<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-Q
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999 OR
[ ] 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
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 38-1612444
(State of Incorporation) (I.R.S. employer identification no.)
THE AMERICAN ROAD, DEARBORN, MICHIGAN 48121
(Address of principal executive offices) (Zip code)
</TABLE>
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 X 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 March 31, 1999.
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.
PAGE 1 OF 23.
EXHIBIT INDEX APPEARS AT PAGE 20.
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<PAGE> 2
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim financial data presented herein are unaudited, but in the
opinion of management reflect all adjustments necessary for a fair presentation
of such information. Results for interim periods should not be considered
indicative of results for a full year. Reference should be made to the financial
statements contained in the registrant's Annual Report on Form 10-K for the year
ended December 31, 1998 (the "10-K Report"). Information relating to earnings
per share is not presented because the registrant, Ford Motor Credit Company
("Ford Credit"), is an indirect wholly owned subsidiary of Ford Motor Company
("Ford" or the "company").
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
AND OF EARNINGS RETAINED FOR USE IN THE BUSINESS
FOR THE PERIODS ENDED MARCH 31, 1999 AND 1998
(IN MILLIONS)
<TABLE>
<CAPTION>
FIRST QUARTER
--------------------
1999 1998
---- ----
(UNAUDITED)
<S> <C> <C>
Financing revenue
Operating leases.......................................... $2,453.9 $2,329.3
Retail.................................................... 1,688.7 1,391.0
Wholesale................................................. 408.6 419.4
Other..................................................... 95.3 93.4
-------- --------
Total financing revenue................................ 4,646.5 4,233.1
Depreciation on operating leases............................ (1,841.3) (1,682.0)
Interest expense............................................ (1,761.5) (1,610.5)
-------- --------
Net financing margin................................... 1,043.7 940.6
Other revenue
Insurance premiums earned................................. 54.8 79.9
Investment and other income............................... 218.5 245.5
-------- --------
Total financing margin and revenue..................... 1,317.0 1,266.0
Expenses
Operating expenses........................................ 442.7 385.8
Provision for credit losses............................... 325.1 321.5
Other insurance expenses.................................. 50.3 69.5
-------- --------
Total expenses......................................... 818.1 776.8
-------- --------
Income before income taxes and minority interests........... 498.9 489.2
Provision for income taxes.................................. 186.2 192.6
-------- --------
Income before minority interests............................ 312.7 296.6
Minority interests in net income of subsidiaries............ 12.9 18.8
-------- --------
Net income.................................................. 299.8 277.8
Earnings retained for use in the business
Beginning of period....................................... 7,911.4 7,327.4
-------- --------
End of period............................................. $8,211.2 $7,605.2
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 3
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN MILLIONS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31, MARCH 31,
1999 1998 1998
--------- ------------ ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents.............................. $ 1,376.8 $ 780.8 $ 843.7
Investments in securities.............................. 667.6 725.8 900.4
Finance receivables, net............................... 96,814.7 95,941.6 82,335.8
Net investment, operating leases....................... 35,004.7 34,566.5 35,299.1
Retained interest in securitized assets................ 1,710.0 1,256.3 1,507.1
Accounts receivable from affiliated companies.......... 2,002.7 1,099.8 1,102.7
Other assets........................................... 3,066.2 2,877.0 2,543.7
---------- ---------- ----------
Total assets................................... $140,642.7 $137,247.8 $124,532.5
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Accounts payable
Trade, customer deposits, and dealer reserves....... $ 3,032.2 $ 3,009.6 $ 3,059.8
Affiliated companies................................ 1,405.5 1,108.1 1,127.5
---------- ---------- ----------
Total accounts payable......................... 4,437.7 4,117.7 4,187.3
Debt................................................... 117,947.1 114,967.3 104,280.3
Deferred income taxes.................................. 3,282.0 3,157.7 2,931.5
Other liabilities and deferred income.................. 3,694.2 4,014.4 2,759.2
---------- ---------- ----------
Total liabilities.............................. $129,361.0 $126,257.1 $114,158.3
Minority interests in net assets of subsidiaries......... 385.2 346.0 497.8
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)......... 4,343.4 4,343.4 3,896.4
Note receivable from affiliated company................ (1,517.0) (1,517.0) (1,517.0)
Accumulated other comprehensive income/(loss).......... (166.1) (118.1) (133.2)
Retained earnings...................................... 8,211.2 7,911.4 7,605.2
---------- ---------- ----------
Total stockholder's equity..................... 10,896.5 10,644.7 9,876.4
---------- ---------- ----------
Total liabilities and stockholder's equity..... $140,642.7 $137,247.8 $124,532.5
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31, 1999 AND 1998
