EX-99.1 2 ex99_1.htm EXHIBIT 99.1 Exhibit 99.1
 
 

Contact:
Christine Solie
313-845-1746
csolie@ford.com

FOR IMMEDIATE RELEASE

FORD MOTOR CREDIT EARNS $441 MILLION IN THE SECOND QUARTER

DEARBORN, Mich., July 20, 2006 - Ford Motor Credit Company reported net income of $441 million in the second quarter of 2006, down $299 million from earnings of $740 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $656 million in the second quarter, compared with $1.2 billion in the previous year. The decrease in earnings primarily reflected higher borrowing costs, the impact of lower average receivable levels, lower credit loss reserve reductions and higher depreciation expense.

"Our sustained focus on strong business fundamentals has generated high-quality assets and solid results," said Mike Bannister, chairman and CEO.  "We continue to support Ford Motor Company with profits and dividends."

On June 30, Ford Motor Credit's on-balance sheet net receivables totaled $136 billion, compared with $132 billion on December 31, 2005. Managed receivables were $151 billion, compared with $150 billion on December 31.

Ford Motor Credit paid dividends of $400 million during the quarter. On June 30, managed leverage was 11.5 to 1.

Ford Motor Credit Company is one of the world's largest automotive finance companies and has supported the sale of Ford products since 1959. With about 14,000 employees, Ford Motor Credit operates in 36 countries and manages approximately $151 billion in receivables. Ford Motor Credit is an indirect, wholly owned subsidiary of Ford Motor Company. It provides automotive financing for Ford, Lincoln, Mercury, Aston Martin, 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/.

# # #


FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended June 30, 2006 and 2005
(in millions)

   
Second Quarter
  
First Half
  
   
2006
  
2005
  
2006
  
2005
  
   
(Unaudited)
  
(Unaudited)
  
Financing revenue
                  
Operating leases
  
$
1,370
  
$
1,339
  
$
2,700
  
$
2,697
  
Retail
    
925
    
1,012
    
1,832
    
2,082
  
Interest supplements and other support costs earned from affiliated companies
    
806
    
795
    
1,582
    
1,638
  
Wholesale
    
642
    
276
    
1,241
    
527
  
Other
    
56
    
55
    
110
    
111
  
Total financing revenue
    
3,799
    
3,477
    
7,465
    
7,055
  
Depreciation on vehicles subject to operating leases
    
(1,264
)
  
(1,095
)
  
(2,445
)
  
(2,172
)
Interest expense
    
(1,826
)
  
(1,386
)
  
(3,503
)
  
(2,812
)
Net financing margin
    
709
    
996
    
1,517
    
2,071
  
Other revenue
                          
Investment and other income related to sales of receivables
    
190
    
443
    
400
    
888
  
Insurance premiums earned, net
    
51
    
52
    
102
    
104
  
Other income
    
264
    
143
    
501
    
313
  
Total financing margin and other revenue
    
1,214
    
1,634
    
2,520
    
3,376
  
Expenses
                          
Operating expenses
    
490
    
522
    
1,009
    
1,050
  
Provision for credit losses
    
4
    
(111
)
  
(2
)
  
6
  
Insurance expenses
    
64
    
61
    
106
    
97
  
Total expenses
    
558
    
472
    
1,113
    
1,153
  
Income from continuing operations before income taxes
    
656
    
1,162
    
1,407
    
2,223
  
Provision for income taxes
    
215
    
426
    
487
    
813
  
Income from continuing operations before minority interests
    
441
    
736
    
920
    
1,410
  
Minority interests in net income of subsidiaries
    
—
    
—
    
—
    
1
  
Income from continuing operations
    
441
    
736
    
920
    
1,409
  
Income from discontinued operations
   
—
    
—
    
—
    
37
  
Gain on disposal of discontinued operations
   
—
    
4
    
—
    
4
  
Net income
  
$
441
  
$
740
  
$
920
  
$
1,450
  
 

FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
(in millions)

   
June 30,
  
December 31,
  
   
2006
  
2005
  
   
(Unaudited)
      
ASSETS
          
Cash and cash equivalents
 
$
13,010
  
$
14,798
  
Marketable securities
    
3,712
    
3,810
  
Finance receivables, net
   
110,847
    
109,876
  
Net investment in operating leases
   
25,345
    
22,213
  
Retained interest in securitized assets
    
1,150
    
1,420
  
Notes and accounts receivable from affiliated companies
    
830
    
1,235
  
Derivative financial instruments
   
1,564
    
2,547
  
Other assets
    
5,808
    
6,256
  
Total assets
  
$
162,266
  
$
162,155
  
               
LIABILITIES AND STOCKHOLDER'S EQUITY
              
Liabilities
              
Accounts payable
              
Customer deposits, dealer reserves and other
  
$
1,869
  
$
1,890
  
Affiliated companies
    
1,052
    
794
  
Total accounts payable
    
2,921
    
2,684
  
Debt
   
133,717
    
134,500
  
Deferred income taxes, net
   
8,826
    
8,772
  
Derivative financial instruments
   
882
    
680
  
Other liabilities and deferred income
   
4,560
    
4,781
  
Total liabilities
    
150,906
    
151,417
  
               
Minority interests in net assets of subsidiaries
    
3
    
3
  
               
Stockholder's equity
              
Capital stock, par value $100 a share, 250,000 shares authorized, issued and outstanding
    
25
    
25
  
Paid-in surplus (contributions by stockholder)
    
5,117
    
5,117
  
Accumulated other comprehensive income
    
737
    
385
  
Retained earnings
   
5,478
    
5,208
  
Total stockholder's equity
    
11,357
    
10,735
  
Total liabilities and stockholder's equity
  
$
162,266
  
$
162,155
  

Prior year amounts have been revised to reflect a reclassification between Cash and cash equivalents and Marketable securities as of December 31, 2005.


FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
OPERATING HIGHLIGHTS*
 
   
Second Quarter
  
First Half
  
Financing Shares
  
2006
  
2005
  
2006
  
2005
  
United States
                  
Financing share - Ford, Lincoln and Mercury
                  
Retail installment and lease
    
45
%
  
40
%
  
44
%
  
41
%
Wholesale
    
79
    
81
    
80
    
81
  
Europe
                          
Financing share - Ford
                          
Retail installment and lease
    
25
%
  
29
%
  
25
%
  
28
%
Wholesale
    
95
    
97
    
95
    
97
  
                           
Contract Volume - New and used retail/lease (in thousands)
                          
North America segment
                          
United States
    
443
    
424
    
841
    
834
  
Canada
    
56
    
51
    
91
    
82
  
Total North America segment
    
499
    
475
    
932
    
916
  
                           
International segment
                          
Europe
    
182
    
206
    
367
    
392
  
Other international
    
56
    
65
    
121
    
138
  
Total International segment
    
238
    
271
    
488
    
530
  
Total contract volume
    
737
    
746
    
1,420
    
1,446
  
                           
Borrowing Cost Rate**
    
5.5
%
  
4.4
%
  
5.2
%
  
4.2
%
                           
Charge-offs (in millions)
                          
On-Balance Sheet Receivables
                          
Retail installment & lease
  
$
64
  
$
140
  
$
175
  
$
307
  
Wholesale
    
19
    
(1
)
  
19
    
16
  
Other
    
0
    
(2
)
  
0
    
(5
)
Total charge-offs - on-balance sheet receivables
  
$
83
  
$
137
  
$
194
  
$
318
  
                           
Total loss-to-receivables ratio
    
0.25
%
  
0.44
%
  
0.29
%
  
0.50
%
                           
Managed Receivables***
                         
Retail installment & lease
  
$
83
  
$
172
  
$
219
  
$
387
  
Wholesale
    
19
    
(1
)
  
