Ford Mtr Co Del · NYSE:F

Ford Mtr Co Del — Ford Motor Credit Company — Q2 2019 Earnings Presentation

23 slides from Ford Mtr Co Del's earnings presentation, Jul 24, 2019

  1. Slide 1: 2Q 2019 Earnings Review

    2Q 2019 Earnings Review July 24, 2019

  2. Slide 2: Key Takeaways

    Key Takeaways • Strong 2Q 2019 EBT of $831 million • Loss metrics reflect healthy and improved consumer credit conditions • 2Q 2019 auction values remain consistent with a year ago; now expect FY to be down around 3% YoY • Funding plan well positioned, diversified across platforms and markets • Mana

  3. Slide 3: Key Metrics

    Key Metrics SECOND QUARTER YEAR TO DATE 2018 2019 H / (L) 2018 2019 H / (L) Net Receivables ($B) $ 143 $ 143 - % $ 143 $ 143 - % Managed Receivables* ($B) $ 151 $ 152 - % $ 151 $ 152 - % • Strong EBT up 29% YoY Loss-to-Receivables** (LTR) 40 bps 39 bps (1) bp 51 bps 47 bps (4) bps Auction Values***

  4. Slide 4: 2Q 2019 EBT YoY Bridge ($M)

    2Q 2019 EBT YoY Bridge ($M) • Ford Credit EBT up 29% • Lease residual reflects benefit from lower supplemental Supplemental Depreciation $ 151 depreciation on vehicles in Auction Performance (76) Ford Credit lease portfolio • Favorable derivatives market Derivatives Market Valuation $ 125 Other 29 v

  5. Slide 5: EBT By Segment

    EBT By Segment 2Q YTD H / (L) H / (L) 2019 2018 2019 2018 Results ($M) Americas segment $ 608 $ 60 $ 1,252 $ 189 Europe segment 116 13 232 18 Asia Pacific segment 15 (12) 49 (24) Total segments $ 739 $ 61 $ 1,533 $ 183 Unallocated other* 92 125 99 163 Earnings before taxes $ 831 $ 186 $ 1,632 $ 346

  6. Slide 6: Americas Financing Shares And Contract Placement Volume

    Americas Financing Shares And Contract Placement Volume 2Q YTD 2018 2019 2018 2019 Financing Shares (%) Share of Ford Retail Sales (excl. Fleet) United States 57 % 49 % 59 % 49 % Canada 79 65 75 66 Wholesale Share United States 76 % 75 % 76 % 76 % Canada 59 57 60 57 Contract Placement Volume - New a

  7. Slide 7: Europe Financing Shares And Contract Placement Volume

    Europe Financing Shares And Contract Placement Volume 2Q YTD 2018 2019 2018 2019 Financing Shares (incl. Fleet) (%) Share of Total Ford Sales U.K. 37 % 36 % 37 % 38 % Germany 54 49 51 49 Total Europe Segment 39 36 37 37 Wholesale Share U.K. 100 % 100 % 100 % 100 % Germany 91 93 93 93 Total Europe Se

  8. Slide 8: Asia Pacific Financing Shares And Contract Placement Volume

    Asia Pacific Financing Shares And Contract Placement Volume 2Q YTD 2018 2019 2018 2019 Financing Shares (incl. Fleet) (%) Share of Total Ford Sales China 31 % 32 % 33 % 34 % India 9 13 9 12 Wholesale Share China 59 % 64 % 60 % 62 % India 37 34 38 35 Contract Placement Volume - New and Used (000) Chi

  9. Slide 9: 2Q 2019 Net Receivables Mix ($B)

    2Q 2019 Net Receivables Mix ($B) Net Investment in Operating Leases Consumer Financing Non-Consumer Financing $143.4 $27.7 $112.8 2Q 2019 H / (L) 2018 • Operating lease portfolio was (Pct.) (Ppts.) 19% of total net receivables SUV / CUV 57 2 $27.1 Truck 29 4 Car 14 (6) • U.S. and Canada represent 98

  10. 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 745 747 747 747 743 741 • Disciplined and consistent underwriting practices 6% 6% 6% 6% 6% 6% • Portfolio quality evidenced by FICO scores and steady risk 1Q18 2Q18 3Q18 4Q18 1Q1

  11. Slide 11: U.S. Retail Credit Loss Drivers

    U.S. Retail Credit Loss Drivers Over-60-Day Delinquencies (excl. Bankruptcies) Repossessions (000) and Repo. Rate (Pct) Repo. Rate Repossessions 1.41% 1.17% 1.26% 1.26% 1.24% 0.14% 0.14% 1.13% 0.12% 0.13% 0.13% 0.11% 8 7 7 7 • Delinquencies and 6 6 repossessions remained low 1Q18 2Q18 3Q18 4Q18 1Q19

