FORD CREDIT EARNS $294 MILLION IN THE THIRD QUARTER- (Even With 0% Financing Huh?)
DEARBORN, Mich., October 16, 2002 – Ford Credit earned $294 million in the third quarter of 2002, compared with $376 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 $408 million, up $19 million from earnings of $389 million in the same period a year earlier primarily reflecting a lower provision for credit losses, offset partially by lower net financing margins.
Ford Credit's owned receivables as of September 30, 2002 totaled $138 billion, compared with $144 billion on June 30, 2002 and $147 billion on September 30, 2001. Managed receivables were $204 billion, compared with $210 billion on June 30, 2002 and $200 billion on September 30, 2001. After-tax return on average equity (excluding SFAS No. 133) was 11 percent in the third quarter of 2002, compared with 12 percent in the same period a year earlier. On September 27, 2002, Ford Credit paid a $450 million dividend to Ford Motor Company, while maintaining managed leverage at the low end of the target range of 13:1 to 14:1.
Compared with the second quarter of 2002 (excluding SFAS No. 133), earnings were up $65 million, reflecting the net favorable impact of securitization transactions and improved net financing margins, offset partially by a higher provision for credit losses. For the first nine months of 2002, Ford Credit earned $993 million, down $201 million from earnings of $1,194 million in the same period a year earlier.
"We continue to see the results of our focus on Ford Credit's core business," said Greg Smith, Chairman and Chief Executive Officer of Ford Credit. "Even with the challenges of an uncertain economy, Ford Credit has been recognized a leader in customer service, taking two of the four top awards in the most recent J.D. Power Customer Finance Satisfaction Study."
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 is rated No. 1 in customer leasing satisfaction by J.D. Power, and 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 and at Ford Credit's investor center, www.fordcredit.com/investorcenter/.
| Ford Motor Credit Company and Consolidated Subsidiaries | ||||||||||||||||||
| OPERATING HIGHLIGHTS | ||||||||||||||||||
| Third Quarter | First Nine Months | |||||||||||||||||
| Net Income | 2002 | 2001 | 2002 | 2001 | ||||||||||||||
| (in millions) | ||||||||||||||||||
Total net income | $ 294 | $ 376 | $ 880 | $ 1,136 | ||||||||||||||
Exclude: | ||||||||||||||||||
SFAS No. 133 | (114) | (13) | (113) | (58) | ||||||||||||||
Operating net income | $ 408 | $ 389 | $ 993 | $ 1,194 | ||||||||||||||
| Memo: Return on Equity excluding SFAS No. 133 | 11% | 12% | 10% | 13% | ||||||||||||||
| September 30, | June 30, | Dec. 31, | ||||||||||||||||
| Balance Sheet | 2002 | 2001 | 2002 | 2001 | ||||||||||||||
| Assets | (in billions) | |||||||||||||||||
| Finance receivables | ||||||||||||||||||
| Retail installment | $ 77.3 | $ 82.5 | $ 78.9 | $ 83.4 | ||||||||||||||
| Wholesale | 15.8 | 15.5 | 16.5 | 15.4 | ||||||||||||||
| Other | 9.3 | 9.2 | 10.9 | 9.3 | ||||||||||||||
Total net finance receivables | $ 102.4 | $ 107.2 | $ 106.3 | $ 108.1 | ||||||||||||||
| Net investment in operating leases | 35.7 | 40.3 | 37.6 | 39.3 | ||||||||||||||
| Total net finance receivables and operating leases | $ 138.1 | $ 147.5 | $ 143.9 | $ 147.4 | ||||||||||||||
| Other assets | 31.3 | 26.8 | 28.7 | 25.7 | ||||||||||||||
| Total assets | $ 169.4 | $ 174.3 | $ 172.6 | $ 173.1 | ||||||||||||||
| Liabilities and Stockholder's Equity | ||||||||||||||||||
| Debt – short-term | $ 16.1 | $ 29.0 | $ 15.7 | $ 22.7 | ||||||||||||||
| Debt – long-term (includes notes payable within 1 year) | 124.7 | 117.4 | 127.0 | 123.6 | ||||||||||||||
| Total debt | $ 140.8 | $ 146.4 | $ 142.7 | $ 146.3 | ||||||||||||||
| Other liabilities | 14.9 | 15.6 | 16.2 | 14.8 | ||||||||||||||
| Total liabilities | $ 155.7 | $ 162.0 | $ 158.9 | $ 161.1 | ||||||||||||||
| Stockholder's equity | 13.7 | 12.3 | 13.7 | 12.0 | ||||||||||||||
Total liabilities and stockholder's equity | $ 169.4 | $ 174.3 | $ 172.6 | $ 173.1 | ||||||||||||||
| Memo: | ||||||||||||||||||
| Shareholder equity excluding SFAS No. 133 | $ 14.2 | $ 13.0 | $ 14.1 | $ 12.6 | ||||||||||||||
| Financial statement leverage (to 1) a/ | 9.0 | 10.8 | 9.5 | 11.2 | ||||||||||||||
| Managed Receivables | ||||||||||||||||||
| Finance receivables | ||||||||||||||||||
| Retail installment | $ 124.4 | $ 117.2 | $ 123.5 | $ 124.8 | ||||||||||||||
| Wholesale | 34.5 | 33.5 | 37.6 | 32.8 | ||||||||||||||
