FORD CREDIT EARNS RECORD $688 MILLION IN FIRST QUARTER
DEARBORN, Mich., April 21 -- Ford Motor Credit Company reported net income of $688 million in the first quarter of 2004, up $246 million from earnings of $442 million a year earlier. On a pre-tax basis from continuing operations, Ford Credit earned $1.1 billion in the first quarter, compared with $727 million in the previous year. The increase in earnings primarily reflected improved credit loss performance, higher used vehicle prices and the favorable impact of the low interest rate environment.
"We're making great progress on all our key business drivers, and you can see the results of that in record earnings this quarter," said Greg Smith, chairman and CEO. "The entire Ford Credit team continues to provide superior service to Ford brands and Ford dealers, and I'm very proud of their efforts and of our results."
On March 31, 2004, receivables on Ford Credit's balance sheet totaled $130 billion, compared with $132 billion on December 31. Managed receivables were $179 billion on March 31, compared with $182 billion on December 31. The lower on-balance sheet and managed receivables primarily reflected lower lease and retail placement volumes.
Ford Credit paid a dividend of $900 million during the quarter. On March 31, managed leverage was 12.8 to 1.
Ford Credit is a wholly-owned subsidiary of Ford Motor Company. Now in its 45th year, Ford Credit provides vehicle financing in 36 countries to nearly 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 SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended March 31, 2004 and 2003
(in millions)
First Quarter
2004 2003
(Unaudited)
Financing revenue
Operating leases $1,490 $2,004
Retail 1,175 1,115
Interest supplements and other support
costs earned from affiliated companies 825 906
Wholesale 239 196
Other 49 89
Total financing revenue 3,778 4,310
Depreciation on operating leases (1,307) (2,128)
Interest expense (1,329) (1,519)
Net financing margin 1,142 663
Other revenue
Investment and other income related to
sales of receivables 549 891
Insurance premiums earned, net 60 64
Other income 225 257
Total financing margin and revenue 1,976 1,875
Expenses
Operating expenses 551 584
Provision for credit losses 301 521
Insurance expenses 37 43
Total expenses 889 1,148
Income from continuing operations before
income taxes 1,087 727
Provision for income taxes 398 284
Income from continuing operations before
minority interests 689 443
Minority interests in net income of subsidiaries - 1
Income from continuing operations 689 442
Loss from discontinued/held-for-sale operations (1) -
Net income $688 $442
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
March 31, December 31,
2004 2003
(Unaudited)
ASSETS
Cash and cash equivalents $12,488 $15,688
Investments in securities 574 611
Finance receivables, net 108,109 108,912
Net investment in operating leases 22,008 23,164
Retained interest in securitized assets 13,369 13,017
Notes and accounts receivable from
affiliated companies 1,871 1,653
Derivative financial instruments 7,588 9,866
Assets of discontinued and held-for-sale
operations 377 388
Other assets 4,899 5,530
Total assets $171,283 $178,829
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Accounts payable
Trade, customer deposits, and dealer
reserves $1,537 $1,535
Affiliated companies 1,548 1,258
Total accounts payable 3,085 2,793
Debt 142,441 149,652
Deferred income taxes, net 6,760 6,334
Derivative financial instruments 962 987
Liabilities of discontinued and held-for-sale
operations 36 37
Other liabilities and deferred income 5,706 6,533
Total liabilities 158,990 166,336
Minority interests in net assets of subsidiaries 11 19
Stockholder's equity
Capital stock, par value $100 a share, 250,000
shares authorized, issued and outstanding 25 25
Paid-in surplus (contributions by stockholder) 5,117 5,117
Accumulated other comprehensive income 440 420
Retained earnings 6,700 6,912
Total stockholder's equity 12,282 12,474
