Ford 2010 Annual Report Download - page 47

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Ford Motor Company | 2010 Annual Report 45
As disclosed in our Current Report on Form 8-K dated September 16, 2009 (the "September 2009 Form 8-K Report"),
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 Federal Financing Bank to enter into a Note Purchase Agreement (the "Note Purchase Agreement") for
the purchase of notes to be issued by us evidencing such loans. The proceeds of advances under the Facility are to be
used to finance certain costs for alternative technology vehicles eligible for financing under the ATVM Program that are
incurred through mid-2012. Advances under the existing Facility may be requested through December 31, 2012. Each
advance under the Facility bears interest at a blended rate based on the Treasury yield curve at the time such advance is
borrowed, based on the principal amortization schedule for that advance, with interest payable quarterly in arrears. The
principal amount of the loans under the Facility is payable in equal quarterly installments, commencing on
September 15, 2012, through June 15, 2022. Through December 31, 2010 we have received $2,752 million in loans
under the Facility. For additional details regarding the Arrangement Agreement and the Note Purchase Agreement, refer
to Exhibits 10.1 and 10.2 filed with the September 2009 Ford 8-K Report.
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
with the EIB. Proceeds of loans drawn under the facility will be used for 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 $699 million of loans at December
31, 2010. 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 20% of the outstanding principal
amount, and bear interest at a fixed rate of approximately 3.2% per annum (excluding fees of 0.13% and 0.30% to the
EIB for the credit facility and the U.K. government for its guarantee, respectively). 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.
U.S. Ex-Im Bank and Private Export Funding Corporation ("PEFCO") Secured Revolving Loan. On
December 21, 2010, we entered into a Credit Agreement with PEFCO and Ex-Im Bank. Under the terms of the Credit
Agreement, PEFCO provided us with a $250 million revolving credit facility and Ex-Im Bank provided a guarantee to
PEFCO for 100% of the outstanding principal amount of the loan, which is secured by our in-transit vehicle inventory to
Canada and Mexico. Proceeds drawn on the facility will be used to finance vehicles exported for sale to Canada and
Mexico that were manufactured in our United States assembly plants. The facility was fully drawn in the fourth quarter of
2010 and we had outstanding a $250 million loan at December 31, 2010. The loan matures on December 21, 2011 and
bears interest at LIBOR, at a time period that most closely parallels the advancement term, plus a margin of 1% (excluding
a facility fee of 1.6%), with interest payable monthly.
Other Automotive Credit Facilities. At December 31, 2010 we had $709 million of local credit facilities to foreign
Automotive affiliates, of which $167 million has been utilized. Of the $709 million of committed credit facilities,
$147 million expires in 2011, $172 million expires in 2013, and $390 million expires in 2014.
Net Cash/(Debt). Our Automotive sector net cash/(debt) calculation is detailed below (in billions):
December 31,
December 31,December 31,
December 31,
2010
20102010
2010
2009
20092009
2009
Gross cash................................................................................................................................
................................
$ 20.5 $ 24.9
Less:
Long-term debt ................................................................................................................................
.........................
17.1 32.0
Debt payable within one year................................................................................................
................................
2.0 1.6
Total debt................................................................................................................................
................................
19.1 33.6
Net cash/(debt) ................................................................................................................................
...........................
$ 1.4 $ (8.7)
See Note 19 of the Notes to the Financial Statements for our debt maturity table as of December 31, 2010 and
additional debt disclosures.