Exhibit 99.1
| Contact: | Brenda Hines 1-313-594-1099 | Fixed Income Investment Community: David Dickenson 1-313-621-0881 | |
| ddickens@ford.com |
FOR IMMEDIATE RELEASE
FORD MOTOR CREDIT REPORTS 2008 PRELIMINARY RESULTS*
Fourth Quarter 2008 $228 Million Net Loss Reported
DEARBORN, Mich., January 29, 2009 – Ford Motor Credit Company reported a net loss of $1.5 billion in 2008, a decrease of $2.3 billion from net income of $775 million a year earlier. On a pre-tax basis, Ford Motor Credit reported a loss of $2.6 billion in 2008, including the second quarter 2008 impairment charge of $2.1 billion for North America operating leases, compared with earnings of $1.2 billion in the previous year. The decrease in full year pre-tax earnings is more than explained by the impairment charge, a higher provision for credit losses, and higher depreciation expense for leased vehicles.
In the fourth quarter of 2008, Ford Motor Credit’s net loss was $228 million, down $414 million from a year earlier. On a pre-tax basis, Ford Motor Credit reported a loss of $372 million in the fourth quarter, compared with earnings of $263 million in the previous year. The decrease in fourth quarter pre-tax earnings primarily reflected a higher provision for credit losses, higher net losses related to market valuation adjustments to derivatives, lower volume, and lower financing margin. Lower operating costs were largely offset by other expenses.
“The drastic and rapid deterioration in the economy, credit markets and auto sales in 2008 brought unprecedented challenges to Ford Motor Credit. The historic decline in used-vehicle auction prices across the industry affected our North American lease portfolio and led to a second quarter impairment,” Chairman and CEO Mike Bannister said. “Tough external challenges are expected in 2009. However, we will continue to manage our business through consistent and sound risk management, lending and servicing practices.”
On December 31, 2008, Ford Motor Credit’s on-balance sheet net receivables totaled $116 billion, compared with $141 billion at year-end 2007. Managed receivables were $118 billion on December 31, 2008, down from $147 billion on December 31, 2007. The lower receivables primarily reflected lower North America receivables, changes in currency exchange rates, the impact of divestitures and alternative business arrangements, and the second quarter 2008 impairment charge for North America operating leases.
Ford Motor Credit also is restructuring its U.S. operations to meet changing business conditions, including lower auto sales and the planned reduction in Jaguar, Land Rover and Mazda receivables, and to maintain a competitive cost structure. The restructuring will affect servicing, sales and central operations and eliminate about 1,200 staff and agency positions, or about 20 percent. The reductions will occur in 2009 through attrition, retirements and involuntary separations.
Ford Motor Credit Company LLC is one of the world’s largest automotive finance companies and has supported the sale of Ford Motor Company products since 1959. Ford Motor Credit is an indirect, wholly owned subsidiary of Ford. It provides automotive financing for Ford, Lincoln, Mercury 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/.
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| * | The financial results discussed herein are presented on a preliminary basis; final data will be included in our Annual Report on Form 10-K for the year ended December 31, 2008. |
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FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
PRELIMINARY
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended December 31, 2008 and 2007
(in millions)
| Fourth Quarter | Full Year | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Financing revenue | ||||||||||||||||
| Operating leases | $ | 1,519 | $ | 1,680 | $ | 6,519 | $ | 6,343 | ||||||||
| Retail | 766 | 895 | 3,270 | 3,475 | ||||||||||||
| Interest supplements and other support costs earned from affiliated companies | 1,092 | 1,214 | 4,774 | 4,592 | ||||||||||||
| Wholesale | 381 | 525 | 1,721 | 2,132 | ||||||||||||
| Other | 30 | 41 | 133 | 174 | ||||||||||||
| Total financing revenue | 3,788 | 4,355 | 16,417 | 16,716 | ||||||||||||
| Depreciation on vehicles subject to operating leases | (1,542 | ) | (1,667 | ) | (9,019 | ) | (6,188 | ) | ||||||||
| Interest expense | (1,853 | ) | (2,166 | ) | (7,634 | ) | (8,630 | ) | ||||||||
| Net financing margin | 393 | 522 | (236 | ) | 1,898 | |||||||||||
| Other revenue | ||||||||||||||||
