Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Credit Company — Q1 2016 Earnings Presentation
30 slides from Ford Mtr Co Del's earnings presentation, Apr 28, 2016
Slide 1: Ford Credit 1Q 2016 Earnings
FORD CREDIT 1Q 2016 EARNINGS April 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: 1Q 2016 Key Metrics
1Q 2016 KEY METRICS U.S. Retail and Lease Contract Managed Average Over-60-Day Loss-to-Receivables Volume Receivables* Pre-Tax Results Placement Delinquencies (LTR) (000) (Bils) (Mils) FICO (Pct) (Pct) Strong quarterly profit $132 739 732 482 480 Receivables growth in line $113 $483 $514 with our gu
Slide 4: 1Q 2016 Pre-Tax Results (Mils)
1Q 2016 PRE-TAX RESULTS (MILS) $31 $514 $483 Strong profit Growth in all products and regions $137 Credit losses and residual $36 $17 performance primarily $(33) driven by lower auction $(65) $(61) values Volume / Financing Credit Lease 1Q 2015 1Q 2016 Mix Margin Loss Residual Exchange Other 3 • Fir
Slide 5: North America Financing Shares and Contract Placement Volume
NORTH AMERICA FINANCING SHARES AND CONTRACT PLACEMENT VOLUME First Quarter 2015 2016 Financing Shares (excl. Fleet) Retail installment and lease share of Ford retail sales United States 63 % 57 % Canada 68 73 Wholesale share United States 76 % 75 % Canada 62 61 Contract Placement Volume -- New and u
Slide 6: International Financing Shares and Contract Placement Volume
INTERNATIONAL FINANCING SHARES AND CONTRACT PLACEMENT VOLUME First Quarter 2015 2016 Financing Shares (incl. Fleet) Retail installment and lease share of total Ford sales Europe 35 % 35 % China 12 13 Wholesale share Europe 98 % 98 % China 55 53 Contract Placement Volume -- New and used retail / leas
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 67 mo. 741 741 63 mo. 64 mo. 63 mo. 64 mo. 739 740 732 6% 6% 6% 6% 6% 4% 3% 3% 4% 3% 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15
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% 0.13% 0.13% 0.13% 0.14% 0.89% 0.10% 7 6 7 8 8 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 Severity Charge-Offs (Mils) and LTR (%) $9,600 $9,800 LTR 0.43% 0.44% $8,600 $9
Slide 9: Worldwide Credit Loss Metrics
WORLDWIDE CREDIT LOSS METRICS Charge-Offs (Mils) and Loss-to-Receivables (LTR) Ratio (%) LTR 0.27% 0.29% 0.22% 0.24% 0.17% $62 $50 $73 $86 $92 1Q15 2Q15 3Q15 4Q15 1Q16 Credit Loss Reserve (Mils) and Reserve as a Pct. of EOP Managed Receivables Reserve as % of EOP Rec. 0.31% 0.32% 0.33% 0.33% 0.35% $
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 32% 101 92 26 18 29% 28 16 28% 27% 28% 22 26% 22% 22% 22% 22% 75 75 79 61 65 Ford 9 10 10 10 10 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 * Source:
Slide 11: U.S. Lease Residual Performance
U.S. LEASE RESIDUAL PERFORMANCE Lease Return Volume (000) Auction Values (At 1Q 2016 Mix) 24-Month 24-Month 36-Month $20,495 $20,635 39-Month / Other $19,895 59 $19,100 $19,290 51 44 20 42 43 20 $18,540 $18,740 23 20 $18,160 21 $17,860 $17,605 33 26 15 16 19 36-Month 6 5 4 5 6 1Q15 2Q15 3Q15 4Q15 1Q
Slide 12: Funding Structure – Managed Receivables
FUNDING STRUCTURE – MANAGED RECEIVABLES $132 $134-139 $127 $2 ~$3 (Bils) $113 $2 $6 ~$6 $6 $2 Commercial Paper $6 $50 $50-53 Ford Interest Advantage $50 $43 Term Asset-Backed Securities* $69 $66-68 $62 $55 Term Debt (incl Bank Borrowings) Other $5 $6 $8 $7-8 Equity $11 $12 $12 ~$13 Cash** $9 $11 $15
Slide 13: Public Term Funding Plan
PUBLIC TERM FUNDING PLAN 2016 2014 2015 Through (Bils) Actual Actual Forecast April 27 Strong start to our Unsecured public term funding - Ford Motor Credit $ 8 $ 11 $ 9 - 12 $ 5 plan - Ford Credit Canada 2 1 1-2 1 - FCE Bank 3 4 3-4 1 YTD issuance evenly - Rest of World* 0 0 1 - weighted Total Unse
Slide 14: Balance Sheet Metrics
BALANCE SHEET METRICS Managed Leverage (To 1)* Liquidity Available For Use (Bils) $35 9.5 9.4 8.8 8-9 $28 $25+ $24 1Q15 4Q15 1Q16 Target 1Q15 4Q15 1Q16 Target * See Appendix for reconciliation to GAAP 13 • We target managed leverage in the range of 8:1 to 9:1. • Managed leverage at March 31 was abov
Slide 15: 2016 Guidance