(IN MILLIONS)
<TABLE>
<CAPTION>
FIRST QUARTER
------------------------
1999 1998
---- ----
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities
Net income................................................ $ 299.8 $ 277.8
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for credit losses............................... 325.1 321.5
Depreciation and amortization............................. 1,849.3 1,685.3
Gain on sales of finance receivables...................... (32.0) (50.8)
Increase in deferred income taxes......................... 124.5 133.9
Increase in other assets.................................. (1,532.7) (360.1)
Decrease in other liabilities............................. (362.0) (909.3)
Other..................................................... 110.9 90.0
---------- ----------
Net cash provided by operating activities................. 782.9 1,188.3
---------- ----------
Cash flows from investing activities
Purchase of finance receivables (other than wholesale).... (11,694.1) (10,538.5)
Collection of finance receivables (other than
wholesale)............................................. 10,346.4 6,594.9
Purchase of operating lease vehicles...................... (6,577.7) (5,136.9)
Liquidation of operating lease vehicles................... 4,157.5 2,913.9
Net change in wholesale receivables....................... (1,631.8) (481.6)
Proceeds from sale of receivables......................... 2,042.3 2,045.2
Purchase of investment securities......................... (307.8) (391.6)
Proceeds from sale/maturity of investment securities...... 366.0 303.3
Other..................................................... (31.6) (37.9)
---------- ----------
Net cash used in investing activities..................... (3,330.8) (4,729.2)
---------- ----------
Cash flows from financing activities
Proceeds from issuance of long-term debt.................. 8,267.3 5,168.6
Principal payments on long-term debt...................... (4,697.4) (4,029.7)
Change in short-term debt, net............................ (327.6) 2,535.8
Other..................................................... 5.4 21.4
---------- ----------
Net cash provided by financing activities................. 3,247.7 3,696.1
---------- ----------
Effect of exchange rate changes on cash and cash equivalents (103.8) (1.0)
---------- ----------
Net change in cash and cash equivalents................... 596.0 154.2
Cash and cash equivalents, beginning of period.............. 780.8 689.5
---------- ----------
Cash and cash equivalents, end of period.................... $ 1,376.8 $ 843.7
========== ==========
Supplementary cash flow information
Interest paid............................................. $ 1,644.3 $ 1,688.3
Taxes paid................................................ 81.3 63.8
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1. FINANCE RECEIVABLES, NET (IN MILLIONS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31, MARCH 31,
1999 1998 1998
--------- ------------ ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Retail.................................................... $67,272.9 $67,732.7 $55,670.0
Wholesale................................................. 24,074.6 22,650.1 22,081.8
Other..................................................... 6,649.6 6,838.8 5,780.2
--------- --------- ---------
Total finance receivables, net of unearned income.... 97,997.1 97,221.6 83,532.0
Less: Allowance for credit losses......................... (1,182.4) (1,280.0) (1,196.2)
--------- --------- ---------
Finance receivables, net............................. $96,814.7 $95,941.6 $82,335.8
========= ========= =========
</TABLE>
5
<PAGE> 6
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
NOTE 2. DEBT (IN MILLIONS)
<TABLE>
<CAPTION>
MARCH 31, 1999
-------------------------------
WEIGHTED AVERAGE MARCH 31, DECEMBER 31, MARCH 31,
INTEREST RATES(A) MATURITIES 1999 1998 1998
----------------- ---------- --------- ------------ ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
PAYABLE WITHIN ONE YEAR
Commercial paper............. $ 46,818.5 $ 46,188.2 $ 42,299.5
Other short-term debt(B)..... 6,543.9 7,445.0 6,499.4
---------- ---------- ----------
Total short-term debt... 53,362.4 53,633.2 48,798.9
Long-term indebtedness
payable within one
year(C)................... 8,508.2 9,689.2 10,114.2
---------- ---------- ----------
Total payable within one
year................. 61,870.6 63,322.4 58,913.1
---------- ---------- ----------
PAYABLE AFTER ONE YEAR
Unsecured senior indebtedness
Notes(D)..................... 5.99% 2000-2078 54,248.9 49,899.0 44,045.1
Debentures................... 3.66% 2001-2006 1,798.9 1,661.1 1,228.1
Unamortized discount......... (72.6) (25.5) (5.6)
---------- ---------- ----------
Total unsecured senior
indebtedness......... 55,975.2 51,534.6 45,267.6
Unsecured long-term
subordinated notes........ 8.27% 2005 101.3 110.3 99.6
---------- ---------- ----------
Total payable after one
year................. 56,076.5 51,644.9 45,367.2
---------- ---------- ----------
Total debt.............. $117,947.1 $114,967.3 $104,280.3
========== ========== ==========
</TABLE>
- -------------------------
(A) Rates were variable on about 0% of the debt payable after one year including
the effects of interest rate swap agreements.
(B) Includes $814.4 million, $988.6 million, and $1,800.0 million with
affiliated companies at March 31, 1999, December 31, 1998, and March 31,
1998, respectively.
(C) Includes $557.9 million, $394.9 million, and $1,300.7 million with
affiliated companies at March 31, 1999, December 31, 1998, and March 31,
1998, respectively.
(D) Includes $3,044.7 million, $3,253.9 million, and $1,814.5 million with
affiliated companies at March 31, 1999, December 31, 1998, and March 31,
1998, respectively.
