The cost of both debt and funding in securitizations is based on a margin or spread over a benchmark interest rate, such as  interest rates paid on U. S. Treasury securities of similar maturities. Over the last two years, on an indicative basis, spreads on  Ford Credit’s securitized funding have fluctuated between 35 and 63 basis points above 3-year U.S. Treasury securities, while  Ford Credit’s unsecured long-term debt funding spreads have fluctuated between 124 and 638 basis points above comparable  U.S. Treasury securities. In 2004, on an indicative basis, Ford Credit’s unsecured term-debt spreads fluctuated between 124 and  205 basis points above 3-year U.S. Treasury securities, with an average spread of 162 basis points and a year-end spread of  165 basis points above comparable U.S. Treasury securities. 3 8 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Services Sector  Ford Credit Debt and Cash. Ford Credit’s total debt was $144.3 billion at December 31, 2004, down $5.4 billion compared with a year ago, primarily reflecting lower funding requirements due to lower asset levels. Ford Credit’s outstanding unsecured  commercial paper at December 31, 2004 totaled $8.9 billion, up $2.8 billion compared with a year ago and up approximately  $700 million compared with year-end 2002, primarily reflecting increased investor demand. At December 31, 2004, Ford Credit had cash and cash equivalents of $12.7 billion. In the normal course of its funding  activities, Ford Credit may generate more proceeds than are necessary for its immediate funding needs. These excess amounts  are maintained primarily as highly liquid investments, which provide liquidity for Ford Credit’s short-term funding obligations  and give Ford Credit flexibility in the use of its other funding programs. Funding. Ford Credit requires substantial funding in the normal course of business. Ford Credit’s funding requirements are driven  mainly by the need to (i) purchase retail installment sale contracts and vehicle leases to support the sale of Ford products, which  are influenced by Ford-sponsored special financing and leasing programs that are available exclusively through Ford Credit, (ii)  provide vehicle inventory and capital financing for Ford dealers, and (iii) repay its debt obligations. Ford Credit’s funding sources include debt issuances, sales of receivables in securitizations and other structured financings, and  bank borrowings. Debt issuance consists of short- and long-term unsecured debt, placed directly by Ford Credit or through  securities dealers or underwriters in the United States and international capital markets, and reaches both retail and institutional  investors. Ford Credit issues commercial paper in the United States, Europe, Canada and other international markets. In addition  to its commercial paper programs, Ford Credit also obtains short-term funding from the sale of floating rate demand notes,  which may be redeemed at any time at the option of the holder thereof without restriction. At December 31, 2004, the principal  amount outstanding of such notes was $7.7 billion. Ford Credit does not hold reserves to fund the payment of the demand notes  or any other short-term funding obligation. Ford Credit’s policy is to have sufficient cash and cash equivalents, unused committed  bank-sponsored asset-backed commercial paper issuer capacity, securitizable assets, and back-up credit facilities to provide  liquidity for all of its short-term funding obligations. During 2004, Ford Credit continued to meet a significant portion of its funding requirements through securitizations because of  the stability of the market for asset-backed securities, their lower relative costs given our credit ratings (as described below), and  the diversity of funding sources that they provide. Securitized funding (both on- and off-balance sheet, net of retained interests)  as a percent of total managed receivables was as follows as of the end of each of the last three years: 2004 - 24%, 2003 - 25%,  2002 - 28%. The following table illustrates Ford Credit’s term public funding issuances for 2003 and 2004 and its planned issuances for 2005 (in billions): 2005 Forecast 2004 2003 Unsecured Term Debt Institutional $  5 – 9 $ 7 $  15 Retail – 6 5 4 Total unsecured term debt 10 – 15 12 19 Term Public Securitization* 10 – 15 6 11 Total term public funding $  20 – 30 $ 18 $  30 * Reflects new issuance and includes funding from discontinued operations in 2004 and 2003; excludes whole-loan sales, and other structured financings.