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ANNUAL REPORT

for the year ended

Filed pursuant to Section 13 or 15(d)

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UNITED STATES

FORM 10-K

Ford Motor Credit Company

(313) 322-3000

Securities registered pursuant to Section 12(b) of the Act:

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    Yes þ

    Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

    As of March 8, 2005, the registrant had outstanding 250,000 shares of Common Stock. No voting stock of the registrant is held by non-affiliates of the registrant.

REDUCED DISCLOSURE FORMAT

    The registrant meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this Form with the reduced disclosure format.

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PART I

ITEM 1. BUSINESS

Overview

      Ford Motor Credit Company (referred to herein as “Ford Credit”, the “Company”, “we”, “our” or “us”) was incorporated in Delaware in 1959. We are an indirect, wholly owned subsidiary of Ford Motor Company (“Ford”). Our principal executive offices are located at One American Road, Dearborn, Michigan 48126, and our telephone number is (313) 322-3000.

      Our annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) are available free of charge through our website located at www.fordcredit.com/investorcenter/. These reports and our current reports on Form 8-K can be found on the SEC’s website located at www.sec.gov.

      Products and Services. We offer a wide variety of automotive financing products to and through automotive dealers throughout the world. Our primary financing products fall into three categories:

	•	Retail financing — purchasing retail installment sale contracts and retail lease contracts from dealers, and offering financing to commercial customers, primarily vehicle leasing companies and fleet purchasers, to lease or purchase vehicle fleets;
	•	Wholesale financing — making loans to dealers to finance the purchase of vehicle inventory, also known as floorplan financing; and
	•	Other financing — making loans to dealers for working capital, improvements to dealership facilities, and to purchase and finance dealership real estate.

      We also service the finance receivables and leases we originate and purchase, make loans to Ford affiliates, purchase certain receivables of Ford and its subsidiaries and provide insurance services related to our financing programs.

      We earn our revenue primarily from:

	•	Payments made under retail installment sale contracts and retail leases that we purchase, including interest supplements and other support payments from Ford on special-rate retail financing programs;
	•	Investment and other income related to sold receivables; and
	•	Payments made under wholesale and other dealer loan financing programs.

      Geographic Scope of Operations and Segment Information. We conduct our financing operations directly or through our subsidiaries and affiliates. We offer substantially similar products and services throughout many different regions, subject to local legal restrictions and market conditions. We divide our business segments based on geographic regions: Ford Credit North America (“North America Segment”) and Ford Financial International (“International Segment”). The North America Segment includes our operations in the United States and Canada. The International Segment includes our operations in all other countries in which we do business directly and indirectly. Additional financial information regarding our operations by business segments and operations by geographic regions are shown in Note 16 of our Notes to the Financial Statements.

North America Segment

      We do business in all 50 states of the United States through about 130 dealer automotive financing branches and seven regional service centers. We do business in all provinces in Canada through 14 dealer automotive financing branches and two regional service centers. Our United States operations accounted for 68% and 69% of our total managed receivables at year-end 2004

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and 2003, respectively, and our Canadian operations accounted for about 7% and 6% of our total managed receivables in 2004 and 2003, respectively.

      In the United States and Canada, under the Ford Credit brand name, we provide financing services to and through dealers of Ford, Lincoln and Mercury brand vehicles and non-Ford vehicles also sold by these dealers and their affiliates. We provide similar financial services under the Jaguar, Land Rover, Mazda and Volvo brand names to and through Jaguar, Land Rover, Mazda and Volvo dealers, respectively. Under the PRIMUS label, we provide financing services to Aston Martin and non-Ford dealers in the United States and Canada.

International Segment

      Our International segment includes operations in three main regions: Europe, Asia-Pacific and Latin America. Our Europe region is our largest international operation, accounting for 19% and 18% of our total managed receivables at year-end 2004 and 2003, respectively. Within the International segment, our Europe region accounted for 77% of our managed receivables in 2004 and 2003. Most of our European operations are managed through a U.K.-based subsidiary, FCE Bank plc (“FCE”), which operates in the United Kingdom and on a branch basis in 16 European countries. In addition, FCE has subsidiaries in the United Kingdom, Finland, Hungary, Poland and the Czech Republic that provide wholesale, leasing and retail vehicle financing. In our largest European markets, Germany and the United Kingdom, FCE offers most of our products and services under the Ford Credit/ Bank, Volvo Car Finance, Land Rover Financial Services, Jaguar Financial Services and Mazda Credit/ Bank brands. FCE generates most of our European revenue and contract volume from Ford Credit/ Bank brand products and services. FCE, through our Worldwide Trade Financing division, provides financing to dealers in countries where typically there is no established local Ford presence. In addition, other private label operations and outsourcing arrangements are in place in several markets in Central and Eastern Europe. We also offer financing in Germany and Sweden for Volvo brand vehicles through Volvo Auto Finanz Service Deutschland GmbH and Volvo Finans, a joint venture with Swedish Volvo dealers. We also have joint ventures in South Africa and Saudi Arabia that provide wholesale, leasing and retail vehicle financing.

      In the Asia-Pacific region, we operate in Australia, Japan, Taiwan, Thailand and New Zealand. We have joint ventures with local financial institutions and other third parties in India, the Philippines and Indonesia. We maintain a presence in China through a representative office. The banking authority in China, the China Banking Regulatory Commission, has approved our initial application to provide auto financing in China and our final application is pending approval. In the Latin America region, we operate in Mexico, Puerto Rico, Brazil, Chile, Venezuela and Argentina.

Competition

      The automotive financing business is highly competitive. Our principal competitors for retail and wholesale financing are:

      We compete mainly on the basis of service and financing rates. A key foundation of our service is providing broad and consistent purchasing policies for retail installment sale and lease contracts and consistent support for dealer financing requirements across economic cycles. Through these

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policies we have built strong relationships with Ford’s dealer network that enhance our competitiveness. Our ability to provide competitive financing rates depends on effectively and efficiently originating, purchasing and servicing our receivables, and accessing the capital markets. We routinely monitor the capital markets and develop funding alternatives to maximize our competitive position. The integration of our financing services with Ford’s vehicle production and marketing plans gives us a competitive advantage in providing financing to Ford dealers and their customers. In addition, our size allows us to take advantage of economies of scale in both purchasing and servicing our receivables and leases.

