Ford 2012 Annual Report Download - page 45

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Ford Motor Company | 2012 Annual Report 43
Management's Discussion and Analysis of Financial Condition and Results of Operations
43
Liquidity. The following table illustrates Ford Credit's liquidity programs and utilization (in billions):
December 31,
2012
December 31,
2011
December 31,
2010
Liquidity Sources (a)
Cash (b) $ 10.9 $12.1 $ 14.6
Unsecured credit facilities 0.9 0.7 1.1
FCAR bank lines 6.3 7.9 9.0
Conduit / Bank Asset-Backed Securitizations ("ABS") 24.3 24 24.2
Total liquidity sources $ 42.4 $44.7 $ 48.9
Utilization of Liquidity
Securitization cash (c) $ (3.0) $ (3.7) $ (4.2)
Unsecured credit facilities (0.1)(0.2) (0.5)
FCAR bank lines (5.8)(6.8) (6.7)
Conduit / Bank ABS (12.3)(14.5) (8.6)
Total utilization of liquidity (21.2)(25.2) (20.0)
Gross liquidity 21.2 19.5 28.9
Capacity in excess of eligible receivables (1.5)(2.4) (6.3)
Liquidity available for use $ 19.7 $17.1 $ 22.6
__________
(a) FCAR and conduits subject to availability of sufficient assets and ability to obtain derivatives to manage interest rate risk; FCAR commercial
paper must be supported by bank lines equal to at least 100% of the principal amount; conduits include committed securitization programs.
(b) Cash, cash equivalents, and marketable securities (excludes marketable securities related to insurance activities).
(c) Securitization cash is to be used only to support on-balance sheet securitization transactions.
At December 31, 2012, Ford Credit had $42.4 billion of committed capacity and cash diversified across a variety of
markets and platforms. The utilization of its liquidity totaled $21.2 billion at year-end, compared with $25.2 billion at
year-end 2011. The decrease of $4 billion reflects lower usage of its private conduits, FCAR outstanding commercial
paper balance, and securitized cash.
Ford Credit ended 2012 with gross liquidity of $21.2 billion. Capacity in excess of eligible receivables decreased to
$1.5 billion. This provides a funding source for future originations and flexibility to transfer capacity among markets
and asset classes where most needed. Total liquidity available for use continues to remain strong at $19.7 billion at
year-end 2012, $2.6 billion higher than year-end 2011. Ford Credit is focused on maintaining liquidity levels that meet
its business and funding requirements through economic cycles.
Cash, Cash Equivalents, and Marketable Securities. At December 31, 2012, Ford Credit's cash, cash equivalents,
and marketable securities (excluding marketable securities related to insurance activities) totaled $10.9 billion,
compared with $12.1 billion at year-end 2011. In the normal course of its funding activities, Ford Credit may generate
more proceeds than are required for its immediate funding needs. These excess amounts are maintained primarily as
highly liquid investments, which provide liquidity for its short-term funding needs and give it flexibility in the use of its
other funding programs. Ford Credit's cash, cash equivalents, and marketable securities are held primarily in highly
liquid investments, which provide for anticipated and unanticipated cash needs. Ford Credit's cash, cash equivalents,
and marketable securities (excluding marketable securities related to insurance activities) primarily include
U.S. Treasury obligations, federal agency securities, bank time deposits with investment-grade institutions and non-
U.S. central banks, corporate investment-grade securities, A-1/P-1 (or higher) rated commercial paper, debt obligations
of a select group of non-U.S. governments, non-U.S. government agencies, supranational institutions and money
market funds that carry the highest possible ratings. Ford Credit currently does not hold cash, cash equivalents, or
marketable securities consisting of investments in government obligations of Greece, Ireland, Italy, Portugal, or Spain,
nor did it hold any at December 31, 2012. The average maturity of these investments ranges from 90 days to up to
one year, and is adjusted based on market conditions and liquidity needs. Ford Credit monitors its cash levels and
average maturity on a daily basis. Cash, cash equivalents, and marketable securities include amounts to be used only
to support Ford Credit's securitization transactions of $3.0 billion and $3.7 billion at December 31, 2012 and 2011,
respectively.
Ford Credit's substantial liquidity and cash balance have provided the opportunity to selectively call and repurchase
its unsecured and asset-backed debt through market transactions. For full-year 2012, Ford Credit repurchased and
called an aggregate principal amount of $628 million of its unsecured and asset-backed debt.
For more information visit www.annualreport.ford.com