FORD MOTOR COMPANY 
By DEARBORN, Mich., Jan. 29, 2013 /PRNewswire/ -- Ford Motor Credit Company reported a pre-tax profit of $1.7 billion in 2012, compared with $2.4 billion a year earlier. The decrease in pre-tax earnings is more than explained by fewer lease terminations, which resulted in fewer vehicles sold at a gain, and lower financing margin as higher yielding assets originated in prior years run off. Ford Credit's net income was $1.2 billion in 2012, compared with $1.8 billion in the previous year.
In the fourth quarter of 2012, Ford Credit's pre-tax profit was $414 million, a decrease of $92 million from a year earlier. The decrease in pre-tax earnings is primarily explained by lower credit loss reserve reductions and lower financing margin. Ford Credit reported fourth quarter net income of $268 million, a decrease of $343 million from a year earlier. The decrease is primarily explained by the non-recurrence of a one-time, non-cash item related to Ford Credit's net deferred tax liability.
"Our 2012 results were solid, and we expect another strong performance in 2013," Ford Credit Chairman and CEO Bernard Silverstone said. "We will remain focused on providing unparalleled support and service for Ford, our dealers and our customers."
On December 31, 2012, Ford Credit's net receivables totaled $90 billion, compared with $83 billion at year-end 2011. Managed receivables were $91 billion on December 31, 2012, up from $85 billion on December 31, 2011.
On December 31, 2012, managed leverage was 8.3:1, unchanged from December 31, 2011. Ford Credit distributed $600 million to its parent in 2012.
For 2013, Ford Credit projects a full year pre-tax profit about equal to 2012; managed receivables at year end in the range of $95 billion to $105 billion; managed leverage to continue in the range of 8:1 to 9:1; and planned distributions of about $200 million.
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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 or www.lincolnafs.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, 2012.
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, geopolitical 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;
-- Market shift away from sales of larger, more profitable vehicles beyond
Ford's current planning assumption, 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 excess
capacity, currency fluctuations or other factors;
-- Economic distress of suppliers that 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 limitations on
production (whether as a result of labor disputes, natural or man-made
disasters, tight credit markets or other financial distress, information
technology issues, production constraints or difficulties, or other
factors);
-- 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;
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;
-- Increased competition from banks or other financial institutions seeking
to increase their share of financing Ford vehicles;
-- Higher-than-expected credit losses, lower-than-anticipated residual
values or higher-than-expected return volumes for leased vehicles;
-- Cybersecurity risks to operational systems, security systems, or
infrastructure owned by us or a third-party vendor, or at a supplier
facility;
-- New or increased credit, consumer or data protection or other laws and
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;
-- Adverse effects on Ford's or our operations resulting from economic,
geopolitical, or other events;
-- 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 2011 10-K Report and Item 1A of Part I of Ford's 2011 10-K Report.
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
PRELIMINARY
CONSOLIDATED INCOME STATEMENT
For the Periods Ended December 31, 2012 and 2011
(in millions)
Fourth Quarter Full Year
-------------- ---------
2012 2011 2012 2011
---- ---- ---- ----
(unaudited) (unaudited)
Financing revenue
Operating leases $707 $593 $2,616 $2,454
Retail 463 496 1,889 2,059
Interest supplements and other support costs earned
from affiliated companies 601 671 2,401 2,800
Wholesale 224 242 920 952
Other 13 16 56 56
Total financing revenue 2,008 2,018 7,882 8,321
Depreciation on vehicles subject to operating leases (660) (538) (2,468) (1,774)
Interest expense (709) (831) (3,027) (3,507)
---- ---- ------ ------
Net financing margin 639 649 2,387 3,040
Other revenue
Insurance premiums earned 30 23 105 100
Other income, net 79 96 286 302
Total financing margin and other revenue 748 768 2,778 3,442
