Ford Mtr Co del · NYSE:F
Ford Mtr Co del — Ford Motor Company — Debt Investor Presentation (June 2011)
41 slides from Ford Mtr Co del's debt investor presentation, Jun 8, 2011
Slide 1: Investor Presentation
INVESTOR PRESENTATION June 2011 0
Slide 2: Discussion Agenda
DISCUSSION AGENDA 1. Business Environment 1 2. The One Ford Plan 3 3. Ford Credit 8 4. Appendix 29 1
Slide 3: Business Environment Overview
BUSINESS ENVIRONMENT OVERVIEW • Global economic growth in 2011 projected to be in the 3.0 - 3.5% range • Rising oil and commodity prices represent challenges for growth • Thus far, the impact on the pace of economic activity relatively minor • Higher fuel prices causing a shift in U.S. segmentation
Slide 4: Discussion Agenda
DISCUSSION AGENDA 1. Business Environment 1 2. The One Ford Plan 3 3. Ford Credit 8 4. Appendix 29 3
Slide 5: Our Plan - Total Company
TOTAL COMPANY OUR PLAN -- • Continue implementation of our global • Aggressively restructure to operate profitably at the current demand and changing model mix • Accelerate development of new products our customers want and value • Finance our Plan and improve our balance sheet • Work together effec
Slide 6: The One Ford Plan Is Working
THE ONE FORD PLAN IS WORKING • Restructured the business significantly • New products well received in the marketplace • Improving the balance sheet • Completed the sale of Volvo; focusing on the Ford and Lincoln brands • Launched the all new Explorer, the F-150 with new powertrains and the global F
Slide 7: 2011 First Quarter Pre-Tax Results by Sector
TOTAL COMPANY 2011 FIRST QUARTER PRE-TAX RESULTS BY SECTOR* Millions $2,837 $2,131 Ford Credit $713 Other (7) $706 Total Automotive Financial Services Memo: B / (W) 2010 1Q $ 827 $ 936 $(109) B / (W) 2010 4Q 1,544 1,390 154 * Excludes special items; see Appendix for detail and reconciliation to GAAP
Slide 8: Trend of Credit Ratings for Ford
TREND OF CREDIT RATINGS FOR FORD S&P -- Issuer Rating Investment Grade A BBB+ BBB BBB- BB+ BB- BB- B+ B+ B B- B- CCC+ Speculative Grade CC 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Targeting To Return To Investment Grade 7
Slide 9: Discussion Agenda
DISCUSSION AGENDA 1. Business Environment 1 2. The One Ford Plan 3 3. Ford Credit 8 4. Appendix 29 8
Slide 10: Ford Credit Products and Services
Capital and Facility Loans Inventory Financing Inventory Insurance ESB / Fee Income Dealer Consulting Commercial Loans Lease Financing Retail Financing 9
Slide 11: Ford Credit - Strategic Priorities
FORD CREDIT -- STRATEGIC PRIORITIES • Profitably support the sale of Ford Motor Company vehicles • Support synergies with automotive partners • Maximize customer and dealer satisfaction and loyalty • Make efficient use of capital 10
Slide 12: Ford Credit's Value Proposition
FORD CREDIT’S VALUE PROPOSITION • Trusted Brand • Access to Dealer Channel • Exclusive Marketing Programs • Automotive Specialist with Vested Interest in Ford Dealer Success More • Training & Consulting Products, • Consistent Market Presence Faster • Fast, Flexible, Quality Service • Full Array of P
