Exhibit 99.1
Contact: | Christine Solie | |
313-845-1746 | ||
csolie@ford.com |
FOR IMMEDIATE RELEASE
FORD MOTOR CREDIT EARNS RECORD $2.9 BILLION IN 2004
Fourth Quarter Earnings of $543 Million Reported
DEARBORN, Mich., January 20, 2005 — Ford Motor Credit Company reported record net income of $2.9 billion in 2004, up $1.1 billion from earnings of $1.8 billion a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $4.4 billion in 2004, compared with $3.0 billion in the previous year. The increase in earnings primarily reflected improved credit loss performance and leasing results.
In the fourth quarter of 2004, Ford Motor Credit’s net income was $543 million, up $73 million from $470 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $859 million in the fourth quarter, compared with $794 million in the previous year. The increase in earnings primarily reflected improved credit loss performance.
“Thanks to good progress on a number of key business drivers, especially credit loss and lease residual performance, we posted record earnings for the second consecutive year,” said Mike Bannister, chairman and CEO. “We expect to generate strong earnings in 2005; however, the record pace of 2004 will not continue.”
On December 31, 2004, Ford Motor Credit’s on-balance sheet receivables totaled $133 billion, compared with $128 billion on
December 31, 2003. Managed receivables were $168 billion, down $7 billion from $175 billion in 2003, primarily reflecting lower retail and operating lease financing.
Ford Motor Credit paid dividends of $900 million during the fourth quarter and $4.3 billion for the full year. On December 31, managed leverage was 13.7 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 more than 16,000 employees, Ford Motor Credit operates in 36 countries and manages $168 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 athttp://www.fordcredit.com and at Ford Motor Credit’s investor center,http://www.fordcredit.com/investorcenter/.
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FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions)
Fourth Quarter | Full Year | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Financing revenue | ||||||||||||||||
Operating leases | $ | 1,410 | $ | 1,638 | $ | 5,880 | $ | 7,423 | ||||||||
Retail | 1,154 | 1,062 | 4,459 | 4,296 | ||||||||||||
Interest supplements and other support costs earned from affiliated companies | 769 | 799 | 3,285 | 3,347 | ||||||||||||
Wholesale | 266 | 206 | 871 | 797 | ||||||||||||
Other | 37 | 51 | 200 | 247 | ||||||||||||
Total financing revenue | 3,636 | 3,756 | 14,695 | 16,110 | ||||||||||||
Depreciation on vehicles subject to operating leases | (1,227 | ) | (1,444 | ) | (4,909 | ) | (7,009 | ) | ||||||||
Interest expense | (1,371 | ) | (1,403 | ) | (5,333 | ) | (5,831 | ) | ||||||||
Net financing margin | 1,038 | 909 | 4,453 | 3,270 | ||||||||||||
Other revenue | ||||||||||||||||
Investment and other income related to sales of receivables | 420 | 575 | 1,930 | 2,611 | ||||||||||||
Insurance premiums earned, net | 49 | 53 | 216 | 232 | ||||||||||||
Other income | 245 | 371 | 1,041 | 1,137 | ||||||||||||
Total financing margin and revenue | 1,752 | 1,908 | 7,640 | 7,250 | ||||||||||||
Expenses | ||||||||||||||||
Operating expenses | 575 | 589 | 2,142 | 2,195 | ||||||||||||
Provision for credit losses | 298 | 493 | 900 | 1,888 | ||||||||||||
