FORD MOTOR CREDIT EARNS $734 MILLION IN THE THIRD QUARTER
DEARBORN, Mich., Oct. 19, 2004 -- Ford Motor Credit Company reported net income of $734 million in the third quarter of 2004, up $230 million from $504 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $1.2 billion in the third quarter, compared with $808 million in the previous year. The increase in earnings primarily reflected improved credit loss performance and improved leasing results.
"We're on track to deliver excellent results this year, as we continue to strengthen our operations," said Mike Bannister, Chairman and CEO. "Our focus is on being the best partner we can to all of Ford Motor Company's brands and dealers so that we can help the company sell more vehicles worldwide."
On September 30, 2004, Ford Motor Credit's on-balance sheet receivables totaled $132 billion, unchanged from December 31, 2003. Managed receivables were $171 billion on September 30, down $11 billion from $182 billion on December 31, primarily reflecting lower retail and wholesale financing volume.
Ford Motor Credit paid dividends of $1.5 billion during the quarter. On September 30, managed leverage was 13.2 to 1.
Ford Motor Credit Company is one of the world's largest automotive finance companies and has supported the sale of Ford products since 1959. With nearly 19,000 employees, Ford Motor Credit operates in 36 countries and manages $171 billion in receivables. Ford Motor Credit is an indirect, wholly owned subsidiary of Ford Motor Company . It provides automotive financing for Ford, Lincoln, Mercury, Aston Martin, Jaguar, Land Rover, Mazda and Volvo dealers and customers. More information can be found at http://www.fordcredit.com/ and at Ford Motor Credit's investor center, http://www.fordcredit.com/investorcenter/.
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended September 30, 2004 and 2003
(in millions)
Third Quarter Nine Months
---------------- ----------------
2004 2003 2004 2003
------ ------ ------ ------
(Unaudited) (Unaudited)
Financing revenue
Operating leases $1,406 $1,761 $4,429 $5,741
Retail 1,193 1,268 3,434 3,473
Interest supplements and other
support costs earned from
affiliated companies 792 851 2,464 2,548
Wholesale 238 168 700 591
Other 54 35 163 196
------ ------ ------ ------
Total financing revenue 3,683 4,083 11,190 12,549
Depreciation on operating
leases (1,133) (1,615) (3,682) (5,565)
Interest expense (1,338) (1,430) (3,962) (4,428)
------ ------ ------ ------
Net financing margin 1,212 1,038 3,546 2,556
Other revenue
Investment and other income
related to sales of
receivables 506 576 1,636 2,139
Insurance premiums earned,
net 46 54 167 179
Other income 271 230 786 736
------ ------ ------ ------
Total financing margin
and revenue 2,035 1,898 6,135 5,610
Expenses
Operating expenses 568 603 1,671 1,726
Provision for credit losses 264 446 641 1,509
Insurance expenses 36 41 147 179
------ ------ ------ ------
Total expenses 868 1,090 2,459 3,414
------ ------ ------ ------
Income from continuing
operations before income taxes 1,167 808 3,676 2,196
Provision for income taxes 435 306 1,353 848
------ ------ ------ ------
Income from continuing
operations before minority
interests 732 502 2,323 1,348
Minority interests in net
(loss)/income of subsidiaries - (1) 1 2
------ ------ ------ ------
Income from continuing
operations 732 503 2,322 1,346
Income/(loss) from discontinued/
held-for-sale operations 2 1 (3) 1
------ ------ ------ ------
Net income $734 $504 $2,319 $1,347
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FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
September 30, December 31,
2004 2003
------------- -------------
(Unaudited)
ASSETS
Cash and cash equivalents $10,148 $15,688
Investments in securities 595 611
Finance receivables, net 110,544 108,912
Net investment in operating leases 21,448 23,164
Retained interest in securitized assets 9,473 13,017
Notes and accounts receivable from
affiliated companies 1,516 2,060
Derivative financial instruments 5,741 9,842
Assets of discontinued/held-for-sale
operations - 388
Other assets 4,674 5,530
------------- -------------
Total assets $164,139 $179,212
============= =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Accounts payable
Trade, customer deposits, and dealer
reserves $1,475 $1,535
Affiliated companies 1,758 1,258
------------- -------------
Total accounts payable 3,233 2,793
Debt 135,336 149,652
Deferred income taxes, net 7,467 6,334
Derivative financial instruments 956 1,370
Liabilities of discontinued/held-for-sale
operations - 37
Other liabilities and deferred income 5,705 6,533
