Ford Mtr Co Del · NYSE:F

Ford Mtr Co Del — Ford Motor Credit Company — Q4 2019 Earnings Presentation

22 slides from Ford Mtr Co Del's earnings presentation, Feb 4, 2020

  1. Slide 1: Q4 2019 And Full Year Earnings Review

    Q4 2019 And Full Year Earnings Review February 4, 2020

  2. Slide 2: Key Metrics

    Key Metrics EBT YoY Bridge ($M) EBT ($M) $663 $42 $801 $831 $678 $663 $736 $630 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Distributions ($M) $600 $660 $675 $650 $1,100 $475 Q4 2018 Volume / Financing Credit Lease Exchange Other Q4 2019 U.S. Retail LTR Ratios* (%) Mix Margin Loss Residual 0.66%

  3. Slide 3: FY 2019 EBT YoY Bridge ($M)

    FY 2019 EBT YoY Bridge ($M) • FY EBT at $3B, up 14% YoY • Favorable lease residual performance driven by lower supplemental depreciation on vehicles in Ford Credit’s lease portfolio, partially offset by non- recurrence of 2018 auction performance gains • Other includes favorable derivatives market v

  4. Slide 4: Q4 2019 Net Receivables Mix ($B)

    Q4 2019 Net Receivables Mix ($B) Net Investment in Operating Leases Consumer Financing Non-Consumer Financing $142.0 $27.7 $113.5 • Operating lease portfolio was Q4 2019 H / (L) 2018 SUV / CUV 57% 1 ppts. 19% of total net receivables Truck 30 3 $27.3 Car 13 (4) • U.S. and Canada represent 99% of ope

  5. Slide 5: U.S. Origination Metrics and Credit Loss Drivers

    U.S. Origination Metrics and Credit Loss Drivers Retail & Lease FICO and Retail Repossessions (000) and Higher Risk Mix (%) Repossession Rate (%) Higher Risk Portfolio Mix (%) Repossession Rate (%) • Disciplined and consistent 747 747 747 750 753 underwriting practices 741 7 7 7 7 7 6% 6% 6% 6% 6% 6

  6. Slide 6: Worldwide Credit Loss Metrics

    Worldwide Credit Loss Metrics Charge-Offs ($M) and LTR Ratio (%) LTR Ratio (%) $127 $129 $109 $107 0.43% 0.42% $89 0.36% $66 0.36% 0.30% 0.22% • Worldwide credit loss metrics remain strong Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 • Credit loss reserve based on Credit Loss Reserve ($M) and his

  7. Slide 7: U.S. Lease Metrics

    U.S. Lease Metrics Lease Return Volume (000) Lease Placement Volume (000) and Return Rates (%) 24-Month Return Rate (%) 36-Month 39-Month / Other 95 93 10 9 83 81 83 82 9 9 11 12 71 71 74 75 70 71 • Lease share below industry, 48 80 75 56 68 64 80% reflecting Ford sales mix 77% 78% 78% 77% 76% 26 5

  8. Slide 8: Funding Structure – Managed Receivables ($B)

    Funding Structure – Managed Receivables* ($B) 2018 2019 Dec 31 Dec 31 Term Debt (incl. Bank Borrowings) $ 70 $ 73 Term Asset-Backed Securities 60 57 • Funding is diversified across Commercial Paper 4 4 platforms and markets Ford Interest Advantage / Deposits 6 7 Other 10 9 • Well capitalized with a

  9. Slide 9: Public Term Funding Plan ($B)

    Public Term Funding Plan* ($B) 2017 2018 2019 2020 Through Actual Actual Actual Forecast Feb 3 Unsecured ― Currency of issuance (USD Equivalent) USD $ 10 $ 6 $ 11 $ 7 - 10 $ 2 CAD 2 1 1 1-2 - EUR / GBP 3 4 5 3-4 - Other 1 1 1 1 - Total unsecured $ 16 $ 13 $ 17 $ 12 - 17 $ 2 Securitizations** 15 14 1

  10. Slide 10: EBT By Segment

    EBT By Segment Q4 FY H / (L) H / (L) 2019 2018 2019 2018 Results ($M) Americas Segment $ 586 $ (3) $ 2,422 $ 214 Europe Segment 49 (39) 363 (28) Asia Pacific Segment 11 (5) 75 (27) Total Segments $ 646 $ (47) $ 2,860 $ 159 Unallocated other* (16) 14 138 212 Earnings before taxes $ 630 $ (33) $ 2,998