6
<PAGE> 7
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
NOTE 3. COMPREHENSIVE INCOME
Ford Credit adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income", as of January 1, 1998. Other comprehensive
income includes foreign currency translation adjustments and primarily net
unrealized gains and losses on investments in equity securities. Total
comprehensive income was as follows (in millions):
<TABLE>
<CAPTION>
FIRST QUARTER
----------------
1999 1998
---- ----
(UNAUDITED)
<S> <C> <C>
Net income.................................................. $299.8 $277.8
Other comprehensive income.................................. (48.0) 9.3
------ ------
Total comprehensive income............................. $251.8 $287.1
====== ======
</TABLE>
7
<PAGE> 8
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
NOTE 4. SEGMENT INFORMATION
Ford Credit adopted Statement of Financial Accounting Standard No. 131,
"Disclosures about Segments of an Enterprise and Related Information", effective
with year end 1998. Segment detail is summarized as follows (in millions):
<TABLE>
<CAPTION>
FIRST QUARTER
-----------------------------------------------------------------------------
FORD CREDIT PERSONAL FORD CREDIT
NORTH FORD CREDIT FINANCIAL ELIMINATIONS/ FINANCIAL
AMERICA INTERNATIONAL SERVICES RECLASSIFICATIONS STATEMENTS
----------- ------------- --------- ----------------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
1999
Revenue............................ $ 4,117.2 $ 899.6 $ 78.8 $ (175.8) $ 4,919.8
Income
Income before income taxes........ 323.2 147.3 16.9 11.5 498.9
Provision for income taxes........ 111.1 63.4 6.5 5.2 186.2
Net income....................... 212.1 83.9 10.4 (6.6) 299.8
Other disclosures
Depreciation on operating
leases.......................... 1,660.0 144.5 -- 36.8 1,841.3
Interest expense.................. 1,547.3 401.2 -- (187.0) 1,761.5
Finance receivables (including net
investment operating leases)*... 121,876.2 27,602.5 -- (17,659.3) 131,819.4
Total assets...................... 124,092.2 28,846.8 1,376.6 (13,672.9) 140,642.7
1998
Revenue............................ $ 3,970.9 $ 809.6 $ 103.2 $ (325.2) $ 4,558.5
Income
Income before income taxes........ 326.3 145.5 22.5 (5.1) 489.2
Provision for income taxes........ 125.8 78.4 8.3 (19.9) 192.6
Net income....................... 200.5 67.1 14.2 (4.0) 277.8
Other disclosures
Depreciation on operating
leases.......................... 1,630.7 78.0 -- (26.7) 1,682.0
Interest expense.................. 1,463.4 379.6 -- (232.5) 1,610.5
Finance receivables (including net
investment operating leases)*... 110,456.0 25,492.4 -- (18,313.5) 117,634.9
Total assets...................... 109,103.3 27,371.2 1,108.0 (13,050.0) 124,532.5
</TABLE>
- -------------------------
* Ford Credit managed receivables exclude allowance for credit losses
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORD CREDIT FIRST QUARTER 1999 COMPARED WITH FIRST QUARTER 1998 RESULTS OF
OPERATIONS
Ford Credit's consolidated net income in the first quarter of 1999 was $300
million, up $22 million or 8% from 1998. Compared with 1998, the increase in
earnings primarily reflects higher financing volumes, improved credit loss
performance and lower effective tax rates, offset partially by lower net
financing margins.
Credit losses as a percent of average net finance receivables including net
investment in operating leases decreased to 0.77% in 1999 compared with 0.93% in
1998 reflecting an improvement in portfolio quality.
The effective income tax rate was 37.3% for the first quarter of 1999
compared with 39.4% for the first quarter of 1998. The decrease in the effective
tax rate resulted from reduced tax on foreign income.
The deterioration in net financing margins primarily reflects higher
depreciation on operating leases. Higher depreciation resulted from higher
residual losses on off-lease vehicles.
Total net finance receivables and net investment in operating leases at
March 31, 1999 were $131.8 billion, up $14.2 billion or 12% from a year earlier.
The increase primarily reflects Ford-sponsored special financing programs that
are available exclusively through Ford Credit.
During the first quarter of 1999, Ford Credit financed 45% of all new cars
and trucks sold by Ford dealers in the U.S. compared with 38% in the same period
of 1998. In Europe during the first quarter of 1999, Ford Credit financed 30% of
all new vehicles sold by Ford dealers compared with 26% in 1998. In the first
quarter of 1999, Ford Credit provided retail financing for 0.7 and 0.2 million
new and used vehicles in the United States and Europe, respectively. In the
first quarter of 1999, Ford Credit provided wholesale financing for 83% of Ford
factory sales in the U.S. and 95% of Ford factory sales in Europe compared with
80% for the United States and 95% for Europe in the same period of 1998.
FORD CREDIT LIQUIDITY AND CAPITAL RESOURCES
Ford Credit's outstanding debt at March 31, 1999 and at the end of each of
the last four years was as follows (in millions):
<TABLE>
<CAPTION>
DECEMBER 31
MARCH 31, ---------------------------------------
1999 1998 1997 1996 1995
--------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Commercial paper & STBAs(a).................... $ 48,335 $ 48,636 $ 42,311 $38,774 $40,419
Other short-term debt(b)....................... 5,027 4,997 3,897 4,243 1,781
Long-term debt (including current
portion)(c).................................. 64,585 61,334 54,517 55,007 49,980
-------- -------- -------- ------- -------
Total debt........................... $117,947 $114,967 $100,725 $98,024 $92,180
======== ======== ======== ======= =======
United States.................................. $ 90,039 $ 85,394 $ 78,443 $76,635 $73,178
Europe......................................... 14,934 16,653 12,491 14,028 13,013
Other international............................ 12,974 12,920 9,791 7,361 5,989
-------- -------- -------- ------- -------
Total debt........................... $117,947 $114,967 $100,725 $98,024 $92,180
======== ======== ======== ======= =======
Memo:
Total support facilities (billions) as of
March 31, 1999 and December 31, 1998-1995,
respectively:
Ford Credit U.S. ......................... $ 26.9 $ 26.9 $ 26.6 $ 27.2 $ 27.4
FCE Bank.................................. 5.2 5.3 5.2 5.7 4.7
</TABLE>
- -------------------------
(a) Short-term borrowing agreements with bank trust departments.
(b) Includes $814 million, $989 million, $831 million, $2,478 million and $176
million with affiliated companies at March 31, 1999, December 31, 1998,
December 31, 1997, December 31, 1996 and December 31, 1995 respectively.
