Ford Credit Earns $1.23 Billion in 2002
DEARBORN, Mich., Jan. 21, 2003; Ford Motor Credit
Company reported earnings of $1.23 billion in 2002, up $395 million from
earnings of $839 million a year earlier. After-tax financial statement return
on average equity was 9 percent in 2002, compared with 7 percent in 2001.
Excluding unusual charges and adjustments related to SFAS No. 133 (Accounting
for Derivative Instruments and Hedging Activities), Ford Credit earned $1.38
billion, up $175 million from earnings of $1.2 billion in 2001. The increase
in earnings primarily reflected a lower provision for credit losses, offset
partially by the net unfavorable impact of receivable sales and lower net
financing margins.
In the fourth quarter of 2002, Ford Credit earned $354 million, up $651
million from a loss of $297 million in the same period a year earlier.
Excluding unusual charges and adjustments related to SFAS No. 133, Ford Credit
earned $382 million in the fourth quarter of 2002, up $376 million from
earnings of $6 million in the same period a year earlier. The improvement
reflected a lower provision for credit losses and the net favorable impact of
receivable sales, offset partially by lower net financing margins. Ford
Credit paid a dividend to Ford Motor Company of $700 million in December. For
the full year, Ford Credit's dividend, net of the January 2002 capital
contribution, was $450 million.
"I'm proud of our solid performance in a difficult year," said Greg Smith,
Chairman and CEO. "Ford Credit delivered improved profits, as well as strong
customer satisfaction and owner loyalty. In addition, we reduced leverage,
continued to diversify funding sources and paid a net dividend to Ford Motor
Company," Smith added.
On December 31, 2002, Ford Credit's owned receivables totaled $129
billion, down $9 billion compared with $138 billion on September 30, 2002, and
down $18 billion compared with $147 billion on December 31, 2001. These
reductions primarily reflected the higher sales of receivables in
securitizations and whole-loan transactions. Managed receivables, which
includes both owned receivables and receivables sold in securitizations, were
$200 billion on December 31, 2002, compared with $204 billion on September 30,
2002, and $206 billion on December 31, 2001. During the fourth quarter of
2002, Ford Credit also sold $5 billion of receivables through whole-loan sales
transactions.
Ford Credit is a wholly owned subsidiary of Ford Motor Company
and is the world's largest automotive finance company. Now in its 44th 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 and at Ford Credit's investor center,
http://www.fordcredit.com/investorcenter/ .
Ford Motor Credit Company and Consolidated Subsidiaries
OPERATING HIGHLIGHTS
Fourth Quarter Full Year
Net Income* 2002 2001 2002 2001
(in millions)
Total Net Income $354 $(297) $1,234 $839
Exclude Unusual Charges & SFAS No. 133
SFAS No. 133 $(28) $(99) $(141) $(157)
Revitalization Plan - (204) - (204)
Total Unusual Charges & SFAS No. 133 $(28) $(303) $(141) $(361)
Operating Net Income $382 $6 $1,375 $1,200
Memo:
Financial Statement Return on Equity 10% Negative 9% 7%
December 31, Sept. 30,
Balance Sheet* 2002 2001 2002
Assets (in billions)
Finance receivables
Retail installment $67.6 $83.4 $77.3
Wholesale 16.4 15.4 15.8
Other 10.8 9.3 9.3
Total net finance receivables $94.8 $108.1 $102.4
Net investment in operating leases 33.8 39.3 35.7
Total net finance receivables and
operating leases $128.6 $147.4 $138.1
Retained interest in securitized
assets 17.6 12.5 9.7
Other assets 24.0 13.2 21.6
Total assets $170.2 $173.1 $169.4
Liabilities and Stockholder's Equity
Debt - short-term $16.3 $22.7 $16.1
Debt - long-term (includes notes
payable within 1 year) 124.5 123.6 124.7
Total debt $140.8 $146.3 $140.8
Other liabilities 15.8 14.8 14.9
Total liabilities $156.6 $161.1 $155.7
Stockholder's equity 13.6 12.0 13.7
Total liabilities and
stockholder's equity $170.2 $173.1 $169.4
Memo: Financial Statement leverage
(to 1)** 9.0 11.2 9.0
Managed Receivables (owned plus
securitized)*
Finance receivables
Retail installment $116.5 $124.8 $124.4
Wholesale 38.9 32.8 34.5
Other 10.8 9.3 9.3
Total net finance receivables $166.2 $166.9 $168.2
Net investment in operating leases 33.8 39.4 35.7
Total managed $200.0 $206.3 $203.9
Memo: Managed leverage
(to 1)** 12.9 14.8 13.0
Serviced Receivables (managed plus
serviced-only)*
Serviced receivables (includes
receivables sold through
whole-loan sales transactions --
serviced-only) $205.0 $206.3 $203.9
* Includes discontinued operations (Axus -- all-makes fleet leasing
business in Europe, Australia and New Zealand)
** Excludes SFAS No. 133, over-borrowing portfolio and cash -- consistent
with the MD&A calculation in Ford Credit's 2001 10K
Ford Motor Credit Company and Consolidated Subsidiaries
OPERATING HIGHLIGHTS
Fourth Quarter Full Year
Selected Operating & Financial Metrics* 2002 2001 2002 2001
Financing share
Ford & Lincoln/Mercury retail
installment & lease United States 36% 69% 41% 54%
Europe 34 43 34 37
Ford & Lincoln/Mercury
wholesale United States 86 84 85 84
Europe 99 98 97 97
Contract volume - New and
used retail/lease
(in thousands)
United States 490 1,054 2,512 3,819
Europe 211 247 917 988
Other international 156 176 668 738
Total contract volume 857 1,477 4,097 5,545
Borrowing costs 4.7% 5.6% 5.1% 6.1%
Credit losses (in millions)
Owned
Retail installment & lease $614 $716 $2,295 $2,055
Wholesale 17 21 40 32
Other 8 23 30 24
Total $639 $760 $2,365 $2,111
Loss-to-receivables
Retail installment & lease 2.23% 2.31% 2.01% 1.71%
Wholesale 0.42 0.52 0.25 0.13
Total including other 1.88% 2.04% 1.69% 1.35%
Allowances for credit losses
(in billions) $3.2 $2.8 $3.2 $2.8
Allowances as a pct. of end-of-period
receivables 2.47% 1.86% 2.47% 1.86%
Managed loss ratios
Loss-to-receivables
Retail installment & lease 1.92% 1.63% 1.71% 1.45%
Wholesale 0.25 0.28 0.13 0.10
Total including other 1.54% 1.46% 1.37% 1.20%
Memo: Ford Credit U.S. retail & lease 1.87% 1.76% 1.50% 1.31%
Sales of Receivables (in millions,
excl. SFAS No. 133)
Income related to securitizations and
whole-loan sales:
Gain-on-sale of finance receivables $310 $269 $728 $739
Interest income, excess spread,
servicing fees 617 390 2,081 1,021
Total income related to
securitizations and whole-loan sales $927 $659 $2,809 $1,760
Impact of securitizations on net
financing margin:
Impact of current-period
securitizations $(103) $(149) $(968) $(1,059)
Impact of prior-periods
securitizations (718) (510) (1,967) (611)
Total impact of securitizations on
financing margin $(821) $(659) $(2,935) $(1,670)
Pre-tax impact of securitizations
and whole-loan sales $106 $0 $(126) $90
Tax (39) 0 47 (33)
After-tax impact of securitizations
and whole-loan sales $67 $0 $(79) $57
* Includes discontinued operations (Axus -- all-makes fleet leasing
business in Europe, Australia and New Zealand)
