Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Credit Company — Q3 2018 Earnings Presentation
24 slides from Ford Mtr Co Del's earnings presentation, Oct 24, 2018
Slide 1: 3Q Earnings Review
3Q Earnings Review October 24, 2018
Slide 2: Key Takeaways
Key Takeaways • 3Q EBT of $678 million – the best quarter in more than 7 years • Loss metrics reflect healthy consumer credit conditions • Continued strong auction performance • Funding plan well positioned, diversified across platforms and markets • Managed leverage maintained within target range o
Slide 3: Key Metrics
Key Metrics THIRD QUARTER YEAR TO DATE 2017 2018 H / (L) 2017 2018 H / (L) Net Receivables (Bils) $ 138 $ 144 4 % $ 138 $ 144 4 % Managed Receivables* (Bils) $ 145 $ 152 5 % $ 145 $ 152 5 % Loss-to-Receivables** (LTR) 53 bps 44 bps (9) bps 51 bps 43 bps (8) bps Auction Values*** $ 17,795 $ 18,760 5
Slide 4: 3Q 2018 EBT YoY Bridge
3Q 2018 EBT YoY Bridge (Mils) Residual Losses $50 • EBT $78M higher YoY Supplemental Depreciation 38 • Improvement reflects favorable lease residual performance due to higher auction values; also reflects favorable volume and mix Volume / Financing Credit Lease 3Q 2017 Mix Margin Loss Residual Excha
Slide 5: 3Q 2018 EBT By Segment
3Q 2018 EBT By Segment 3Q YTD H / (L) H / (L) 2018 2017 2018 2017 Results (Mils) Americas segment $ 556 $ 71 $ 1,619 $ 311 Europe segment 89 17 303 80 Asia Pacific segment 13 (10) 86 17 Total segments $ 658 $ 78 $ 2,008 $ 408 Unallocated other* 20 - (44) (144) Earnings before taxes $ 678 $ 78 $ 1,96
Slide 6: Americas Financing Shares And Contract Placement Volume
Americas Financing Shares And Contract Placement Volume 3Q YTD 2017 2018 2017 2018 Financing Shares (%) Retail Installment and Lease Share of Ford Retail Sales (excl. Fleet) United States 53 % 59 % 53 % 59 % Canada 74 69 75 73 Wholesale Share United States 76 % 76 % 76 % 76 % Canada 60 57 61 59 Cont
Slide 7: Europe Financing Shares And Contract Placement Volume
Europe Financing Shares And Contract Placement Volume 3Q YTD 2017 2018 2017 2018 Financing Shares (incl. Fleet) (%) Retail Installment and Lease Share of Total Ford Sales U.K. 32 % 36 % 34 % 37 % Germany 50 47 48 50 Total Europe Segment 38 38 36 37 Wholesale Share U.K. 100 % 100 % 100 % 100 % German
Slide 8: Asia Pacific Financing Shares And Contract Placement Volume
Asia Pacific Financing Shares And Contract Placement Volume 3Q YTD 2017 2018 2017 2018 Financing Shares (incl. Fleet) (%) Retail Installment Share of Total Ford Sales China 31 % 37 % 28 % 34 % India 9 7 9 9 Wholesale Share China 55 % 64 % 56 % 61 % India 36 37 36 38 Contract Placement Volume - New a
Slide 9: 3Q 2018 Net Receivables Mix
3Q 2018 Net Receivables Mix (Bils) Net Investment in Operating Leases Consumer Financing Non-Consumer Financing $143.6 $27.6 $112.7 • Operating lease portfolio was 3Q 2018 H/(L) 2017 (Pct.) (Ppts.) 19% of total net receivables SUV / CUV 55 0 $27.1 Truck 27 4 Car 18 (4) • U.S. and Canada represent 98
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 748 750 747 744 743 745 • Disciplined and consistent underwriting practices 6% 6% 6% 6% 6% 6% • Portfolio quality evidenced by FICO scores and steady risk 2Q17 3Q17 4Q17 1Q18 2Q1
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 1.16% 1.22% 1.06% 1.12% 1.07% 0.15% 1.00% 0.13% 0.13% 0.12% 0.12% • Delinquencies and 0.10% repossessions remained low 10 10 9 9 8 8 • Severity t
Slide 12: Worldwide Credit Loss Metrics