      No single company is a dominant force in the industry. Some of our bank competitors have developed credit aggregation systems that permit dealers to send, through a single standard system, retail credit applications to multiple finance sources to evaluate financing options offered by these finance sources. This process has resulted in greater competition based on financing rates. We, along with other automobile manufacturers’ affiliated finance companies, formed a joint venture in 2002, RouteOne LLC (“RouteOne”), that developed a similar credit application management system. RouteOne developed a web-based system that enables dealers and their finance sources, including automobile manufacturers’ affiliated finance companies, banks, and other financial institutions, to exchange credit application and decision information online. The system was launched in our United States branches during 2004 and rollout in Canada is scheduled for the first quarter of 2005.

      Seasonal Variations. As a finance company, we own and manage a large portfolio of finance receivables and operating leases that are generated throughout the year and are collected over a number of years, primarily in fixed monthly payments. As a result, our overall financing revenues do not exhibit seasonal variations. However, throughout the automotive financing industry, charge-offs are typically higher in the first and fourth quarters of the year due to competing financial demands on customers and lower vehicle resale values.

Dependence on Ford

      The predominant share of our business consists of financing Ford vehicles and supporting Ford dealers. Any extended reduction or suspension of Ford’s production or sale of vehicles due to a decline in consumer demand, work stoppage, governmental action, negative publicity or other event, or significant changes to marketing programs sponsored by Ford, would have an adverse effect on our business. Additional information about Ford’s business, operations, production, sales and risks can be found in Ford’s Annual Report on Form 10-K for the year ended December 31, 2004 (“Ford’s 2004 10-K Report”), filed separately with the SEC and included as an exhibit to this report (without financial statements and exhibits).

      Ford has sponsored special-rate financing programs available only through us. Similar programs may be offered in the future. Under these programs, Ford makes interest supplements or other support payments to us. These programs may increase our financing volume and share of financing sales of Ford vehicles. In each of 2004 and 2003, we recorded as financing revenue about $3.3 billion related to interest supplements and other payments received from Ford. For further discussion regarding interest supplements and other support costs earned from affiliated companies, see Note 15 of our Notes to the Financial Statements.

Retail Financing

Overview and Purchasing Process

      We provide financing services to retail customers through automotive dealers that have established relationships with us. Our primary business consists of purchasing retail installment sale and lease contracts for new and used vehicles mainly from dealers of Ford vehicles. In 2004, on a worldwide basis, we financed about 2.6 million vehicles through installment sales, and we financed

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about 519,000 vehicles through operating and finance leases. We report in our financial statements the receivables from customers under installment sale contracts and certain leases with fleet customers as finance receivables. We report in our financial statements most of our retail leases as operating leases with the capitalized cost of the vehicles recorded as depreciable assets. We report retail leases in our financial statements as net investment in operating leases. At December 31, 2004, our retail finance receivables net of allowances for credit losses totaled $81.7 billion and our net investment in operating leases was $21.9 billion.

      In general, we purchase from dealers retail installment sale contracts and lease contracts that meet our credit standards. These contracts primarily relate to the purchase or lease of new vehicles, but some are for used vehicles. Dealers typically submit customer applications electronically to one of our branch offices. Some of the applications are automatically evaluated and either approved or rejected based on our origination scorecard and credit policy criteria. In other cases, our credit analysts evaluate applications using our written guidelines.

Retail Installment Sale Contracts

      The amount we pay for a retail installment sale contract is based on a negotiated vehicle purchase price agreed to between the dealer and the retail customer, plus any additional products, such as insurance and extended service plans, that are included in the contract, less any vehicle trade-in allowance or down payment from the customer applied to the purchase price. The net purchase price owed by the customer typically is paid over a specified number of months with interest at a fixed rate negotiated between the dealer and the retail customer. The dealer may retain a portion of the finance charge.

      We offer a variety of retail installment sale financing products. We generally purchase retail installment sale contracts with terms ranging from 12 to 72 months. The average original term of our retail installment sale contracts was 58 months in the United States in 2004, compared with 59 months in 2003.

      In the United States, the average amount financed for new Ford, Lincoln, and Mercury brand vehicles under retail installment sale contracts was $24,000 in 2004, compared with $25,088 in 2003. The corresponding average monthly payment was about $505 in 2004 and $510 in 2003.

      Some of our retail installment sale contracts have non-uniform payment periods and payment amounts to accommodate special cash flow situations. We also offer a Red Carpet Option (“RCO”) program under which the retail customer may finance their vehicle with an installment sale contract with a series of relatively lower monthly payments followed by paying the amount remaining in a single balloon payment. The RCO customer can satisfy the balloon payment obligation by payment in full of the amount owed, by refinancing the amount owed, or by returning the vehicle to us and paying additional charges for mileage and excess wear and use, if any. We sell vehicles returned to us to other Ford and non-Ford dealers through the same auction process that we use for repossessed vehicles. Customers who choose our RCO program may also qualify for special-rate financing offers from Ford. Our United States RCO program is available in Texas, Connecticut, New Jersey, New York, Rhode Island and Pennsylvania. We may consider offering this product instead of lease financing in other states.

      We hold a security interest in the vehicles purchased through retail installment sale contracts. This security interest provides us certain rights and protections. As a result, if our collection efforts fail to bring a delinquent customer’s payments current, we generally can repossess the customer’s vehicle, after satisfying local legal requirements, and sell it at auction. The customer typically remains liable for any deficiency between net auction proceeds and the defaulted contract obligations, including any repossession-related expenses. We require retail customers to carry fire, theft and collision insurance on financed vehicles.