  11. Slide 11: 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

  12. Slide 12: Appendix

    APPENDIX Financing Shares And Contract Placement Volume A1-A2 U.S. Origination Metrics and Credit Loss Drivers A3 Worldwide Credit Loss Metrics A4 U.S. Lease Metrics A5 Total Net Receivables Reconciliation To Managed Receivables A6 Financial Statement Leverage Reconciliation to Managed Leverage A7 L

  13. Slide 13: Financing Shares And Contract Placement Volume

    Financing Shares And Contract Placement Volume Q4 FY 2018 2019 2018 2019 Share of Ford Sales* United States 55 % 50 % 58 % 51 % Canada 85 79 75 66 U.K. 38 40 37 39 Germany 45 47 48 47 Total Europe Segment 38 38 38 37 China 37 36 35 35 Wholesale Share United States 76 % 75 % 76 % 75 % Canada 59 55 59

  14. Slide 14: Financing Shares And Contract Placement Volume

    Financing Shares And Contract Placement Volume 2015 2016 2017 2018 2019 Share of Ford Sales* United States 65 % 56 % 55 % 58 % 51 % Canada 73 75 77 75 66 U.K. 40 38 35 37 39 Germany 48 47 48 48 47 Total Europe Segment 37 37 37 38 37 China 12 19 28 35 35 Wholesale Share United States 76 % 76 % 76 % 7

  15. Slide 15: U.S. Origination Metrics and Credit Loss Drivers

    U.S. Origination Metrics and Credit Loss Drivers Retail & Lease FICO and Retail Repossessions (000) and Higher Risk Mix (%) Repossession Rate (%) Higher Risk Portfolio Mix (%) Repossession Rate (%) • Disciplined and consistent 746 746 748 underwriting practices 740 739 25 27 28 27 • Portfolio qualit

  16. Slide 16: Worldwide Credit Loss Metrics

    Worldwide Credit Loss Metrics Charge-Offs ($M) and LTR Ratio (%) LTR Ratio (%) $425 $369 $371 $321 0.35% 0.31% 0.33% 0.31% $210 0.23% • Worldwide credit loss metrics remain strong 2015 2016 2017 2018 2019 • Credit loss reserve based on Credit Loss Reserve ($M) and historical losses, portfolio Reserv

  17. Slide 17: U.S. Lease Metrics

    U.S. Lease Metrics Lease Return Volume (000) Lease Placement Volume (000) and Return Rates (%) 24-Month Return Rate (%) 36-Month 39-Month / Other 290 281 290 407 393 246 368 385 92 56 38 43 329 41 180 78% 80% 78% 78% • Lease share below industry, 298 288 276 290 236 74% reflecting Ford sales mix 39

  18. Slide 18: Total Net Receivables Reconciliation To Managed Receivables ($B)

    Total Net Receivables Reconciliation To Managed Receivables ($B) 2017 2018 2019 Dec 31 Dec 31 Dec 31 Finance receivables, net (GAAP) $ 116.0 $ 118.8 $ 114.3 Net investment in operating leases (GAAP) 26.7 27.4 27.7 Total net receivables* $ 142.7 $ 146.3 $ 142.0 Held-for-sale receivables (GAAP) $ - $

  19. Slide 19: Financial Statement Leverage Reconciliation To Managed Leverage ($B)

    Financial Statement Leverage Reconciliation To Managed Leverage* ($B) 2017 2018 2019 Dec 31 Dec 31 Dec 31 Leverage Calculation Debt $ 137.8 $ 140.1 $ 140.0 Adjustments for cash (11.8) (10.2) (11.7) Adjustments for derivative accounting - 0.2 (0.5) Total adjusted debt $ 126.0 $ 130.1 $ 127.8 Equity $

  20. Slide 20: Liquidity Sources ($B)

    Liquidity Sources* ($B) 2017 2018 2019 Dec 31 Dec 31 Dec 31 Liquidity Sources Cash $ 11.8 $ 10.2 $ 11.7 Committed asset-backed facilities 33.4 35.4 36.6 Other unsecured credit facilities 3.3 3.0 3.0 Ford corporate credit facility allocation 3.0 3.0 3.0 Total liquidity sources $ 51.5 $ 51.6 $ 54.3 Ut

  21. Slide 21: 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

  22. Slide 22: 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

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