Ford Motor Credit Reports First Quarter 2009 Preliminary Results*
The decrease in pre-tax earnings primarily reflected lower volume and a higher provision for credit losses, offset partially by lower depreciation expense for leased vehicles and lower net losses related to market valuation adjustments to derivatives. Lower operating costs were offset partially by other expenses, including restructuring costs.
“Like the rest of the industry, Ford Motor Credit continues to be affected by credit market constraints, reduced vehicle sales, low consumer confidence, and job contraction in difficult economic conditions,” said
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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 Quarterly
Report on Form 10-Q for the quarter ended March 31, 2009.
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
PRELIMINARY
CONSOLIDATED STATEMENT OF OPERATIONS
For the Periods Ended March 31, 2009 and 2008
(in millions)
First Quarter
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2009 2008
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(Unaudited)
Financing revenue
Operating leases $ 1,398 $ 1,707
Retail 756 859
Interest supplements and other support costs
earned from affiliated companies 970 1,246
Wholesale 291 477
Other 20 35
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Total financing revenue 3,435 4,324
Depreciation on vehicles subject to
operating leases (1,415) (1,814)
Interest expense (1,420) (1,992)
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Net financing margin 600 518
Other revenue
Insurance premiums earned, net 29 40
Other income, net 64 187
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Total financing margin and other revenue 693 745
Expenses
Operating expenses 328 367
Provision for credit losses 385 327
Insurance expenses 16 19
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Total expenses 729 713
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Income/(Loss) before income taxes (36) 32
Provision for/(Benefit from) income taxes (23) 9
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Income/(Loss) from continuing operations (13) 23
Gain on disposal of discontinued operations - 1
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Net income/(loss) $ (13) $ 24
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FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
PRELIMINARY
CONSOLIDATED BALANCE SHEET
(in millions)
March 31, December 31,
2009 2008
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(Unaudited)
ASSETS
Cash and cash equivalents $ 12,638 $ 15,473
Marketable securities 7,236 8,606
Finance receivables, net 84,014 93,331
Net investment in operating leases 20,166 22,506
Notes and accounts receivable from
affiliated companies 810 1,047
Derivative financial instruments 2,799 3,791
Assets of held-for-sale operations - 214
Other assets 4,644 5,159
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Total assets $ 132,307 $ 150,127
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LIABILITIES AND SHAREHOLDER'S INTEREST
Liabilities
Accounts payable
Customer deposits, dealer reserves
and other $ 1,129 $ 1,781
Affiliated companies 1,293 1,015
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Total accounts payable 2,422 2,796
Debt 111,422 126,458
Deferred income taxes 2,361 2,668
Derivative financial instruments 1,973 2,145
Liabilities of held-for-sale operations - 56
Other liabilities and deferred income 4,859 5,438
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Total liabilities 123,037 139,561
Shareholder's interest
Shareholder's interest 5,149 5,149
Accumulated other comprehensive income 203 432
Retained earnings 3,918 4,985
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Total shareholder's interest 9,270 10,566
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Total liabilities and shareholder's
interest $ 132,307 $ 150,127
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FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
OPERATING HIGHLIGHTS
First Quarter
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2009 2008
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Financing Shares
United States
Financing share - Ford, Lincoln and Mercury
Retail installment and lease 31% 37%
Wholesale 78 77
Europe
Financing share - Ford
Retail installment and lease 26% 25%
Wholesale 99 96
Contract Volume - New and used retail/lease
(in thousands)
North America segment
United States 135 275
Canada 20 31
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Total North America segment 155 306
International segment
Europe 122 178
Other international 17 49
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Total International segment 139 227
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Total contract volume 294 533
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Borrowing Cost Rate* 5.0% 5.6%
Charge-offs - On-Balance Sheet (in millions)
Retail installment and lease $ 309 $ 226
Wholesale 19 1
Other 4 2
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Total charge-offs - on-balance sheet $ 332 $ 229
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Total loss-to-receivables ratio -
on-balance sheet 1.21% 0.64%
Memo:
Total charge-offs - managed (in millions)** $ 335 $ 243
Total loss-to-receivables ratio - managed** 1.22% 0.66%
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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 securitized off-balance sheet receivables that Ford Motor Credit 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 underlying securitized assets are available only for payment 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
March 31, December 31,
2009 2008
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(in billions)
Total debt $ 111.4 $ 126.5
Securitized off-balance sheet receivables
outstanding 0.5 0.6
Retained interest in securitized
off-balance sheet receivables (0.1) (0.1)
Adjustments for cash, cash equivalents, and
marketable securities* (19.4) (23.6)
Adjustments for derivative
accounting** (0.3) (0.4)
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Total adjusted debt $ 92.1 $ 103.0
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Equity $ 9.3 $ 10.6
Adjustments for derivative
accounting** (0.1) (0.2)
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Total adjusted equity $ 9.2 $ 10.4
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Managed leverage (to 1) = Total adjusted
debt / Total adjusted equity 10.0 9.9
Memo: Financial statement leverage (to 1)
= Total debt / Equity 12.0 12.0
Net Finance Receivables and Operating Leases
March 31, December 31,
2009 2008
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(in billions)
Receivables - On-Balance Sheet
Retail installment $ 61.3 $ 65.5
Wholesale 22.8 27.7
Other finance receivables 2.7 2.8
Unearned interest supplements (1.3) (1.3)
Allowance for credit losses (1.5) (1.4)
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Finance receivables, net 84.0 93.3
Net investment in operating leases 20.2 22.5
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Total receivables - on-balance sheet $ 104.2 $ 115.8
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Memo: Total receivables - managed*** $ 106.0 $ 117.7
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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. 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 $1.3 billion at March
31, 2009 and December 31, 2008; and includes off-balance sheet retail
receivables of about $500 million and about $600 million at March 31,
2009 and December 31, 2008, respectively.
SOURCE Ford Motor Credit Company