Fourth Quarter 2009 Earnings of $440 Million Reported DEARBORN,
Mich., Jan. 28 /PRNewswire/ -- Ford Motor Credit Company reported
net income of $1.3 billion in 2009, an improvement of $2.8 billion
from a net loss of $1.5 billion a year earlier. On a pre-tax basis,
Ford Credit earned $2 billion in 2009, compared with a loss of $2.6
billion in the previous year. Excluding the $2.1 billion impairment
charge for North America operating leases in the second quarter of
2008, Ford Credit incurred a pre-tax loss of $473 million in 2008.
The improvement in full year pre-tax earnings primarily reflected
the non-recurrence of the impairment charge, lower depreciation
expense for leased vehicles due to higher auction values, and a
lower provision for credit losses, offset partially by lower
volume. Ford Credit also significantly reduced its operating costs
in 2009 compared with the previous year. In the fourth quarter of
2009, Ford Credit's net income was $440 million, an improvement of
$668 million from a year earlier. On a pre-tax basis, Ford Credit
earned $696 million in the fourth quarter of 2009, compared with a
loss of $372 million in the previous year. The improvement in
pre-tax earnings primarily reflected lower depreciation expense for
leased vehicles due to higher auction values and a lower provision
for credit losses, offset partially by lower volume. "Our profit
and consistent, solid support of Ford Motor Company dealers and
customers in a very challenging economy demonstrate our unique
value as Ford's financial services company," Ford Credit Chairman
and CEO Mike Bannister said. "We remain well-positioned to help put
people behind the wheels of Ford products as the economy improves."
On December 31, 2009, Ford Credit's on-balance sheet net
receivables totaled $93 billion, compared with $116 billion at
year-end 2008. Managed receivables were $95 billion on December 31,
2009, down from $118 billion on December 31, 2008. The lower
receivables primarily reflected lower industry volumes, lower
dealer stocks, and the transition of Jaguar, Land Rover and Mazda
financing to other finance providers. On December 31, 2009, managed
leverage was 7.3 to 1. In 2009, Ford Credit distributed $1.5
billion to its immediate parent, Ford Holdings LLC. Ford Credit
expects to be profitable in 2010, but lower than 2009 based on
lower average receivables and non-recurrence of certain favorable
2009 factors. ### Ford Motor Credit Company LLC is one of the
world's largest automotive finance companies and has provided
dealer and customer financing to support the sale of Ford Motor
Company products since 1959. Ford Credit is an indirect, wholly
owned subsidiary of Ford. For more information, visit
http://www.fordcredit.com/. - - - - - * 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, 2009. Cautionary Statement Regarding Forward
Looking Statements Statements included or incorporated by reference
herein may constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on expectations, forecasts and
assumptions by our management and involve a number of risks,
uncertainties, and other factors that could cause actual results to
differ materially from those stated, including, without limitation:
Automotive Related: -- Further declines in industry sales volume,
particularly in the United States or Europe, due to financial
crisis, deepening recessions, geo-political events or otherwise; --
Decline in Ford's market share; -- Continued or increased price
competition for Ford vehicles resulting from industry overcapacity,
currency fluctuations or other factors; -- A further increase in or
acceleration of the market shift away from sales of trucks, sport
utility vehicles, or other more profitable vehicles, particularly
in the United States; -- Continued or increased high prices for, or
reduced availability of, fuel; -- Lower-than-anticipated market
acceptance of new or existing Ford products; -- Adverse effects
from the bankruptcy of, government-funded restructuring of, change
in ownership or control of, or alliances entered into by a major