(c) Includes $3,603 million, $3,649 million, $3,547 million, $4,237 million and
$1,174 million with affiliated companies at March 31, 1999 and December 31,
1998, December 31, 1997, December 31, 1996 and December 31, 1995
respectively.
9
<PAGE> 10
Support facilities represent additional sources of funds, if required. At
March 31, 1999, Ford Credit had approximately $19.2 billion of contractually
committed facilities. In addition, approximately $7.7 billion of Ford lines of
credit may be used by Ford Credit at Ford's option. These credit lines have
various maturity dates through June 30, 2003 and may be used, at Ford Credit's
option, by any of its direct or indirect majority-owned subsidiaries. Any such
borrowings will be guaranteed by Ford Credit. Banks also provide $1.5 billion of
contractually committed liquidity facilities to support Ford Credit's asset
backed commercial paper program.
Additionally, at March 31, 1999, there were approximately $4.6 billion of
contractually committed facilities available for FCE Bank plc's ("FCE Bank")
use. In addition, $615 million of Ford lines of credit may be used by FCE Bank
at Ford's option. The lines have various maturity dates through June 30, 2003
and may be used, at FCE Bank's option, by any of its direct or indirect
majority-owned subsidiaries. Any such borrowings will be guaranteed by FCE Bank.
NEW ACCOUNTING STANDARDS
In the first quarter of 1999, Ford Credit adopted Statement of Position
("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use". This SOP requires entities to capitalize certain
internal-use software costs once certain criteria are met. Ford Credit's
practice has been to expense the costs of obtaining or developing internal-use
software as incurred. Adoption of this standard did not have a material effect
on first quarter earnings.
Statement of Financial Accounting Standards No. 133 ("SFAS 133"),
"Accounting for Derivative Instruments and Hedging Activities", was issued by
the Financial Accounting Standards Board in June 1998. This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires recognition of all derivatives as either assets
or liabilities on the balance sheet and measurement of those instruments at fair
value. If certain conditions are met, a derivative may be designated
specifically as (a) a hedge of the exposure to changes in the fair value of a
recognized asset or liability or an unrecognized firm commitment referred to as
a fair value hedge, (b) a hedge of the exposure to variability in cash flows of
a forecasted transaction (a cash flow hedge), or (c) a hedge of the foreign
currency exposure of a net investment in a foreign operation, an unrecognized
firm commitment, an available-for-sale security, or a forecasted transaction.
Ford Credit anticipates having types (a) and (b) of these hedges, and will
comply with the requirements of SFAS 133 when adopted beginning January 1, 2000.
Ford Credit has not yet determined the effect of adopting SFAS 133.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a discussion of purported class actions affecting Ford Credit, see Item
5. "Legal Proceedings -- Ford -- Class Actions -- Lease Agreement Disclosure".
ITEM 2. CHANGES IN SECURITIES
Not required.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not required.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not required.
ITEM 5. OTHER INFORMATION
INFORMATION CONCERNING FORD
Following is a condensed consolidated statement of income (unaudited) of
Ford for the periods ended March 31, 1999 and 1998 (in millions except amounts
per share):
<TABLE>
<CAPTION>
FIRST QUARTER
------------------
1999 1998
---- ----
<S> <C> <C>
Sales and revenues.......................................... $37,885 $36,584
Total costs and expenses.................................... 34,979 33,968
Operating income............................................ 2,906 2,616
Automotive net interest income.............................. 47 123
Automotive equity in net/(loss)income of affiliated
companies................................................. 50 (10)
Gain on spin-off of the Associates.......................... 15,955
Income before income taxes.................................. 3,003 18,684
Provision for income taxes.................................. 1,005 972
Minority interests in net income of subsidiaries............ 19 66
Net income.................................................. 1,979 17,646
Amounts Per Share of Common Stock and Class B Stock after
Preferred Stock Dividends
Basic income................................................ $ 1.64 $ 14.48
Diluted income.............................................. $ 1.60 $ 14.23
Cash dividends.............................................. $ 0.46 $ 0.42
</TABLE>
11
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- FORD
OVERVIEW
Ford's worldwide net income was $1,979 million in the first quarter of
1999, or $1.60 per diluted share of Common and Class B Stock. Excluding a $165
million gain from the sale of Ford's interest in AutoEuropa to Volkswagen AG,
Ford's operating income would have been $1,814 million, or $1.46 per diluted
share of Common and Class B Stock. This compares with first quarter 1998
operating income of $1,514 million, or $1.22 per diluted share, excluding all
income and a one-time gain related to Associates First Capital Corporation ("The
Associates"), and a one-time earnings per share reduction of $0.07 per share
resulting from the premium paid to repurchase Ford's Series B Cumulative
Preferred Stock.
Ford's worldwide sales and revenues were $37.9 billion in the first quarter
of 1999, up $1.3 billion from a year ago. Vehicle unit sales of cars and trucks
were 1,774,000, up 47,000 units. Stockholders' equity was $24.7 billion at March
31, 1999, up $1.3 billion from December 31, 1998.
RESULTS OF OPERATIONS
Results of Ford's operations by major business sector are shown below (in
millions). Ford's Automotive sector, which includes Automotive operations and
Visteon Automotive Systems, earned $1,651 million in the first quarter of 1999.
This compares with earnings of $1,235 million in the first quarter of 1998.
Ford's Financial Services sector had earnings of $328 million in first quarter
1999. This compares with $279 million in the first quarter of 1998, excluding
all income and a one-time gain related to The Associates detailed below.