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Retail Lease Plans

      We offer leasing plans to retail customers through our dealers. Our highest volume retail leasing plan is called Red Carpet Lease, which is offered in the United States and Canada through dealers of Ford, Lincoln and Mercury brands. We offer similar lease plans through dealers of other Ford brands (Jaguar, Land Rover, Mazda and Volvo) and through a limited number of non-Ford dealers under the PRIMUS brand. Under these plans, dealers originate the leases and offer them to us for purchase. Upon our purchase of a lease, we take ownership of the lease and title to the leased vehicle from the dealer. After we purchase a lease from a dealer, that dealer generally has no further obligation to us in connection with the lease. The customer is responsible for properly maintaining the vehicle and is obligated to pay for excess wear and use as well as excess mileage, if any. At the end of the lease, the customer has the option to purchase the vehicle for the customer purchase option price specified in the lease contract, or return the vehicle to the dealer. If the customer returns the vehicle to the dealer, the dealer may buy the vehicle from us or return it to us. We sell vehicles returned to us to other Ford and non-Ford dealers through the same auction process that we use for repossessed vehicles.

      The amount we pay to a dealer for a retail lease, also called the acquisition cost, is based on the negotiated vehicle price agreed to by the dealer and the retail customer plus any additional products, such as insurance and extended service plans, that are included in the contract, less any vehicle trade-in allowance or down payment from the customer. The customer makes monthly lease payments based on the acquisition cost less the contractual residual value of the vehicle, plus lease charges. Some of our lease programs, such as our Red Carpet Lease Advance Payment Plan, provide certain pricing advantages to customers who make all or some monthly payments at lease inception or purchase refundable higher mileage allowances. We require lease customers to carry fire, theft, liability and collision insurance on leased vehicles. In the case of a contract default and repossession, the customer typically remains liable for any deficiency between net auction proceeds and the defaulted contract obligations, including any repossession-related expenses.

      In the United States, retail operating lease terms for new Ford, Lincoln and Mercury brand vehicles range primarily from 12 to 48 months. In 2004, the average original lease term was 34 months compared with 35 months in 2003; the average monthly payment was about $440 in 2004 and $470 in 2003.

Other Retail Financing

      We also offer vehicle financing programs to commercial customers including leasing companies, daily rental companies, government entities and fleet customers. These financings include both lease plans and installment purchase plans and are generally for terms of 12 to 84 months. The financing obligations are collateralized by perfected security interests on financed vehicles in almost all instances and, where appropriate, an assignment of rentals under any related leases. At the end of the finance term, a lease customer may be required to pay us any shortfall between the fair market value and the specified end of term value of the vehicle. If the fair market value of the vehicle at the end of the finance term exceeds the specified end of term value, we may pay the lease customer the excess amount. In the United States, these financings totaled about $1.6 billion as of December 31, 2004, and are included in retail finance receivables and net investment in operating leases in our financial statements.

Wholesale Financing

      We offer a wholesale financing program for qualifying dealers to finance new and used vehicles held in inventory. We generally finance the vehicle’s wholesale invoice price for new vehicles and up to 100% of the dealer’s purchase price for used vehicles. Dealers generally pay a floating interest rate on wholesale loans based on the prime rate. The dealer pays off each wholesale receivable as

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the related vehicle is sold or leased. In the United States in 2004, the average wholesale receivable was outstanding for 89 days, excluding the time the vehicle was in transit from the assembly plant to the dealership. In 2004, we financed about 5 million vehicles worldwide through wholesale financing. At December 31, 2004, our wholesale portfolio totaled $23.8 billion net of allowance for credit losses. Our wholesale financing program includes financing of large multi-brand national dealer groups that are some of our largest wholesale customers based on the amount financed.

      When a dealer uses our wholesale financing program to purchase vehicles we obtain a security interest in the vehicles and, in many instances, other assets of the dealer. Our subsidiary, The American Road Insurance Company, provides insurance for vehicle damage and theft of vehicles held in dealer inventory that are financed by us.

      For each year since 2002, we have provided about 84% of the wholesale financing on new Ford, Lincoln and Mercury brand vehicles acquired by dealers in the United States and about 97% of the wholesale financing on new Ford brand vehicles acquired by dealers in Europe.

Other Financing

      We make loans to dealers for facilities improvements, working capital and for the purchase and financing of dealership real estate. For dealers in the United States and Canada, these loans totaled about $2.9 billion at December 31, 2004 and were included in other finance receivables in our financial statements. These loans typically are secured by mortgages on real estate, security interests in other dealership assets and sometimes personal guarantees of the individual owners of the dealership.

      We also purchase certain receivables generated by divisions and affiliates of Ford, primarily in connection with the delivery of vehicle inventories from Ford, the sale of parts and accessories by Ford to dealers and the purchase of other receivables generated by Ford. At December 31, 2004, these purchased receivables totaled about $3.1 billion and are included in net finance receivables.

Marketing and Special Programs

      We actively market our financing products and services to automotive dealers and customers. Through personal sales contacts, targeted advertisements in trade publications, participation in dealer-focused conventions and organizations and support from manufacturers, we seek to demonstrate to dealers the value of entering into a business relationship with us. We base our marketing strategy on our belief that we can better assist dealers in achieving their sales, financial and customer satisfaction goals by being a stable, committed finance source with knowledgeable automotive and financial professionals offering personal attention and interaction. We demonstrate our commitment to dealer relationships with a variety of materials, measurements and analyses showing the advantages of a full range of automotive financing products that allows consistent and predictable single source financing. From time to time, we promote increased dealer transactions through incentives, bonuses, contests and selected program and rate adjustments.