competitor; -- Economic distress of suppliers may require Ford to
provide financial support or take other measures to ensure supplies
of components or materials and could increase Ford's costs, affect
Ford's liquidity, or cause production disruptions; -- Work
stoppages at Ford or supplier facilities or other interruptions of
supplies; -- Single-source supply of components or materials; --
The discovery of defects in Ford vehicles resulting in delays in
new model launches, recall campaigns or increased warranty costs;
-- Increased safety, emissions, fuel economy or other regulation
resulting in higher costs, cash expenditures and/or sales
restrictions; -- Unusual or significant litigation or governmental
investigations arising out of alleged defects in Ford products or
otherwise; -- A change in Ford's requirements for parts or
materials where it has entered into long-term supply arrangements
that commit it to purchase minimum or fixed quantities of certain
parts or materials, or to pay a minimum amount to the seller
("take-or-pay contracts"); -- Adverse effects on our results from a
decrease in or cessation of government incentives; -- Adverse
effects on Ford's operations resulting from certain geo-political
or other events; -- Substantial levels of indebtedness adversely
affecting Ford's financial condition or preventing Ford from
fulfilling its debt obligations (which may grow because Ford is
able to incur substantially more debt, including additional secured
debt); -- Inability of Ford to implement its One Ford plan; Ford
Credit Related: -- A prolonged disruption of the debt and
securitization markets; -- Inability to access debt, securitization
or derivative markets around the world at competitive rates or in
sufficient amounts due to credit rating downgrades, market
volatility, market disruption or otherwise; -- Inability to obtain
competitive funding; -- Higher-than-expected credit losses; --
Adverse effects from the government-supported restructuring of,
change in ownership or control of, or alliances entered into by a
major competitor; -- Increased competition from banks or other
financial institutions seeking to increase their share of retail
installment financing Ford vehicles; -- Collection and servicing
problems related to our finance receivables and net investment in
operating leases; -- Lower-than-anticipated residual values or
higher-than-expected return volumes for leased vehicles; -- New or
increased credit, consumer or data protection or other regulations
resulting in higher costs and/or additional financing restrictions;
-- Changes in Ford's operations or changes in Ford's marketing
programs could result in a decline in our financing volumes;
General: -- Fluctuations in foreign currency exchange rates and
interest rates; -- Failure of financial institutions to fulfill
commitments under committed credit and liquidity facilities; --
Labor or other constraints on Ford's or our ability to restructure
its or our business; -- Substantial pension and postretirement
healthcare and life insurance liabilities impairing Ford's or our
liquidity or financial condition; and -- Worse-than-assumed
economic and demographic experience for postretirement benefit
plans (e.g., discount rates, investment returns, and health care
cost trends). We cannot be certain that any expectations, forecasts
or assumptions made by management in preparing these
forward-looking statements will prove accurate, or that any
projections will be realized. It is to be expected that there may
be differences between projected and actual results. Our
forward-looking statements speak only as of the date of their
initial issuance, and we do not undertake any obligation to update
or revise publicly any forward-looking statements, whether as a
result of new information, future events, or otherwise. For
additional discussion of these risk factors, see Item 1A of Part I
of our 2008 10-K Report and Item 1A of Part I of Ford's 2008 10-K
Report, as updated by Ford's and Ford Credit's subsequent Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. FORD MOTOR