<TABLE>
<CAPTION>
FIRST QUARTER
NET INCOME/(LOSS)
-----------------------------
1999
O/(U)
1999 1998 1998
---- ---- -----
<S> <C> <C> <C>
Automotive Sector........................................... $1,651 $ 1,235 $ 416
Financial Services Sector................................... 328 279 49
------ ------- --------
Total Operations............................................ $1,979 $ 1,514 $ 465
Gain on Spin-Off of The Associates.......................... -- 15,955 (15,955)
The Associates (net of Minority Interest)................... -- 177 (177)
------ ------- --------
Total Ford.................................................. $1,979 $17,646 $(15,667)
====== ======= ========
</TABLE>
FIRST QUARTER 1999 COMPARED WITH FIRST QUARTER 1998 -- FORD
Automotive Sector
Worldwide earnings for Ford's Automotive sector were $1,651 million in the
first quarter of 1999 on sales of $31.9 billion. Excluding a $165 million gain
from the sale of Ford's interest in AutoEuropa to Volkswagen AG, Ford's first
quarter 1999 earnings would have been $1,486 million, compared with earnings of
$1,235 million in the first quarter of 1998 on sales of $29.1 billion. The
increase in operating earnings reflects higher sales volumes in the U.S., offset
partially by lower sales volumes in Europe and South America. Adjusted for
constant volume and mix, total costs in the Automotive sector declined $100
million compared with the first quarter of 1998.
12
<PAGE> 13
Details of Automotive sector earnings are shown below (in millions).
<TABLE>
<CAPTION>
FIRST QUARTER
NET INCOME/(LOSS)
-------------------------
1999
O/(U)
1999 1998 1998
---- ---- -----
<S> <C> <C> <C>
North American Automotive................................... $1,588 $1,010 $ 578
Automotive Outside North America
- -- Europe................................................... 165 230 (65)
- -- South America............................................ (165) (45) (120)
- -- Other.................................................... 63 40 23
------ ------ -----
Total Automotive Outside North America...................... 63 225 (162)
------ ------ -----
Total Automotive Sector..................................... $1,651 $1,235 $ 416
====== ====== =====
</TABLE>
Automotive sector earnings in North America were $1,588 million in the
first quarter of 1999 on sales of $24.4 billion, compared with $1,010 million a
year ago on sales of $20.7 billion. The increase reflects primarily higher sales
volume and lower costs, offset partially by higher marketing costs and lower net
interest income. The after-tax return on sales for Ford's North American
Automotive sector was 6.6% in the first quarter of 1999.
In the first quarter of 1999, 4 million new cars and trucks were sold in
the United States, up from 3.6 million units a year ago. Ford's share of those
unit sales was 24.4% in the first quarter of 1999, unchanged from a year ago.
Ford's Automotive sector earnings in Europe were $165 million in the first
quarter of 1999, down $65 million from a year ago. The deterioration is
explained by lower sales volumes, reflecting primarily a lower market share, and
higher fixed marketing costs, offset partially by the gain from the sale of
Ford's interest in AutoEuropa.
In the first quarter of 1999, 4.4 million new cars and trucks were sold in
Europe, up from 4.3 million units a year ago. Ford's share of those unit sales
was 9.8% in the first quarter of 1999, down 1.6 percentage points from a year
ago. Ford's market share declined because of intense competitive conditions in
Europe.
Ford's Automotive sector in South America lost $165 million in the first
quarter of 1999, compared with a loss of $45 million a year ago. The decline was
the result of lower volume and revenue, resulting from the devaluation of the
Real in Brazil and weak economic conditions throughout the region, offset
partially by lower costs. Ford is looking at all of its options to address the
business equation in South America.
In the first quarter of 1999, 276,000 new cars and trucks were sold in
Brazil, compared with 384,000 a year ago. Ford's share of those unit sales was
9% in the first quarter of 1999, down 4.7 percentage points from a year ago. The
decline in market share reflects production and transportation interruptions
caused by labor disruptions, which have been resolved, and an increasingly
competitive market.
Ford's Visteon operations earned $208 million on revenues of $4,772 million
in the first quarter of 1999, compared with earnings of $189 million on revenues
of $4,378 million in the first quarter of 1998. This earnings improvement
reflects primarily favorable volume and mix and material cost reductions, offset
partially by lower revenue from negotiated price reductions. Visteon's after-tax
return on sales in the first quarter of 1999 was 4.3%, unchanged from a year
ago.
13
<PAGE> 14
Financial Services Sector
Earnings of Ford's Financial Services sector consist primarily of two
segments, Ford Credit and Hertz. Details of Financial Services sector earnings
are shown below (in millions).
<TABLE>
<CAPTION>
FIRST QUARTER
NET INCOME/(LOSS)
---------------------------
1999
O/(U)
1999 1998 1998
---- ---- -----
<S> <C> <C> <C>
Ford Credit................................................. $300 $ 278 $ 22
Hertz....................................................... 49 35 14
Minority Interests, Eliminations, and Other (excluding The
Associates)............................................... (21) (34) 13
---- ------- --------
Financial Services (excluding The Associates).......... 328 279 49
Gain on Spin-Off of The Associates.......................... -- 15,955 (15,955)
The Associates (net of Minority Interest)................... -- 177* (177)
---- ------- --------
Total Financial Services Sector...................... $328 $16,411 $(16,083)
==== ======= ========
Memo: Ford's share of earnings in Hertz..................... 40 29 11
</TABLE>
- -------------------------
* Through March 12, 1998
For a discussion of Ford Credit's operations in first quarter 1999, see
Item 2. "Management's Discussion and Analysis of Financial Conditions and
Results of Operations -- Ford Credit First Quarter 1999 Compared with First
Quarter 1998 Results of Operations."