      We promote our retail financing products primarily through pre-approved credit offers to prospective customers, point-of-sale information, ongoing communications and contacts with existing customers. Our communications to these customers promote the advantages of our financing products, the availability of special plans and programs and the benefits of affiliated products, such as extended warranties, service plans, insurance coverage gap protection and excess wear and use waivers. In addition, we emphasize the quality of our customer service and the ease of making payments and transacting business with us. For example, through the Ford Credit North America web site, a customer can make inquiries, review an account balance, examine current incentives, schedule an electronic payment or qualify for a pre-approved credit offer.

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      We also market our non-consumer financial services described above in “Other Retail Financing” with a specialized group of employees who make direct sales calls on dealers, and, often at the request of such dealers, on potential high-volume commercial customers. This group also uses various materials to explain our flexible programs and services specifically directed at the needs of commercial and fleet vehicle customers.

Servicing

      General. After we purchase retail installment sale contracts and leases from dealers and other customers, we manage the receivables during their contract terms. This management process is called servicing. We service all contracts that we originate or acquire. Our servicing duties include the following:

	•	applying monthly payments from customers,
	•	contacting delinquent customers for payment,
	•	maintaining the security interest in the financed vehicle,
	•	monitoring insurance coverage for lease vehicles,
	•	providing billing statements to customers,
	•	responding to customer inquiries,
	•	releasing security interests on paid-off finance contracts,
	•	arranging for the repossession of vehicles, and
	•	selling repossessed and returned vehicles at auction.

      Service Center Locations. We have 9 regional service centers in North America and 2 regional service centers in Europe.

      Our North American regional service centers are located in:

      Each of these service centers generally services customers located in their region, but all of our North American service centers are electronically linked and workload can be allocated across service centers.

      We also have four specialty service centers in North America that focus on specific servicing activities:

	•	Customer Service Center — Omaha, Nebraska;
	•	Volvo Customer Service Center — Richardson, Texas;
	•	National Bankruptcy Service Center — Livonia, Michigan; and
	•	National Recovery Center — Mesa, Arizona.

      In Europe, we have centralized customer servicing activities in St. Albans, England to support our U.K. operations and customers, and in Cologne, Germany to support our German operations and customers. In smaller countries, we provide servicing through our local branches.

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      Customer Payment Operations. In the United States and Canada, customers are directed in their monthly billing statements to mail payments to a bank for deposit in a lockbox account. Customers may also make payments through electronic payment services, a direct debit program or a telephonic payment system.

      Servicing Activities — Consumer Credit. We design our collection strategies and procedures to keep accounts current and to collect on delinquent accounts. We employ a combination of proprietary and non-proprietary tools to assess the probability and severity of default for all of our receivables and leases and implement our collection efforts based on our determination of the credit risk associated with each customer. As each customer develops a payment history, we use an internally developed behavioral scoring model to assist in determining the best collection strategies. Based on data from this scoring model, we group contracts by risk category for collection. Our centralized collection operations are supported by state-of-the-art auto-dialing technology and proprietary collection and workflow operating systems. Our U.S. systems also employ a web-based network of outside contractors who support the repossession process. Through our auto-dialer program and our monitoring and call log systems, we target our efforts on contacting customers about missed payments and developing satisfactory solutions to bring accounts current.

      Outsourced Operations. We engage vendors to perform many of our servicing processes. These processes include applying monthly payments from customers, monitoring the perfection of security interests in financed vehicles, monitoring insurance coverage on lease vehicles, imaging of contracts and electronic data file maintenance, generation of retail and lease billing statements, telephonic payment systems for retail customers, the handling of some inbound customer service calls and the recovery of deficiencies in selected accounts.

      Payment Extensions. At times, we offer payment extensions to customers who have encountered temporary financial difficulty that limits their ability to pay as contracted. A payment extension allows the customer to extend the term of the contract, usually by paying a fee that is calculated in a manner specified by law. Following a payment extension, the customer’s account is no longer delinquent. Before agreeing to a payment extension, the service representative reviews the customer’s payment history, current financial situation and assesses the customer’s desire and capacity to make future payments. The service representative decides whether the proposed payment extension complies with our policies and guidelines. Service center managers review, and generally must approve, payment extensions outside these guidelines.

      Repossessions and Auctions. We view repossession of a financed or leased vehicle as a final step that we undertake only after all other collection efforts have failed. We sell repossessed vehicles at auction and apply the proceeds to the amount owed on the customer’s account. At our National Recovery Center, we continue to attempt collection of any deficient amounts until the account is paid in full, we obtain mutually satisfactory payment arrangements with the debtor or we determine that the account is uncollectible.

      Ford’s Vehicle Remarketing Department, in conjunction with our regional service centers and our National Recovery Center, manages the sale of repossessed vehicles and returned leased vehicles. Repossessed vehicles are reported in other assets on our balance sheet at values that approximate expected net auction proceeds. We inspect and recondition the vehicle to maximize the net auction value of the vehicle. Vehicles are then offered for sale through open auctions, in which any licensed dealer can participate, and closed auctions, in which only Ford, Lincoln and Mercury dealers may participate.

      Wholesale and Commercial. We require dealers to submit monthly financial statements that we monitor for potential credit deterioration. We assign an evaluation rating to each dealer and we perform physical audits of vehicle inventory periodically, with more frequent audits for higher risk dealers. We monitor dealer inventory financing payoffs daily to detect deviations from typical

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repayment patterns and take appropriate actions. Within the United States and Canada, ten commercial lending offices provide services to fleet purchasers, leasing companies, daily rental companies and other commercial customers. We generally review our exposure under these credit arrangements at least annually. In our international markets, this business is managed within the head office of the local market area.

Insurance

      We conduct insurance operations primarily through The American Road Insurance Company (“TARIC”) and its subsidiaries in the United States and Canada and through various other insurance subsidiaries outside the United States and Canada. TARIC offers a variety of products and services, including:

	•	Extended service plan contracts, mainly through Ford dealers for new and used vehicles,
	•	Physical damage insurance covering vehicles at dealers’ locations and vehicles in-transit between final assembly plants and dealers’ locations, and
	•	Physical damage/liability coverage on Ford dealer daily rental vehicles.

