Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Credit Company — FY2020 Earnings Presentation
25 slides from Ford Mtr Co Del's earnings presentation, Feb 4, 2021
Slide 1: Q4 & Full Year 2020 Earnings Review
Ford Credit Q4 & Full Year 2020 Earnings Review February 4, 2021
Slide 2: Information Regarding This Presentation
Information Regarding This Presentation Forward-Looking Statements This presentation includes forward-looking statements. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could caus
Slide 3: Key Takeaways
Key Takeaways • Strong Q4 EBT of $912M, best Q4 ever • Balance sheet remains strong with liquidity at $35B; continue to access diverse funding sources • Portfolio performing well – charge-offs and loss-to-receivables (LTR) ratio remain significantly below year-ago levels. Credit loss reserve reflect
Slide 4: Key Metrics
Key Metrics EBT ($B) $1,123 Headlines $736 $912 $630 $543 • Q4 EBT of $912M is up $282M, reflecting strong auction performance $30 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 • Portfolio performing well – loss-to-receivables (LTR) remains low Distributions ($M) $1,100 $475 $275 $275 $575 $1,290
Slide 5: FY 2020 EBT YoY Bridge ($M)
FY 2020 EBT YoY Bridge ($M) • FY EBT at $2.6B, down 13% YoY • Volume & mix primarily driven by lower receivables • Credit loss primarily reflects estimates of the impact of COVID-19 in future periods • Lease residual performance driven by improved auction values 2019 Volume / Financing Credit Lease
Slide 6: Q4 2020 Net Receivables Mix ($B)
Q4 2020 Net Receivables Net Investment in Operating Leases Mix ($B) Consumer Financing Non-Consumer Financing $131.7 $26.7 $104.3 Q4 2020 H / (L) 2019 • Receivables declined $10B YoY, SUV / CUV 59% 2 ppts. primarily reflecting lower wholesale $26.4 Truck 32 2 Car 9 (4) receivables • Operating lease
Slide 7: U.S. Origination Metrics And Credit Loss Drivers
U.S. Retail & Lease FICO and Higher Risk Mix (%) Retail Repossessions (000) and Repossession Rate (%) Origination Higher Risk Portfolio Mix (%) Repossession Rate (%) Metrics And 750 753 739 743 738 735 Credit Loss 7 7 7 6% 6% 6% 6% 6% 6% 5 5 Drivers 1.32% 1.27% 1.24% 3 1.04% 1.01% 0.52% • Discipline
Slide 8: Worldwide Credit Loss Metrics
Worldwide C h a r g e - O f f s ( $ M ) a n d LT R R a t i o ( % ) Credit Loss LTR Ratio (%) Metrics $89 $107 $101 $88 0.36% 0.35% $67 0.30% 0.32% $45 0.24% 0.17% • Worldwide credit loss metrics remain strong and below year ago Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 levels Credit Loss Reser
Slide 9: U.S. Lease Metrics
U.S. Lease Metrics Lease Return Volume (000) Lease Placement Volume (000) and Return Rates (%) 24-Month Return Rate (%) 36-Month 39-Month / Other 83 82 75 70 71 11 70 67 • Lease placement volume and 12 11 52 12 62 58 65 53 share down YoY 9 11 68 64 38 77% • Lower lease return volume and 36 59 47 76%
Slide 10: Cumulative Maturities At December 31, 2020 ($B)
Cumulative Maturities At December 31, 2020* ($B) Assets Debt $157 • Strong balance sheet is inherently $135 $136 liquid with cumulative debt $111 $103 maturities having a longer tenor $86 $80 than asset maturities $60 • As of December 31, 2020 $81B of $157B assets are unencumbered 2021 2022 2023 202
Slide 11: Funding Structure – Managed
Funding Structure – Managed 2019 2020 Dec 31 Dec 31 Receivables* Term Debt (incl. Bank Borrowings) $ 73 $ 77 ($B) Term Asset-Backed Securities 57 55 Commercial Paper 4 0 Ford Interest Advantage / Deposits 7 6 • Well capitalized with a strong balance sheet; $35B in net liquidity Other 9 7 • Funding i
Slide 12: Public Term Funding Plan ($B)
Public Term Funding Plan* ($B) 2019 2020 2021 Through Actual Actual Forecast Feb 3 • Completed $27B of public issuance in 2020 Unsecured $ 17 $ 14 $ 7 - 11 $ - • Strong balance sheet and substantial liquidity provide funding Securitizations** 14 13 11 - 14 1 flexibility Total $ 31 $ 27 $ 18 - 25 $ 1
Slide 13: 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 14: Appendix