Earnings at Hertz in the first quarter of 1999 were $49 million (of which
$40 million was Ford's share), compared with earnings of $35 million (of which
$29 million was Ford's share) a year ago. The increase in earnings reflects
primarily higher revenues and improved profit margins in worldwide car rental
operations.
LIQUIDITY AND CAPITAL RESOURCES -- FORD
Automotive Sector
At March 31, 1999, Ford's Automotive sector had $23.5 billion of cash and
marketable securities, down $349 million from December 31, 1998. The decline was
more than explained by the acquisition of Volvo Cars, offset partially by
operating cash flows and a global debt issuance of $1.5 billion.
Automotive capital expenditures, including the effect of adopting the
accounting change for the capitalization of computer software (Statement of
Position 98-1) discussed below, totaled $1.3 billion in the first quarter of
1999, down from $2.1 billion in the first quarter of 1998, which was unusually
high. Ford's target for capital expenditures for 1999 remains at $8.5 billion.
At March 31, 1999, Ford's Automotive sector had total debt of $11.5
billion, compared with $9.8 billion at December 31, 1998. This amount was 31.7%
of Ford's total capitalization (that is, the sum of stockholders' equity and
Automotive debt) at the end of the first quarter of 1999, compared with 30% of
total capitalization at December 31, 1998.
Financial Services Sector
At March 31, 1999, Ford's Financial Services sector had cash and marketable
securities totaling $1.7 billion, up $592 million from December 31, 1998.
Net receivables and lease investments were $134 billion at March 31, 1999,
up $1.4 billion from December 31, 1998.
Total debt was $124.9 billion at March 31, 1999, up $2.6 billion from
December 31, 1998.
Outstanding commercial paper at March 31, 1999 totaled $46.8 billion at
Ford Credit, and $2.1 billion at Hertz, with an average remaining maturity of 27
days and 35 days, respectively.
14
<PAGE> 15
OTHER MATTERS -- FORD
Volvo
On March 31, 1999, Ford purchased AB Volvo's worldwide passenger car
business ("Volvo Car") for approximately $6.45 billion. The acquisition price
consisted of a cash payment of approximately $2 billion on March 31, 1999, a
deferred payment obligation to AB Volvo of approximately $1.6 billion due March
31, 2001, and Volvo Car automotive-related net indebtedness of approximately
$2.9 billion.
In addition to the cash payment to AB Volvo, on March 31, 1999
approximately $1 billion was paid to reduce Volvo Car's automotive indebtedness
and for acquisition-related costs. Most of the remaining automotive indebtedness
of Volvo Car was repaid on April 12, 1999. The purchase price payment and debt
repayments were funded from Ford's cash reserves.
The acquisition will be accounted for as a purchase. The assets purchased,
liabilities assumed and the results of operations of Volvo Car will be included
in Ford's financial statements on a consolidated basis beginning in the second
quarter of 1999.
Kwik-Fit
On April 12, 1999, Ford announced that it had reached an agreement with the
board of Kwik-Fit Holdings plc ("Kwik-Fit") for a cash tender offer for all the
outstanding capital stock of Kwik-Fit. Kwik-Fit is Europe's largest independent
car maintenance and repair company, with over 1,900 service points in the United
Kingdom, Ireland and continental Europe.
Ford's offer price is L5.60 (approximately the equivalent of $9.05) per
share, or an aggregate of L1,008 million (approximately the equivalent of $1.6
billion).
Ford's offer is contingent on receipt of applicable regulatory approvals
and acceptances from holders of at least 90% of the outstanding shares of
Kwik-Fit. The directors of Kwik-Fit have unanimously recommended that Kwik-Fit
shareholders accept Ford's offer.
NEW ACCOUNTING STANDARDS AND CHANGES
New Standards
In the first quarter of 1999, Ford adopted Statement of Position ("SOP")
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use". This SOP requires entities to capitalize certain internal-use
software costs once certain criteria are met. Ford's practice has been to
expense the costs of obtaining or developing internal-use software as incurred.
Adoption of this standard did not have a material effect on first quarter
earnings.
Statement of Financial Accounting Standards No. 133 ("SFAS 133"),
"Accounting for Derivative Instruments and Hedging Activities", was issued by
the Financial Accounting Standards Board in June 1998. This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires recognition of all derivatives as either assets
or liabilities on the balance sheet and measurement of those instruments at fair
value. If certain conditions are met, a derivative may be designated
specifically as (a) a hedge of the exposure to changes in the fair value of a
recognized asset or liability or an unrecognized firm commitment referred to as
a fair value hedge, (b) a hedge of the exposure to variability in cash flows of
a forecasted transaction (a cash flow hedge), or (c) a hedge of the foreign
currency exposure of a net investment in a foreign operation, an unrecognized
firm commitment, an available-for-sale security, or a forecasted transaction.
Ford anticipates having each of these types of hedges, and will comply with the
requirements of SFAS 133 when it is adopted. Ford expects to adopt SFAS 133
beginning January 1, 2000. Ford has not yet determined the effect of adopting
SFAS 133.
15
<PAGE> 16
Accounting Changes
Beginning in 1999, Ford changed from an accelerated method to the
units-of-production method for special tooling amortization. This change is
being made to recognize that special tooling retains its value more uniformly
over time and more closely aligns tooling amortization with vehicle production
volumes, providing a better matching of costs and revenues.
