Ford 2007 Annual Report Download - page 50

• Retail Warehouse. If credit losses or delinquencies in Ford Credit's portfolio of retail assets exceed specified
levels, Ford Credit will be unable to obtain additional funding from the securitization of retail installment sale
contracts through its retail warehouse facility (i.e., a short-term credit facility under which draws are backed by the
retail contracts).
• Revolving and Variable Funding Note Structures in Europe. If FCE fails to add the required amount of additional
assets, or if cash reserves fall below certain levels, FCE will be unable to obtain additional funding through its
revolving/variable funding note securitization programs and any existing funding would begin to amortize.
In the past, these features have not limited Ford Credit's ability to use securitization to fund its operations.
In addition to the specific transaction-related structural features discussed above, Ford Credit's securitization programs
may be affected by the following factors: market disruption and volatility, the market capacity for Ford Credit and Ford
Credit's sponsored investments, the general demand for the type of assets supporting the asset-backed securities, the
availability of liquidity facilities, the amount and credit quality of assets available, the performance of assets in its previous
securitizations, accounting and regulatory changes, and Ford Credit's credit ratings. If, as a result of any of these or other
factors, the cost of securitization funding were to increase significantly or funding through securitizations were no longer
available to Ford Credit, it would have a material adverse impact on Ford Credit's financial condition, results of operations
or liquidity.
AGGREGATE CONTRACTUAL OBLIGATIONS
We are party to many contractual obligations involving commitments to make payments to third parties. Most of these
are debt obligations incurred by our Financial Services sector. Long-term debt may have fixed or variable interest rates.
For long-term debt with variable rate interest, we estimate the future interest payments based on projected market interest
rates for various floating-rate benchmarks received from third parties. In addition, as part of our normal business practices,
we enter into contracts with suppliers for purchases of certain raw materials, components and services. These
arrangements may contain fixed or minimum quantity purchase requirements. We enter into such arrangements to
facilitate adequate supply of these materials and services. "Purchase obligations" are defined as off-balance sheet
agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all
significant terms.
The table below summarizes our contractual obligations as of December 31, 2007 (in millions):
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* Amount includes $521 million for the Automotive sector and $32.8 billion for the Financial Services sector for the current portion of long-term debt. See
Note 16 of the Notes to the Financial Statements for additional discussion.
Liabilities recognized under FIN 48 for uncertain tax benefits of $2.1 billion (see Note 19 of the Notes to the Financial
Statements) are excluded from the table above. Final settlement of a significant portion of these obligations will require
bilateral tax agreements among us and various countries, the timing of which cannot be reasonably estimated.
For additional information regarding long-term debt, operating lease obligations, and pension and OPEB obligations,
see Notes 16, 5 and 24, respectively, of the Notes to the Financial Statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
48 Ford Motor Company | 2007 Annual Report