DEARBORN, Mich. — Boosted by lower depreciation expenses on leased vehicles, Ford Motor Credit Co. posted a year-over-year net income increase of $332 million during the third quarter, based on preliminary data.

Specifically, Ford Credit's quarterly net earnings were $427 million, compared with $95 million in the same period of 2008.

Pre-tax, Ford Credit's earnings were $677 million, up from $161 million in the prior-year period.

Officials attributed the pre-tax income gains largely to lower depreciation expenses for leased vehicles. This was due to higher auction values, a lower provision for credit losses and lower operating costs, which were partially offset by lower volume.

"We always adapt our operations to changing business conditions and had the additional benefit in the third quarter of improved used-vehicle auction markets," explained Mike Bannister, chairman and chief executive officer. "We continue to profitably support Ford Motor Co. sales."

As of Sept. 30, the company's on-balance sheet net receivables were at $93 billion, down from $116 billion at the end of 2008.

Meanwhile, managed receivables were $94 billion at the end of the quarter. At year-end 2008, they were $118 billion.

Officials said the lower receivables were due mainly to lower industry volumes, lower dealer stocks and the transition of Jaguar, Land Rover and Mazda financing to other finance providers.

Managed leverage, as of Sept. 30, was 7.7 to 1. Ford Credit said it distributed $431 million to Ford Holdings, LLC — its immediate parent — during the third quarter.

Looking forward, executives said they expect the company will be profitable again in the fourth quarter. Moreover, they anticipate the year-end managed receivables will be between $90 billion and $95 billion.

However, officials said they project lower profits next year due to lower average receivables and "non-recurrence of favorable 2009 factors."

Officials emphasized that its financial results for the third quarter are preliminary at this point. It will post final data in the quarterly report on Form 10-Q.