Appendix EBT By Segment A2 Financing Shares And Contract Placement Volume A3 Financing Shares And Contract Placement Volume A4 U.S. Origination Metrics And Credit Loss Drivers A5 Worldwide Credit Loss Metrics A6 U.S. Lease Metrics A7 Total Net Receivables Reconciliation To Managed Receivables A8 Fin
Slide 15: EBT By Segment ($M)
EBT By Segment* ($M) Q4 Full Year H / (L) H / (L) 2020 2019 2020 2019 Results United States and Canada segment $ 842 $ 271 $ 2,241 $ (124) Europe segment 41 (6) 196 (156) All Other segment (0) (28) 38 (105) Total segments $ 883 $ 237 $ 2,475 $ (385) Unallocated other 29 45 133 (5) Earnings before ta
Slide 16: Financing Shares And Contract Placement Volume
Financing Shares And Contract Placement Volume Q4 Full Year 2019 2020 2019 2020 Share of Ford Sales* United States 50 % 40 % 51 % 56 % Canada 79 94 66 74 U.K. 40 34 39 40 Germany 47 42 47 41 China 36 42 35 39 Wholesale Share United States 75 % 74 % 75 % 74 % Canada 55 24 57 40 U.K. 100 100 100 100 G
Slide 17: Financing Shares And Contract Placement Volume
Financing Shares And Contract Placement Volume 2016 2017 2018 2019 2020 Share of Ford Sales* United States 56 % 55 % 58 % 51 % 56 % Canada 75 77 75 66 74 U.K. 38 35 37 39 40 Germany 47 48 48 47 41 China 19 28 35 35 39 Wholesale Share United States 76 % 76 % 76 % 75 % 74 % Canada 61 61 59 57 40 U.K.
Slide 18: U.S. Origination Metrics And Credit Loss Drivers
U.S. Retail & Lease FICO and Higher Risk Mix (%) Retail Repossessions (000) and Repossession Rate (%) Origination Higher Risk Portfolio Mix (%) Repossession Rate (%) Metrics And 739 746 746 748 739 Credit Loss 27 28 27 25 Drivers 21 6% 6% 6% 6% 6% 1.21% 1.29% 1.28% 1.24% 0.95% • Disciplined and cons
Slide 19: Worldwide Credit Loss Metrics
Worldwide C h a r g e - O f f s ( $ M ) a n d LT R R a t i o ( % ) Credit Loss LTR Ratio (%) Metrics $425 $369 $371 $321 $301 0.33% 0.35% • Worldwide credit loss metrics 0.31% 0.31% remain strong 0.27% • Credit loss reserve based on historical losses, portfolio quality, 2016 2017 2018 2019 2020 and
Slide 20: U.S. Lease Metrics
U.S. Lease Metrics Lease Return Volume (000) Lease Placement Volume (000) and Return Rates (%) 24-Month Return Rate (%) 36-Month 39-Month / Other 290 290 281 393 385 246 243 368 56 38 43 329 41 258 43 80% 78% 78% 78% 298 290 288 236 180 69% • Lease share below industry, reflecting Ford sales mix 39
Slide 21: Total Net Receivables Reconciliation To Managed Receivables ($B)
Total Net Receivables Reconciliation To Managed Receivables ($B) 2018 2019 2020 Dec 31 Dec 31 Dec 31 Finance receivables, net (GAAP) $ 118.8 $ 114.3 $ 105.0 Net investment in operating leases (GAAP) 27.4 27.7 26.7 Total net receivables* $ 146.3 $ 142.0 $ 131.7 Held-for-sale receivables (GAAP) $ - $
Slide 22: Financial Statement Leverage Reconciliation To Managed Leverage ($B)
Financial Statement Leverage Reconciliation To Managed Leverage* ($B) 2018 2019 2020 Dec 31 Dec 31 Dec 31 Leverage Calculation Debt $ 140.1 $ 140.0 $ 137.7 Adjustments for cash (10.2) (11.7) (18.5) Adjustments for derivative accounting 0.2 (0.5) (1.5) Total adjusted debt $ 130.1 $ 127.8 $ 117.7 Equi
Slide 23: Liquidity Sources ($B)
Liquidity Sources* ($B) 2018 2019 2020 Dec 31 Dec 31 Dec 31 Liquidity Sources Cash $ 10.2 $ 11.7 $ 18.5 Committed asset-backed facilities 35.4 36.6 38.1 Other unsecured credit facilities 3.0 3.0 2.5 Ford corporate credit facility allocation 3.0 3.0 - Total liquidity sources $ 51.6 $ 54.3 $ 59.1 Util
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 supplemental
Slide 25: Definitions And Calculations
Definitions And Calculations ABS capacity in excess of eligible receivables and other adjustments (as shown on the Liquidity Sources chart) Includes asset-backed capacity in excess of eligible receivables; cash related to the Ford Credit Revolving Extended Variable-utilization program (“FordREV”), w
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