Slide 13: Origination & Servicing Strategy
FORD CREDIT -- ORIGINATION & SERVICING STRATEGY • Collect it Effectively • Buy it Right • Operate Efficiently Originate Service Fund • Fund it Efficiently • Manage Balance Sheet Risk 12
Slide 14: Ford Credit Results and Metrics - 2011 First Quarter
FORD CREDIT RESULTS AND METRICS -- 2011 FIRST QUARTER Pre-Tax Profit (Mils.) Key Metrics First Quarter $(115) 2010 2011 On-Balance Sheet $828 Receivables (Bils.) $ 88 $ 83 Charge-Offs (Mils.) $ 133 $ 55 Loss-to-Receivables Ratio $713 - Worldwide 0.58% 0.27% - U.S. Retail and Lease 0.91 0.45 Allowanc
Slide 15: Ford Credit - 2011 First Quarter Pre-Tax Results Compared with 2010
FORD CREDIT -- 2011 FIRST QUARTER PRE-TAX RESULTS COMPARED WITH 2010 Millions $(115) $828 $713 Market Valuation Adj. $(90) Operating Costs 25 Other 15 $40 $15 $(70) $(50) $(50) 2010 2011 Volume Financing Credit Lease Other Memo: Margin Loss Residual B / (W) 4Q 2010 $141 $(5) $- $50 $(20) $116 Manage
Slide 16: Ford Credit - U.S. Ford and Lincoln Portfolio Credit Loss Metrics
FORD CREDIT -- U.S. FORD AND LINCOLN PORTFOLIO CREDIT LOSS METRICS* U.S. Retail & Lease Average Placement FICO Score Over-60-Day Delinquencies 730 726 719 715 714 0.36% 0.35% 710 706 0.24% 0.24% 685 0.18% 0.19% 674 0.15% 0.16% 0.15% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 20
Slide 17: Ford Credit - Historical Credit Loss Metrics
FORD CREDIT -- HISTORICAL CREDIT LOSS METRICS Worldwide On-Balance Sheet Loss-to-Receivables Ratio (Pct.) 1.57% 1.51% Loss-to- 1.02% 1.07% Receivables 0.84% Ratio 0.57% 0.39% 0.46% 0.47% 2002 2003 2004 2005 2006 2007 2008 2009 2010 Worldwide On-Balance Sheet Charge-Offs and Allowance for Credit Loss
Slide 18: Ford Credit - Credit Loss Metrics
FORD CREDIT -- CREDIT LOSS METRICS* Loss-to-Receivables Ratio Worldwide Ford and Lincoln U.S. Retail & Lease 1.35% 0.98% 0.91% 0.78% 0.58% 0.59% 0.47% 0.39% 0.45% 0.44% 0.45% 0.27% Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 Worldwide Charge-Offs (Mils.) $238 $133 $86 $95 $101 $55 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2
Slide 19: Ford Credit - Credit Loss Drivers
FORD CREDIT -- CREDIT LOSS DRIVERS FORD AND LINCOLN U.S. RETAIL AND LEASE* Repossessions (000) Severity 23 Repo. $7,700 Ratio $7,300 19 $6,700 $6,600 $6,900 $6,500 16 15 14 3.20% 12 2.77% 2.46% 2.18% 2.22% 1.98% Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 2009 2010 2011 Over-60-Day Delinquenc
Slide 20: Ford Credit - Credit Loss Reserves
FORD CREDIT -- CREDIT LOSS RESERVES SECRET Billions $1.7 $1.6 $1.5 $1.1 $1.1 $0.9 $0.7 2005 2006 2007 2008 2009 2010 Q1 2011 % of Receivables 1.19% 0.81% 0.77% 1.40% 1.61% 1.02% 0.87% Present Reserve Levels Are At A Historical Low -- The Opportunity To Continue To Release Reserves Is Minimal 19
Slide 21: Ford Credit - Lease Residual Performance