19
    
16
  
Other
    
0
    
(2
)
  
0
    
(5
)
Total charge-offs - managed receivables
  
$
102
  
$
169
  
$
238
  
$
398
  
                           
Total loss-to-receivables ratio
   
0.27
%
  
0.41
%
  
0.32
%
  
0.48
%
 
— — — — —
*
Continuing operations
**
On-balance sheet debt, includes the effect of interest rate swap agreements
***
See appendix for additional information
 

FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
APPENDIX
 
In evaluating Ford Motor Credit's financial performance, Ford Motor Credit management uses financial statements and other financial measures in accordance with Generally Accepted Accounting Principles (GAAP). Included below are brief definitions of key terms, information about the impact of on-balance sheet securitization and a reconciliation of other measures.

KEY TERMS:
 
·
Managed receivables: receivables reported on Ford Motor Credit's balance sheet and receivables Ford Motor Credit sold in off-balance sheet securitizations and 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

IMPACT OF ON-BALANCE SHEET SECURITIZATION: finance receivables (retail and wholesale) and investments in operating leases reported on Ford Motor Credit's balance sheet include assets transferred in securitizations that do not qualify for accounting sale treatment. These assets have been legally transferred to Ford Motor Credit sponsored special purpose entities and are available only to pay the obligations of the special purpose entities and are not available to pay the other obligations of Ford Motor Credit or the claims of Ford Motor Credit's other creditors. Debt reported on Ford Motor Credit's balance sheet includes debt issued by these special purpose entities to securitization investors which is payable out of collections on the assets supporting the securitizations and is not the legal obligation of Ford Motor Credit or its other subsidiaries.

RECONCILIATION OF MEASURES:
          
           
Managed Leverage Calculation 
  
June 30,
  
December 31,
  
   
2006
  
2005
  
   
(in billions)
  
Total debt
  
$
133.7
  
$
134.5
  
Securitized off-balance sheet receivables outstanding
    
14.6
    
18.0
  
Retained interest in securitized off-balance sheet receivables
    
(1.1
)
  
(1.4
)
Adjustments for cash and cash equivalents, and marketable securities *
    
(16.0
)
  
(17.9
)
Fair value hedge accounting adjustments
    
(0.7
)
  
(1.6
)
Total adjusted debt
  
$
130.5
  
$
131.6
  
               
Total stockholder's equity (including minority interest)
  
$
11.4
  
$
10.7
  
Fair value hedge accounting adjustments
    
(0.1
)
  
(0.0
)
Total adjusted equity
  
$
11.3
  
$
10.7
  
               
Managed leverage (to 1) = adjusted debt / adjusted equity
    
11.5
    
12.3
  
Memo: Financial statement leverage (to 1) = total debt / stockholder's equity
    
11.8
    
12.5
  

 
Net Finance Receivables and Operating Leases
  
Managed Receivables
  
   
On-Balance
  
Off-Balance
      
   
Sheet
  
Sheet
  
Total
  
June 30, 2006
  
(in billions)
  
Retail installment
 
$
66.5
  
$
14.6
  
$
81.1
  
Wholesale
    
39.9
    
—
    
39.9
  
Other finance receivables
    
4.5
    
—
    
4.5
  
Net investment in operating leases
    
25.3
    
—
    
25.3
  
Total net finance receivables and operating leases
  
$
136.2
  
$
14.6
  
$
150.8
  
                     
December 31, 2005
                    
Retail installment
 
$
65.7
  
$
18.0
  
$
83.7
  
Wholesale
    
39.6
    
—
    
39.6
  
Other finance receivables
    
4.6
    
—
    
4.6
  
Net investment in operating leases
    
22.2
    
—
    
22.2
  
Total net finance receivables and operating leases
  
$
132.1
  
$
18.0
  
$
150.1
  
 
— — — — —
*
Excluding marketable securities related to insurance activities