| Contact: | Christine Solie | |
| 313-845-1746 | ||
| csolie@ford.com |
FOR IMMEDIATE RELEASE
FORD MOTOR CREDIT EARNS $710 MILLION IN THE FIRST QUARTER
DEARBORN, Mich., April 20, 2005 — Ford Motor Credit Company reported net income of $710 million in the first quarter of 2005, up $22 million from earnings of $688 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $1,061 million in the first quarter, compared with $1,047 million in the previous year. The increase in earnings primarily reflected improved credit loss performance, offset partially by the impact of lower receivable levels and higher borrowing costs.
“Our strong results this quarter, aided by lower credit losses, reflect our ongoing commitment to strengthening our operations,” said Mike Bannister, chairman and CEO. “We will continue to support Ford Motor Company with solid profits and dividends in 2005.”
On March 31, 2005, Ford Motor Credit’s on-balance sheet net receivables totaled $125 billion, compared with $133 billion on December 31, 2004. Managed receivables were $165 billion on March 31, down from $168 billion on December 31. The lower managed receivables primarily reflected lower retail and lease placement volumes and the impact of receivables sold in a whole-loan sale transaction during the first quarter of 2005.
Ford Motor Credit paid cash dividends of $450 million during the quarter. On March 31, managed leverage was 13.0 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 17,000 employees, Ford Motor Credit has operations in 36 countries and manages $165 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
For the Periods Ended March 31, 2005 and 2004
(in millions)
| First Quarter | ||||||||
| 2005 | 2004 | |||||||
| (Unaudited) | ||||||||
| Financing revenue | ||||||||
| Operating leases | $ | 1,358 | $ | 1,574 | ||||
| Retail | 1,070 | 1,071 | ||||||
| Interest supplements and other support costs earned from affiliated companies | 843 | 856 | ||||||
| Wholesale | 251 | 189 | ||||||
| Other | 56 | 49 | ||||||
| Total financing revenue | 3,578 | 3,739 | ||||||
| Depreciation on vehicles subject to operating leases | (1,077 | ) | (1,307 | ) | ||||
| Interest expense | (1,426 | ) | (1,329 | ) | ||||
| Net financing margin | 1,075 | 1,103 | ||||||
| Other revenue | ||||||||
| Investment and other income related to sales of receivables | 445 | 492 | ||||||
| Insurance premiums earned, net | 52 | 60 | ||||||
| Other income | 170 | 228 | ||||||
| Total financing margin and other revenue | 1,742 | 1,883 | ||||||
| Expenses | ||||||||
| Operating expenses | 528 | 517 | ||||||
| Provision for credit losses | 117 | 282 | ||||||
| Insurance expenses | 36 | 37 | ||||||
| Total expenses | 681 | 836 | ||||||
| Income from continuing operations before income taxes | 1,061 | 1,047 | ||||||
| Provision for income taxes | 387 | 383 | ||||||
| Income from continuing operations before minority interests | 674 | 664 | ||||||
| Minority interests in net income of subsidiaries | 1 | — | ||||||
| Income from continuing operations | 673 | 664 | ||||||
| Income from discontinued/held-for-sale operations | 37 | 24 | ||||||
| Net income | $ | 710 | $ | 688 | ||||
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
| March 31, | December 31, | |||||||
| 2005 | 2004 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 13,091 | $ | 12,668 | ||||
| Investments in securities | 663 | 653 | ||||||
| Finance receivables, net | 103,494 | 110,851 | ||||||
| Net investment in operating leases | 21,741 | 21,866 | ||||||
| Retained interest in securitized assets | 8,028 | 9,166 | ||||||
| Notes and accounts receivable from affiliated companies | 1,423 | 1,780 | ||||||
| Derivative financial instruments | 4,543 | 6,930 | ||||||
| Assets of discontinued/held-for-sale operations | 2,456 | 2,186 | ||||||
| Other assets | 6,114 | 6,521 | ||||||
| Total assets | $ | 161,553 | $ | 172,621 | ||||
| LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||
| Liabilities | ||||||||
| Accounts payable | ||||||||
| Customer deposits, dealer reserves and other | $ | 1,628 | $ | 1,645 | ||||
| Affiliated companies | 1,489 | 819 | ||||||
| Total accounts payable | 3,117 | 2,464 | ||||||
| Debt | 132,744 | 144,274 | ||||||
| Deferred income taxes, net | 7,926 | 7,593 | ||||||
| Derivative financial instruments | 863 | 911 | ||||||
| Liabilities of discontinued/held-for-sale operations | 112 | 93 | ||||||
| Other liabilities and deferred income | 5,173 | 5,802 | ||||||
