ 1,401 $ 1,983 $ (582)
Securitized Off-Balance Sheet
Retail installment and lease $ 244 $ 551 $ (307)
Wholesale - - -
Other - - -
Total securitized off-balance sheet $ 244 $ 551 $ (307)
Managed
Retail installment and lease $ 1,599 $ 2,380 $ (781)
Wholesale 43 148 (105)
Other 3 6 (3)
Total managed $ 1,645 $ 2,534 $ (889)
Loss-to-Receivables Ratios
On-Balance Sheet (including reacquired receivables)*
Retail installment and lease 1.36% 1.86% (0.50) pts.
Wholesale 0.20 0.79 (0.59)
Total including other 1.10% 1.60% (0.50) pts.
Memo: On-Balance Sheet (excluding reacquired receivables) 1.04% 1.52% (0.48) pts.
Managed
Retail installment and lease 1.32% 1.77% (0.45) pts.
Wholesale 0.10 0.37 (0.27)
Total including other 0.97% 1.40% (0.43) pts.
* Ford Credit believes that the use of the on-balance sheet loss-to-receivables ratio that includes the charge-offs related to reacquired receivables
is useful to investors because it provides a more complete presentation of Ford Credit’s on-balance sheet charge-off performance.