Ford 2012 Annual Report Download - page 41

Ford Motor Company | 2012 Annual Report 39
Management's Discussion and Analysis of Financial Condition and Results of Operations
Shown below is a reconciliation between financial statement Net cash provided by/(used in) operating activities and
operating-related cash flows (calculated as shown in the table above), as of the dates shown (in billions):
2012 2011 2010
Net cash provided by/(used in) by operating activities $ 6.3 $ 9.4 $ 6.4
Items included in operating-related cash flows
Capital expenditures (5.5)(4.3) (3.9)
Proceeds from the exercise of stock options — 0.1 0.3
Net cash flows from non-designated derivatives (0.8) 0.1 (0.2)
Items not included in operating-related cash flows
Cash impact of Job Security Benefits and personnel-reduction actions 0.4 0.3 0.2
Contributions to funded pension plans 3.4 1.1 1.0
Tax refunds, tax payments, and tax receipts from affiliates (0.1)(1.4) (0.2)
Settlement of outstanding obligation with affiliates (0.3) — —
Other — 0.3 0.8
Operating-related cash flows $ 3.4 $ 5.6 $ 4.4
Credit Agreement. Lenders under our Credit Agreement have commitments totaling $9.3 billion in a revolving credit
facility that will mature on November 30, 2015, and commitments totaling an additional $307 million in a revolving credit
facility that will mature on November 30, 2013. Our Credit Agreement is free of material adverse change clauses,
restrictive financial covenants (for example, debt-to-equity limitations and minimum net worth requirements) and credit
rating triggers that could limit our ability to obtain funding. The Credit Agreement contains a liquidity covenant that
requires us to maintain a minimum of $4 billion in the aggregate of domestic cash, cash equivalents, and loaned and
marketable securities and/or availability under the revolving credit facilities. On May 22, 2012, the collateral securing our
Credit Agreement was automatically released upon our senior, unsecured, long-term debt being upgraded to investment
grade by Fitch and Moody's. If our senior, unsecured, long-term debt does not maintain at least two investment grade
ratings, the guarantees of certain subsidiaries will be reinstated.
At December 31, 2012, the utilized portion of the revolving credit facilities was $93 million, representing amounts
utilized as letters of credit. Less than 1% of the commitments in the revolving credit facilities are from financial institutions
that are based in Greece, Ireland, Italy, Portugal, and Spain.
U.S. Department of Energy ("DOE") Advanced Technology Vehicle Manufacturer ("ATVM") Incentive Program. In
September 2009, we entered into a Loan Arrangement and Reimbursement Agreement ("Arrangement Agreement") with
the DOE, pursuant to which the DOE agreed to (i) arrange a 13-year multi-draw term loan facility (the "Facility") under the
ATVM Program in the aggregate principal amount of up to $5.9 billion, (ii) designate us as a borrower under the ATVM
Program and (iii) cause the Federal Financing Bank to enter into a Note Purchase Agreement for the purchase of notes to
be issued by us evidencing such loans. In August 2012, the Facility was fully drawn with $5.9 billion outstanding. We
began repayment in September 2012 and at December 31, 2012, an aggregate of $5.6 billion was outstanding. The
proceeds of the ATVM loan have been used to finance certain costs for fuel-efficient, advanced-technology vehicles. The
principal amount of the ATVM loan bears interest at a blended rate based on the U.S. Treasury yield curve at the time
each draw was made (with the weighted-average interest rate on all such draws being about 2.3% per annum). The
ATVM loan is repayable in equal quarterly installments of $148 million, which began in September 2012 and will end in
June 2022.
European Investment Bank ("EIB") Credit Facility. On July 12, 2010, Ford Motor Company Limited, our operating
subsidiary in the United Kingdom ("Ford of Britain"), entered into a credit facility for an aggregate amount of £450 million
(equivalent to $729 million at December 31, 2012) with the EIB. Proceeds of loans drawn under the facility are being
used to fund costs for the research and development of fuel-efficient engines and commercial vehicles with lower
emissions, and related upgrades to an engine manufacturing plant. The facility was fully drawn in the third quarter of
2010, and Ford of Britain had outstanding $729 million of loans at December 31, 2012. The loans are five-year, non-
amortizing loans secured by a guarantee from the U.K. government for 80% of the outstanding principal amount and cash
collateral from Ford of Britain equal to approximately 20% of the outstanding principal amount, and bear interest at a fixed
rate of 3.9% per annum excluding a commitment fee of 0.30% to the U.K. government. Ford of Britain has pledged
substantially all of its fixed assets, receivables and inventory to the U.K. government as collateral, and we have
guaranteed Ford of Britain's obligations to the U.K. government related to the government's guarantee.
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