MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS During 2002, Ford Credit began a program to sell retail installment sale contracts in transactions where it retains no interest  and thus no exposure to the sold assets. These transactions, referred to as “whole-loan sale transactions,” provide liquidity by  enabling Ford Credit to reduce its managed receivables and its need for funding to support those receivables. Total outstanding  receivables sold in whole-loan sale transactions at December 31, 2004 were $4.0 billion. As a result of lower credit ratings over the last three years, Ford Credit focused its efforts on further diversification of funding  sources and reduced its reliance on short-term funding, especially unsecured commercial paper. Ford Credit launched new  asset-backed commercial paper and retail unsecured bond programs, and it expanded its securitization and other structured  financing channels, including transactions by foreign affiliates and expansion of its bank-sponsored asset-backed commercial  paper issuers program. As Ford Credit’s short-term credit ratings have declined, asset-backed commercial paper programs  have become more cost-effective compared with unsecured commercial paper, and allow Ford Credit access to a larger  investor base. As a result of Ford Credit’s funding strategy and the reduction in its managed receivables, lower credit ratings  during the past three years have not had a material impact on Ford Credit’s ability to fund its operations. Any further lowering  of its credit ratings may increase Ford Credit’s borrowing costs and potentially constrain its funding sources. This could cause  Ford Credit to increase its use of securitization or other sources of liquidity or to reduce the amount of receivables it could  purchase, thereby potentially adversely affecting its ability to support the sale of Ford vehicles. For additional funding and to maintain liquidity, Ford Credit and its majority-owned subsidiaries, including FCE, have contractually committed credit facilities with financial institutions that totaled approximately $7.5 billion at December 31, 2004. This includes $4.3 billion of Ford Credit facilities ($3.9 billion global and approximately $400 million  non-global) and $3.2 billion of FCE facilities ($3.0 billion global and approximately $200 million non-global). Approximately  $800 million of the total facilities were in use at December 31, 2004. Additionally, at December 31, 2004, banks provided  $18.0 billion of contractually committed liquidity facilities supporting two asset-backed commercial paper programs established  by Ford Credit. Ford Credit also has entered into agreements with a number of bank-sponsored asset-backed commercial  paper issuers under which such issuers are contractually committed to purchase from Ford Credit, at Ford Credit’s option, up to  $14.3 billion of receivables in the aggregate at December 31, 2004. For further discussion of these facilities and agreements,  see Note 15 of the Notes to the Financial Statements. Leverage. Ford Credit uses leverage, or the debt-to-equity ratio, to make various business decisions, including establishing  pricing for retail, wholesale and lease financing, and assessing its capital structure. Ford Credit calculates leverage on a  financial statement basis and on a managed basis using the following formulas: Financial  Statement  Leverage = Total Debt Equity Retained Interest in Securitized Securitized Off-Balance Off-Balance Cash SFAS No. 133 Sheet Sheet and Cash Adjustments Managed Leverage Total Debt + Receivables - Receivables - Equivalents - on Total Debt = Equity + Minority  Interest - SFAS No. 133  Adjustment on   Equity December 31, 2004 2003 2002 Total debt $  144.3 $ 149.7 $ 140.3 Total stockholder’s equity 11.5 12.5 13.6 Debt-to-equity ratio (to 1) 12.6 12.0 10.3  The following table illustrates the calculation of Ford Credit’s financial statement leverage (in billions, except for ratios): 3 9