Ford 2004 Annual Report Download - page 76

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7 4
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13. ALLOWANCE FOR CREDIT LOSSES – FINANCIAL SERVICES SECTOR
The allowance for credit losses is our estimate of the credit losses related to impaired receivables and operating leases as of the
date of the financial statements. This allowance is based on factors including historical credit loss trends, the credit quality of
our present portfolio, trends in historical and projected used vehicle values and general economic measures. Additions to the
allowance for credit losses are made by recording charges to the provision for credit losses on our income statement. Finance
receivables and lease investments are charged to the allowance for credit losses at the earlier of when an account is deemed to
be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the borrower
or lessee, the value of the collateral, recourse to guarantors and other factors. Recoveries on finance receivables and lease
investments previously charged off as uncollectible are credited to the allowance for credit losses.
Changes in the allowance for credit losses for finance receivables, investment in direct financing leases and investment in
operating leases were as follows (in millions):
NOTE 14. LIABILITIES – AUTOMOTIVE SECTOR (IN MILLIONS)
2004 2003 2002
Beginning balance $ 2,962 $ 3,054 $ 2,610
Provision for credit losses 923 1,928 2,778
Total charge-offs and recoveries:
Charge-offs (1,843) (2,409) (2,613)
Recoveries 477 475 469
Net charge-offs (1,366) (1,934) (2,144)
Other changes, principally amounts related to finance
receivables sold and translation adjustments (48) (86) (190)
Ending balance $ 2,471 $ 2,962 $ 3,054
Accrued Liabilities (Current) 2004 2003
Dealer and customer allowances and claims $ 16,356 $ 16,098
Deferred revenue 3,502 2,587
Deferred income taxes 2,514 2,996
Employee benefit plans 1,990 1,732
Postretirement benefits other than pensions 1,572 1,397
Accrued interest 1,538 1,814
Other 6,101 5,519
Total accrued liabilities $ 33,573 $ 32,143
Other Liabilities (Non-current)
Postretirement benefits other than pensions $ 15,306 $ 17,136
Dealer and customer allowances and claims 8,557 9,097
Employee benefit plans 5,010 5,189
Pension liability 3,735 4,382
Other 3,091 4,085
Total other liabilities $ 35,699 $ 39,889