      We also offer various Ford branded insurance products throughout the world underwritten by non-affiliated insurance companies from which we receive fee income but the underwriting risk remains with the non-affiliated insurance companies. In addition, TARIC provides to Ford and its subsidiaries various types of surety bonds, including bonds generally required as part of any appeals of litigation, financial guarantee bonds and self-insurance workers’ compensation bonds. Our insurance business generated approximately 1% of our total revenues in 2004 and 2003.

Employee Relations

      At December 31, 2004, we had 17,424 full-time employees, and 1,380 part-time and agency personnel. Most of our employees are salaried, and most are not represented by a union. We consider employee relations to be satisfactory.

Governmental Regulations

      As a finance company, we are highly regulated by the governmental authorities in the locations where we operate.

United States

      Within the United States, our operations are subject to regulation, supervision and licensing under various federal, state and local laws and regulations.

      Federal Regulation. We are subject to extensive federal regulation, including the Truth-in-Lending Act, the Equal Credit Opportunity Act and the Fair Credit Reporting Act. These laws require us to provide certain disclosures to prospective borrowers and lessees in consumer retail and lease financing transactions and prohibit discriminatory credit practices. The principal disclosures required under the Truth-in-Lending Act for retail finance transactions include the terms of repayment, the amount financed, the total finance charge and the annual percentage rate. For retail lease transactions, we are required to disclose the amount of payments at lease inception, the terms for payment, and information about lease charges, insurance, excess mileage and liability on early termination. The Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on a variety of factors, including race, color, sex, age or marital status. Pursuant to the Equal Credit Opportunity Act, creditors are required to make certain disclosures regarding consumer rights and advise consumers whose credit applications are not approved of the reasons for being denied. In addition, any of the credit scoring systems we use during the application process or other

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processes must comply with the requirements for such systems under the Equal Credit Opportunity Act. The Fair Credit Reporting Act requires us to provide certain information to consumers whose credit applications are not approved on the basis of a consumer credit report obtained from a national credit bureau and sets forth requirements related to identity theft, privacy and enhanced accuracy in credit reporting content. We are also subject to the Soldiers’ and Sailors’ Civil Relief Act that requires us to reduce the interest rate charged on transactions with customers who subsequently enter into full-time service with the military and limits our ability to collect future payments from lease customers who terminate their lease early. In addition, we are subject to other federal regulation, including the Gramm-Leach-Bliley Act, that requires us to maintain privacy with respect to certain consumer data in our possession and to communicate periodically with consumers on privacy matters.

      State Regulation — Licensing. In most states, a consumer credit regulatory agency regulates and enforces laws relating to finance companies. Rules and regulations generally provide for licensing of finance companies, limitations on the amount, duration and charges, including interest rates, that can be included in finance contracts, requirements as to the form and content of finance contracts and other documentation, and restrictions on collection practices and creditors’ rights. We must renew these licenses periodically. Moreover, several states have laws that limit interest rates on consumer financing. In certain states, we are subject to periodic examination by state regulatory authorities. In periods of high interest rates, these rate limitations could have an adverse effect on our operations if we were unable to purchase retail installment sale contracts with finance charges that reflect our increased costs.

      State Regulation — Repossessions. To mitigate our credit losses, sometimes we repossess a financed or leased vehicle. Repossessions are subject to prescribed legal procedures, including peaceful repossession, one or more customer notifications, a prescribed waiting period prior to disposition of the repossessed vehicle and return of personal items to the customer. Some states provide the customer with reinstatement or redemption rights that require us to return a repossessed vehicle to the customer in certain circumstances. Our ability to sell a repossessed vehicle is restricted if a customer declares bankruptcy.

International

      In some countries outside the United States, some of our subsidiaries, including FCE, are regulated banking institutions and are required, among other things, to maintain minimum capital reserves. FCE is authorized as a deposit taking business and insurance intermediary under the Financial Services and Markets Act of 2000 and is regulated by the U.K. Financial Services Authority (“FSA”). FCE also holds a standard license under the U.K. Consumer Credit Act of 1974. Since 1993, FCE has obtained authorizations from the Bank of England (which role is now undertaken by the FSA) pursuant to the Second Banking Consolidation Directive entitling it to operate on a branch basis in 16 European countries. In many other locations where we operate, governmental authorities require us to obtain licenses to conduct our financing business.

Regulatory Compliance Status

      We believe that we maintain all material licenses and permits required for our current operations and are in substantial compliance with all laws and regulations applicable to us and our operations. Failure to satisfy those legal and regulatory requirements could have a material adverse effect on our operations, financial condition and liquidity. Further, the adoption of new laws or regulations, or the revision of existing laws and regulations, could have a material adverse effect on our operations, financial condition and liquidity.

      We actively monitor proposed changes to relevant legal and regulatory requirements in order to maintain our compliance. Through our governmental relations efforts, we also attempt to participate

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in the legislative and administrative rule-making process on regulatory initiatives that impact finance companies. Our ongoing compliance efforts have not had a material adverse effect on our operations, financial condition or liquidity.

Legislative Developments

      On October 22, 2004, President Bush signed into law The American Jobs Creation Act of 2004 (the “Act”). The most significant component of the Act was the repeal of the extraterritorial income (“ETI”) exclusion and the replacement of ETI with a domestic deduction for a range of broadly defined domestic production activities. The Act also provides for a one-year period to repatriate certain foreign earnings at a special tax rate. The provisions of the Act are not expected to have a material impact on future earnings.

Transactions with Ford and Affiliates

      We have a profit maintenance agreement with Ford that requires Ford to maintain our consolidated income before income taxes and net income at specified minimum levels. In addition, we have an agreement to maintain a minimum control interest in FCE and to maintain FCE’s net worth above a minimum level. No payments were made under either of these agreements during the 2002 through 2004 periods.

