Ford 2009 Annual Report Download - page 89

Notes to the Financial Statements
Ford Motor Company | 2009 Annual Report 87
NOTE 1. PRESENTATION (Continued)
Certain Transactions Between Automotive and Financial Services Sectors
Intersector transactions occur in the ordinary course of business. We formally documented certain long-standing
business practices with Ford Credit, our indirect wholly-owned subsidiary, in a 2001 agreement that was amended in
2006. Additional details on certain transactions and the effect on each sector's balance sheet at December 31 are shown
below (in billions):
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Additionally, amounts recorded as revenue by the Financial Services sector and billed to the Automotive sector for
interest supplements and other support costs for special financing and leasing programs were $3.7 billion, $4.8 billion,
and $4.6 billion in 2009, 2008 and 2007, respectively. The Automotive sector had accrued in Accrued liabilities and
deferred revenue $1 billion and $2.5 billion for interest supplements at December 31, 2009 and 2008, respectively, and
about $180 million and about $450 million for residual-value supplements in the United States and Canada to be paid to
Ford Credit over the term of the related finance contracts at December 31, 2009 and 2008, respectively.
Liquidity
At December 31, 2009, our Automotive sector had total cash, cash equivalents, and marketable securities of
$25.5 billion and full-year operating cash flows from continuing operations of $4.1 billion.
During 2009, we completed numerous financing transactions designed to provide additional Automotive liquidity and
improve our balance sheet. These transactions include the Amended Settlement Agreement relating to our hourly retiree
health care obligation (discussed in Note 18) (providing us the option to pay up to approximately 50% of VEBA obligations
in Ford Common Stock), reduction of Automotive debt by $10.1 billion principal amount, and issuance of $1.6 billion of
equity in an underwritten offering of Ford Common Stock and about $700 million through equity distribution agreements.
In addition, we entered into a U.S. Department of Energy ("DOE") loan agreement to provide up to $5.9 billion in loans,
issued $2.875 billion of 2016 Convertible Notes, and amended and extended the revolving credit facility (discussed in
Note 19) thereby extending the maturity date for $7.2 billion of the facility from December 2011 to November 2013.
Although the economic environment for 2010 remains uncertain, we believe that all reasonably possible scenarios,
including a decline in 2010 industry sales volumes to levels below our planning assumptions, would not exhaust our
presently available liquidity. Therefore, we do not believe that these reasonably possible scenarios cause substantial
doubt about our ability to continue as a going concern for the next year.
Accordingly, we have concluded that there is no substantial doubt about our ability to continue as a going concern,
and our financial statements have been prepared on a going concern basis.