Ford Motor Credit Company
QUARTERLY REPORT
for the quarter ended
Filed pursuant to Section 13
TABLE OF CONTENTS
| Item | Page | |||||||||
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PART I
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1 | Financial Statements | 2 | |||||||
| 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 9 | ||||||||
| Overview | 9 | |||||||||
| Results of Operations | 9 | |||||||||
| Financial Condition | 10 | |||||||||
| Credit Ratings | 15 | |||||||||
| Funding and Liquidity | 15 | |||||||||
| Sales of Receivables and Securitization | 18 | |||||||||
| Outlook | 21 | |||||||||
| Cautionary Statement Regarding Forward Looking Statements | 21 | |||||||||
| Changes in Accounting Standards | 22 | |||||||||
| Other Financial Information | 23 | |||||||||
| Additional Information | 23 | |||||||||
| 3 | Quantitative and Qualitative Disclosures about Market Risk | 23 | ||||||||
| 4 | Controls and Procedures | 23 | ||||||||
|
PART II
|
1 | Legal Proceedings | 24 | |||||||
| 5 | Other Information | 24 | ||||||||
| 6 | Exhibit and Reports on Form 8-K | 24 | ||||||||
| Signatures | 26 | |||||||||
| Report of Independent Accountants | 29 | |||||||||
| Exhibit Index | 30 | |||||||||
| Exhibit 12 — Calculation of Ratios of Earnings to Fixed Charges | 33 | |||||||||
| Exhibit 15 — PricewaterhouseCoopers LLP Letter | 34 | |||||||||
| Exhibit 99.1 — Other Information: Sections of Ford Motor Company Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002 | 35 | |||||||||
| Exhibit 99.2 — Certification of Chief Financial Officer | 58 | |||||||||
| Exhibit 99.3 — Certification of the Chairman & Chief Executive Officer | 59 | |||||||||
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
(Mark One)
| x |
QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2002
OR
| o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission file numbers 1-6368
Ford Motor Credit Company
|
Delaware (State of Incorporation) |
38-1612444 (I.R.S. employer identification no.) |
|
|
One American Road, Dearborn, Michigan (Address of principal executive offices) |
48126 (Zip code) |
Registrant’s telephone number, including area code (313) 322-3000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ü No
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 250,000 shares of common stock as of November 13, 2002. No voting stock of the registrant is held by non-affiliates of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
This Report incorporates by reference Part I, sections of Item 1 and Item 5 of Part II, Exhibit 12 and Exhibit 15 of Ford Motor Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002.
The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form in reduced disclosure format.
EXHIBIT INDEX APPEARS AT PAGE 30
The interim financial data presented herein are unaudited, but in our opinion reflect all adjustments consisting only of normal recurring adjustments, necessary for a fair statement of such information. Results for interim periods should not be considered indicative of results for a full year. We refer you to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2001 (10-K Report). We are not presenting information relating to earnings per share because we are an indirect wholly owned subsidiary of Ford Motor Company (Ford). Certain amounts in prior period’s financial statements have been reclassified to conform with current period presentations.
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
| Third Quarter | Nine Months | |||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||
|
Financing revenue
|
||||||||||||||||||
|
Operating leases
|
$ | 2,836.3 | $ | 3,077.9 | $ | 8,668.3 | $ | 8,960.2 | ||||||||||
|
Retail
|
1,885.4 | 2,167.6 | 5,733.3 | 6,459.6 | ||||||||||||||
|
Wholesale
|
241.5 | 401.2 | 692.9 | 1,784.1 | ||||||||||||||
|
Other
|
91.7 | 115.6 | 271.8 | 363.2 | ||||||||||||||
|
Total financing revenue
|
5,054.9 | 5,762.3 | 15,366.3 | 17,567.1 | ||||||||||||||
|
Depreciation on operating leases
|
(2,213.3 | ) | (2,219.4 | ) | (6,686.1 | ) | (6,590.8 | ) | ||||||||||
|
Interest expense
|