CREDIT COMPANY LLC AND SUBSIDIARIES PRELIMINARY CONSOLIDATED
STATEMENT OF OPERATIONS For the Periods Ended December 31, 2009 and
2008 (in millions) Fourth Quarter Full Year ------------------
------------------ 2009 2008 2009 2008 ------ ------ ------ ------
Financing revenue Operating leases $ 1,025 $ 1,519 $ 4,879 $ 6,519
Retail 674 766 2,940 3,270 Interest supplements and other support
costs earned from affiliated companies 912 1,092 3,725 4,774
Wholesale 212 381 921 1,721 Other 16 30 76 133 ------ ------ ------
------ Total financing revenue 2,839 3,788 12,541 16,417
Depreciation on vehicles subject to operating leases (657) (1,542)
(3,857) (9,019) Interest expense (1,193) (1,853) (5,162) (7,634)
------ ------ ------ ------ Net financing margin 989 393 3,522
(236) Other revenue Insurance premiums earned, net 24 30 100 140
Other income, net 70 125 644 957 ------ ------ ------ ------ Total
financing margin and other revenue 1,083 548 4,266 861 Expenses
Operating expenses 306 387 1,262 1,548 Provision for credit losses
73 520 966 1,769 Insurance expenses 8 13 55 103 ------ ------
------ ------ Total expenses 387 920 2,283 3,420 ------ ------
------ ------ Income/(Loss) before income taxes 696 (372) 1,983
(2,559) Provision for/(Benefit from) income taxes 256 (144) 718
(1,014) ------ ------ ------ ------ Income/(Loss) from continuing
operations 440 (228) 1,265 (1,545) Gain on disposal of discontinued
operations - - 2 9 ------ ------ ------ ------ Net income/(loss) $
440 $ (228) $ 1,267 $(1,536) ====== ====== ====== ====== FORD MOTOR
CREDIT COMPANY LLC AND SUBSIDIARIES PRELIMINARY CONSOLIDATED
BALANCE SHEET (in millions) December 31, -----------------------
2009 2008 -------- -------- ASSETS Cash and cash equivalents $
10,882 $ 15,473 Marketable securities 6,864 8,606 Finance
receivables, net 77,968 93,331 Net investment in operating leases
14,578 22,506 Notes and accounts receivable from affiliated
companies 1,090 1,047 Derivative financial instruments 1,862 3,791
Assets held-for-sale - 214 Other assets 4,100 5,159 --------
-------- Total assets $117,344 $150,127 ======== ========
LIABILITIES AND SHAREHOLDER'S INTEREST Liabilities Accounts payable
Customer deposits, dealer reserves and other $ 1,082 $ 1,781
Affiliated companies 1,145 1,015 -------- -------- Total accounts
payable 2,227 2,796 Debt 96,351 126,458 Deferred income taxes 1,810
2,668 Derivative financial instruments 1,179 2,145 Liabilities
held-for-sale - 56 Other liabilities and deferred income 4,808
5,438 -------- -------- Total liabilities 106,375 139,561
Shareholder's interest Shareholder's interest 5,149 5,149
Accumulated other comprehensive income 1,053 432 Retained earnings
4,767 4,985 -------- -------- Total shareholder's interest 10,969
10,566 -------- -------- Total liabilities and shareholder's
interest $117,344 $150,127 ======== ======== FORD MOTOR CREDIT
COMPANY LLC AND SUBSIDIARIES OPERATING HIGHLIGHTS Fourth Quarter
Full Year --------------------- ---------------------- 2009 2008
2009 2008 ------ ------ ------ ------ Financing Shares United
States Financing share - Ford, Lincoln and Mercury Retail
installment and lease 28% 34% 29% 39% Wholesale 80 78 79 77 Europe
Financing share - Ford Retail installment and lease 31% 30% 28% 28%
Wholesale 99 98 99 98 Contract Volume - New and used retail/lease
(in thousands) North America Segment United States 142 179 591
1,043 Canada 17 27 85 149 ------ ------ ------ ------ Total North
America Segment 159 206 676 1,192 International Segment Europe 110
125 468 629 Other international 12 24 49 129 ------ ------ ------
------ Total International Segment 122 149 517 758 ------ ------
------ ------ Total contract volume 281 355 1,193 1,950 ======
====== ====== ====== Borrowing Cost Rate* 4.8% 5.8% 4.9% 5.6%
Charge-offs - On-Balance Sheet (in millions) Retail installment and
lease $ 215 $ 332 $ 989 $1,089 Wholesale 21 19 94 29 Other 2 13 12
17 ------ ------ ------ ------ Total charge- offs - on- balance
sheet $ 238 $ 364 $1,095 $1,135 ====== ====== ====== ====== Total
loss-to- receivables ratio - on- balance sheet 0.98% 1.18% 1.07%