  12. Slide 12: Worldwide Credit Loss Metrics

    Worldwide Credit Loss Metrics Charge-Offs ($M) and LTR Ratio (Pct) LTR Ratio Charge-Offs 0.43% 0.42% 0.36% 0.31% 0.25% 0.22% • Worldwide credit loss metrics $93 $127 $129 $109 $66 $76 remain strong 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 • Credit loss reserve based on Credit Loss Reserve ($M) and historical l

  13. Slide 13: U.S. Lease Origination Metrics

    U.S. Lease Origination Metrics Lease Placement Volume (000) 24-Month 39-Month / Other 36-Month 104 93 95 93 12 83 81 12 10 9 9 9 58 75 48 80 75 56 23 17 26 16 5 9 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 • Lease share below industry, reflecting Ford sales mix Lease Share of Retail Sales (Pct) Ford Credit Indus

  14. Slide 14: U.S. Lease Residual Performance

    U.S. Lease Residual Performance Lease Return Volume (000) and Return Rates (Pct) Return Rates Return Volume 79% 78% 78% 80% 78% 77% 68 71 71 71 74 75 • Auction performance slightly 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 better than expectations; now expect FY auction values to be down around 3% YoY Off-Lease

  15. Slide 15: Funding Structure – Managed Receivables ($B)

    Funding Structure – Managed Receivables* ($B) 2017 2018 2019 Dec 31 Dec 31 Jun 30 Term Debt (incl. Bank Borrowings) $ 75 $ 70 $ 74 Term Asset-Backed Securities 53 60 57 Commercial Paper 5 4 4 • Funding is diversified across Ford Interest Advantage / Deposits 5 6 6 platforms and markets Other 9 10 10

  16. Slide 16: Public Term Funding Plan ($B)

    Public Term Funding Plan* ($B) 2017 2018 2019 Through Actual Actual Forecast Jul 23 Unsecured ― Currency of issuance (USD Equivalent) USD $ 10 $ 6 $ 8 - 10 $ 6 CAD 2 1 1-2 1 EUR / GBP 3 4 4-5 4 Other 1 1 1 1 Total unsecured $ 16 $ 13 $ 15 - 18 $ 12 Securitizations 15 14 12 - 14 7 Total public $ 32 $

  17. Slide 17: Cautionary Note On Forward-Looking Statements

    Cautionary Note On Forward-Looking Statements Statements included or incorporated by reference herein may constitute “forw ard-looking statements” w ithin the meaning of the Priv ate Securities Litigation Reform Act of 1995. Forw ard-looking statements are based on expectations, forecasts, and assum

  18. Slide 18: 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

  19. Slide 19: Total Net Receivables Reconciliation To Managed Receivables ($B)

    Total Net Receivables Reconciliation To Managed Receivables ($B) 2017 2018 2018 2019 Dec 31 Jun 30 Dec 31 June 30 Finance receivables, net (GAAP) $ 116.0 $ 115.9 $ 118.8 $ 115.7 Net investment in operating leases (GAAP) 26.7 27.3 27.4 27.7 Total net receivables* $ 142.7 $ 143.2 $ 146.3 $ 143.4 Unear

  20. Slide 20: Financial Statement Leverage Reconciliation To Managed Leverage ($B)

    Financial Statement Leverage Reconciliation To Managed Leverage* ($B) 2018 2018 2019 2019 Jun 30 Dec 31 Mar 31 Jun 30 Leverage Calculation Total debt $ 136.7 $ 140.1 $ 142.9 $ 141.5 Adjustments for cash (10.7) (10.2) (12.8) (14.1) Adjustments for derivative accounting 0.5 0.2 (0.1) (0.6) Total adjus

  21. Slide 21: Liquidity Sources ($B)

    Liquidity Sources* ($B) 2018 2018 2019 2019 Jun 30 Dec 31 Mar 31 Jun 30 Liquidity Sources Cash $ 10.7 $ 10.2 $ 12.8 $ 14.1 Committed asset-backed facilities 32.0 35.4 35.2 35.7 Other unsecured credit facilities 2.8 3.0 3.3 2.9 Ford corporate credit facility allocation 3.0 3.0 3.0 3.0 Total liquidity

  22. Slide 22: 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

  23. Slide 23: 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

Ford Motor Credit Company — Q2 2019 Earnings Presentation on 6ix