Some Good News - Ford Credit Earns $839 Million in 2001 Some Bad-4th Quarter Loss of $297 Million Reported
DEARBORN, Mich., Jan. 17 -- Ford Motor Credit Company reported earnings of $839 million in 2001. This result included unusual charges (included in Ford Motor Company's previously announced Revitalization Plan), as well as the ongoing impact of SFAS 133 (Accounting for Derivative Instruments and Hedging Activities). The unusual charges included strategic partnering actions in Brazil, government initiatives in Argentina related to currency devaluation and consumer debt, and voluntary employee separation costs in North America. Together, these charges reduced net income by $361 million in 2001.
Excluding the charges discussed above, full-year earnings were $1.2 billion, $336 million lower than in 2000. After-tax return on average equity was 9.5 percent in 2001, compared with 13.1 percent in 2000. Lower earnings in 2001 were primarily a result of a higher provision for credit losses, offset partially by favorable volumes, margins, and investment and other income. The higher provision for credit losses was in response to significant weakening of economic conditions. The higher investment and other income resulted from gains on the sale of receivables and higher interest income on retained assets related to securitization transactions. Compared with 2000, Ford Credit increased the use of securitization as a cost-effective source of funds and, coupled with a falling interest rate environment, reported higher gains on the sale of receivables.
In the fourth quarter of 2001, Ford Credit incurred a loss of $297 million. Excluding the unusual charges and the impact of SFAS 133 discussed above, Ford Credit earned $6 million, compared with earnings of $410 million in the same period a year earlier. The reduction was more than accounted for by a higher provision for credit losses.
``We responded to rapid changes in the economy by increasing our credit loss reserves in the fourth quarter,'' said Greg Smith, President and COO of Ford Credit. ``In 2002, we will focus on improving profitability in our core business and providing support for Ford Motor Company brands and dealers.''
On December 31, 2001, Ford Credit's total owned receivables were $149 billion, compared with $161 billion a year earlier. The reduction reflects higher sale of receivables in securitization transactions. Managed receivables were $208 billion, compared with $190 billion a year earlier. During the fourth quarter of 2001, Ford Credit made no dividend payment to Ford Motor Company. On January 11, 2002, Ford Credit received a capital contribution of $700 million.
Ford Credit is a wholly owned subsidiary of Ford Motor Company and is the
world's largest automotive finance company.
Now in its 43rd year, Ford Credit
provides vehicle financing in 40 countries to more than 10 million customers
and more than 12,500 automotive dealers.
More information about Ford Credit
can be found at www.fordcredit.com .
Ford Motor Credit Company and Consolidated Subsidiaries
OPERATING HIGHLIGHTS
Income 4th Quarter Full Year
Net Income (in Millions) 2001 2000 2001 2000
Total Net Income $ (297) $ 410 $ 839 $1,536
Exclude Unusual
Charges & SFAS 133
SFAS 133 $ (99) $ -- $ (157) $ --
Revitalization Plan (204) -- (204) --
Total Unusual
Charges & SFAS 133 $ (303) $ -- $ (361) $ --
Operating Net Income $ 6 $ 410 $1,200 $1,536
Balance Sheet
Assets (in Billions) Year-End
2001 2000
Net Finance Receivables $109.7 $122.7
Net Investment in Operating Leases 39.3 38.5
Total Net Finance Receivables
(Owned Receivables) $149.0 $161.2
Other Assets 24.1 13.1
Total Assets $173.1 $174.3
Liabilities and Stockholder's Equity (in Billions)
Liabilities
Debt - Short-Term $ 22.7 $ 50.1
Debt - Long-Term 123.6 96.2
Total Debt $146.3 $146.3
Other Liabilities 14.8 15.8
Total Liabilities $161.1 $162.1
Minority Interests in Net Assets of
Subsidiaries 0.0 0.0
Stockholders Equity 12.0 12.2
Total Liabilities and Stockholders Equity $173.1 $174.3
Memo: Shareholder Equity Excluding
SFAS 133 (in Billions) a/ $ 12.5 $ 12.2
Managed Receivables (in Billions) 207.8 189.6
Operating & Financial Metrics 4th Quarter Full Year
Market Share 2001 2000 2001 2000
Ford & Lincoln/Mercury Retail & Lease
United States 68.6% 47.9% 54.3% 50.9%
Europe 42.8 33.6 36.8 32.1
Ford & Lincoln/Mercury Wholesale
United States 84.1% 80.0% 84.3% 83.5%
Europe 98.0 98.3 97.3 97.4
Contract Volume - New and Used Retail/Lease (in Thousands)
United States 1,054 743 3,819 3,525
Europe 247 177 988 795
Other International 176 177 738 686
Total Contract Volume 1,477 1,097 5,545 5,005
Financial Metrics (Excluding Unusual Charges & SFAS 133)
Return on Equity 9.5%
Financial Statement Leverage 11.3 a/ b/
Managed Leverage 14.8 a/ b/
a/ Including a capital contribution of $700 million made on
January 11, 2002, the financial statement equity excluding
FSAS 133 would be $13.2 billion with leverage of 10.7:1 and
managed leverage of 14.0:1.
b/ Excludes $1.9 billion of overborrowing portfolio