MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table shows actual credit losses net of recoveries, which are referred to as charge-offs, for Ford Credit’s  worldwide on-balance sheet, reacquired, securitized off-balance sheet and managed receivables, for the various categories  of financing during the periods indicated. Reacquired receivables reflect the amount of receivables that resulted from the  accounting consolidation of FCAR Owner Trust (“FCAR”) in the second quarter of 2003. The loss-to-receivables ratios, which  equal charge-offs divided by the average amount of net receivables outstanding for the period, are shown for the on-balance  sheet and managed portfolios. Ford Credit believes that the use of the on-balance sheet loss-to-receivables ratio that includes the charge-offs related to reacquired receivables is useful to investors because it provides a more complete presentation of Ford Credit’s on-balance sheet charge-off performance. In 2004, charge-offs for Ford Credit’s on-balance sheet and its securitized off-balance sheet receivables declined from a  year ago primarily reflecting fewer repossessions and a lower average loss per repossession in its U.S. retail installment  and operating lease portfolio. These improvements resulted from Ford Credit’s emphasis on purchasing higher quality retail  installment and lease contracts and enhancements to its collection practices. The on-balance sheet loss-to-receivables ratio  decreased primarily reflecting improvements in charge-offs as described above. 3 2 2004  Over/(Under)  2003 2004 2003 Charge-offs (in millions) On-Balance Sheet Retail installment and lease $ 1,281 $ 1,737 $   (456) Wholesale 43  148 (105) Other 3 6 (3) Total on-balance sheet (excluding reacquired receivables) 1,327  1,891 (564) Reacquired Receivables (retail)  74 92 (18) Total on-balance sheet (including reacquired receivables) $ 1,401 $ 1,983 $   (582) Securitized Off-Balance Sheet Retail installment and lease $  244 $  551 $   (307) Wholesale - - - Other Total securitized off-balance sheet $  244 $  551 $   (307) Managed Retail installment and lease $ 1,599 $ 2,380 $   (781) Wholesale 43 148 (105) Other 3 6 (3) Total managed $ 1,645 $ 2,534 $   (889) Loss-to-Receivables Ratios On-Balance Sheet (including reacquired receivables)* Retail installment and lease 1.36% 1.86% (0.50) pts. Wholesale 0.20 0.79 (0.59) Total including other 1.10% 1.60% (0.50) pts. Memo: On-Balance Sheet (excluding reacquired receivables) 1.04% 1.52% (0.48) pts. Managed Retail installment and lease 1.32% 1.77% (0.45) pts. Wholesale 0.10 0.37 (0.27) Total including other 0.97% 1.40% (0.43) pts.