Insurance expenses | 20 | 32 | 167 | 211 | ||||||||||||
Total expenses | 893 | 1,114 | 3,209 | 4,294 | ||||||||||||
Income from continuing operations before income taxes | 859 | 794 | 4,431 | 2,956 | ||||||||||||
Provision for income taxes | 334 | 299 | 1,648 | 1,134 | ||||||||||||
Income from continuing operations before minority interests | 525 | 495 | 2,783 | 1,822 | ||||||||||||
Minority interests in net income of subsidiaries | 1 | — | 2 | 2 | ||||||||||||
Income from continuing operations | 524 | 495 | 2,781 | 1,820 | ||||||||||||
Income from discontinued/held-for-sale operations | 19 | 30 | 81 | 52 | ||||||||||||
Loss on disposal of discontinued/held-for-sale operations | — | (55 | ) | — | (55 | ) | ||||||||||
Net income | $ | 543 | $ | 470 | $ | 2,862 | $ | 1,817 | ||||||||
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
December 31, | ||||||||
2004 | 2003 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 12,668 | $ | 15,698 | ||||
Investments in securities | 653 | 611 | ||||||
Finance receivables, net | 110,851 | 105,376 | ||||||
Net investment in operating leases | 21,866 | 23,164 | ||||||
Retained interest in securitized assets | 9,166 | 12,569 | ||||||
Notes and accounts receivable from affiliated companies | 1,780 | 1,983 | ||||||
Derivative financial instruments | 6,930 | 9,842 | ||||||
Assets of discontinued/held-for-sale operations | 2,186 | 1,810 | ||||||
Other assets | 6,521 | 8,082 | ||||||
Total assets | $ | 172,621 | $ | 179,135 | ||||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||
Liabilities | ||||||||
Accounts payable | ||||||||
Trade, customer deposits, and dealer reserves | $ | 1,645 | $ | 1,534 | ||||
Affiliated companies | 819 | 1,258 | ||||||
Total accounts payable | 2,464 | 2,792 | ||||||
Debt | 144,274 | 149,652 | ||||||
Deferred income taxes, net | 7,593 | 6,352 | ||||||
Derivative financial instruments | 911 | 1,293 | ||||||
Liabilities of discontinued/held-for-sale operations | 93 | 82 | ||||||
Other liabilities and deferred income | 5,802 | 6,471 | ||||||
Total liabilities | 161,137 | 166,642 | ||||||
Minority interests in net assets of subsidiaries | 13 | 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 | 855 | 420 | ||||||
Retained earnings | 5,474 | 6,912 | ||||||
Total stockholder’s equity | 11,471 | 12,474 | ||||||
Total liabilities and stockholder’s equity | $ | 172,621 | $ | 179,135 | ||||
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
OPERATING HIGHLIGHTS*
Fourth Quarter | Full Year | |||||||||||||||
Financing Shares | 2004 | 2003 | 2004 | 2003 | ||||||||||||
United States | ||||||||||||||||
Financing share — Ford, Lincoln and Mercury | ||||||||||||||||
Retail installment and lease | 48 | % | 39 | % | 45 | % | 39 | % | ||||||||
Wholesale | 83 | 84 | 84 | 85 | ||||||||||||
Europe | ||||||||||||||||
Financing share — Ford | ||||||||||||||||
Retail installment and lease | 35 | % | 33 | % | 29 | % | 31 | % | ||||||||
Wholesale | 97 | 99 | 97 | 97 | ||||||||||||
Contract Volume— New and used retail/lease (in thousands) | ||||||||||||||||
North America Segment | ||||||||||||||||
United States | 455 | 406 | 1,842 | 1,883 | ||||||||||||
Canada | 38 | 41 | 172 | 197 | ||||||||||||
Total North America Segment | 493 | 447 | 2,014 | 2,080 | ||||||||||||
International Segment | ||||||||||||||||
Europe | 192 | 187 | 806 | 836 | ||||||||||||