2016 GUIDANCE 2015 FY 2016 FY Results Guidance Pre-Tax Profit $2.1B ≥ 2015 Managed Receivables* $127B $134B - $139B Distributions $250M $0 Managed Leverage* (to 1) 9.5 ~9 * See Appendix for reconciliation to GAAP 14 • Our guidance for pre-tax profit and managed receivables is unchanged. • We do not
Slide 16: Key Takeaways
KEY TAKEAWAYS 1. Strategic asset to Ford, delivering profitable, sustainable growth 2. Strong 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 15 15
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 Historical North America Financing Shares and Contract Placement Volume 2 Historical International Financing Shares and Contract Placement Volume 3 Historical U.S. Origination Metrics 4 Historical U.S. Retail and Lease Credit Loss Drivers 5 Historical Worl
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 F3 R
Slide 21: Historical North America Financing Shares and Contract Placement Volume
HISTORICAL NORTH AMERICA FINANCING SHARES AND CONTRACT PLACEMENT VOLUME 2011 2012 2013 2014 2015 Financing Shares (excl. Fleet) Retail installment and lease share of Ford retail sales United States 52 % 54 % 56 % 63 % 65 % Canada 53 55 65 67 73 Wholesale share United States 80 % 78 % 77 % 77 % 76 %
Slide 22: Historical International Financing Shares and Contract Placement Volume
HISTORICAL INTERNATIONAL FINANCING SHARES AND CONTRACT PLACEMENT VOLUME 2011 2012 2013 2014 2015 Financing Shares (incl. Fleet) Retail installment and lease share of total Ford sales Europe 29 % 32 % 34 % 36 % 37 % China 18 14 13 13 12 Wholesale share Europe 99 % 98 % 98 % 98 % 98 % China 64 58 59 6
Slide 23: Historical U.S. Origination Metrics
HISTORICAL 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 738 737 738 741 740 62 mo. 64 mo. 59 mo. 60 mo. 60 mo. 6% 6% 5% 5% 6% 4% 0% 0% 0% 1% 2011 2012 2013 2014 2015
Slide 24: Historical U.S. Retail and Lease Credit Loss Drivers
HISTORICAL U.S. RETAIL AND LEASE CREDIT LOSS DRIVERS Over-60-Day Delinquencies* Repossessions (000) 1.86% Repo. Ratio 0.14% 0.15% 0.15% 0.14% 1.35% 1.18% 0.12% 1.06% 0.98% 45 32 29 28 28 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Severity** Charge-Offs (Mils) and LTR (%) $8,900 LTR $7,600 $7,
Slide 25: Historical Worldwide Credit Loss Metrics
HISTORICAL WORLDWIDE CREDIT LOSS METRICS Charge-Offs (Mils) and Loss-to-Receivables (LTR) Ratio (%) LTR 0.24% 0.23% 0.16% 0.18% 0.19% $201 $136 $176 $209 $271 2011 2012 2013 2014 2015 Credit Loss Reserve (Mils) and Reserve as a Pct. of EOP Managed Receivables Reserve as % 0.63% of EOP Rec. 0.44% 0.3
Slide 26: Historical U.S. Lease Origination Metrics
HISTORICAL U.S. LEASE ORIGINATION METRICS Lease Placement Volume (000) Lease Share of Retail Sales 24-Month 36-Month 407 39-Month / Other 357 92 324 Industry* 87 28% 26% 94 24% 236 22% 204 20% 21% 20% 18% 54 113 276 230 15% 189 14% 105 91 Ford 45 32 41 40 39 2011 2012 2013 2014 2015 2011 2012 2013 2
Slide 27: Historical U.S. Lease Residual Performance
HISTORICAL U.S. LEASE RESIDUAL PERFORMANCE Lease Return Volume (000) Auction Values (At Incurred Mix) 24-Month 24-Month 36-Month 189 39-Month / Other 180 $19,875 $19,740 $19,785 $19,000 $18,765 114 84 114 86 4 $17,975 71 $17,535 $17,865 62 44 75 $17,385 46 33 $16,540 26 36-Month 38 17 29 12 17 21 20
Slide 28: Managed Receivables Reconciliation to GAAP
MANAGED RECEIVABLES RECONCILIATION TO GAAP Mar . 31, Dec. 31, Mar . 31, (Bils) 2015 2015 2016 Net R eceivables* Finance receivables -- North America Segment Consumer retail financing $43.7 $49.2 $49.4 Non-consumer: Dealer financing** 22.5 25.5 27.1 Non-consumer: Other 0.9 0.9 0.9 Total finance recei
Slide 29: Managed Leverage Reconciliation to GAAP
MANAGED LEVERAGE RECONCILIATION TO GAAP Mar. 31, Dec. 31, Mar. 31, (Bils) 2015 2015 2016 Leverage Calculation Total debt* $109.1 $119.6 $127.4 Adjustments for cash** (13.0) (11.2) (14.9) Adjustments for derivative accounting*** (0.7) (0.5) (1.0) Total adjusted debt $95.4 $107.9 $111.5 Equity**** $11
Slide 30: Liquidity Sources
LIQUIDITY SOURCES Mar. 31, Dec. 31, Mar. 31, (Bils) 2015 2015 2016 Liquidity Sources Cash* $ 13.0 $ 11.2 $ 14.9 Committed ABS facilities** 31.9 33.2 36.4 Committed Other unsecured credit facilities 1.6 2.3 2.5 Capacity Ford revolving credit facility allocation 2.0 3.0 3.0 $41.9 billion Total liquidi
Ford Motor Credit Company — Q1 2016 Earnings Presentation on 6ix