Ford Credit Earns $528 Million in the First Quarter of 2010*

DEARBORN, Mich., April 27 /PRNewswire-FirstCall/ -- Ford Motor Credit Company reported net income of $528 million in the first quarter of 2010, an improvement of $541 million from a net loss of $13 million a year earlier.  On a pre-tax basis, Ford Credit earned $828 million in the first quarter, compared with a loss of $36 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.

"Ford Credit had strong first quarter results, in part due to improvements in the used vehicle auction markets," said Mike Bannister, chairman and CEO.  "Economic conditions are still uncertain and, as always, we will utilize the solid business practices and superior servicing that remain the foundations of our company."

On March 31, 2010, Ford Credit's on-balance sheet net receivables totaled $88 billion, compared with $93 billion at year-end 2009.  Managed receivables were $90 billion on March 31, 2010, down from $95 billion on December 31, 2009.  The lower receivables primarily reflected the transition of Jaguar, Land Rover, Mazda, and Volvo financing to other finance providers and lower industry and financing volumes in 2009 and 2010 compared with prior years.

On March 31, 2010, managed leverage was 6.9 to 1.  In the first quarter of 2010, Ford Credit distributed $500 million to its immediate parent, Ford Holdings LLC.

Ford Credit now expects 2010 profits to be about the same as its 2009 profits.  The recent improvements in used vehicle auction values and credit loss performance are expected to offset the effects of lower average receivables and the non-recurrence of certain favorable 2009 factors.

Ford Motor Credit Company LLC is one of the world's largest automotive finance companies and 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.

— — — — —

* The financial results discussed herein are presented on a preliminary basis; final data will be included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.

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:

• Further declines in industry sales volume, particularly in the United States or Europe, due to financial crisis, deepening recessions, geo-political events or otherwise;
• Decline in Ford's market share;
• Continued or increased price competition for Ford vehicles resulting from industry overcapacity, currency fluctuations or other factors;
• A further increase in or acceleration of the market shift away from sales of trucks, medium- and large-sized utilities, or other more profitable vehicles, particularly in the United States;
• Continued or increased high prices for, or reduced availability of, fuel;
• Lower-than-anticipated market acceptance of new or existing Ford products;
• Adverse effects from the bankruptcy of, government-funded restructuring of, change in ownership or control of, or alliances entered into by a major competitor;
• Economic distress of suppliers may require Ford to provide 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 disruptions;
• Work stoppages at Ford or supplier facilities or other interruptions of production;
• Single-source supply of components or materials;
• The discovery of defects in Ford vehicles resulting in delays in new model launches, recall campaigns or increased warranty costs;
• Increased safety, emissions, fuel economy or other regulation resulting in higher costs, cash expenditures and/or sales restrictions;
• Unusual or significant litigation or governmental investigations arising out of alleged defects in Ford products, perceived environmental impacts, or otherwise;
• A change in Ford's requirements for parts or materials where it has entered into long-term supply arrangements that commit it to purchase minimum or fixed quantities of certain parts or materials, or to pay a minimum amount to the seller ("take-or-pay contracts");
• Adverse effects on Ford's results from a decrease in or cessation of government incentives related to capital investments;
• Adverse effects on Ford's operations resulting from certain geo-political or other events;
• Substantial levels of indebtedness adversely affecting Ford's financial condition or preventing Ford from fulfilling its debt obligations (which may grow because Ford is able to incur substantially more debt, including additional secured debt);
• Inability of Ford to implement its One Ford plan;

Ford Credit Related:

• A prolonged disruption of the debt and securitization markets;
• Inability 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 or otherwise;
• Inability to obtain competitive funding;
• Higher-than-expected credit losses;
• Adverse effects from the government-supported restructuring of, change in ownership or control of, or alliances entered into by a major competitor;
• Increased competition from banks or other financial institutions seeking to increase their share of retail installment financing Ford vehicles;
• Collection and servicing problems related to our finance receivables and net investment in operating leases;
• Lower-than-anticipated residual values or higher-than-expected return volumes for leased vehicles;
• New or increased credit, consumer or data protection or other regulations resulting in higher costs and/or additional financing restrictions;
• Changes in Ford's operations or changes in Ford's marketing programs could result in a decline in our financing volumes;

General:

• Fluctuations in foreign currency exchange rates and interest rates;
• Failure of financial institutions to fulfill commitments under committed credit and liquidity facilities;
• Labor or other constraints on Ford's or our ability to restructure its or our business;
• Substantial pension and postretirement healthcare and life insurance liabilities impairing Ford's or our liquidity or financial condition; and
• Worse-than-assumed economic and demographic experience for postretirement benefit plans (e.g., discount rates, investment returns, and health care cost trends).

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 2009 10-K Report and Item 1A of Part I of Ford's 2009 10-K Report.

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.  Included below are brief definitions of key terms, information about the impact of on-balance sheet securitization and a reconciliation of non-GAAP measures to GAAP:

• Managed receivables:  receivables reported on Ford Credit's balance sheet, excluding unearned interest supplements related to finance receivables, and securitized off-balance sheet receivables that Ford Credit continues to service
• Charge-offs on managed receivables:  charge-offs associated with receivables reported on Ford Credit's balance sheet and charge-offs associated with receivables that Ford Credit sold in off-balance sheet securitizations and continues to service
• Equity:  shareholder's interest reported on Ford Credit's balance sheet

IMPACT OF ON-BALANCE SHEET SECURITIZATION:  Finance receivables (retail and wholesale) and net investment in operating leases reported on Ford Credit's balance sheet include assets that have been sold for legal purposes in securitization transactions that do not satisfy the requirements for accounting sale treatment. These 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.  Debt reported on Ford Credit's balance sheet includes obligations issued or arising in securitization transactions that are payable only out 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.

SOURCE Ford Motor Credit Company