(1,743.9 | ) | (2,146.9 | ) | (5,374.2 | ) | (6,920.6 | ) | ||||||||||
|
Net financing margin
|
1,097.7 | 1,396.0 | 3,306.0 | 4,055.7 | ||||||||||||||
|
Other revenue
|
||||||||||||||||||
|
Investment and other income related to
securitizations
|
594.4 | 357.3 | 1,751.8 | 906.1 | ||||||||||||||
|
Insurance premiums earned
|
70.2 | 53.4 | 198.3 | 173.2 | ||||||||||||||
|
Other income
|
92.3 | 255.0 | 497.6 | 625.6 | ||||||||||||||
|
Total financing margin and revenue
|
1,854.6 | 2,061.7 | 5,753.7 | 5,760.6 | ||||||||||||||
|
Expenses
|
||||||||||||||||||
|
Operating expenses
|
616.7 | 616.0 | 1,906.2 | 1,882.8 | ||||||||||||||
|
Provision for credit losses
|
714.2 | 801.9 | 2,265.9 | 1,905.2 | ||||||||||||||
|
Other insurance expenses
|
55.0 | 45.5 | 180.6 | 164.3 | ||||||||||||||
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Total expenses
|
1,385.9 | 1,463.4 | 4,352.7 | 3,952.3 | ||||||||||||||
|
Income before income taxes and minority interests
|
468.7 | 598.3 | 1,401.0 | 1,808.3 | ||||||||||||||
|
Provision for income taxes
|
173.9 | 222.0 | 519.8 | 670.9 | ||||||||||||||
|
Income before minority interests
|
294.8 | 376.3 | 881.2 | 1,137.4 | ||||||||||||||
|
Minority interests in net income of subsidiaries
|
0.5 | 0.7 | 1.0 | 1.6 | ||||||||||||||
|
Net income
|
294.3 | 375.6 | 880.2 | 1,135.8 | ||||||||||||||
|
Earnings retained for use in the business
|
||||||||||||||||||
|
Beginning of period
|
9,296.7 | 8,782.5 | 8,710.8 | 8,272.3 | ||||||||||||||
|
Dividends
|
(450.0 | ) | (150.0 | ) | (450.0 | ) | (400.0 | ) | ||||||||||
|
End of period
|
$ | 9,141.0 | $ | 9,008.1 | $ | 9,141.0 | $ | 9,008.1 | ||||||||||
The accompanying notes are an integral part of the financial statements.
2
CONSOLIDATED BALANCE SHEET
| September 30, | December 31, | September 30, | |||||||||||||
| 2002 | 2001 | 2001 | |||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
|
ASSETS
|
|||||||||||||||
|
Cash and cash equivalents
|
$ | 7,118.4 | $ | 2,945.3 | $ | 4,052.8 | |||||||||
|
Investments in securities
|
558.0 | 525.9 | 502.8 | ||||||||||||
|
Finance receivables, net
|
102,357.4 | 108,133.1 | 107,204.8 | ||||||||||||
|
Net investment, operating leases
|
35,734.1 | 39,334.9 | 40,273.6 | ||||||||||||
|
Retained interest in securitized assets
|
9,675.3 | 12,548.4 | 12,177.7 | ||||||||||||
|
Notes and accounts receivable from affiliated
companies
|
1,678.7 | 2,529.0 | 2,207.1 | ||||||||||||
|
Derivative financial instruments
|
6,585.4 | 1,568.3 | 2,549.2 | ||||||||||||
|
Other assets
|
5,679.7 | 5,511.5 | 5,349.6 | ||||||||||||
|
Total assets
|
$ | 169,387.0 | $ | 173,096.4 | $ | 174,317.6 | |||||||||
|
LIABILITIES AND STOCKHOLDER’S
EQUITY
|
|||||||||||||||
|
Liabilities
|
|||||||||||||||
|
Accounts payable
|
|||||||||||||||
|
Trade, customer deposits, and dealer reserves
|
$ | 1,414.3 | $ | 1,174.0 | $ | 3,025.3 | |||||||||
|
Affiliated companies
|
1,478.5 | 1,005.6 | 1,040.7 | ||||||||||||
|
Total accounts payable
|
2,892.8 | 2,179.6 | 4,066.0 | ||||||||||||
|
Debt
|
140,840.8 | 146,343.7 | 146,354.3 | ||||||||||||
|
Deferred income taxes
|
5,200.9 | 4,591.5 | 4,765.6 | ||||||||||||
|
Derivative financial instruments
|
927.0 | 2,058.4 | 1,527.6 | ||||||||||||
|
Other liabilities and deferred income
|
5,849.1 | 5,921.6 | 5,240.8 | ||||||||||||
|
Total liabilities
|
155,710.6 | 161,094.8 | 161,954.3 | ||||||||||||
|
Minority interests in net assets of subsidiaries
|
18.6 | 17.8 | 17.1 | ||||||||||||
|
Stockholder’s Equity
|
|||||||||||||||
|
Capital stock, par value $100 a share, 250,000
shares authorized, issued and outstanding
|
25.0 | 25.0 | 25.0 | ||||||||||||
|
Paid-in surplus (contributions by stockholder)
|
5,116.8 | 4,457.7 | 4,447.0 | ||||||||||||
|
Accumulated other comprehensive loss
|
(625.0 | ) | (1,209.7 | ) | (1,133.9 | ) | |||||||||
|
Retained earnings
|
9,141.0 | 8,710.8 | 9,008.1 | ||||||||||||
|
Total stockholder’s equity
|
13,657.8 | 11,983.8 | 12,346.2 | ||||||||||||
|
Total liabilities and stockholder’s equity
|
$ | 169,387.0 | $ | 173,096.4 | $ | 174,317.6 | |||||||||
The accompanying notes are an integral part of the financial statements.
