Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Credit Company — Q1 2018 Earnings Presentation
25 slides from Ford Mtr Co Del's earnings presentation, Apr 25, 2018
Slide 1: 1Q Earnings Review
1Q Earnings Review April 25, 2018
Slide 2: 1Q 2018 Highlights
1Q 2018 Highlights • Strong first quarter EBT across all segments • Achieved record quarterly EBT in China • Receivables grew globally led by retail financing • Credit loss metrics remain strong • Auction values trending better than expectations 2
Slide 3: Key Metrics
Key Metrics FIRST QUARTER 2017 2018 H / (L) • Strong 1Q EBT up 33% YoY Net Receivables (Bils) $ 133 $ 148 11 % Managed Receivables* (Bils) $ 140 $ 156 11 % • Receivables up globally, led by Loss-to-Receivables** (LTR) 54 bps 51 bps (3) bps retail financing in all segments Auction Values*** $ 17,090
Slide 4: 1Q 2018 EBT YoY (Mils)
1Q 2018 EBT YoY (Mils) • YoY EBT improvement of $160M • All factors positive, except Other due to derivatives market Residual Losses $80 valuation Supplemental Depreciation (30) Derivatives Market Valuation $ (49) • Volume and mix higher due to Operating Costs & Other 11 global receivables growth •
Slide 5: 1Q 2018 EBT By Segment
1Q 2018 EBT By Segment 1Q 2018 H / (L) 2017 Results (Mils) Americas segment $ 515 $ 157 Europe segment 111 34 Asia Pacific segment 46 18 • EBT higher YoY in all segments Total segments $ 672 $ 209 Unallocated other* (31) (49) • Benefit from income taxes Earnings before taxes $ 641 $ 160 driven by ta
Slide 6: Americas Financing Shares And Contract Placement Volume
Americas Financing Shares And Contract Placement Volume 1Q 2017 2018 Financing Shares (%) Retail Installment and Lease Share of Ford Retail Sales (excl. Fleet) United States 57 % 61 % Canada 75 70 Wholesale Share United States 76 % 76 % Canada 60 60 Contract Placement Volume - New and Used Retail /
Slide 7: Europe Financing Shares And Contract Placement Volume
Europe Financing Shares And Contract Placement Volume 1Q 2017 2018 Financing Shares (incl. Fleet) (%) Retail Installment and Lease Share of Total Ford Sales U.K. 36 % 37 % Germany 47 48 Total Europe Segment 35 36 Wholesale Share U.K. 100 % 100 % Germany 94 94 Total Europe Segment 99 98 Contract Plac
Slide 8: Asia Pacific Financing Shares And Contract Placement Volume
Asia Pacific Financing Shares And Contract Placement Volume 1Q 2017 2018 Financing Shares (incl. Fleet) (%) Retail Installment Share of Total Ford Sales China 24 % 35 % India 9 9 Wholesale Share China 51 % 61 % India 34 38 Contract Placement Volume - New and Used Retail (000) China 45 50 India 2 2 T
Slide 9: 1Q 2018 Net Receivables Mix (Bils)
1Q 2018 Net Receivables Mix (Bils) Net Investment in Operating Leases Consumer Financing Non-Consumer Financing $147.7 $26.7 • Prudent management of lease $113.3 mix 1Q 2018 H/(L) 2017 (Pct.) (Ppts.) SUV / CUV 55 0 • Operating lease portfolio was $26.3 Truck 24 4 Car 21 (4) 18% of total net receivab
Slide 10: U.S. Origination Metrics
U.S. Origination Metrics Retail and Lease FICO and Higher Risk Mix (Pct) Higher Risk Portfolio Mix Average Placement FICO 748 750 741 741 744 743 • Disciplined and consistent underwriting practices 6% 6% 6% 6% 6% 6% • Portfolio quality evidenced by FICO scores and steady risk 4Q16 1Q17 2Q17 3Q17 4Q1
Slide 11: U.S. Retail And Lease Credit Loss Drivers
U.S. Retail And Lease Credit Loss Drivers Over-60-Day Delinquencies (excl. Bankruptcies) Repossessions (000) and Repo. Rate (Pct) Repo. Rate Repossessions • Delinquencies and 1.16% 1.16% 1.12% 1.16% 1.22% repossessions remain low 0.16% 0.16% 1.06% 0.15% 0.13% 0.13% 0.12% • Severity trended favorably
Slide 12: Worldwide Credit Loss Metrics
Worldwide Credit Loss Metrics Charge-Offs (Mils) and LTR Ratio (Pct) LTR Ratio Charge-Offs 0.39% 0.39% 0.35% 0.33% 0.29% 0.31% • Worldwide credit loss metrics remain strong $132 $119 $101 $118 $143 $118 • Credit loss reserve based on 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 historical losses, portfolio quality
Slide 13: U.S. Lease Origination Metrics