Total liabilities and stockholder's
equity $171,283 $178,829
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
OPERATING HIGHLIGHTS
First Quarter
Financing Shares 2004 2003
United States
Financing share - Ford, Lincoln and Mercury
Retail installment and lease 38% 35%
Wholesale 80 82
Europe
Financing share - Ford
Retail installment and lease 28% 30%
Wholesale 96 98
Contract Volume - New and used retail/lease (in thousands)
North America Segment
United States 428 472
Canada 36 42
Total North America Segment 464 514
International Segment
Europe 213 221
Other international 74 79
Total International Segment 287 300
Total financing volume 751 814
Borrowing Cost Rate 3.7% 4.5%
Credit Losses (in millions)
On-Balance sheet
Retail installment & lease $333 $493
Wholesale 3 1
Other (1) (1)
Total on-balance sheet credit losses $335 $493
Total Loss-to-receivables Ratios (LTR) 1.11% * 1.61%
Managed**
Retail installment & lease $491 $686
Wholesale 3 1
Other (1) (1)
Total managed credit losses $493 $686
Total Loss-to-receivables Ratios (LTR) 1.10% 1.42%
- - - - -
* Includes credit losses on reacquired receivables
Total excluding credit losses on reacquired
receivables 1.03% 1.61%
** See appendix for additional information
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
APPENDIX
In evaluating Ford Credit's financial performance, Ford Credit management uses financial statements and other financial measures in accordance with Generally Accepted Accounting Principles (GAAP). Included below are brief definitions of key terms, information about the impact of on-balance sheet securitization and a reconciliation of other measures.
KEY TERMS:
* Managed receivables: receivables reported on Ford Credit's balance sheet and receivables Ford Credit sold in off-balance sheet securitizations and continues to service.
* Managed credit losses: credit losses associated with receivables reported on Ford Credit's balance sheet plus credit losses associated with receivables that Ford Credit sold in off-balance sheet securitizations and continues to service.
IMPACT OF ON-BALANCE SHEET SECURITIZATION: retail installment receivables reported on Ford Credit's balance sheet include receivables sold in securitizations. These receivables have been legally sold to Ford Credit sponsored special purpose entities and are available only to pay securitization investors and other participants and are not available to pay the obligations of Ford Credit or the claims of Ford Credit's creditors. Debt reported on Ford Credit's balance sheet includes debt issued to securitization investors which is payable solely out of collections on the receivables supporting the securitization and is not the legal obligation of Ford Credit.
RECONCILIATION OF MEASURES:
Managed Leverage Calculation March 31, December 31,
2004 2003
(in billions)
Total debt $142.4 $149.7
Securitized off-balance sheet receivables
outstanding 48.4 49.4
Retained interest in securitized off-balance
sheet receivables (13.4) (13.0)
Adjustments for cash and cash equivalents (12.5) (15.7)
Adjustments for SFAS No. 133 (5.2) (4.7)
Total adjusted debt $159.7 $165.7
Total stockholder's equity (including
minority interest) $12.3 $12.5
Adjustments for SFAS No. 133 0.2 0.2
Total adjusted equity $12.5 $12.7
Managed leverage (to 1) = adjusted debt /
adjusted equity 12.8 13.0
Memo: Financial statement leverage (to 1) =
total debt / stockholder's equity 11.6 12.0
Net Finance Receivables and Operating Leases Managed Receivables
On-Balance Off-Balance
Sheet Sheet Total
March 31, 2004 (in billions)
Retail installment $77.4 $26.4 $103.8
Wholesale 22.4 22.0 44.4
Other finance receivables 8.3 0.0 8.3
Net investment in operating leases 22.0 0.0 22.0
Total net finance receivables and
operating leases $130.1 $48.4 $178.5
December 31, 2003
Retail installment $77.8 $29.1 $106.9
Wholesale 22.5 20.3 42.8
Other finance receivables 8.6 0.0 8.6
Net investment in operating leases 23.2 0.0 23.2
Total net finance receivables and
operating leases $132.1 $49.4 $181.5