3
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
| Nine Months | |||||||||||
| 2002 | 2001 | ||||||||||
| (Unaudited) | |||||||||||
|
Cash flows from operating activities
Net income |
$ | 880.2 | $ | 1,135.8 | |||||||
|
Adjustments to reconcile net income to net cash
provided by operating activities
|
|||||||||||
|
Provision for credit losses
|
2,265.8 | 1,905.2 | |||||||||
|
Depreciation and amortization
|
6,991.0 | 6,964.5 | |||||||||
|
Gain on sales of finance receivables
|
(288.1 | ) | (275.3 | ) | |||||||
|
Increase in deferred income taxes
|
477.7 | 603.9 | |||||||||
|
Decrease in other assets
|
135.1 | 221.1 | |||||||||
|
Increase/(decrease) in other liabilities
|
1,326.4 | (639.8 | ) | ||||||||
|
All other operating activities
|
(249.3 | ) | 39.9 | ||||||||
|
Net cash provided by operating activities
|
11,538.8 | 9,955.3 | |||||||||
|
Cash flows from investing activities
|
|||||||||||
|
Purchase of finance receivables (other than
wholesale)
|
(44,036.5 | ) | (47,948.2 | ) | |||||||
|
Collection of finance receivables (other than
wholesale)
|
25,566.2 | 21,018.9 | |||||||||
|
Purchase of operating lease vehicles
|
(16,060.9 | ) | (21,796.4 | ) | |||||||
|
Liquidation of operating lease vehicles
|
12,431.3 | 13,009.6 | |||||||||
|
Increase in wholesale receivables
|
(1,736.9 | ) | (999.0 | ) | |||||||
|
Net change in retained interest
|
636.2 | 3,223.0 | |||||||||
|
Decrease in notes receivable with affiliates
|
277.7 | 947.5 | |||||||||
|
Proceeds from sale of receivables
|
28,236.7 | 29,449.1 | |||||||||
|
Purchase of investment securities
|
(419.7 | ) | (559.4 | ) | |||||||
|
Proceeds from sale/maturity of investment
securities
|
387.6 | 604.0 | |||||||||
|
All other investing activities
|
349.6 | (174.3 | ) | ||||||||
|
Net cash provided by/(used in) investing
activities
|
5,631.3 | (3,225.2 | ) | ||||||||
|
Cash flows from financing activities
|
|||||||||||
|
Proceeds from issuance of long-term debt
|
12,150.0 | 28,133.4 | |||||||||
|
Principal payments on long-term debt
|
(17,990.7 | ) | (10,756.3 | ) | |||||||
|
Decrease in short-term debt
|
(7,544.4 | ) | (21,070.3 | ) | |||||||
|
Cash dividends paid
|
(450.0 | ) | (400.0 | ) | |||||||
|
All other financing activities
|
659.1 | 295.4 | |||||||||
|
Net cash (used in) financing activities
|
(13,176.0 | ) | (3,797.8 | ) | |||||||
|
Effect of exchange rate changes on cash and cash
equivalents
|
179.0 | (2.9 | ) | ||||||||
|
Net change in cash and cash equivalents
|
4,173.1 | 2,929.4 | |||||||||
|
Cash and cash equivalents, beginning of period
|
2,945.3 | 1,123.4 | |||||||||
|
Cash and cash equivalents, end of period
|
$ | 7,118.4 | $ | 4,052.8 | |||||||