Ford Credit Earns Full Year 2012 Pre-Tax Profit of $1.7 Billion, Net Income of $1.2 Billion* PR Newswire DEARBORN, Mich., Jan. 29, 2013 DEARBORN, Mich., Jan. 29, 2013 /PRNewswire/ --Ford Motor Credit Company reported a pre-tax profit of $1.7billion 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 $1.2billion 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 $90billion, compared with $83billion at year-end 2011. Managed receivables were $91billion on December 31, 2012, up from $85billion on December31,2011. On December 31,2012, managed leverage was 8.3:1, unchanged from December31,2011. 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 8:1to 9:1; and planned distributions of about $200 million. # # # 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. — — — — — * 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: oDecline in industry sales volume, particularly in the United States or Europe, due to financial crisis, recession, geopolitical events or other factors; oDecline in Ford's market share or failure to achieve growth; oLower-than-anticipated market acceptance of new or existing Ford products; oMarket shift away from sales of larger, more profitable vehicles beyond Ford's current planning assumption, particularly in the United States; oAn increase in fuel prices, continued volatility of fuel prices, or reduced availability of fuel; oContinued or increased price competition resulting from industry excess capacity, currency fluctuations or other factors; oEconomic 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; oWork 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); oSingle-source supply of components or materials; oRestriction on use of tax attributes from tax law "ownership change"; oThe discovery of defects in Ford vehicles resulting in delays in new model launches, recall campaigns, reputational damage or increased warranty costs; oIncreased safety, emissions, fuel economy or other regulation resulting in higher costs, cash expenditures and/or sales restrictions; oUnusual or significant litigation, governmental investigations or adverse publicity arising out of alleged defects in Ford products, perceived environmental impacts, or otherwise; oA 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"); oAdverse effects on Ford's results from a decrease in or cessation or clawback of government incentives related to capital investments; Ford Credit Related: oInability 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; oIncreased competition from banks or other financial institutions seeking to increase their share of financing Ford vehicles; oHigher-than-expected credit losses, lower-than-anticipated residual values or higher-than-expected return volumes for leased vehicles; oCybersecurity risks to operational systems, security systems, or infrastructure owned by us or a third-party vendor, or at a supplier facility; oNew or increased credit, consumer or data protection or other laws and regulations resulting in higher costs and/or additional financing restrictions; oChanges in Ford's operations or changes in Ford's marketing programs could result in a decline in our financing volumes; General: oFluctuations in foreign currency exchange rates and interest rates; oAdverse effects on Ford's or our operations resulting from economic, geopolitical, or other events; oFailure of financial institutions to fulfill commitments under committed credit and liquidity facilities; oLabor or other constraints on Ford's or our ability to maintain competitive cost structure; oSubstantial pension and postretirement healthcare and life insurance liabilities impairing Ford's or our liquidity or financial condition; oWorse-than-assumed economic and demographic experience for postretirement benefit plans (e.g., discount rates or investment returns); and oInherent 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 601 671 2,401 2,800 companies Wholesale 224 242 920 952 Other 13 16 56 56 Total financing 2,008 2,018 7,882 8,321 revenue Depreciation on vehicles subject (660) (538) (2,468) (1,774) to operating leases 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 748 768 2,778 3,442 revenue 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 2 (139) 143 (221) translation Total other comprehensive 2 (139) 143 (221) income/(loss), net of tax Comprehensive income $ 270 $ 472 $ 1,357 $ 1,574 FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES PRELIMINARY CONSOLIDATED BALANCE SHEET (in millions) December December 31, 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 14,701 11,098 leases Notes and accounts receivable from affiliated 1,173 1,152 companies Derivative financial 1,256 1,365 instruments Other assets 2,256 2,172 Total assets $ 105,744 $ 100,242 LIABILITIES Accounts payable Customer deposits, dealer $ 1,072 $ 901 reserves, and other Affiliated companies 234 773 Total accounts 1,306 1,674 payable Debt 89,258 84,659 Deferred income taxes 1,669 1,134 Derivative financial 400 286 instruments Other liabilities and 3,458 3,593 deferred income Total liabilities 96,091 91,346 SHAREHOLDER'S INTEREST Shareholder's interest 5,274 5,274 Accumulated other 743 600 comprehensive income Retained earnings 3,636 3,022 Total shareholder's 9,653 8,896 interest Total liabilities and $ 105,744 $ 100,242 shareholder's interest 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 December 31, 31, 2012 2011 (unaudited) ASSETS Cash and cash equivalents $ 2,877 $ 3,356 Finance receivables, net 47,190 49,329 Net investment in operating 6,308 6,354 leases Derivative financial 4 157 instruments LIABILITIES Debt $ 40,245 $ 41,421 Derivative financial 134 97 instruments 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 December December Operating Leases 31, 31, 2012 2011 Receivables (a) (in billions) Finance Receivables – North America Segment Consumer Retail installment and direct $ 39.5 $ 38.4 financing leases Non-Consumer Wholesale 18.1 15.5 Dealer loan 1.4 1.1 Other 1.1 1.0 Total North America Segment 60.1 56.0 – finance receivables Finance Receivables – International Segment Consumer Retail installment and direct 9.0 9.1 financing leases Non-Consumer Wholesale 7.4 8.5 Dealer loan 0.1 - Other 0.4 0.4 Total International Segment – 16.9 18.0 finance receivables Unearned interest (1.5) (1.6) supplements Allowance for credit losses (0.4) (0.5) Finance 75.1 71.9 receivables, net Net investment in operating 14.7 11.1 leases Total $ 89.8 $ 83.0 receivables Memo: Total managed receivables $ 91.3 $ 84.6 (b) December December Managed Leverage Calculation 31, 31, 2012 2011 (in billions) Total debt (c) $ 89.3 $ 84.7 Adjustments for cash, cash equivalents, and marketable (10.9) (12.1) securities (d) Adjustments for derivative (0.8) (0.7) accounting (e) Total adjusted debt $ 77.6 $ 71.9 Equity (f) $ 9.7 $ 8.9 Adjustments for derivative (0.3) (0.2) accounting (e) Total adjusted equity $ 9.4 $ 8.7 Managed leverage (to 1) = Total adjusted debt / Total adjusted 8.3 8.3 equity Memo: Financial statement leverage 9.2 9.5 (to 1) = Total debt / Equity — — — — — 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 (a) 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. Equals total receivables, excluding unearned interest supplements of (b) $(1.5) billion at December 31, 2012 and $(1.6) billion December 31, 2011. Includes debt reported on Ford Credit's balance sheet including obligations issued or arising in securitization transactions that are payable only out (c) 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. Primarily related to market valuation adjustments to derivatives due to movements in interest rates. Adjustments to debt are related to (e) 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 Website: http://www.fordcredit.com Contact: Margaret Mellott, Ford Credit Communications, +1-313-322-5393, firstname.lastname@example.org; or Molly Tripp, Ford Fixed Income Investment Community, +1-313-621-0881, email@example.com
Ford Credit Earns Full Year 2012 Pre-Tax Profit of $1.7 Billion, Net Income of $1.2 Billion*
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