U.S. Lease Origination Metrics Lease Placement Volume (000) 24-Month 39-Month / Other 36-Month 91 98 97 91 93 10 10 82 11 10 12 8 70 77 76 72 58 65 10 11 11 9 9 23 • Lease share continues to be 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 below industry reflecting Ford sales mix Lease Share of Retail Sales (Pct) F
Slide 14: U.S. Lease Residual Performance
U.S. Lease Residual Performance Lease Return Volume (000) and Return Rates (Pct) Return Rates Return Volume 83% 81% 81% 79% 78% 79% • Healthy used car market supporting lease residual and credit loss performance 65 79 80 70 61 68 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 • Auction values stronger than expected
Slide 15: Funding Structure – Managed Receivables
Funding Structure – Managed Receivables* (Bils) 2016 2017 2018 Dec 31 Dec 31 Mar 31 Term Debt (incl. Bank Borrowings) $ 66 $ 75 $ 76 Term Asset-Backed Securities 50 53 56 Commercial Paper 4 5 5 • Funding is diversified across platforms and markets Ford Interest Advantage / Deposits 6 5 5 Other 9 9 1
Slide 16: Public Term Funding Plan (Bils)
Public Term Funding Plan* (Bils) 2016 2017 2018 Through Actual Actual Forecast Apr 24 Unsecured -- Currency of issuance (USD Equivalent) USD $ 9 $ 10 $ 5-7 $ 1 CAD 1 2 1-2 0 EUR / GBP 3 3 4-6 3 Other 1 1 1 0 Total unsecured $ 14 $ 16 $ 11 - 16 $ 5 Securitizations $ 13 $ 15 $ 13 - 15 $ 6 Total public
Slide 17: 2018 Guidance (Mils)
2018 Guidance (Mils) • Expect 2018 EBT to be flat to lower than 2017 Key Metric 2017 FY Results 2018 FY Plan 2018 FY Outlook • Distributions are planned to maintain leverage within Flat To Lower EBT $2,310 < 2017 FY Than 2017 target range of 8:1 to 9:1 Distributions $406 ~ $2,000 Higher Than Plan •
Slide 18: Key Takeaways
Key Takeaways • Strong 1Q EBT • Now expect 2018 EBT to be flat to lower than 2017; projected distributions higher than plan • Funding plan well-positioned for business cycles • Consistent originations, servicing, and collections • Strategic asset to Ford, supporting sales and delivering profits • Pl
Slide 19: Cautionary Note On Forward-Looking Statements
Cautionary Note On 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 assumptio
Slide 20: Appendix
Appendix Total Net Receivables Reconciliation to Managed Receivables A1 Financial Statement Leverage Reconciliation to Managed Leverage A2 Liquidity Sources A3 Non-GAAP Financial Measures that Supplement GAAP Measures A4 Definitions and Calculations A5 SECRET
Slide 21: Total Net Receivables Reconciliation To Managed Receivables (Bils)
Total Net Receivables Reconciliation To Managed Receivables (Bils) 2016 2017 2017 2018 Dec 31 Mar 31 Dec 31 Mar 31 Finance receivables, net (GAAP) $ 103.0 $ 106.6 $ 116.0 $ 121.0 Net investment in operating leases (GAAP) 27.2 26.4 26.7 26.7 Total net receivables* $ 130.2 $ 133.0 $ 142.7 $ 147.7 Unea
Slide 22: Financial Statement Leverage Reconciliation To Managed Leverage (Bils)
Financial Statement Leverage Reconciliation To Managed Leverage* (Bils) 2017 2017 2018 Mar 31 Dec 31 Mar 31 Leverage Calculation Total debt $ 129.2 $ 137.8 $ 142.0 Adjustments for cash (11.3) (11.8) (11.8) Adjustments for derivative accounting (0.2) - 0.3 Total adjusted debt $ 117.7 $ 126.0 $ 130.5
Slide 23: Liquidity Sources (Bils)
Liquidity Sources* (Bils) 2017 2017 2018 Mar 31 Dec 31 Mar 31 Liquidity Sources Cash $ 11.3 $ 11.8 $ 11.8 Committed ABS facilities 34.8 33.4 33.9 Other unsecured credit facilities 2.6 3.3 3.4 Ford corporate credit facility allocation 3.0 3.0 3.0 Total liquidity sources $ 51.7 $ 51.5 $ 52.1 Utilizati
Slide 24: Non-GAAP Financial Measures That Supplement GAAP Measures
Non-GAAP Financial Measures That Supplement GAAP Measures • We use both GAAP and non-GAAP financial measures for operational and financial decision making, and to assess Company and segment business performance. The non-GAAP measures listed below are intended to be considered by users as supplementa
Slide 25: Definitions And Calculations
Definitions And Calculations Adjustments (as shown on the Liquidity Sources chart) • Include certain adjustments for asset-backed capacity in excess of eligible receivables and cash related to the Ford Credit Revolving Extended Variable-utilization program (“FordREV”), which can be accessed through
Ford Motor Credit Company — Q1 2018 Earnings Presentation on 6ix