Worldwide Credit Loss Metrics Charge-Offs (Mils) and LTR Ratio (Pct) LTR Ratio Charge-Offs 0.39% 0.40% 0.33% 0.31% 0.29% • YoY increase in charge-offs 0.25% reflects a non-consumer loss recognized in 3Q 2018 $101 $118 $143 $118 $97 $152 • Credit loss reserve based on 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 hi
Slide 13: U.S. Lease Origination Metrics
U.S. Lease Origination Metrics Lease Placement Volume (000) 24-Month 39-Month / Other 36-Month 97 104 91 93 95 10 82 12 10 12 10 8 76 58 75 72 65 80 11 9 9 23 17 5 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 • 3Q lease share lower sequentially and below industry Lease Share of Retail Sales (Pct) reflecting Ford s
Slide 14: U.S. Lease Residual Performance
U.S. Lease Residual Performance Lease Return Volume (000) and Return Rates (Pct) Return Rates Return Volume 81% 79% 78% 79% 78% 77% • Healthy used car market supporting lease residual and credit loss performance 80 70 61 68 71 71 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 • Auction values stronger than expected
Slide 15: Funding Structure – Managed Receivables
Funding Structure – Managed Receivables* (Bils) 2016 2017 2018 Dec 31 Dec 31 Sep 30 Term Debt (incl. Bank Borrowings) $ 66 $ 75 $ 73 Term Asset-Backed Securities 50 53 55 Commercial Paper 4 5 4 • Funding is diversified across Ford Interest Advantage / Deposits 6 5 6 platforms and markets Other 9 9 1
Slide 16: Public Term Funding Plan
Public Term Funding Plan* (Bils) 2018 2016 2017 Through Actual Actual Forecast Oct 23 Unsecured -- Currency of issuance (USD Equivalent) USD $ 9 $ 10 $ 6-8 $ 6 CAD 1 2 1-2 1 EUR / GBP 3 3 4-5 4 Other 1 1 1 1 Total unsecured $ 14 $ 16 $ 14 - 16 $ 13 Securitizations $ 13 $ 15 $ 13 - 14 $ 13 Total publ
Slide 17: 2018 Guidance
2018 Guidance (Mils) • Expect 2018 EBT to be 2018 FY 2018 YTD improved from 2017 Key Metric 2017 FY Results 2018 FY Plan Outlook Results • Distributions are planned to EBT $2,310 < 2017 > 2017 $1,964 maintain leverage within target range of 8:1 to 9:1 Distributions $406 ~ $2,000 ~ $2,500 $2,063 • Pr
Slide 18: 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 19: 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
Slide 20: Total Net Receivables Reconciliation To Managed Receivables
Total Net Receivables Reconciliation To Managed Receivables (Bils) 2016 2017 2017 2018 Dec 31 Sep 30 Dec 31 Sep 30 Finance receivables, net (GAAP) $ 103.0 $ 110.6 $ 116.0 $ 116.0 Net investment in operating leases (GAAP) 27.2 26.9 26.7 27.6 Total net receivables* $ 130.2 $ 137.5 $ 142.7 $ 143.6 Unea
Slide 21: Financial Statement Leverage Reconciliation To Managed Leverage
Financial Statement Leverage Reconciliation To Managed Leverage* (Bils) 2017 2017 2018 2018 Sep 30 Dec 31 Jun 30 Sep 30 Leverage Calculation Total debt $ 132.4 $ 137.8 $ 136.7 $ 138.2 Adjustments for cash (11.3) (11.8) (10.7) (12.1) Adjustments for derivative accounting (0.2) - 0.5 0.6 Total adjuste
Slide 22: Liquidity Sources
Liquidity Sources* (Bils) 2017 2017 2018 2018 Sep 30 Dec 31 Jun 30 Sep 30 Liquidity Sources Cash $ 11.3 $ 11.8 $ 10.7 $ 12.1 Committed ABS facilities 33.4 33.4 32.0 32.0 Other unsecured credit facilities 2.8 3.3 2.8 3.0 Ford corporate credit facility allocation 3.0 3.0 3.0 3.0 Total liquidity source
Slide 23: 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 24: 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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