Ford Motor Credit Earns $95 Million In The Third Quarter Of 2008*
DEARBORN, Mich. – Ford Motor Credit Company reported net income of $95 million in the third quarter of 2008, down $239 million from earnings of $334 million a year earlier. On a pre-tax basis, Ford Motor Credit earned $161 million, compared with $546 million in the previous year.
The decrease in pre-tax earnings primarily reflected the non-recurrence of net gains related to market valuation adjustments to derivatives, a higher provision for credit losses, and lower volume. These were offset partially by higher financing margin.
In the third quarter of 2008, pre-tax earnings would have been $185 million excluding net losses of $24 million related to market valuation adjustments to derivatives. In the third quarter of 2007, pre-tax earnings would have been $341 million excluding net gains of $205 million related to market valuation adjustments to derivatives.
“We were able to earn a pre-tax operating profit in the third quarter despite increased pressure from the market,” said Mike Bannister, Ford Motor Credit chairman and CEO. “We expect the marketplace to remain extraordinarily challenging. To weather these conditions, we will continue to focus on our dealers and customers through the factors we control – our strong credit practices, solid risk management, and exceptional account servicing.”
On September 30, 2008, Ford Motor Credit’s on-balance sheet net receivables totaled $127 billion, compared with $141 billion at year-end 2007. Managed receivables were $130 billion on September 30, 2008, down from $147 billion on December 31, 2007. The lower receivables were more than explained by lower North America receivables, the impact of divestitures and alternative business arrangements, changes in currency exchange rates, and the second quarter 2008 impairment charge for North America operating leases.
On September 30, 2008, managed leverage was 9.6 to 1.
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, Jaguar, Land Rover, Mazda 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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