      We formally documented our long-standing business practices with Ford in an agreement dated October 18, 2001, a copy of which was filed with the SEC on that date. The principal terms of this agreement include the following:

	•	Any extension of credit from us to Ford and any of Ford’s automotive affiliates will be on arm’s length terms and will be enforced in a commercially reasonable manner.
	•	We will not be required to guarantee the indebtedness or make equity investments in Ford or any of Ford’s automotive affiliates.
	•	We and Ford agree to maintain our stockholder’s equity at a commercially reasonable level to support the amount, quality and type of receivables in light of prevailing economic circumstances.
	•	We will not be required to accept credit or residual risk beyond what we would be willing to accept acting in a prudent and commercially reasonable manner (taking into consideration any interest rate supplements or residual value support payments, guarantees, or other subsidies that are provided to us by Ford or any of Ford’s automotive affiliates).
	•	We and Ford are separate, legally distinct companies and will continue to maintain separate books, accounts, assets and liabilities.

      More information about transactions between us and Ford and other affiliates, is contained in Note 15 of our Notes to the Financial Statements, “Business — Overview”, “Business — Retail Financing”; “Business — Other Financing” and the description of Ford’s business in Ford’s 2004 10-K Report included as an exhibit to this report.

ITEM 2. PROPERTIES

      We own our world headquarters in Dearborn, Michigan. We lease our corporate offices in Brentwood, England from an affiliate of Ford. Most of our automotive finance branches and service centers are located in leased properties. The continued use of any of these leased properties is not material to our operations. At December 31, 2004, our total obligation under leases of real property was about $220 million.

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ITEM 3. LEGAL PROCEEDINGS

      We are subject to legal actions, governmental investigations and other proceedings and claims relating to state and federal laws concerning finance and insurance, employment-related matters and other contractual relationships. Some of these matters are class actions or are seeking class action status. Some of these matters may involve claims for compensatory, punitive or treble damages and attorneys’ fees in very large amounts, or request other relief which, if granted, would require very large expenditures. Our significant pending matters are summarized below:

      SEC Inquiry of Ford Money Market Account Program. In January 2004, the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) requested information from us relating to the offering of debt securities under our Ford Money Market Account (“FMMA”) program. Under the FMMA program, we offer floating rate variable denomination demand debt securities to individual investors. Following the submission of information, we and the SEC Staff have been in discussions about resolving concerns the Staff identified regarding the use of certain marketing and solicitation materials. In March 2005, we made a settlement offer that included, with us neither admitting nor denying the Staff’s allegations, the issuance of a Cease and Desist Order requiring that we comply with Section 5 of the Securities Act of 1933 in connection with all marketing and solicitation materials. The terms of the tentative settlement also require us to undertake to discontinue or change certain aspects of our marketing practices relating to the FMMA program and to pay the SEC approximately $760,000 in disgorgement (based on cost savings relating to those practices). The SEC Staff has indicated that it will recommend this settlement offer to the Commission. The tentative settlement is subject to approval by the full Commission of the SEC.

      Fair Lending Class Actions. Jones v. Ford Motor Credit Company is pending in federal court in New York. Plaintiffs allege that our pricing practices discriminate against African-Americans. Plaintiffs’ motion for class certification is pending. A second fair lending case, Claybrook v. PRIMUS, is pending in federal court in Tennessee. The plaintiffs in Claybrook have made similar allegations concerning PRIMUS accounts. The class in Claybrook was certified on January 18, 2005, and trial began on March 1, 2005.

      Litigation is subject to many uncertainties and the outcome is not predictable. It is reasonably possible that either of the matters described above could be decided unfavorably to us. Although the amount of liability at December 31, 2004 with respect to these matters cannot be ascertained, we believe that any resulting liability should not materially affect our operations, financial condition and liquidity.

      In addition, any litigation, investigation, proceeding or claim against Ford that results in Ford incurring significant liability, expenditures or costs could also have a material adverse effect on our operations, financial condition and liquidity. For a discussion of pending cases against Ford, see Item 3 in Ford’s 2004 Form 10-K Report.

PART II

      At December 31, 2004, all shares of our common stock were owned by Ford Holdings, LLC, a wholly owned subsidiary of Ford. We did not issue or sell any equity securities during 2004, and there is no market for our stock. We paid cash dividends of $4.3 billion and $3.7 billion in 2004 and 2003, respectively. For a discussion of our dividend policy, see the “Leverage” section in Item 7.

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ITEM 6. SELECTED FINANCIAL DATA

FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES

*	Managed receivables include receivables sold in off-balance sheet securitizations and exclude receivables sold in whole-loan sale transactions. For a discussion of how we review our business performance, including on a managed basis, see the “Overview” section in Item 7.

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Overview

Generation of Revenue, Income and Cash

      As an indirect, wholly owned subsidiary of Ford, our primary focus is to profitably support the sale of Ford vehicles. The principal factors that influence our earnings are the amount and mix of finance receivables and net investment in operating leases and financing margins. The performance of these receivables and leases over time, mainly through the impact of credit losses and variations in the residual value of leased vehicles, also affects our earnings.

      The amount of our finance receivables and net investment in operating leases depends on many factors, including:

	•	the volume of new and used vehicle sales and leases,
	•	the extent to which we purchase retail installment sale and lease contracts and the extent to which we provide wholesale financing,
	•	the sales price of the vehicles financed,
	•	the level of dealer inventories,
	•	Ford-sponsored special financing programs available exclusively through us, and
	•	the availability of cost-effective funding for the purchase of retail installment sale and lease contracts and to provide wholesale financing.

      For finance receivables, financing margin equals the difference between revenue earned on finance receivables and the cost of borrowed funds. For operating leases, financing margin equals revenue earned on operating leases, less depreciation expense and the cost of borrowed funds. Interest rates earned on most receivables and rental charges on operating leases generally are fixed at the time the contracts are originated. On some receivables, primarily wholesale financing, we charge interest at a floating rate that varies with changes in short-term interest rates.