| Total liabilities | 149,935 | 161,137 | ||||||
| Minority interests in net assets of subsidiaries | 14 | 13 | ||||||
| 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 | 736 | 855 | ||||||
| Retained earnings | 5,726 | 5,474 | ||||||
| Total stockholder’s equity | 11,604 | 11,471 | ||||||
| Total liabilities and stockholder’s equity | $ | 161,553 | $ | 172,621 | ||||
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
OPERATING HIGHLIGHTS*
| First Quarter | ||||||||
| Financing Shares | 2005 | 2004 | ||||||
| United States | ||||||||
| Financing share — Ford, Lincoln and Mercury | ||||||||
| Retail installment and lease | 43 | % | 38 | % | ||||
| Wholesale | 82 | 84 | ||||||
| Europe | ||||||||
| Financing share — Ford | ||||||||
| Retail installment and lease | 26 | % | 26 | % | ||||
| Wholesale | 97 | 96 | ||||||
Contract Volume— New and used retail/lease (in thousands) | ||||||||
| North America Segment | ||||||||
| United States | 410 | 398 | ||||||
| Canada | 31 | 36 | ||||||
| Total North America Segment | 441 | 434 | ||||||
| International Segment | ||||||||
| Europe | 186 | 202 | ||||||
| Other international | 74 | 74 | ||||||
| Total International Segment | 260 | 276 | ||||||
| Total financing volume | 701 | 710 | ||||||
Borrowing Cost Rate** | 4.1 | % | 3.7 | % | ||||
Charge-offs(in millions) | ||||||||
On-Balance sheet | ||||||||
| Retail installment & lease | $ | 167 | $ | 313 | ||||
| Wholesale | 17 | 3 | ||||||
| Other | (3 | ) | (1 | ) | ||||
| Total on-balance sheet charge-offs | $ | 181 | $ | 315 | ||||
| Total Loss-to-receivables Ratio | 0.56 | % | 0.97 | % | ||||
Managed*** | ||||||||
| Retail installment & lease | $ | 215 | $ | 427 | ||||
| Wholesale | 17 | 3 | ||||||
| Other | (3 | ) | (1 | ) | ||||
| Total managed charge-offs | $ | 229 | $ | 429 | ||||
| Total Loss-to-receivables Ratio | 0.55 | % | 0.98 | % | ||||
| * | Continuing operations | |
| ** | Includes the effect of interest rate swap agreements | |
| *** | 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:finance receivables (retail and wholesale) and investments in operating leases reported on Ford Motor Credit’s balance sheet include assets transferred in securitizations that do not qualify for accounting sale treatment. These assets have been legally transferred to Ford Motor Credit sponsored special purpose entities and are available only to pay the obligations of the special purpose entities 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 by these special purpose entities to securitization investors which is payable out of collections on the assets supporting the securitizations and is not the legal obligation of Ford Motor Credit or its other subsidiaries.
RECONCILIATION OF MEASURES:
| Managed Leverage Calculation | March 31, | December 31, | ||||||
| 2005 | 2004 | |||||||
| (in billions) | ||||||||
| Total debt | $ | 132.7 | $ | 144.3 | ||||
| Securitized off-balance sheet receivables outstanding* | 41.1 | 37.7 | ||||||
| Retained interest in securitized off-balance sheet receivables** | (8.3 | ) | (9.5 | ) | ||||
| Adjustments for cash and cash equivalents | (13.1 | ) | (12.7 | ) | ||||
| Adjustments for SFAS No. 133 | (2.2 | ) | (3.2 | ) | ||||
| Total adjusted debt | $ | 150.2 | $ | 156.6 | ||||
| Total stockholder’s equity (including minority interest) | $ | 11.6 | $ | 11.5 | ||||
| Adjustments for SFAS No. 133 | (0.1 | ) | (0.1 | ) | ||||
| Total adjusted equity | $ | 11.5 | $ | 11.4 | ||||
| Managed leverage (to 1) = adjusted debt / adjusted equity | 13.0 | 13.7 | ||||||
| Memo: Financial statement leverage (to 1) = total debt / stockholder’s equity | 11.4 | 12.6 | ||||||
| Net Finance Receivables and Operating Leases | Managed Receivables | |||||||||||
| On-Balance | Off-Balance | |||||||||||
| Sheet | Sheet | Total | ||||||||||
| (in billions) | ||||||||||||
March 31, 2005 | ||||||||||||
| Retail installment | $ | 73.1 | $ | 20.1 | $ | 93.2 | ||||||
| Wholesale | 25.1 | 19.2 | 44.3 | |||||||||
| Other finance receivables | 5.3 | 0.0 | 5.3 | |||||||||
| Net investment in operating leases | 21.7 | 0.0 | 21.7 | |||||||||
| Total net finance receivables and operating leases | $ | 125.2 | $ | 39.3 | $ | 164.5 | ||||||
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 | ||||||
| * | Includes securitized funding from discontinued operations | |
| ** | Includes retained interest in securitized receivables from discontinued operations |