Expenses
Operating expenses 273 270 1,004 1,076
Provision for credit losses 40 (9) 7 (118)
Insurance expenses 21 1 70 80
Total expenses 334 262 1,081 1,038
--- --- ----- -----
Income before income taxes 414 506 1,697 2,404
Provision for income taxes 146 (105) 483 609
--- ---- --- ---
Net income $268 $611 $1,214 $1,795
===
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Periods Ended December 31, 2012 and 2011
(in millions)
Fourth Quarter Full Year
-------------- ---------
2012 2011 2012 2011
---- ---- ---- ----
(unaudited) (unaudited)
Net income $268 $611 $1,214 $1,795
Other comprehensive income/(loss), net of tax:
Foreign currency translation 2 (139) 143 (221)
Total other comprehensive income/(loss), net of tax 2 (139) 143 (221)
--- ---- --- ----
Comprehensive income $270 $472 $1,357 $1,574
==== ==== ====== ======
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
PRELIMINARY
CONSOLIDATED BALANCE SHEET
(in millions)
December 31, December 31,
2012 2011
---- ----
(unaudited)
ASSETS
Cash and cash equivalents $9,189 $8,713
Marketable securities 2,106 3,835
Finance receivables, net 75,063 71,907
Net investment in operating leases 14,701 11,098
Notes and accounts receivable from affiliated companies 1,173 1,152
Derivative financial instruments 1,256 1,365
Other assets 2,256 2,172
Total assets $105,744 $100,242
======== ========
LIABILITIES
Accounts payable
Customer deposits, dealer reserves, and other $1,072 $901
Affiliated companies 234 773
Total accounts payable 1,306 1,674
Debt 89,258 84,659
Deferred income taxes 1,669 1,134
Derivative financial instruments 400 286
Other liabilities and deferred income 3,458 3,593
Total liabilities 96,091 91,346
SHAREHOLDER'S INTEREST
Shareholder's interest 5,274 5,274
Accumulated other comprehensive income 743 600
Retained earnings 3,636 3,022
Total shareholder's interest 9,653 8,896
----- -----
Total liabilities and shareholder's interest $105,744 $100,242
======== ========
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, December 31,
2012 2011
---- ----
(unaudited)
ASSETS
Cash and cash equivalents $2,877 $3,356
Finance receivables, net 47,190 49,329
Net investment in operating leases 6,308 6,354
Derivative financial instruments 4 157
LIABILITIES
Debt $40,245 $41,421
Derivative financial instruments 134 97
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.
RECONCILIATION OF NON-GAAP MEASURES TO GAAP:
--------------------------------------------
Net Finance Receivables and Operating Leases December 31, December 31,
2012 2011
---- ----
Receivables (a) (in billions)
--------------
Finance Receivables - North America Segment
Consumer
--------
Retail installment and direct financing leases $39.5 $38.4
Non-Consumer
------------
Wholesale 18.1 15.5
Dealer loan 1.4 1.1
Other 1.1 1.0
--- ---
Total North America Segment - finance receivables 60.1 56.0
Finance Receivables - International Segment
Consumer
--------
Retail installment and direct financing leases 9.0 9.1
Non-Consumer
------------
Wholesale 7.4 8.5
Dealer loan 0.1 -
Other 0.4 0.4
--- ---
Total International Segment - finance receivables 16.9 18.0
Unearned interest supplements (1.5) (1.6)
Allowance for credit losses (0.4) (0.5)
Finance receivables, net 75.1 71.9
Net investment in operating leases 14.7 11.1
Total receivables $89.8 $83.0
===== =====
Memo: Total managed receivables (b) $91.3 $84.6
Managed Leverage Calculation December 31, December 31,
2012 2011
---- ----
(in billions)
Total debt (c) $89.3 $84.7
Adjustments for cash, cash equivalents, and marketable securities (d) (10.9) (12.1)
Adjustments for derivative accounting (e) (0.8) (0.7)
---- ----
Total adjusted debt $77.6 $71.9
Equity (f) $9.7 $8.9
Adjustments for derivative accounting (e) (0.3) (0.2)
---- ----
Total adjusted equity $9.4 $8.7
Managed leverage (to 1) = Total adjusted debt / Total adjusted equity 8.3 8.3
Memo: Financial statement leverage (to 1) = Total debt / Equity 9.2 9.5
- - - - -
(a) 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 creditors.
(b) Equals total receivables, excluding unearned interest supplements of $(1.5) billion at December 31, 2012 and $(1.6)
billion December 31, 2011.
(c) 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 issued or arising in each of these securitization transactions.
(d) Excludes marketable securities related to insurance activities.
(e) 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.
(f) Shareholder's interest reported on Ford Credit's balance sheet.
SOURCE Ford Motor Credit Company
