Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Credit Company — Q2 2016 Earnings Presentation
23 slides from Ford Mtr Co Del's earnings presentation, Jul 28, 2016
Slide 1: Ford Credit 2Q 2016 Earnings
FORD CREDIT 2Q 2016 EARNINGS July 28, 2016 0 0
Slide 2: Ford Credit Strategy
FORD CREDIT STRATEGY ORIGINATE SERVICE FUND Support Ford and High customer and dealer Strong liquidity Lincoln sales satisfaction Diverse sources and Strong dealer relationships World-class servicing channels Full spread of business Collections within portfolio Cost effective loss
Slide 3: 2Q 2016 Key Metrics
2Q 2016 KEY METRICS U.S. Retail and Lease Net Managed Pre-Tax Average Over-60-Day Loss-to-Receivables Receivables growth as Receivables Receivables* Results Placement Delinquencies (LTR) (Bils) (Bils) (Mils) FICO (Pct) (Pct) expected $134 740 741 $128 $118 2Q profit solid, but lower $113 $506 YOY; 1
Slide 4: 2Q 2016 Pre-Tax Results (Mils)
2Q 2016 PRE-TAX RESULTS (MILS) $506 Receivables growth drove $400 Insurance $(34) volume and mix Charge-offs $(34) Derivatives Market Valuation (15) Reserve (31) Other (8) Credit losses normalizing Residual Gains / (Losses) $(16) $139 Supplemental Depreciation (65) with higher charge-offs; reserve i
Slide 5: North America Financing Shares and Contract Placement Volume
NORTH AMERICA FINANCING SHARES AND CONTRACT PLACEMENT VOLUME Second Quarter Year-to-Date 2015 2016 2015 2016 Financing Shares (excl. Fleet) Retail installment and lease share of Ford retail sales United States 64 % 60 % 63 % 59 % Canada 81 76 75 75 Wholesale share United States 76 % 75 % 76 % 75 % C
Slide 6: International Financing Shares and Contract Placement Volume
INTERNATIONAL FINANCING SHARES AND CONTRACT PLACEMENT VOLUME Second Quarter Year-to-Date 2015 2016 2015 2016 Financing Shares (incl. Fleet) Retail installment and lease share of total Ford sales Europe 38 % 37 % 36 % 36 % China 10 16 11 14 Wholesale share Europe 98 % 98 % 98 % 98 % China 53 61 54 57
Slide 7: U.S. Origination Metrics
U.S. ORIGINATION METRICS FICO and Higher Risk Mix Retail Contract Terms Retail and Lease Average Placement FICO Average Retail Term Higher Risk Portfolio Mix Retail ≥73 Months Mix 739 740 741 741 741 67 mo. 732 63 mo. 64 mo. 63 mo. 64 mo. 64 mo. 6% 6% 6% 6% 6% 6% 4% 5% 3% 3% 4% 3% 1Q15 2Q15 3Q15 4Q1
Slide 8: U.S. Retail and Lease Credit Loss Drivers
U.S. RETAIL AND LEASE CREDIT LOSS DRIVERS Over-60-Day Delinquencies* Repossessions (000) Repo. Ratio 1.00% 1.01% 1.00% 1.04% 0.96% 0.13% 0.13% 0.13% 0.14% 0.12% 0.89% 0.10% 7 6 7 8 8 7 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Severity Charge-Offs (Mils) and LTR Ratio (%) LTR $9,60
Slide 9: Worldwide Credit Loss Metrics
WORLDWIDE CREDIT LOSS METRICS Charge-Offs (Mils) and LTR Ratio (%) LTR 0.27% 0.29% 0.22% 0.24% 0.25% 0.17% $62 $50 $73 $86 $92 $84 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Credit Loss Reserve (Mils) and Reserve as a Pct. of EOP Managed Receivables Reserve as % of EOP Rec. 0.35% 0.38% 0.31% 0.32% 0.33% 0.33% $3
Slide 10: U.S. Lease Origination Metrics
U.S. LEASE ORIGINATION METRICS Lease Placement Volume (000) Lease Share of Retail Sales 24-Month 36-Month 39-Month / Other 111 Industry* 103 107 106 32% 101 31% 92 26 18 16 29% 28 16 28% 27% 28% 22 26% 22% 23% 22% 22% 22% 75 75 79 80 61 65 Ford 9 10 10 10 10 10 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 1Q15 2Q1
Slide 11: U.S. Lease Residual Performance
U.S. LEASE RESIDUAL PERFORMANCE Lease Return Volume (000) Off-Lease Auction Values (At 2Q16 Mix) 24-Month 36-Month 24-Month 39-Month / Other $20,165 $20,280 $19,655 62 59 $18,835 $19,010 $19,020 51 19 44 43 20 42 $18,340 $18,530 20 $17,965 $17,700 $17,600 23 21 20 $17,420 33 36 26 15 16 19 36-Month
