Ford Credit Earns $330 Million in the Second Quarter
DEARBORN, Mich., July 17 Ford Credit earned $330 million in the second quarter of 2002, compared with $367 million in the same period a year ago. Excluding adjustments related to SFAS No. 133 (Accounting for Derivative Instruments and Hedging Activities), Ford Credit earned $343 million, down $56 million from earnings of $399 million in the same period a year ago.
Compared with the second quarter of 2001, earnings were down because of higher actual credit losses and the unfavorable impact of securitizations, offset partially by the impact of currency changes in overseas markets and higher levels of managed receivables. Higher actual credit losses reflected higher levels of unemployment and bankruptcies in the United States. Over the past 12 months, increased securitizations have resulted in lower owned receivables and related revenue, offset partially by higher income from assets retained in securitizations and servicing fees.
Ford Credit's total owned receivables as of June 30, 2002, were $144 billion, compared with $164 billion a year earlier. Managed receivables were $210 billion as of June 30, 2002, compared with $198 billion a year earlier. After-tax return on average equity (excluding SFAS No. 133) was 10 percent in the second quarter of 2002, compared with 13 percent in the same period a year earlier.
Compared with the first quarter 2002, earnings were up $101 million, reflecting a lower provision for credit losses and the impact of favorable currency offset partially by lower margins. For the first six months of 2002, Ford Credit earned $585 million, down $220 million from earnings of $805 million in the same period a year ago.
"While the external environment continues to be difficult, our focus on the fundamentals of our business is paying off, and our performance is improving," said Greg Smith, President and Chief Operating Officer of Ford Credit.
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 36 countries to more than 11 million customers
and more than 12,500 automotive dealers. More information can be found at
http://www.fordcredit.com.
Ford Motor Credit Company and Consolidated Subsidiaries
OPERATING HIGHLIGHTS
Second Quarter First Half
Net Income 2002 2001 2002 2001
(in millions)
Total net income $ 330 $ 367 $ 586 $ 760
Exclude:
SFAS No. 133 (13) (32) 1 (45)
Operating net income $343 $ 399 $ 585 $ 805
Memo: Return on Equity
excluding SFAS No. 133 10% 13% 9% 13%
June 30, Mar. 31, Dec. 31,
Balance Sheet 2002 2001 2002 2001
(in billions)
Assets
Finance receivables
Retail installment $78.9 $79.6 $75.4 $ 83.4
Wholesale 16.5 36.0 15.5 15.4
Other 10.9 9.0 9.6 9.3
Total net finance receivables $ 106.3 $ 124.6 $ 100.5 $ 108.1
Net investment in operating leases 37.6 39.6 38.2 39.3
Total net finance receivables
and operating leases $ 143.9 $ 164.2 $ 138.7 $ 147.4
Other assets 28.7 17.8 26.7 25.7
Total assets $ 172.6 $ 182.0 $ 165.4 $ 173.1
Liabilities and
Stockholder's Equity
Debt - short-term $15.7 $41.2 $15.1 $22.7
Debt - long-term (includes
notes payable within 1 year) 127.0 112.7 122.8 123.6
Total debt $ 142.7 $ 153.9 $ 137.9 $ 146.3
Other liabilities 16.2 16.1 14.4 14.8
Total liabilities $ 158.9 $ 170.0 $ 152.3 $ 161.1
Stockholder's equity 13.7 12.0 13.1 12.0
Total liabilities and
stockholder's equity $ 172.6 $ 182.0 $ 165.4 $ 173.1
Memo:
Shareholder equity
excluding SFAS No. 133 $14.1 $12.5 $13.5 $12.6
Financial statement
leverage (to 1) a/ 9.5 12.1 9.5 11.2
Managed Receivables
Finance receivables
Retail installment $ 123.5 $ 111.8 $ 122.7 $ 124.87
Wholesale 37.6 37.3 34.2 32.8
Other 10.9 9.1 9.6 9.3
Total net finance
receivables $ 172.0 $ 158.2 $ 166.5 $ 166.9
Net investment in
operating leases 37.6 39.8 38.2 39.4
Total managed $ 209.6 $ 198.0 $ 204.7 $ 206.3
Memo: Managed
leverage (to 1) a/ 13.4 14.2 13.7 14.8
a/ Excludes SFAS No. 133, over-borrowing portfolio and cash
Ford Motor Credit Company and Consolidated Subsidiaries
OPERATING HIGHLIGHTS
Second Quarter First Half
Selected Operating & Financial Metrics 2002 2001 2002 2001
Market share
Ford & Lincoln/Mercury
retail installment & lease
United States 37% 47% 40% 48%
Europe 35 38 34 34
Ford & Lincoln/Mercury wholesale
United States 85 86 85 86
Europe 96 98 96 97
Contract volume - New and used
retail/lease (in thousands)
United States 631 945 1,293 1,798
Europe 246 261 484 490
Other international 189 189 341 369
Total contract volume 1,066 1,395 2,119 2,657
Borrowing costs 5.1% 6.2% 5.2% 6.4%
Credit losses (in millions)
Owned
Retail installment & lease $527 $ 383 $ 1,096 $ 802
Wholesale 87 5 16 9
Other 14 -- 22 --
Total $ 548 $ 388 $ 1,134 $ 811
Loss-to-receivables
Retail installment & lease 1.84% 1.30% 1.90% 1.38%
Wholesale 0.19 0.06 0.21 0.05
Total including other 1.56% 0.95% 1.61% 1.01%
Allowances for credit
losses (in billions) $ 3.1 $ 1.7 $ 3.1 $ 1.7
Allowances as Pct. of
end-of-period receivables 2.16% 1.03% 2.16% 1.03%
Managed
Retail installment & lease $ 617 $ 511 $ 1,284 $ 993
Wholesale 7 5 16 98
Other 14 -- 22 --
Total $ 638 $ 516 $ 1,322 $ 1,002
Loss-to-receivables
Retail installment & lease 1.54% 1.34% 1.60% 1.32%
Wholesale 0.09 0.05 0.10 0.05
Total including other 1.24% 1.06% 1.29% 1.05%
Memo: Ford Credit U.S. retail & lease 1.23% 1.01% 1.33% 1.08%
Allowances for credit
losses (in billions) $3.7 $2.2 $3.7 $2.2
Allowances as Pct. of
end-of-period receivables 1.77% 1.11% 1.77% 1.11%
Securitizations
(in millions, excl. SFAS No. 133)
Income related to securitizations:
Gain-on-sale of finance receivables $41 $89 $258 $300
Interest income, excess
spread, servicing fees 501 182 926 330
Total income related
to securitizations $542 $271 $1,184 $630
Impact of receivable sales
on net financing margin:
Impact of current-period
receivable sales $(12) $(39) $(244) $ (191)
Impact of from prior-periods
receivable sales (633) (256) (1,152) (353)
Total impact of receivable
sales on financing margin $ (645) $ (295) $ (1,396) $ (544)
Pre-tax impact of securitizations $ (103) $(24) $(212) $86
Tax 38 9 78 (32)
After-tax impact of securitizations $(65) $(15) $(134) $54