Business Performance

      We review our business performance from several perspectives, including:

	•	On-balance sheet basis — includes the receivables we own and receivables sold for legal purposes that remain on our balance sheet,
	•	Securitized off-balance sheet basis — includes receivables sold in securitization transactions that are not reflected on our balance sheet,
	•	Managed basis — includes on-balance sheet and securitized off-balance sheet receivables that we continue to service, and
	•	Serviced basis — includes managed receivables and receivables sold in whole-loan sale transactions where we retain no interest in the sold receivables, but which we continue to service.

      We analyze our financial performance primarily on an on-balance sheet and managed basis. We retain interests in receivables sold in off-balance sheet securitizations, and with respect to subordinated retained interests, we have credit risk. As a result, we evaluate credit losses, receivables and leverage on a managed basis as well as on an on-balance sheet basis. In contrast, we do not have the same financial interest in the performance of receivables sold in whole-loan sale transactions, and as a result we generally review the performance of our serviced portfolio only to evaluate the effectiveness of our origination and collection activities. To evaluate the performance of

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these activities, we monitor a number of measures, such as repossession statistics, losses on repossessions and the number of bankruptcy filings.

      We measure the performance of our North America segment and our International segment primarily on an income before income taxes basis, after excluding the impact to earnings from hedge ineffectiveness, and other adjustments in applying Statement of Financial Accounting Standards No. 133 (“SFAS No. 133”), Accounting for Derivative Instruments and Hedging Activities, because our risk management activities are carried out on a centralized basis at the corporate level, with only certain elements allocated to our two segments. For further discussion regarding our segments, see Note 16 of our Notes to the Financial Statements.

Trends and Strategies

Origination: Buy it Right, Price it Right

      In 2004, our origination strategy for the purchase of retail installment sale contracts and lease contracts from dealers continued to focus on financing Ford brand vehicles. In 2004, we continued to upgrade our proprietary risk assessment tools used in the origination process by refining assumptions to better align our pricing with our risk for each applicant. In North America, we announced in 2004 a plan to create an integrated sales platform in the United States and Canada over the next two years that would support sales activities for Ford Credit, Volvo Car Finance, PRIMUS, (Jaguar Credit, Land Rover Capital Group, Mazda Credit) and Commercial Lending Services. The plan included the consolidation of regional sales offices and an integration of branch locations. At December 31, 2004, the new regional structure was complete and the branch integration was on schedule. This integrated sales platform will allow us to provide expanded dealer support with longer operating hours as well as provide for dedicated brand managers located on-site to support each of the automotive brands. These actions will improve the process excellence of our origination activity in a manner that will improve cost efficiency.

Servicing: Operate Efficiently, Collect Effectively, Enhance Owner Loyalty

      Our servicing strategy is to improve efficiency and collections effectiveness by continually upgrading our processes while at the same time enhancing customer satisfaction and loyalty. During 2004, we further increased the commonality of our business processes and information technology platforms and introduced other enhancements to increase efficiency and effectiveness. In North America, for example, we enhanced our collection modeling capabilities to allow for more focused collection activity on high-risk accounts and refined a risk-based staffing model to ensure collection resources are aligned with portfolio risk. A common collection system was launched throughout our North American service centers. These and other process improvements, and the gradual improvement in the U.S. economy, resulted in us substantially lowering credit losses and delinquencies in 2004.

Funding: Fund it Efficiently, Manage Risks

      Our funding strategy is to maintain liquidity and access to diverse funding sources that are cost effective. We continue to have considerable flexibility between the mix of unsecured debt and asset-backed securitization issuance to meet our funding requirements. We continue to meet a significant portion of our funding requirements through securitizations because of the stability of the market for asset-backed securities, their lower costs compared with unsecured debt at our present credit ratings and the diversity of funding sources they provide. In recent years, lower credit ratings generally have resulted in higher borrowing costs and reduced access to capital markets. Our credit ratings are closely associated with the credit ratings of Ford, which have been lowered in the last several years. These lower credit ratings are primarily a reflection of concerns regarding Ford’s automotive cash

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flow and profitability, declining market share, excess industry capacity, industry pricing pressure and rising healthcare costs. As our credit ratings have declined, asset-backed funding programs have become more cost-effective compared with unsecured funding programs, and allow us access to a larger investor base. As a result of our funding strategy and the reduction in our managed receivables, our lower credit ratings have not had a material impact on our ability to fund our operations.

Results of Operations

Discontinued Operations

      During the fourth quarter of 2004, we committed to a plan to sell Triad Financial Corporation, our operation in the United States that specializes in automobile retail installment sales contracts with borrowers who generally would not be expected to qualify, based on their credit worthiness, for traditional financing sources such as those provided by commercial banks or automobile manufacturers’ affiliated finance companies. We expect to complete the sale of this business during 2005 for an amount approximately equal to the recorded book value. We have reported this business as discontinued/held-for-sale under SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets, for all periods shown.

      During 2004, we completed the sale of AMI Leasing and Fleet Management Services, our operation in the United States that offered full service car and truck leasing.

      The following discussion of our results in Items 7 and 7A excludes the results of these discontinued/held-for-sale operations, as defined by SFAS No. 144, and are described in Note 13 of the Notes to the Financial Statements.

Fourth Quarter 2004 Compared with Fourth Quarter 2003

      In the fourth quarter of 2004, earnings were up $73 million compared with a year ago. Our income from continuing operations before income taxes was up $65 million compared with a year ago. The increase in earnings primarily resulted from improved credit loss performance.

      Results of our operations by business segment for the fourth quarter of 2004 and 2003 are shown below:

      North America segment income from continuing operations before income taxes in the fourth quarter of 2004 was up $146 million compared with the fourth quarter of 2003. This increase primarily reflected improved credit loss performance, which primarily resulted from fewer repossessions and a lower average loss per repossession.