| Investment and other income related to sales of receivables | 13 | 83 | 199 | 391 | ||||||||||||
| Insurance premiums earned, net | 30 | 39 | 140 | 169 | ||||||||||||
| Other income, net | 112 | 398 | 758 | 1,362 | ||||||||||||
| Total financing margin and other revenue | 548 | 1,042 | 861 | 3,820 | ||||||||||||
| Expenses | ||||||||||||||||
| Operating expenses | 387 | 478 | 1,548 | 1,929 | ||||||||||||
| Provision for credit losses | 520 | 287 | 1,769 | 588 | ||||||||||||
| Insurance expenses | 13 | 14 | 103 | 88 | ||||||||||||
| Total expenses | 920 | 779 | 3,420 | 2,605 | ||||||||||||
| Income/(Loss) before income taxes | (372 | ) | 263 | (2,559 | ) | 1,215 | ||||||||||
| Provision for/(Benefit from) income taxes | (144 | ) | 83 | (1,014 | ) | 446 | ||||||||||
| Income/(Loss) before minority interests | (228 | ) | 180 | (1,545 | ) | 769 | ||||||||||
| Minority interests in net income of subsidiaries | — | 0 | 0 | 0 | ||||||||||||
| Income/(Loss) from continuing operations | (228 | ) | 180 | (1,545 | ) | 769 | ||||||||||
| Gain on disposal of discontinued operations | — | 6 | 9 | 6 | ||||||||||||
| Net income/(loss) | $ | (228 | ) | $ | 186 | $ | (1,536 | ) | $ | 775 | ||||||
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
PRELIMINARY
CONSOLIDATED BALANCE SHEET
(in millions)
| December 31, | ||||||||
| 2008 | 2007 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 15,473 | $ | 14,137 | ||||
| Marketable securities | 8,606 | 3,155 | ||||||
| Finance receivables, net | 93,331 | 111,468 | ||||||
| Net investment in operating leases | 22,506 | 29,663 | ||||||
| Retained interest in securitized assets | 92 | 653 | ||||||
| Notes and accounts receivable from affiliated companies | 1,047 | 906 | ||||||
| Derivative financial instruments | 3,791 | 2,811 | ||||||
| Assets of held-for-sale operations | 214 | — | ||||||
| Other assets | 5,067 | 6,230 | ||||||
| Total assets | $ | 150,127 | $ | 169,023 | ||||
| LIABILITIES AND SHAREHOLDER'S INTEREST | ||||||||
| Liabilities | ||||||||
| Accounts payable | ||||||||
| Customer deposits, dealer reserves and other | $ | 1,781 | $ | 1,837 | ||||
| Affiliated companies | 1,015 | 2,308 | ||||||
| Total accounts payable | 2,796 | 4,145 | ||||||
| Debt | 126,458 | 139,411 | ||||||
| Deferred income taxes | 2,668 | 5,380 | ||||||
| Derivative financial instruments | 2,145 | 1,376 | ||||||
| Liabilities of held-for-sale operations | 56 | — | ||||||
| Other liabilities and deferred income | 5,438 | 5,314 | ||||||
| Total liabilities | 139,561 | 155,626 | ||||||
| Minority interests in net assets of subsidiaries | 0 | 3 | ||||||
| Shareholder's interest | ||||||||
| Shareholder's interest | 5,149 | 5,149 | ||||||
| Accumulated other comprehensive income | 432 | 1,730 | ||||||
| Retained earnings | 4,985 | 6,515 | ||||||
| Total shareholder's interest | 10,566 | 13,394 | ||||||
| Total liabilities and shareholder's interest | $ | 150,127 | $ | 169,023 | ||||
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
OPERATING HIGHLIGHTS
| Fourth Quarter | Full Year | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Financing Shares | ||||||||||||||||
| United States | ||||||||||||||||
| Financing share – Ford, Lincoln and Mercury | ||||||||||||||||
| Retail installment and lease | 34 | % | 32 | % | 39 | % | 38 | % | ||||||||
| Wholesale | 78 | 78 | 77 | 78 | ||||||||||||
| Europe | ||||||||||||||||
| Financing share – Ford | ||||||||||||||||
| Retail installment and lease | 30 | % | 27 | % | 28 | % | 26 | % | ||||||||
| Wholesale | 98 | 96 | 98 | 96 | ||||||||||||
Contract Volume – New and used retail/lease (in thousands) | ||||||||||||||||
| North America segment | ||||||||||||||||
| United States | 179 | 248 | 1,043 | 1,256 | ||||||||||||
| Canada | 27 | 38 | 149 | 186 | ||||||||||||
| Total North America segment | 206 | 286 | 1,192 | 1,442 | ||||||||||||
| International segment | ||||||||||||||||
| Europe | 125 | 155 | 629 | 696 | ||||||||||||
| Other international | 24 | 48 | 129 | 207 | ||||||||||||
| Total International segment | 149 | 203 | 758 | 903 | ||||||||||||
| Total contract volume | 355 | 489 | 1,950 | 2,345 | ||||||||||||
Borrowing Cost Rate* | 5.8 | % | 6.2 | % | 5.6 | % | 6.1 | % | ||||||||
Charge-offs (in millions) | ||||||||||||||||
| On-Balance Sheet Receivables | ||||||||||||||||
| Retail installment and lease | $ | 332 | $ | 220 | $ | 1,089 | $ | 608 | ||||||||
| Wholesale | 19 | (8 | ) | 29 | 17 | |||||||||||
| Other | 13 | 4 | 17 | 7 | ||||||||||||
Total charge-offs – on-balance sheet receivables | $ | 364 | $ | 216 | $ | 1,135 | $ | 632 | ||||||||
| Total loss-to-receivables ratio | 1.18 | % | 0.61 | % | 0.84 | % | 0.46 | % | ||||||||
