FORD MOTOR COMPANY 
By DEARBORN, Mich., Jan. 27, 2012 /PRNewswire/ -- Ford Motor Credit Company reported net income of $1.8 billion in 2011, compared with $2 billion a year earlier. On a pre-tax basis, Ford Credit earned $2.4 billion in 2011, compared with $3.1 billion in the previous year. The decrease in pre-tax earnings is more than explained by fewer leases being terminated and the related vehicles sold at a gain, and lower credit loss reserve reductions.
In the fourth quarter of 2011, Ford Credit's net income was $611 million, an increase of $244 million from a year earlier. The increase is more than explained by a favorable, one-time, non-cash item recorded in the quarter related to Ford Credit's net deferred tax liability. On a pre-tax basis, Ford Credit earned $506 million in the fourth quarter of 2011, compared with $572 million in the previous year. The decrease in pre-tax earnings is more than explained by fewer leases being terminated and the related vehicles sold at a gain.
"Our results in 2011 were strong and, as planned, we provided substantial distributions to Ford," Ford Credit Chairman and CEO Mike Bannister said. "We remain committed to Ford's growth plans through support of the company, our dealers and customers."
On December 31, 2011, Ford Credit's net receivables totaled $83 billion, compared with $81 billion at year-end 2010. Managed receivables were $85 billion on December 31, 2011, up from $83 billion on December 31, 2010.
On December 31, 2011, managed leverage was 8.3 to 1, up from 6.7 to 1 at December 31, 2010. Ford Credit distributed $300 million to its parent in the fourth quarter for a total of $3 billion of distributions in 2011.
For full-year 2012, Ford Credit expects to be solidly profitable but at a lower level than 2011. In addition, Ford Credit expects to pay distributions of between $500 million and $1 billion to its parent in 2012. At year-end 2012, managed receivables are anticipated to be in the range of $85 billion to $95 billion.
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About Ford Motor Credit Company
Ford Motor Credit Company LLC 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 www.fordcredit.com.
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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, 2011.
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:
-- Decline in industry sales volume, particularly in the United States or
Europe, due to financial crisis, recession, geo-political events or
other factors;
-- Decline in Ford's market share or failure to achieve growth;
-- Lower-than-anticipated market acceptance of new or existing Ford
products;
-- An increase in or acceleration of market shift beyond Ford's current
planning assumptions from sales of trucks, medium- and large-sized
utilities, or other more profitable vehicles, particularly in the United
States;
-- An increase in fuel prices, continued volatility of fuel prices, or
reduced availability of fuel;
-- Continued or increased price competition resulting from industry
overcapacity, currency fluctuations or other factors;
-- Adverse effects from the bankruptcy, insolvency, or 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 substantial
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 constraints or disruptions;
-- Work stoppages at Ford or supplier facilities or other interruptions of
production;
-- Single-source supply of components or materials;
-- Restriction on use of tax attributes from tax law "ownership change";
-- The discovery of defects in Ford vehicles resulting in delays in new
model launches, recall campaigns, reputational damage 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, governmental investigations or
adverse publicity arising out of alleged defects in Ford products,
perceived environmental impacts, or otherwise;
-- A change in Ford's requirements for parts where it has entered into
long-term supply arrangements that commit it to purchase minimum or
fixed quantities of certain parts, or to pay a minimum amount to the
seller ("take-or-pay contracts");
-- Adverse effects on Ford's results from a decrease in or cessation or
clawback of government incentives related to capital investments;
-- 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;
Ford Credit Related:
-- 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, regulatory
requirements or other factors;
-- Higher-than-expected credit losses;
-- Increased competition from banks or other financial institutions seeking
to increase their share of 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 laws and
regulations resulting in higher costs and/or additional financing
restrictions;
-- Imposition of additional costs or restrictions due to the Dodd-Frank
Wall Street Reform and Consumer Protection Act and its implementing
rules and regulations;
-- 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 maintain
competitive cost structure;
-- Substantial pension and postretirement healthcare and life insurance
liabilities impairing Ford's or our liquidity or financial condition;
-- Worse-than-assumed economic and demographic experience for
postretirement benefit plans (e.g., discount rates or investment
returns); and
-- Inherent limitations of internal controls impacting financial statements
and safeguarding of assets.
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 2010 10-K Report and Item 1A of Part I of Ford's 2010 10-K Report.
