Ford Credit Earns $256 Million in the First Quarter
DEARBORN, Mich., April 17-- Ford Credit earned $256 million in the first quarter of 2002. First quarter 2002 earnings were down $137 million from earnings of $393 million in the same period a year ago.
Excluding favorable adjustments related to SFAS No. 133 (Accounting for Derivative Instruments and Hedging Activities), Ford Credit earned $242 million. Compared with the first quarter of 2001, results were down $164 million. First quarter 2002 earnings were up $236 million compared with the fourth quarter of 2001 of $6 million excluding unusual items.
Compared with the first quarter of 2001, earnings were down because of the unfavorable impact of securitizations and higher actual credit losses, offset partially by improved financing margins and higher levels of managed receivables. Increased securitizations over the past 12 months resulted in lower owned receivables and related revenue, offset partially by higher income on retained interests, excess spread and servicing fees. Higher actual credit losses reflected weaker economic conditions compared with a year ago. Financing margins improved because of lower borrowing costs related to the lower interest rate environment. Managed receivables were $206 billion as of March 31, 2002, compared with $194 billion a year earlier, reflecting strong year-end volume. Ford Credit's total owned receivables as of March 31, 2002, were $140 billion, compared with $162 billion a year earlier.
After-tax return on average equity (excluding SFAS No. 133) was 7.5 percent in the first quarter of 2002, compared with 13.3 percent in the same period a year earlier.
``The economy continues to pose challenges, but is showing signs of recovery, evidenced by our improved financial performance over the last quarter,'' said Greg Smith, President and Chief Operating Officer of Ford Credit. ``We remain focused on the fundamentals of our business and recognize that further improvement is required,'' Smith added.
Ford Credit is a wholly owned subsidiary of Ford Motor Company (NYSE: F - news) and is the world's largest automotive finance company. Now in its 43rd year, Ford Credit provides vehicle financing in 36 countries to more than 11 million customers and more than 12,500 automotive dealers. More information can be found at www.fordcredit.com .
Ford Motor Credit Company and Consolidated Subsidiaries
OPERATING HIGHLIGHTS
Income First Quarter Fourth
Quarter
2002 2001 2001
Net income (in millions)
Total net income $256 $393 $(297)
Exclude:
Unusual items - - (204)
SFAS No. 133 14 (13) (99)
Operating net income $242 $406 $6
Memo: Return on Equity (excl.
unusual items & SFAS No. 133) 7.5% 13.3% 0.2%
March 31, December 31,
2002 2001 2001
Balance Sheet (in billions)
Assets
Finance receivables
Retail installment $75.4 $77.6 $83.4
Wholesale 15.5 36.4 15.4
Other 10.9 9.5 10.9
Total net finance receivables $101.8 $123.5 $109.7
Net investment in operating leases 38.2 38.7 39.3
Total net finance receivables
and operating leases $140.0 $162.3 $149.0
Other assets 25.4 12.9 24.1
Total assets $165.4 $175.2 $173.1
Liabilities and Stockholder's Equity
Debt - short-term $15.1 $41.6 $22.7
Debt - long-term (includes notes 122.8 106.3 123.6
payable within 1 year)
Total debt $137.9 $147.9 $146.3
Other liabilities 14.4 15.6 14.8
Total liabilities $152.3 $163.5 $161.1
Stockholder's equity 13.1 11.7 12.0
Total liabilities and
stockholder's equity $165.4 $175.2 $173.1
Memo:
Shareholder equity excluding SFAS
No. 133 $13.5 $12.2 $12.6 b/
Financial statement leverage (to 1)
a/ 9.5 11.9 11.2 b/
Managed Receivables
Finance receivables
Retail installment $122.7 $107.5 $124.7
Wholesale 34.2 37.7 32.8
Other 10.9 9.5 10.9
Total net finance receivables $167.8 $154.7 $168.4
Net investment in operating leases 38.2 39.1 39.4
Total managed $206.0 $193.8 $207.8
Memo: Managed leverage (to 1) a/ 13.7 14.2 14.8 b/
a/ Excludes SFAS No. 133, over-borrowing portfolio and cash
b/ Including a capital contribution of $700 million made on January 11, 2002, the financial statement equity excluding SFAS No. 133 would be $13.2 billion with leverage of 10.7:1 and managed leverage of 14.1:1.
Ford Motor Credit Company and Consolidated Subsidiaries
OPERATING HIGHLIGHTS
Fourth
First Quarter Quarter
Selected Operating & Financial Metrics 2002 2001 2001
Market share
Ford & Lincoln/Mercury retail United
installment & lease States 43.2% 48.3% 68.6%
Europe 33.7 30.9 42.8
Ford & Lincoln/Mercury United
wholesale States 84.3 86.1 84.1
Europe 96.4 96.1 98.0
Contract volume - New and used retail/lease (in thousands)
United States 662 853 1,054
Europe 239 229 247
Other international 152 169 176
Total contract volume 1,053 1,251 1,477
Borrowing Costs 5.4% 6.5% 5.6%
Credit losses (in millions)
Owned
Retail installment & lease $570 $420 $716
Wholesale 9 3 21
Other 7 0 23
Total $586 $423 $760
Loss-to-receivables
Retail installment & lease 1.95% 1.45% 2.31%
Wholesale 0.23 0.04 0.52
Total including other 1.64 1.06 2.02
Allowances for credit losses
(in billions) $3.0 $1.7 $2.8
Allowances as % of end-of-period 2.14% 1.06% 1.86%
receivables
Managed
Retail installment & lease $667 $482 $691
Wholesale 9 3 22
Other 7 0 23
Total $683 $485 $736
Loss-to-receivables
Retail installment & lease 1.61% 1.30% 1.64%
Wholesale 0.10 0.04 0.28
Total including other 1.36 1.02 1.46
Memo: Ford Credit U.S. Retail & Lease 1.40 1.15 1.76
Allowances for credit losses
(in billions) $3.5 $2.2 $3.3
Allowances as % of end-of-period 1.72% 1.14% 1.60%
receivables
Securitizations (in millions, excl. SFAS No. 133)
Income related to Securitization:
Gain-on-sale of finance receivables $217 $213 $219
Interest income, excess spread,
servicing fees 425 146 440
Total income related to Securitization $642 $359 $659
Impact of receivable sales on net financing margin:
Impact of current-year receivable sales $(107) $(63) $(563)
Impact of prior-year receivable sales (644) (187) (94)
Total impact of receivable sales on
financing margin $(751) $(250) $(657)
Pre-tax impact of Securitization $(109) $109 $2
Tax 40 (40) (1)
After-tax impact of Securitization $(69) $69 $1