Ford Credit Earns $1.23 Billion In 2002
DEARBORN, Mich., January 21, 2003 – Ford Motor Credit Company reported earnings of $1.23 billion in 2002, up $395 million from earnings of $839 million a year earlier. After-tax financial statement return on average equity was 9 percent in 2002, compared with 7 percent in 2001. Excluding unusual charges and adjustments related to SFAS No. 133 (Accounting for Derivative Instruments and Hedging Activities), Ford Credit earned $1.38 billion, up $175 million from earnings of $1.2 billion in 2001. The increase in earnings primarily reflected a lower provision for credit losses, offset partially by the net unfavorable impact of receivable sales and lower net financing margins.
In the fourth quarter of 2002, Ford Credit earned $354 million, up $651 million from a loss of $297 million in the same period a year earlier. Excluding unusual charges and adjustments related to SFAS No. 133, Ford Credit earned $382 million in the fourth quarter of 2002, up $376 million from earnings of $6 million in the same period a year earlier. The improvement reflected a lower provision for credit losses and the net favorable impact of receivable sales, offset partially by lower net financing margins. Ford Credit paid a dividend to Ford Motor Company of $700 million in December. For the full year, Ford Credit's dividend, net of the January 2002 capital contribution, was $450 million.
"I'm proud of our solid performance in a difficult year," said Greg Smith, Chairman and CEO. "Ford Credit delivered improved profits, as well as strong customer satisfaction and owner loyalty. In addition, we reduced leverage, continued to diversify funding sources and paid a net dividend to Ford Motor Company," Smith added.
On December 31, 2002, Ford Credit's owned receivables totaled $129 billion, down $9 billion compared with
$138 billion on September 30, 2002, and down $18 billion compared with $147 billion on December 31, 2001. These reductions primarily reflected the higher sales of receivables in securitizations and whole-loan transactions. Managed receivables, which includes both owned receivables and receivables sold in securitizations, were $200 billion on December 31, 2002, compared with $204 billion on September 30, 2002, and $206 billion on December 31, 2001. During the fourth quarter of 2002, Ford Credit also sold $5 billion of receivables through whole-loan sales transactions.