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Notes to the Financial Statements
NOTE 5. MARKETABLE, LOANED AND OTHER SECURITIES (Continued)
The fair value of our investments in an unrealized loss position at December 31, 2005, aggregated by investment category and
length of time that the investments have been in a continuous loss position, are as follows (in millions):
Less Than
12 Months
12 Months
or Greater Total
Description of Securities
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Automotive Sector
U.S. government ................................................................
................................
$ 805 $ 4 $ 105 $ 2 $ 910 $ 6
Mortgage-backed securities ................................................................
.................
288 2 89 2 377 4
Other debt securities ................................................................
............................
321 2230 5551 7
Total ................................................................................................
..................
$ 1,414 $ 8 $ 424 $ 9 $ 1,838 $ 17
Financial Services Sector
U.S. government ................................................................
................................
$ 29 $ — $ — $ — $ 29 $ —
Mortgage-backed securities ................................................................
.................
139 3 33 1 172 4
Other debt securities ................................................................
............................
85 1 75 2 160 3
Equity securities................................................................................................
...
3—2151
Total ................................................................................................
..................
$ 256 $ 4 $ 110 $ 4 $ 366 $ 8
We also hold an additional $822 million investment in marketable securities at December 31, 2005 in a Voluntary Employees
Beneficiary Association trust ("VEBA"), which assets are used to fund certain employee benefit obligations in the near term.
These investments are recorded at fair value and included in Other assets on our balance sheet. At December 31, 2005, the fair
value and unrealized loss of these assets that have been in a continuous loss position for less that twelve months was $318 million
and $1 million, respectively, and the fair value and unrealized loss of these assets in a continuous loss position for twelve months
or greater was $128 million and $1 million, respectively.
Management has determined that the unrealized losses on our investments in debt and equity securities at December 31, 2005
are temporary in nature. Factors considered in determining whether a loss is temporary include the length of time and extent to
which fair value has been below cost, the financial condition and near-term prospects of the issuer and our ability and intent to
hold the investment for a period of time sufficient to allow for any anticipated recovery.
NOTE 6. INVENTORIES — AUTOMOTIVE SECTOR
Inventories at December 31 were as follows (in millions):
2005 2004
Raw materials, work-in-process and supplies ................................................................................................................................
...
$ 4,056 $ 3,968
Finished products................................................................................................................................................................
..............
7,224 7,799
Total inventories at FIFO................................................................................................................................
................................
11,280 11,767
Less: LIFO adjustment ................................................................................................................................................................
...
(1,009) (1,001)
Total inventories................................................................................................................................................................
.............
$ 10,271 $ 10,766
Inventories are stated at lower of cost or market. About one-fourth of inventories were determined under the last-in, first-out
method ("LIFO").
During 2005, inventory quantities were reduced, resulting in a liquidation of LIFO inventory quantities carried at lower costs
prevailing in prior years as compared with the cost of 2005 purchases, the effect of which decreased cost of goods sold by
approximately $12 million.
Ford Motor Company Annual Report 2005 70 Ford Motor Company Annual Report 2005 71