FORD CREDIT EARNS $1.3 BILLION IN 2009
Fourth Quarter 2009 Earnings of $440 Million Reported
Download Full 4Q Financial Release (PDF)
DEARBORN, Mich., January 28, 2010 – 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.