Also beginning in 1999, Ford modified Ford's plant and equipment retirement
policy to reflect gains and losses in income in the year of retirement.
Previously, the cost of retired assets, net of salvage proceeds, was charged to
accumulated depreciation. The change in accounting principle for plant and
equipment retirement is being made to better reflect the results of asset
disposal/sale decisions.
Adoption of these changes did not have a material effect on Ford's
financial statements.
LEGAL PROCEEDINGS -- FORD
Class Actions
Air Bag. (Previously discussed in the third full paragraph on page 22 of
the 10-K Report.) Upon reconsideration of the trial court's decision to deny
defendants' motion for change of venue, the Alabama Supreme Court would not
overturn the trial court's ruling. Ford's motion to dismiss this action
continues to be pending.
Lease Agreement Disclosure. (Previously discussed in the last paragraph on
page 23 of the 10-K Report.) In addition to the seven of the twenty cases
discussed in the 10-K Report as having been dismissed in various state courts,
the actions pending in Florida, New Jersey and Tennessee state courts were
recently dismissed on the basis that itemization of monthly lease charges is not
required under federal or state law.
Windstar Transmission. A purported class action has been filed in
California state court alleging that 1995 Ford Windstar vehicles are defective
because they contain a 3.8 liter engine with a defective transmission.
Plaintiffs allege transmissions in the Windstar prematurely suffered from
serious shifting problems and acceleration failures, requiring early replacement
at a substantial expense to owners and lessees. They seek compensatory damages,
punitive damages, attorneys' and experts' fees and additional unspecified
relief. Plaintiffs do not specifically seek damages for any alleged personal
injuries suffered by purported class members. The California class action is
nationwide in scope and purports to represent all persons or entities in the
United States who own or lease any model 1995 Ford Windstar. After Ford removed
the case to federal court, the state court granted Plaintiffs' motion to remand
the case back to Los Angeles County court. Ford plans to file a motion for
judgment on the pleadings.
16
<PAGE> 17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Please refer to the Exhibit Index on page 20.
(b) Reports on Form 8-K during the quarter ended March 31, 1999:
<TABLE>
<CAPTION>
DATE OF REPORT ITEM FINANCIAL STATEMENTS FILED
-------------- ---- --------------------------
<S> <C> <C>
January 11, 1999............... Item 5 -- Other None.
Events
February 2, 1999............... Item 5 -- Other 1998 Audit of Consolidated Financial
Events Statements of Ford Motor Credit Company and
Subsidiaries together with the Report of
Independent Accountants of
PricewaterhouseCoopers LLP, independent
certified public accountants, and News
Release dated January 21, 1999 of Ford
Motor Company and Subsidiaries for the year
ended December 31, 1998 with attachments
and News Release dated January 28, 1999 of
Ford Motor Company announcing its plans to
acquire the passenger car business of AB
Volvo.
February 22, 1999.............. Item 5 -- Other None.
Events
</TABLE>
17
<PAGE> 18
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FORD MOTOR CREDIT COMPANY
(Registrant)
/s/ E. S. ACTON
--------------------------------------
E. S. Acton
Vice President -- Finance
(Chief Financial Officer)
April 22, 1999
18
<PAGE> 19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Ford Motor Credit Company:
We have reviewed the condensed consolidated balance sheet of Ford Motor
Credit Company and Subsidiaries at March 31, 1999 and 1998, and the related
condensed consolidated statements of income and of earnings retained for use in
the business and cash flows for the periods set forth in this Form 10-Q for the
quarter ended March 31, 1999. These financial statements are the responsibility
of the company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet at December 31, 1998 and the related
consolidated statements of income, stockholder's equity and cash flows for the
year then ended (not presented herein); and in our report dated January 20,
1999, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet at December 31, 1998 is fairly stated in
all material respects in relation to the consolidated balance sheet from which
it has been derived.
/s/ PricewaterhouseCoopers LLP
Detroit, Michigan
April 13, 1999
19
<PAGE> 20
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
DESIGNATION DESCRIPTION METHOD OF FILING
- ----------- ----------- ----------------
<S> <C> <C>
12-A Calculation of ratio of earnings to fixed charges of Filed with this Report.
Ford Credit
12-B Calculation of ratio of earnings to fixed charges of Filed with this Report.
Ford
15 Letter from PricewaterhouseCoopers LLP dated April Filed with this Report.
22, 1999, regarding unaudited interim financial
information
27 Financial Data Schedule Filed with this Report.
</TABLE>
20
<PAGE> 1
EXHIBIT 12-A
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS
TO FIXED CHARGES
(IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS FOR THE YEARS ENDED DECEMBER 31
------------------- ----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed Charges
Interest expense............. $1,761.5 $1,610.5 $6,910.4 $6,268.2 $6,235.7 $5,987.8 $4,226.3
Rents........................ 5.8 5.4 26.4 26.2 22.2 19.5 16.9
-------- -------- -------- -------- -------- -------- --------
Total fixed charges....... 1,767.3 1,615.9 6,936.8 6,294.4 6,257.9 6,007.3 4,243.2
Earnings
Income before income taxes... 498.9 489.2 1,812.2 1,806.0 2,240.2 2,327.8 2,335.5
Less equity in net income of
affiliated companies...... 0.0 0.3 2.3 1.0 55.3 255.4 232.5
-------- -------- -------- -------- -------- -------- --------
Earnings before fixed
charges................... $2,266.2 $2,104.8 $8,746.7 $8,099.4 $8,442.8 $8,079.7 $6,346.2
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed
charges................... 1.3 1.3 1.3 1.3 1.3 1.3 1.5
</TABLE>
For purposes of the Ford Credit ratio, earnings consist of the sum of
pre-tax income from continuing operations before adjustment for minority
interests in consolidated subsidiaries, plus fixed charges. Fixed charges
consist of interest on borrowed funds, amortization of debt discount, premium,
and issuance expense, and one-third of all rental expense (the proportion deemed
representative of the interest factor).