Slide 12: Funding Structure – Managed Receivables
FUNDING STRUCTURE – MANAGED RECEIVABLES* $134 $127 $3 (Bils) $113 $2 $6 $6 $2 Commercial Paper $6 $47 $50 Ford Interest Advantage $43 Term Asset-Backed Securities** $70 $62 Term Debt (incl Bank Borrowings) $55 Other $8 $5 $6 Equity $11 $12 $12 Cash*** $9 $11 $12 Year-End Year-End 2Q Securitized Fund
Slide 13: Public Term Funding Plan
PUBLIC TERM FUNDING PLAN 2016 2014 2015 Through (Bils) Actual Actual Forecast July 27 Outstanding first half Unsecured of public term issuance - Ford Motor Credit $8 $ $11 $10 - 12 $8 - Ford Credit Canada 2 1 1-2 1 YTD issuance weighted - FCE Bank 3 4 3-4 3 toward unsecured - Rest of World* 0 0 1 -
Slide 14: Balance Sheet Metrics
BALANCE SHEET METRICS Leverage (To 1)* Liquidity Available For Use (Bils) Financial Statement Managed 10.4 $35 $34 10.2 10.2 9.5 9.4 9.4 8-9 $25 $24 4Q15 1Q16 2Q16 Target 4Q15 1Q16 2Q16 Target Minimum * See Appendix for reconciliation to GAAP 13 • At June 30, financial statement leverage was 10.2 to
Slide 15: 2016 Guidance
2016 GUIDANCE 2015 FY 2016 FY Memo: 2016 1H Results Guidance Status Results Pre-Tax Profit $2,086M ≥ 2015 Lower $914M Distributions $250M $0 On Track $0 14 • We now expect our full-year pre-tax results to be lower than 2015, primarily reflecting our expectation of continued lower auction values on s
Slide 16: Key Takeaways
KEY TAKEAWAYS 1. Strategic asset to Ford, delivering profitable, sustainable growth 2. Solid quarterly pre-tax profit 3. Consistent originations, servicing and collections 4. Robust portfolio performance with low credit losses 5. Funding plan well-positioned for business cycles 6. Full-year pre-tax
Slide 17: Risk Factors
RISK FACTORS 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 assumptions by our management and involve
Slide 18: Appendix
APPENDIX
Slide 19: Appendix Index
APPENDIX INDEX Credit Ratings 1 Total Net Receivables Reconciliation to Managed Receivables 2 Financial Statement Leverage Reconciliation to Managed Leverage 3 Liquidity Sources 4 18
Slide 20: Credit Ratings
CREDIT RATINGS S&P Moody's Fitch DBRS Issuer Ratings Ford Motor BBB N/A BBB BBB Ford Credit BBB N/A BBB BBB FCE Bank plc BBB N/A BBB NR Long-Term Senior Unsecured Ford Motor BBB Baa2 BBB BBB Ford Credit BBB Baa2 BBB BBB FCE Bank plc BBB Baa2 BBB NR Short-Term Unsecured Ford Credit A-2 P-2 F2 R-2M Ou
Slide 21: Total Net Receivables Reconciliation to Managed Receivables
TOTAL NET RECEIVABLES RECONCILIATION TO MANAGED RECEIVABLES Dec . 3 1 , Jun. 3 0 , Dec . 3 1 , Jun. 3 0 , (Bils) 2014 2015 2015 2016 Net R ec eivables* Finance receivables -- North America Segment Consumer retail financing $44.1 $45.2 $49.2 $50.8 Non-consumer: Dealer financing** 22.5 23.1 25.5 27.2
Slide 22: Financial Statement Leverage Reconciliation to Managed Leverage
FINANCIAL STATEMENT LEVERAGE RECONCILIATION TO MANAGED LEVERAGE Dec. 31, Mar. 31, Jun. 30, (Bils) 2015 2016 2016 Leverage Calculation Total debt* $119.6 $127.4 $126.3 Adjustments for cash** (11.2) (14.9) (11.6) Adjustments for derivative accounting*** (0.5) (1.0) (1.3) Total adjusted debt $107.9 $11
Slide 23: Liquidity Sources
LIQUIDITY SOURCES Dec. 31, Mar. 31, Jun. 30, (Bils) 2015 2016 2016 Liquidity Sources Cash* $11.2 $14.9 $11.6 Committed ABS facilities** 33.2 36.4 36.0 Committed Other unsecured credit facilities 2.3 2.5 2.7 Capacity Ford revolving credit facility allocation 3.0 3.0 3.0 $41.7 billion Total liquidity
Ford Motor Credit Company — Q2 2016 Earnings Presentation on 6ix