PROFITABLE GROWTH FOR ALL

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Financial Services Sector
Ford Credit
Funding Strategy. Ford Credit's funding strategy remains focused on diversification, and it plans to continue
accessing a variety of markets, channels and investors. Ford Credit's liquidity remains strong, and it maintains cash
balances and committed capacity that meet its business and funding requirements in all global market conditions.
Ford Credit completed its full year funding plan despite volatile market conditions. In 2011, it completed $35 billion of
term funding, including $19 billion in the public market and $16 billion of private securitizations. Ford Credit's public
unsecured issuance was over $8 billion, including over $800 million issued under its U.S. Retail Notes program which it
reintroduced in 2011.
The public retail securitization transactions included $2.5 billion from Ford Credit's FUEL notes program. These are
5-year notes backed by automotive retail finance receivables. The FUEL notes will be mandatorily exchanged for Ford
Credit unsecured notes having the same maturity and interest rate upon Ford Credit's senior unsecured debt receiving
two investment grade credit ratings among S&P, Moody's, and Fitch. After the mandatory exchange, Ford Credit expects
to reacquire the assets supporting the FUEL notes.
Ford Credit ended the year with over $17 billion of liquidity and about $33 billion of committed capacity, compared with
about $34 billion at December 31, 2010. Throughout 2011, Ford Credit generally saw lower costs across the facilities it
renewed.
Ford Credit's funding plan is subject to risks and uncertainties, many of which are beyond its control, including
disruption in the capital markets that could impact both unsecured debt and asset-backed securities issuances and the
effects of regulatory reform efforts on the financial markets. Potential impacts of industry events and regulation on Ford
Credit's ability to access debt and derivatives markets, or renew its committed liquidity programs in sufficient amounts and
at competitive rates, represents another risk to its funding plan. As a result of such events or regulation, Ford Credit may
need to reduce new originations of receivables, thereby reducing its ongoing profits and adversely affecting its ability to
support the sale of our vehicles.
Funding. Ford Credit requires substantial funding in the normal course of business. Its funding requirements are
driven mainly by the need to: (i) purchase retail installment sale contracts and retail lease contracts to support the sale of
Ford products, which are influenced by Ford-sponsored special-rate financing programs that are available exclusively
through Ford Credit, (ii) provide wholesale financing and capital financing for Ford dealers, and (iii) repay its debt
obligations.
Ford Credit's funding sources include primarily securitization transactions (including other structured financings) and
unsecured debt. Ford Credit issues both short- and long-term debt that is held by both institutional and retail investors,
with long-term debt having an original maturity of more than 12 months. Ford Credit sponsors a number of securitization
programs that can be structured to provide both short- and long-term funding through institutional investors in the
United States and international capital markets.
Ford Credit obtains short-term unsecured funding from the sale of floating rate demand notes under its Ford Interest
Advantage program and by issuing unsecured commercial paper in the United States, Europe, Mexico, and other
international markets. At December 31, 2011, the principal amount outstanding of Ford Interest Advantage notes, which
may be redeemed at any time at the option of the holders thereof without restriction, was $4.7 billion. At present, all of
Ford Credit's short-term credit ratings by nationally recognized statistical rating organizations ("NRSROs") are below the
Tier-2 category, and as a result it has limited access to the unsecured commercial paper market, and Ford Credit's
unsecured commercial paper cannot be held by money market funds. At December 31, 2011, the principal amount
outstanding of Ford Credit's unsecured commercial paper was about $150 million, which primarily represents issuance
under its commercial paper program in Mexico and Europe. Ford Credit does not hold reserves specifically to fund the
payment of any of its unsecured short-term funding obligations. Instead, Ford Credit maintains multiple sources of
liquidity, including cash, cash equivalents, and marketable securities (excluding marketable securities related to insurance
activities), unused committed liquidity programs, excess securitizable assets, and committed and uncommitted credit
facilities, which should be sufficient for Ford Credit's unsecured short-term funding obligations.
U.S. Financial Industry Regulations. See "Item 1A. Risk Factors," of our Annual Report on Form 10-K for year ended
December 31, 2011, for discussion of new or increased credit, consumer, data protection, or other regulations.
60 Ford Motor Company | 2011 Annual Report