Ford Credit Earns Full Year 2013 Pre-Tax Profit of $1.8 Billion; Net Income of $1.5 Billion*
DEARBORN, MI--Jan. 28, 2014: Ford Motor Credit Company reported a pre-tax profit of $1.8 billion in 2013, compared with $1.7 billion a year earlier. The improvement was more than explained by higher volume, primarily in North America, driven by an increase in leasing reflecting changes in Ford's marketing programs, as well as higher non-consumer finance receivables due to higher dealer stocks. Partial offsets were higher credit losses due to lower credit loss reserve reductions in all geographic segments and unfavorable residual performance related to lower than expected auction values in North America. Ford Credit's net income was $1.5 billion in 2013, compared with $1.2 billion in the previous year.
In the fourth quarter of 2013, Ford Credit's pre-tax profit was $368 million, a decrease of $46 million from a year earlier. The decrease primarily reflects unfavorable residual performance related to lower auction values and lower financing margin, both in North America, as well as credit loss reserve changes; higher volume was a partial offset. Ford Credit reported fourth quarter net income of $568 million, an increase of $300 million from a year earlier. The increase is primarily explained by a reduction in its tax liability resulting from favorable one-time tax items recorded in the quarter.
"We're pleased with our team's 2013 performance," Ford Credit Chairman and CEO Bernard Silverstone said. "The team delivered solid results in all the key measures of our business. We remain focused on continuous improvement and providing ongoing support to Ford, our dealers and our customers in 2014."
On Dec. 31, 2013, Ford Credit's total net receivables were $100 billion, compared with $89 billion at year-end 2012.** Managed receivables were $103 billion on Dec. 31, 2013, up from $92 billion on Dec. 31, 2012.***
On Dec. 31, 2013, managed leverage was 8.5:1, compared with 8.3:1 on Dec. 31, 2012. Ford Credit distributed $445 million to its parent in 2013.
For 2014, Ford Credit expects full year pre-tax profit to be about equal to 2013. Ford Credit also expects managed receivables at year-end of about $110 billion, managed leverage to continue in the range of 8:1 to 9:1, and distributions to its parent of about $250 million.