Other international | 70 | 65 | 277 | 279 | ||||||||||||
Total International Segment | 262 | 252 | 1,083 | 1,115 | ||||||||||||
Total financing volume | 755 | 699 | 3,097 | 3,195 | ||||||||||||
Borrowing Cost Rate** | 4.0 | % | 3.9 | % | 3.8 | % | 4.2 | % | ||||||||
Charge-offs(in millions) | ||||||||||||||||
On-Balance sheet | ||||||||||||||||
Retail installment & lease | $ | 357 | $ | 486 | $ | 1,281 | $ | 1,718 | ||||||||
Wholesale | 24 | 110 | 43 | 148 | ||||||||||||
Other | 5 | 10 | 3 | 25 | ||||||||||||
Total on-balance sheet charge-offs | $ | 386 | $ | 606 | $ | 1,327 | $ | 1,891 | ||||||||
Total Loss-to-receivables Ratios*** | 1.23 | % | 1.99 | % | 1.10 | % | 1.60 | % | ||||||||
Managed**** | ||||||||||||||||
Retail installment & lease | $ | 425 | $ | 648 | $ | 1,599 | $ | 2,361 | ||||||||
Wholesale | 23 | 108 | 43 | 148 | ||||||||||||
Other | 5 | 10 | 3 | 25 | ||||||||||||
Total managed charge-offs | $ | 453 | $ | 766 | $ | 1,645 | $ | 2,534 | ||||||||
Total Loss-to-receivables Ratios | 1.09 | % | 1.73 | % | 0.97 | % | 1.40 | % |
— — — — —
* | Continuing operations | ||||||||||||||||
** | Includes the effect of interest rate swap agreements | ||||||||||||||||
*** | Includes charge-offs on reacquired receivables | ||||||||||||||||
Total excluding charge-offs on reacquired receivables | 1.18 | % | 1.88 | % | 1.04 | % | 1.52 | % | |||||||||
**** | 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. |
RECONCILIATION OF MEASURES:
Managed Leverage Calculation | December 31, | |||||||
2004 | 2003 | |||||||
(in billions) | ||||||||
Total debt | $ | 144.3 | $ | 149.7 | ||||
Securitized off-balance sheet receivables outstanding* | 37.7 | 49.4 | ||||||
Retained interest in securitized off-balance sheet receivables** | (9.5 | ) | (13.0 | ) | ||||
Adjustments for cash and cash equivalents | (12.7 | ) | (15.7 | ) | ||||
Adjustments for SFAS No. 133 | (3.2 | ) | (4.7 | ) | ||||
Total adjusted debt | $ | 156.6 | $ | 165.7 | ||||
Total stockholder’s equity (including minority interest) | $ | 11.5 | $ | 12.5 | ||||
Adjustments for SFAS No. 133 | (0.1 | ) | 0.2 | |||||
Total adjusted equity | $ | 11.4 | $ | 12.7 | ||||
Managed leverage (to 1) = adjusted debt / adjusted equity | 13.7 | 13.0 | ||||||
Memo: Financial statement leverage (to 1) = total debt / stockholder’s equity | 12.6 | 12.0 |
Net Finance Receivables and Operating Leases | Managed Receivables | |||||||||||
On-Balance | Off-Balance | |||||||||||
Sheet | Sheet | Total | ||||||||||
(in billions) | ||||||||||||
December 31, 2004 | ||||||||||||
Retail installment | $ | 81.7 | $ | 16.7 | $ | 98.4 | ||||||
Wholesale | 23.8 | 18.9 | 42.7 | |||||||||
Other finance receivables | 5.3 | 0.0 | 5.3 | |||||||||
Net investment in operating leases | 21.9 | 0.0 | 21.9 | |||||||||
Total net finance receivables and operating leases | $ | 132.7 | $ | 35.6 | $ | 168.3 | ||||||
December 31, 2003 | ||||||||||||
Retail installment | $ | 77.0 | $ | 26.6 | $ | 103.6 | ||||||
Wholesale | 22.4 | 20.3 | 42.7 | |||||||||
Other finance receivables | 5.9 | 0.0 | 5.9 | |||||||||
Net investment in operating leases | 23.2 | 0.0 | 23.2 | |||||||||
Total net finance receivables and operating leases | $ | 128.5 | $ | 46.9 | $ | 175.4 | ||||||
— — — — —
* | Includes securitized funding from discontinued operations | |
** | Includes retained interest in securitized receivables from discontinued operations |