Dearborn, Mich. — Ford Motor Credit Company reported net income of $62 million in the second quarter of 2007, down $242 million from earnings of $304 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned $112 million in the second quarter compared with $435 million in the previous year. The decrease in earnings primarily reflected higher borrowing costs, lower credit loss reserve reductions, higher depreciation expense for leased vehicles and higher net losses related to market valuation adjustments from derivatives. Lower expenses, primarily reflecting improved operating costs, were a partial offset.

In the second quarters of 2007 and 2006, pre-tax earnings were $428 million and $667 million excluding the net losses related to market valuation adjustments from derivatives, which were $316 million and $232 million, respectively.

Ford Motor Credit expects to earn on a pre-tax basis $1.3 billion to $1.4 billion this year, excluding the impact of gains and losses related to market valuation adjustments from derivatives, up from the previous estimate of $1.2 billion.

"Our operating results for the second quarter were slightly better than our expectations," said Mike Bannister, chairman and CEO. "We're increasing our earnings outlook due to higher average receivables, improved operating costs and continued good performance in our credit losses.

"Our commitment to solid risk management principles that support Ford vehicle sales worldwide has produced a high-quality portfolio that is performing very well."

On June 30, 2007, Ford Motor Credit's on-balance sheet net receivables totaled $140 billion, compared with $135 billion at year-end 2006. Managed receivables were $149 billion, compared with $148 billion on December 31.