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ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

      International segment income from continuing operations before income taxes in the fourth quarter of 2004 was down $8 million compared with the fourth quarter of 2003. This decrease primarily reflected the impairment of certain unconsolidated investments in our Asia-Pacific region, offset partially by favorable exchange (weaker dollar) in Europe, and recognition of a value-added tax refund in the United Kingdom.

      Income from continuing operations before income taxes in the unallocated/eliminations category in the fourth quarter of 2004 was down $73 million compared with the fourth quarter of 2003. The decrease primarily reflected a reduction in the favorable market valuation of derivative instruments and associated exposures.

Full Year 2004 Compared with Full Year 2003

      In 2004, earnings were up $1,045 million compared with a year ago. Income from continuing operations before income taxes was up $1,475 million compared with a year ago. The increase in earnings primarily reflected improved credit loss performance and improved leasing results.

      Results of our operations by business segment for 2004 and 2003 are shown below:

      North America segment income from continuing operations before income taxes in 2004 was up $1,374 million compared with 2003. This increase primarily reflected improved credit loss performance and improved leasing results, offset partially by lower income related to sales of receivables. The improved credit loss performance primarily resulted from fewer repossessions and a lower average loss per repossession. The improvement in leasing results primarily reflected higher used vehicle prices and a reduction in the percentage of vehicles returned to us at lease termination. The lower income related to sales of receivables primarily reflected lower sales of receivables and the impact of lower outstanding off-balance sheet receivables.

      International segment income from continuing operations before income taxes in 2004 was up $118 million compared with 2003. This increase is more than explained by favorable exchange (weaker dollar) in Europe and Asia-Pacific, improved operating costs in Europe, and the sale of the full-service leasing portfolios in the United Kingdom, Italy, Switzerland and Spain.

      Income from continuing operations before income taxes in the unallocated/eliminations category in 2004 was down $17 million compared with 2003. The decrease primarily reflected a reduction in the favorable market valuation of derivative instruments and associated exposures.

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Full Year 2003 Compared with Full Year 2002

      In 2003, earnings were up $583 million compared with a year ago. Income from continuing operations before income taxes in 2003 was up $977 million from 2002.

      North America segment income from continuing operations before income taxes in 2003 was up $373 million compared with 2002. This increase primarily reflected improved credit loss performance, offset partially by the impact of lower average net receivables. The improved credit loss performance resulted in a lower allowance for credit losses consistent with our improving trend in charge-offs. The impact of lower average net receivables reflected lower retail installment and operating lease contract placement volumes.

      International segment income from continuing operations before income taxes in 2003 was up $80 million compared with 2002. This increase primarily reflected a lower provision for credit losses, the favorable impact of currency exchange rates and higher wholesale volume.

      Income from continuing operations before income taxes in the unallocated/eliminations category in 2003 was up $524 million compared with 2002. The improvement primarily reflected the net favorable market valuation of derivative instruments and associated exposures.

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ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Placement Volume and Financing Share

      Total worldwide financing contract placement volumes, excluding financing volumes for unconsolidated entities, for new and used vehicles are shown below:

      Shown below are our financing shares of new Ford, Lincoln and Mercury brand vehicles sold by dealers in the United States and Ford brand vehicles sold by dealers in Europe. Also shown below are our wholesale financing shares of new Ford, Lincoln and Mercury brand vehicles acquired by dealers in the United States, excluding fleet, and of new Ford brand vehicles acquired by dealers in Europe:

      North America Segment. In the fourth quarter of 2004, our total financing contract placement volumes were 493,000 contracts, up 46,000 contracts compared with a year ago reflecting an increase in Ford, Lincoln and Mercury brand retail and lease financing. Similarly, financing share of new Ford, Lincoln and Mercury brand cars and light trucks sold by dealers in the United States was 48% compared with 39% a year ago, resulting from favorable Ford-sponsored marketing programs.

      For the full year of 2004, our total financing contract placement volumes were 2.0 million contracts, down 66,000 compared with a year ago. This overall decrease reflected our reduction of used and non-Ford retail installment financing as a result of our continued focus on financing Ford brand vehicles.

      International Segment. In the fourth quarter of 2004, our total financing contract placement volumes were 262,000, up 10,000 contracts compared with a year ago. For the full year of 2004, our

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total financing contract placement volumes were 1.1 million contracts, down 32,000 compared with a year ago.

Financial Condition

Finance Receivables and Operating Leases

      Our financial condition is impacted significantly by the level of our receivables, which are shown below:

      On-Balance Sheet Receivables. On-balance sheet net finance receivables and net investment in operating leases at December 31, 2004, were $132.7 billion, up $4.2 billion from year-end 2003.

      At December 31, 2004 and 2003, about $16.9 billion and $14.3 billion, respectively, of finance receivables have been sold for legal purposes to consolidated securitization special purpose entities (“SPEs”). In addition, at December 31, 2004, interests in operating leases and the related vehicles of about $2.5 billion have been transferred for legal purposes to consolidated securitization SPEs. These receivables and interests in operating leases and the related vehicles are available only for

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repayment of debt issued by those entities, and to pay other securitization investors and other participants; they are not available to pay our other obligations or the claims of our other creditors.

      Securitized Off-Balance Sheet Receivables. Total securitized off-balance sheet receivables decreased $11.3 billion from a year ago.

      Managed Receivables. Total managed receivables decreased $7.1 billion from a year ago. The decrease primarily reflected lower retail and operating lease contract placement volumes. The lower level of managed receivables reflected our continued focus on financing Ford brand vehicles.

      Serviced Receivables. Serviced receivables include our managed receivables and receivables that we sold in whole-loan sale transactions. We continue to service the receivables sold in whole-loan sale transactions.

Credit Risk

      Credit risk is the possibility of loss from a customer’s failure to make payments according to contract terms. Credit risk has a significant impact on our business. We actively manage the credit risk of our consumer and non-consumer portfolios to balance our level of risk and return. The allowance for credit losses reflected on our balance sheet is our estimate of the credit losses for receivables and leases that are impaired at the points in time shown on our balance sheet.

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Credit Loss Metrics