<PAGE> 1
EXHIBIT 12-B
FORD MOTOR COMPANY AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(IN MILLIONS)
<TABLE>
<CAPTION>
FIRST FOR THE YEARS ENDED DECEMBER 31
QUARTER ---------------------------------------------------
1999 1998 1997 1996 1995 1994
------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings
Income before income taxes........ $3,003 $25,396 $10,939 $ 6,793 $ 6,705 $ 8,789
Equity in net (income)/loss of
affiliates plus dividends from
affiliates...................... (41) 78 121 36 179 (182)
Adjusted fixed charges(a)......... 2,268 9,215 10,911 10,801 10,556 8,122
------ ------- ------- ------- ------- -------
Earnings..................... $5,230 $34,689 $21,971 $17,630 $17,440 $16,729
====== ======= ======= ======= ======= =======
Combined Fixed Charges and Preferred
Stock Dividends
Interest expense(b)............... $2,192 $ 8,919 $10,570 $10,464 $10,121 $ 7,787
Interest portion of rental
expense(c)...................... 61 245 309 300 396 265
Preferred stock dividend
requirements of majority owned
subsidiaries and trusts(d)...... 14 55 55 55 199 160
------ ------- ------- ------- ------- -------
Fixed charges................ 2,267 9,219 10,934 10,819 10,716 8,212
Ford preferred stock dividend
requirements(e)...................... 6 122 82 95 459 472
------ ------- ------- ------- ------- -------
Total combined fixed charges and
preferred stock dividends....... $2,273 $ 9,341 $11,016 $10,914 $11,175 $ 8,684
====== ======= ======= ======= ======= =======
Ratios
Ratio of earnings to fixed
charges......................... 2.3 3.8(f) 2.0 1.6 1.6 2.0
Ratio of earnings to combined
fixed charges and preferred
stock dividends................. 2.3 3.7(f) 2.0 1.6 1.6 1.9
</TABLE>
- -------------------------
(a) Fixed charges, as shown above, adjusted to exclude the amount of interest
capitalized during the period and preferred stock dividend requirements of
majority owned subsidiaries and trusts.
(b) Includes interest, whether expensed or capitalized, and amortization of debt
expense and discount or premium relating to any indebtedness.
(c) One-third of all rental expense is deemed to be interest.
(d) Preferred stock dividend requirements of Ford Holdings, Inc. (1995 - 1993)
increased to an amount representing the pre-tax earnings which would be
required to cover such dividend requirements based on Ford's effective
income tax rates. Beginning in Fourth Quarter 1995, includes requirements
related to Company-obligated mandatorily redeemable preferred securities of
a subsidiary trust.
(e) Preferred stock dividend requirements of Ford Motor Company, increased to an
amount representing the pre-tax earnings which would be required to cover
such dividend requirements based on Ford Motor Company's effective income
tax rates.
(f) Earnings used in calculation of this ratio include the $15,955 million gain
on the spin-off of The Associates. Excluding this gain, the ratio is 2.0.
<PAGE> 1
EXHIBIT 15
Ford Motor Credit Company
The American Road
Dearborn, Michigan
Re: Ford Motor Credit Company Registration Statement Nos. 333-75177, 333-50611,
333-45015 and 333-41059 on Form S-3
We are aware that our report dated April 13, 1999 accompanying the
unaudited interim financial information of Ford Motor Credit Company and
subsidiaries for the periods ended March 31, 1999 and 1998 and included in the
Ford Motor Credit Company Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999 will be incorporated by reference in the above Registration
Statements. Pursuant to Rule 436(c) under the Securities Act of 1933, this
report should not be considered a part of the Registration Statements prepared
or certified by us within the meaning of Sections 7 and 11 of the Act.
/s/ PricewaterhouseCoopers LLP
Detroit, Michigan
April 22, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
FORD CREDIT'S CONDENSED CONSOLIDATED BALANCE SHEET IS UNCLASSIFIED. THEREFORE,
THE FOLLOWING TAGS LISTED BELOW ARE NOT APPLICABLE TO FORD CREDIT: CURRENT
ASSETS AND CURRENT LIABILITIES. INFORMATION RELATING TO EARNINGS PER SHARE IS
NOT PRESENTED BECAUSE FORD CREDIT IS AN INDIRECT WHOLLY OWNED SUBSIDIARY OF FORD
MOTOR COMPANY.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1377
<SECURITIES> 668
<RECEIVABLES> 96,815
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 140,643
<CURRENT-LIABILITIES> 0
<BONDS> 117,947
0
0
<COMMON> 25
<OTHER-SE> 10,871
<TOTAL-LIABILITY-AND-EQUITY> 140,643
<SALES> 0
<TOTAL-REVENUES> 4,919
<CGS> 0
<TOTAL-COSTS> 4,420
<OTHER-EXPENSES> 2,334
<LOSS-PROVISION> 325
<INTEREST-EXPENSE> 1,761
<INCOME-PRETAX> 499
<INCOME-TAX> 186
<INCOME-CONTINUING> 300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 300
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