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
PRELIMINARY
CONSOLIDATED STATEMENT OF OPERATIONS
For the Periods Ended December 31, 2011 and 2010
(in millions)
Fourth Quarter Full Year
-------------- ---------
2011 2010 2011 2010
---- ---- ---- ----
Financing revenue
Operating
leases $593 $719 $2,454 $3,312
Retail 496 557 2,059 2,335
Interest
supplements
and other
support
costs earned 671 712 2,800 3,226
from affiliated
companies
Wholesale 242 233 952 894
Other 16 12 56 59
--- --- --- ---
Total
financing
revenue 2,018 2,233 8,321 9,826
Depreciation
on vehicles
subject to
operating
leases (538) (425) (1,774) (1,945)
Interest
expense (831) (984) (3,507) (4,222)
---- ---- ------ ------
Net financing
margin 649 824 3,040 3,659
Other revenue
Insurance
premiums
earned, net 23 23 100 98
Other income,
net 96 13 302 223
--- --- --- ---
Total
financing
margin and
other
revenue 768 860 3,442 3,980
Expenses
Operating
expenses 270 298 1,076 1,149
Provision for
credit
losses (9) (14) (118) (269)
Insurance
expenses 1 4 80 46
--- --- --- ---
Total
expenses 262 288 1,038 926
--- --- ----- ---
Income/
(Loss)
before
income taxes 506 572 2,404 3,054
Provision
for/
(Benefit
from) income
taxes (105) 205 609 1,106
---- --- --- -----
Net income/
(loss) $611 $367 $1,795 $1,948
==== ==== ====== ======
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
PRELIMINARY
CONSOLIDATED BALANCE SHEET
(in millions)
December 31,
------------
2011 2010
---- ----
ASSETS
Cash and cash equivalents $8,713 $8,347
Marketable securities 3,835 6,759
Finance receivables, net 71,907 71,302
Net investment in operating leases 11,098 9,956
Notes and accounts receivable from
affiliated companies 1,152 1,095
Derivative financial instruments 1,365 1,246
Other assets 2,172 2,991
----- -----
Total assets $100,242 $101,696
======== ========
LIABILITIES
Accounts payable
Customer deposits, dealer reserves
and other $901 $1,272
Affiliated companies 773 884
--- ---
Total accounts payable 1,674 2,156
Debt 84,659 82,879
Deferred income taxes 1,134 1,494
Derivative financial instruments 286 534
Other liabilities and deferred
income 3,593 4,311
----- -----
Total liabilities 91,346 91,374
SHAREHOLDER'S INTEREST
Shareholder's interest 5,274 5,274
Accumulated other comprehensive
income 600 821
Retained earnings 3,022 4,227
----- -----
Total shareholder's interest 8,896 10,322
----- ------
Total liabilities and shareholder's
interest $100,242 $101,696
======== ========
The following table includes assets to be used to settle
the liabilities of the
consolidated variable interest entities ("VIEs"). These
assets and liabilities are
included in the consolidated balance sheet above.
December 31,
------------
2011 2010
---- ----
ASSETS
Cash and cash equivalents $3,356 $4,031
Finance receivables, net 49,329 50,001
Net investment in operating leases 6,354 6,121
Derivative financial instruments 157 26
LIABILITIES
Debt $41,421 $40,247
Derivative financial instruments 97 222
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 and a reconciliation of non-GAAP measures to GAAP:
--Managed receivables: net finance receivables and net investment in
operating leases reported on Ford Credit's balance sheet, excluding
unearned interest supplements related to finance receivables
--Equity: shareholder's interest reported on Ford Credit's balance
sheet
RECONCILIATION OF NON-GAAP
MEASURES TO GAAP:
--------------------------
Net Finance Receivables and
Operating Leases
December December
31, 31,
2011 2010
---- ----
(in billions)
Receivables (a)
---------------
Finance Receivables - North America
Segment
Consumer
--------
Retail installment and direct
financing leases $38.4 $39.1
Non-Consumer
------------
Wholesale 15.5 13.3
Dealer loan and other 2.1 1.9
--- ---
Total North America Segment -
finance receivables 56.0 54.3
Finance Receivables - International
Segment
Consumer
--------
Retail installment and direct
financing leases 9.1 10.6
Non-Consumer
------------
Wholesale 8.5 8.7
Dealer loan and other 0.4 0.4
--- ---
Total International Segment -
finance receivables 18.0 19.7
Unearned interest supplements (1.6) (1.9)
Allowance for credit losses (0.5) (0.8)
---- ----
Finance receivables, net 71.9 71.3
Net investment in operating leases 11.1 10.0
---- ----
Total receivables $83.0 $81.3
----- -----
Memo: Total managed receivables
(b) $84.6 $83.2
December December
Managed Leverage Calculation 31, 31,
2011 2010
---- ----
(in billions)
Total debt (c) $84.7 $82.9
Adjustments for cash, cash
equivalents, and marketable
securities (d) (12.1) (14.6)
Adjustments for derivative
accounting (e) (0.7) (0.3)
---- ----
Total adjusted debt $71.9 $68.0
===== =====
Equity $8.9 $10.3
Adjustments for derivative
accounting (e) (0.2) (0.1)
---- ----
Total adjusted equity $8.7 $10.2
==== =====
Managed leverage (to 1) = Total
adjusted debt /Total adjusted
equity 8.3 6.7
Memo: Financial statement leverage
(to 1) = Total debt /Equity 9.5 8.0
- - - - -
Includes finance receivables (retail and wholesale) and net
investment in operating leases reported on Ford Credit's balance
sheet 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
(a) creditors.
Includes receivables, excluding unearned interest supplements related
to finance receivables of $1.6 billion and $1.9 billion at December
(b) 31, 2011 and December 31, 2010, respectively.
Includes debt reported on Ford Credit's balance sheet including
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
(c) issued or arising in each of these securitization transactions.
(d) 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
(e) to retained earnings.
SOURCE Ford Motor Credit Company