| Other | 9.3 | 9.2 | 10.9 | 9.3 | ||||||||||||||
| Total net finance receivables | $ 168.2 | $ 159.9 | $ 172.0 | $ 166.9 | ||||||||||||||
| Net investment in operating leases | 35.7 | 40.3 | 37.6 | 39.4 | ||||||||||||||
| Total managed | $ 203.9 | $ 200.2 | $ 209.6 | $ 206.3 | ||||||||||||||
| Memo: Managed leverage (to 1) a/ | 13.0 | 13.9 | 13.4 | 14.8 | ||||||||||||||
| - - - - - - | ||||||||||||||||||
| a/ Excludes SFAS No. 133, over-borrowing portfolio and cash | ||||||||||||||||||
| Ford Motor Credit Company and Consolidated Subsidiaries | |||||||||||||||||||||||||||||
| OPERATING HIGHLIGHTS | |||||||||||||||||||||||||||||
| Third Quarter | First Nine Months | ||||||||||||||||||||||||||||
| Selected Operating & Financial Metrics | 2002 | 2001 | 2002 | 2001 | |||||||||||||||||||||||||
Market share | |||||||||||||||||||||||||||||
Ford & Lincoln/Mercury retail installment & lease lease lease | United States | 46% | 52% | 40% | 47% | ||||||||||||||||||||||||
| Europe | 33 | 39 | 34 | 36 | |||||||||||||||||||||||||
| Ford & Lincoln/Mercury wholesale | United States | 85 | 85 | 85 | 86 | ||||||||||||||||||||||||
| Europe | 98 | 97 | 97 | 97 | |||||||||||||||||||||||||
Contract volume - New and used retail/lease (in thousands) | |||||||||||||||||||||||||||||
United States | 729 | 967 | 2,022 | 2,765 | |||||||||||||||||||||||||
Europe | 220 | 251 | 705 | 741 | |||||||||||||||||||||||||
Other international | 170 | 204 | 511 | 562 | |||||||||||||||||||||||||
Total contract volume | 1,119 | 1,422 | 3,238 | 4,068 | |||||||||||||||||||||||||
| Borrowing costs | 5.1% | 5.9% | 5.2% | 6.2% | |||||||||||||||||||||||||
| Credit losses (in millions) | |||||||||||||||||||||||||||||
Owned | |||||||||||||||||||||||||||||
Retail installment & lease | $585 | $536 | $1,681 | $1,339 | |||||||||||||||||||||||||
Wholesale | 7 | 4 | 23 | 12 | |||||||||||||||||||||||||
Other | 0 | 1 _ | 22 | 1 | |||||||||||||||||||||||||
Total | $ 592 | $ 541 | $ 1,726 | $1,352 | |||||||||||||||||||||||||
Loss-to-receivables | |||||||||||||||||||||||||||||
| Retail installment & lease | 2.02% | 1.76% | 1.94% | 1.51% | |||||||||||||||||||||||||
| Wholesale | 0.18 | 0.06 | 0.20 | 0.05 | |||||||||||||||||||||||||
| Total including other | 1.68% | 1.38% | 1.63% | 1.13% | |||||||||||||||||||||||||
Allowances for credit losses (in billions) | $ 3.2 | $ 2.0 | $ 3.2 | $ 2.0 | |||||||||||||||||||||||||
Allowances as a pct. of end-of-period receivables | 2.29% | 1.33% | 2.29% | 1.33% | |||||||||||||||||||||||||
Managed | |||||||||||||||||||||||||||||
Retail installment & lease | $699 | $588 | $1,983 | $ 1,581 | |||||||||||||||||||||||||
Wholesale | 7 | 4 | 23 | 12 | |||||||||||||||||||||||||
Other | 0 | 1 | 22 | 1 | |||||||||||||||||||||||||
Total | $ 706 | $ 593 | $ 2,028 | $ 1,594 | |||||||||||||||||||||||||
Loss-to-receivables | |||||||||||||||||||||||||||||
| Retail installment & lease | 1.73% | 1.47% | 1.63% | 1.37% | |||||||||||||||||||||||||
| Wholesale | 0.08 | 0.05 | 0.09 | 0.05 | |||||||||||||||||||||||||
| Total including other | 1.37% | 1.22% | 1.32% | 1.11% | |||||||||||||||||||||||||
| Memo: Ford Credit U.S. retail & lease | 1.51% | 1.27% | 1.39% | 1.15% | |||||||||||||||||||||||||
Allowances for credit losses (in billions) | $ 3.9 | $ 2.5 | $ 3.9 | $ 2.5 | |||||||||||||||||||||||||
| Allowances as Pct. of end-of-period receivables | 1.90% | 1.25% | 1.90% | 1.25% | |||||||||||||||||||||||||
| | |||||||||||||||||||||||||||||
| Securitizations (in millions, excl. SFAS No. 133) | |||||||||||||||||||||||||||||
| Income related to securitizations: | |||||||||||||||||||||||||||||
| Gain-on-sale of finance receivables | $ 160 | $ 169 | $ 418 | $ 469 | |||||||||||||||||||||||||
| Interest income, excess spread, servicing fees | 538 | 301 | 1,464 | 631 | |||||||||||||||||||||||||
| Total income related to securitizations | $ 698 | $ 470 | $ 1,882 | $ 1,100 | |||||||||||||||||||||||||
Impact of receivable sales on net financing margin: | |||||||||||||||||||||||||||||
| Impact of current-period receivable sales | $ (82) | $ (122) | $ (547) | $ (496) | |||||||||||||||||||||||||
| Impact from prior-periods receivable sales | (637) | (346) | (1,568) | (516) | |||||||||||||||||||||||||
| Total impact of receivable sales on financing margin | $ (719) | $ (468) | $ (2,115) | $ (1,012) | |||||||||||||||||||||||||
| Pre-tax impact of securitizations | $ (21) | $ 2 | $ (233) | $ 88 | |||||||||||||||||||||||||
| Tax | 8 | (1) | 85 | (32) | |||||||||||||||||||||||||
| After-tax impact of securitizations | $ (13) | $ 1 | $ (147) | $ 56 | |||||||||||||||||||||||||