0.84% Memo : Total charge- offs - managed (in millions)** $ 238 $
366 $1,100 $1,166 Total loss-to- receivables ratio - managed**
0.98% 1.18% 1.07% 0.84% - - - - - * 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 Credit's financial
performance, Ford 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 Credit's balance sheet, excluding unearned
interest supplements related to finance receivables, and
securitized off-balance sheet receivables that Ford Credit
continues to service -- Charge-offs on managed receivables:
charge-offs associated with receivables reported on Ford Credit's
balance sheet and charge-offs associated with receivables that Ford
Credit sold in off-balance sheet securitizations and continues to
service -- Equity: shareholder's interest reported on Ford Credit's
balance sheet IMPACT OF ON-BALANCE SHEET SECURITIZATION:
----------------------------------------- Finance receivables
(retail and wholesale) and net investment in operating leases
reported on Ford Credit's balance sheet include assets that have
been sold for legal purposes in securitization transactions that do
not satisfy the requirements for accounting sale treatment. These
receivables are available only for payment of the debt and other
obligations issued or arising in the securitization transactions;
they are not available to pay the other obligations of Ford Credit
or the claims of Ford Credit's other creditors. Debt reported on
Ford Credit's balance sheet includes obligations issued or arising
in securitization transactions that are payable only out of
collections on the underlying securitized assets and related
enhancements. Ford Credit holds the right to the excess cash flows
not needed to pay the debt and other obligations issued or arising
in each of these securitization transactions. RECONCILIATION OF
NON-GAAP MEASURES TO GAAP:
------------------------------------------- Managed Leverage
Calculation December 31, December 31, 2009 2008 ------------
------------ (in billions) Total debt $ 96.4 $126.5 Securitized
off-balance sheet receivables outstanding 0.1 0.6 Retained interest
in securitized off- balance sheet receivables - (0.1) Adjustments
for cash, cash equivalents, and marketable securities* (17.3)
(23.6) Adjustments for derivative accounting** (0.3) (0.4)
--------- -------- Total adjusted debt $ 78.9 $103.0 =========
======== Equity $ 11.0 $ 10.6 Adjustments for derivative
accounting** (0.2) (0.2) --------- -------- Total adjusted equity $
10.8 $ 10.4 ========= ======== Managed leverage (to 1) = Total
adjusted debt / Total adjusted equity 7.3 9.9 Memo: Financial
statement leverage (to 1) = Total debt / Equity 8.8 12.0 Net
Finance Receivables and Operating Leases December 31, December 31,
2009 2008 ------------ ------------ Receivables - On-Balance Sheet
(in billions) ------------------------------ Retail installment $
56.3 $ 65.5 Wholesale 22.4 27.7 Other finance receivables 2.4 2.8
Unearned interest supplements (1.9) (1.3) Allowance for credit
losses (1.3) (1.4) -------- -------- Finance receivables, net 77.9
93.3 Net investment in operating leases 14.6 22.5 -------- --------
Total receivables - on-balance Sheet $ 92.5 $115.8 ========
======== Memo: Total receivables - managed*** $ 94.5 $117.7 - - - -
- * Excludes marketable securities related to insurance activities.
** Primarily related to market valuation adjustments to derivatives
due to movements in interest rates. Adjustments to debt are related
to designated fair value hedges and adjustments to equity are
related to retained earnings. *** Includes on-balance sheet
receivables, excluding unearned interest supplements related to
finance receivables of $1.9 billion and $1.3 billion at December
31, 2009 and December 31, 2008, respectively; and includes
off-balance sheet retail receivables of about $100 million and
about $600 million at December 31, 2009 and December 31, 2008,
respectively. DATASOURCE: Ford Motor Credit Company CONTACT: Media:
Margaret Mellott, +1-313-322-5393, ; or Fixed Income Investment
Community: David Dickenson, +1-313-621-0881, Web Site:
http://www.fordcredit.com/
Copyright