| Managed Receivables** | ||||||||||||||||
| Retail installment and lease | $ | 334 | $ | 237 | $ | 1,120 | $ | 673 | ||||||||
| Wholesale | 19 | (8 | ) | 29 | 17 | |||||||||||
| Other | 13 | 4 | 17 | 7 | ||||||||||||
Total charge-offs – managed receivables | $ | 366 | $ | 233 | $ | 1,166 | $ | 697 | ||||||||
| Total loss-to-receivables ratio | 1.18 | % | 0.62 | % | 0.84 | % | 0.47 | % | ||||||||
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| * | On-balance sheet debt includes the effects of derivatives and facility fees. |
| ** | See Appendix for additional information. |
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
APPENDIX
In evaluating Ford Motor Credit’s financial performance, Ford Motor Credit management uses financial measures based on Generally Accepted Accounting Principles (“GAAP”), as well as financial measures that include adjustments from GAAP. Included below are brief definitions of key terms, information about the impact of on-balance sheet securitization and a reconciliation of non-GAAP measures to GAAP:
| · | Managed receivables: receivables reported on Ford Motor Credit’s balance sheet, excluding unearned interest supplements related to finance receivables, 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 and charge-offs associated with receivables that Ford Motor Credit sold in off-balance sheet securitizations and continues to service |
| · | Equity: shareholder’s interest reported on Ford Motor Credit’s balance sheet |
IMPACT OF ON-BALANCE SHEET SECURITIZATION: Finance receivables (retail and wholesale) and net investment in operating leases reported on Ford Motor Credit’s balance sheet include assets included in securitizations that do not qualify for accounting sale treatment. These assets are available only for repayment of the debt or other obligations issued or arising in the securitization transactions; they are not available to pay the other obligations of Ford Motor Credit or the claims of Ford Motor Credit’s other creditors until the associated debt or other obligations are satisfied. Debt reported on Ford Motor Credit’s balance sheet includes obligations issued or arising in securitizations that are payable only out of collections on the underlying securitized assets and related enhancements.
| RECONCILIATION OF NON-GAAP MEASURES TO GAAP: | ||||||||
| Managed Leverage Calculation | December 31, | December 31, | ||||||
| 2008 | 2007 | |||||||
| (in billions) | ||||||||
| Total debt | $ | 126.5 | $ | 139.4 | ||||
| Securitized off-balance sheet receivables outstanding | 0.6 | 6.0 | ||||||
| Retained interest in securitized off-balance sheet receivables | (0.1 | ) | (0.7 | ) | ||||
| Adjustments for cash, cash equivalents and marketable securities* | (23.6 | ) | (16.7 | ) | ||||
| Adjustments for hedge accounting** | (0.4 | ) | 0.0 | |||||
| Total adjusted debt | $ | 103.0 | $ | 128.0 | ||||
| Total equity (including minority interest) | $ | 10.6 | $ | 13.4 | ||||
| Adjustments for hedge accounting** | (0.2 | ) | (0.3 | ) | ||||
| Total adjusted equity | $ | 10.4 | $ | 13.1 | ||||
| Managed leverage (to 1) = Total adjusted debt / Total adjusted equity | 9.9 | 9.8 | ||||||
| Memo: Financial statement leverage (to 1) = Total debt / Total equity | 12.0 | 10.4 | ||||||
| Net Finance Receivables and Operating Leases | December 31, | December 31, | ||||||
| 2008 | 2007 | |||||||
| On-Balance Sheet Receivables | (in billions) | |||||||
| Retail installment | $ | 65.5 | $ | 74.2 | ||||
| Wholesale | 27.7 | 34.8 | ||||||
| Other finance receivables | 2.8 | 3.4 | ||||||
| Unearned interest supplements | (1.3 | ) | — | |||||
| Allowance for credit losses | (1.4 | ) | (1.0 | ) | ||||
| Finance receivables, net | 93.3 | 111.4 | ||||||
| Net investment in operating leases | 22.5 | 29.7 | ||||||
| Total net finance receivables and operating leases | $ | 115.8 | $ | 141.1 | ||||
Off-Balance Sheet Receivables –Retail | $ | 0.6 | $ | 6.0 | ||||
| Managed Receivables | ||||||||
| Retail installment | $ | 66.1 | $ | 80.2 | ||||
| Wholesale | 27.7 | 34.8 | ||||||
| Other finance receivables | 2.8 | 3.4 | ||||||
| Unearned interest supplements | — | — | ||||||
| Allowance for credit losses | (1.4 | ) | (1.0 | ) | ||||
| Finance receivables, net | 95.2 | 117.4 | ||||||
| Net investment in operating leases | 22.5 | 29.7 | ||||||
| Total net finance receivables and operating leases | $ | 117.7 | $ | 147.1 | ||||
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| * | Excludes marketable securities related to insurance activities. |
| ** | Primarily related to market valuation adjustments to derivatives due to movements in interest rates. |