Ford Credit Earns $1.3 Billion in 2009
DEARBORN, Mich. – Ford Motor Credit Co. reported net income of $1.3 billion in 2009, an improvement of $2.8 billion from a net loss of $1.5 billion a year earlier. On a pre-tax basis, Ford Credit earned $2 billion in 2009, compared with a loss of $2.6 billion in the previous year.
Excluding the $2.1 billion impairment charge for North America operating leases in the second quarter of 2008, Ford Credit incurred a pre-tax loss of $473 million in 2008. The improvement in full year pre-tax earnings primarily reflected the non-recurrence of the impairment charge, lower depreciation expense for leased vehicles due to higher auction values, and a lower provision for credit losses, offset partially by lower volume. Ford Credit also significantly reduced its operating costs in 2009 compared with the previous year.
In the fourth quarter of 2009, Ford Credit’s net income was $440 million, an improvement of $668 million from a year earlier. On a pre-tax basis, Ford Credit earned $696 million in the fourth quarter of 2009, compared with a loss of $372 million in the previous year. The improvement in pre-tax earnings primarily reflected lower depreciation expense for leased vehicles due to higher auction values and a lower provision for credit losses, offset partially by lower volume.
“Our profit and consistent, solid support of Ford Motor Co. dealers and customers in a very challenging economy demonstrate our unique value as Ford’s financial services company,” Ford Credit Chairman and CEO Mike Bannister said. “We remain well-positioned to help put people behind the wheels of Ford products as the economy improves.”
On December 31, 2009, Ford Credit’s on-balance sheet net receivables totaled $93 billion, compared with $116 billion at year-end 2008. Managed receivables were $95 billion on December 31, 2009, down from $118 billion on December 31, 2008. The lower receivables primarily reflected lower industry volumes, lower dealer stocks, and the transition of Jaguar, Land Rover and Mazda financing to other finance providers.
On December 31, 2009, managed leverage was 7.3 to 1. In 2009, Ford Credit distributed $1.5 billion to its immediate parent, Ford Holdings LLC.
Ford Credit expects to be profitable in 2010, but lower than 2009 based on lower average receivables and nonrecurrence of certain favorable 2009 factors.
More Industry

World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →
Smaller Is Looking Better
A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.
Read More →
U.S. EV Market Slowly Stabilizes
U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.
Read More →
Global EV Market Entering New Phase
Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.
Read More →
Black Book Weekly Market Update
The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.
Read More →
Auto Affordability in Context
Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.
Read More →
Black Book: Weekly Market Update
Automotive auction inventory increased last week, giving choosy bidders even more leeway.
Read More →