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Notes to the Financial Statements
Ford Motor Company | 2007 Annual Report 73
NOTE 7. SALES OF RECEIVABLES — FINANCIAL SERVICES SECTOR (Continued)
Outstanding delinquencies over 30 days related to the off-balance sheet securitized portfolio were $180 million and
$208 million at December 31, 2007 and 2006, respectively. Credit losses, net of recoveries, were $65 million and
$84 million for the years ended December 31, 2007 and 2006, respectively. Expected static pool credit losses related to
outstanding securitized retail receivables were 1.1% at December 31, 2007. To calculate the static pool credit losses,
actual and projected future credit losses are added together and divided by the original balance of each pool of assets.
On-Balance Sheet Securitizations
At December 31, 2007 and 2006, finance receivables of $67.2 billion and $56.5 billion, respectively, have been sold for
legal purposes in securitizations that do not satisfy the requirements for accounting sale treatment. In addition, at
December 31, 2007 and 2006, net investment in operating leases of $18.9 billion and $15.2 billion, respectively, have
been included in securitizations that do not satisfy the requirements for accounting sale treatment. These receivables and
net investment in operating leases are available only for payment of the debt or other obligations issued or arising in the
securitization transactions. At December 31, 2007 and 2006, associated debt of $69.2 billion and $59.6 billion,
respectively, is reported on Ford Credit balance sheet for financial statement reporting purposes. This debt includes long-
term and short-term asset-backed debt that is payable only out of collections on the underlying securitized assets and
related enhancements. The cash balances to be used only to support the on-balance sheet securitizations at
December 31, 2007 and 2006 were $4.7 billion and $3.7 billion, respectively. On-balance sheet securitizations generally
use VIEs of which Ford Credit is the primary beneficiary.
NOTE 8. INVENTORIES
Inventories at December 31 were as follows (in millions):
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D5(50P,N!I4*N:)60<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< ! %?C%A! ! %?%@C!
G*67E!5(;,(6*45,0!:(N,4!35406W5(?!35406W*:6!+,6P*N!.^D'D_^1 <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< ! AA?""A! ! AA?#B"!
/,00i!/706W5(?!35406W*:6!+,6P*N!.^/'D_^1!7Nf:06+,(6 <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< !!!!!!.A?A##1! !!!!!!.A?#A&1!
G*67E!5(;,(6*45,0<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< =! A#?A"A! =! A#?#A$!
Inventories are stated at lower of cost or market. About one-fourth of inventories were determined under LIFO method.