------------- -------------
Total liabilities 152,697 166,719
Minority interests in net assets of
subsidiaries 12 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 457 420
Retained earnings 5,831 6,912
------------- -------------
Total stockholder's equity 11,430 12,474
------------- -------------
Total liabilities and stockholder's
equity $164,139 $179,212
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FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
OPERATING HIGHLIGHTS
Third Quarter First Nine Months
-------------------- --------------------
Financing Shares 2004 2003 2004 2003
------- ------- ------- -------
United States
Financing share - Ford,
Lincoln and Mercury
Retail installment and
lease 55% 48% 44% 39%
Wholesale 78 82 79 83
Europe
Financing share - Ford
Retail installment and
lease 29% 31% 28% 31%
Wholesale 97 96 97 96
Contract Volume - New and
used retail/lease
(in thousands)
North America Segment
United States 579 588 1,479 1,551
Canada 46 54 134 156
------- ------- ------- -------
Total North America
Segment 625 642 1,613 1,707
International Segment
Europe 191 205 614 649
Other international 69 70 207 214
------- ------- ------- -------
Total International
Segment 260 275 821 863
------- ------- ------- -------
Total financing volume 885 917 2,434 2,570
======= ======= ======= =======
Borrowing Cost Rate* 4.0% 4.1% 3.8% 4.3%
Charge-offs (in millions)
On-Balance sheet
Retail installment &
lease $340 $443 $999 $1,356
Wholesale 10 21 19 38
Other (1) 2 (2) 16
------- ------- ------- -------
Total on-balance sheet
charge-offs $349 $466 $1,016 $1,410
======= ======= ======= =======
Total Loss-to-receivables
Ratios** 1.13% 1.52% 1.10% 1.54%
Managed***
Retail installment & lease $448 $647 $1,379 $1,922
Wholesale 11 19 20 39
Other (1) 2 (2) 16
------- ------- ------- -------
Total managed
charge-offs $458 $668 $1,397 $1,977
======= ======= ======= =======
Total Loss-to-receivables
Ratios 1.07% 1.45% 1.06% 1.41%
- - - - -
* Includes the effect of
interest rate swap
agreements
** Includes charge-offs on
reacquired receivables
Total excluding charge-
offs on reacquired
receivables 1.07% 1.40% 1.05% 1.49%
*** See appendix for additional
information
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
APPENDIX
In evaluating Ford Motor Credit's financial performance, Ford Motor 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 Motor Credit's
balance sheet and receivables Ford Motor Credit sold in off-balance
sheet securitizations and continues to service.
* Charge-offs on managed receivables: charge-offs associated with
receivables reported on Ford Motor Credit's balance sheet plus charge-
offs associated with receivables that Ford Motor Credit sold in off-
balance sheet securitizations and continues to service.
IMPACT OF ON-BALANCE SHEET SECURITIZATION: retail installment receivables
reported on Ford Motor Credit's balance sheet include receivables sold in
securitizations. These receivables have been legally sold to Ford Motor
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 Motor Credit or the claims of Ford Motor
Credit's creditors. Debt reported on Ford Motor 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 Motor Credit.
RECONCILIATION OF MEASURES:
Managed Leverage Calculation September 30, December 31,
2004 2003
------------- ------------
(in billions)
Total debt $135.3 $149.7
Securitized off-balance sheet receivables
outstanding 38.7 49.4
Retained interest in securitized off-balance
sheet receivables (9.5) (13.0)
Adjustments for cash and cash equivalents (10.1) (15.7)
Adjustments for SFAS No. 133 (3.6) (4.7)
-------- --------
Total adjusted debt $150.8 $165.7
======== ========
Total stockholder's equity (including
minority interest) $11.4 $12.5
Adjustments for SFAS No. 133 0.0 0.2
-------- --------
Total adjusted equity $11.4 $12.7
======== ========
Managed leverage (to 1) = adjusted
debt / adjusted equity 13.2 13.0
Memo: Financial statement leverage
(to 1) = total debt / stockholder's equity 11.8 12.0
Net Finance Receivables and Managed Receivables
Operating Leases --------------------------------------
On-Balance Off-Balance
Sheet Sheet Total
------------ ------------ ------------
September 30, 2004 (in billions)
Retail installment $82.1 $20.1 $102.2
Wholesale 21.2 18.6 39.8
Other finance receivables 7.2 0.0 7.2
Net investment in operating leases 21.5 0.0 21.5
----- ----- -----
Total net finance receivables and
operating leases $132.0 $38.7 $170.7
====== ===== ======
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
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