FORD CREDIT -- FORD AND LINCOLN U.S. LEASE RESIDUAL PERFORMANCE* 36-Month Auction Values Lease Return Volume (000) (At Q1 2011 Mix) 24-Month 36-Month 39-Month / Other $15,910 $15,380 $15,420 46 $14,770 $14,905 44 $14,505 13 39 36 16 9 30 30 1 17 20 16 17 16 19 12 13 14 13 13 7 9 Q4 Q1 Q2 Q3 Q4 Q1 Q4
Slide 22: Ford Credit - Lease Termination Volume
FORD CREDIT -- LEASE TERMINATION VOLUME SECRET Thousands Impaired Leases Unimpaired Leases 381 386 408 283 214 282 230 185 98 172 125 45 2008 2009 2010 2011 80,000 Fewer Impaired Leases Are Expected To Terminate And The Associated Vehicles To Be Sold In 2011 Vs. 2010, Resulting In A Profit Impact Of
Slide 23: Ford Credit - Term Funding Plan
FORD CREDIT -- TERM FUNDING PLAN 2011 2008 2009 2010 YTD Actual Actual Actual Forecast Actual* (Bils.) (Bils.) (Bils.) (Bils.) (Bils.) Public Transactions Unsecured $ 2 $ 5 $ 6 $ 7- 9 $ 3 Securitizations** 11 15 11 11 – 14 4 Total Public $ 13 $ 20 $ 17 $ 18 – 22 $ 7 Private Transactions*** $ 29 $ 11
Slide 24: Ford Credit - Funding Strategy
FORD CREDIT -- FUNDING STRATEGY Funding of Managed Receivables (Bils.) $118 Ford Interest Advantage $2 Asset-Backed Commercial $12 $95 Paper $4 $83 $85 $82-87 $6 $5 ~$5 $5 Term Asset-Backed Securities $61 $7 $7 $6-7 $47 $37 $38 $39-42 Term Debt and Other $56 $44 $39 $38 $36-38 Equity $11 $11 $10 $10
Slide 25: Ford Credit - Liquidity Programs
FORD CREDIT -- LIQUIDITY PROGRAMS March 31, 2011 (Bils.) Capacity & $46.6 Committed Capacity = $33.6 billion* Cash**** Securitization $4.5** Cash Committed $6.6*** Excess Capacity Capacity / Liquidity $23.8 Liquidity $13.0 $35.5 $4.5** $8.7 $1.1 $8.5 Unsecured FCAR Conduits / Cash**** Total Credit L
Slide 26: Ford Credit's Balance Sheet Will Grow with Ford
FORD CREDIT’S BALANCE SHEET WILL GROW WITH FORD Managed Receivables (Bils.) $118 $110 - $120 $83 $82 - $87 2008 2010 2011 Mid-Decade 25
Slide 27: Ford Credit Mid-Decade Financial Metrics
FORD CREDIT MID-DECADE FINANCIAL METRICS ABS Debt as % of Mgd Receivables (~ 35%) Liquidity (Months of Protection) Mid- Mid- Decade Decade Target Target 2010 2011 Mid-Decade 2010 2011 Mid-Decade Managed Leverage (10-11 to 1) Return on Equity (Low Double Digits) Mid- Mid- Decade Decade Target Target
Slide 28: Summary
SUMMARY • The One Ford Plan is working • On track to meet our financial targets for 2011 • Focused on growth • The funding environment continues to improve • Experiencing substantially improved credit loss performance • Ford Credit continues to focus and deliver on our strategic priorities 27
Slide 29: Safe Harbor
SAFE HARBOR 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 a
Slide 30: Appendix
APPENDIX 29
Slide 31: Income / (Loss) from Continuing Operations
TOTAL COMPANY INCOME / (LOSS) FROM CONTINUING OPERATIONS First Quarter 2010 2011 (Mils.) (Mils.) North America $ 1,253 $ 1,844 South America 203 210 Europe 107 293 Asia Pacific Africa 23 33 Other Automotive (391) (249) Total Automotive (excl. special items) $ 1,195 $ 2,131 Special items -- Automotiv
Slide 32: 2011 Special Items
TOTAL COMPANY 2011 SPECIAL ITEMS First Quarter 2010 2011 (Mils.) (Mils.) Personnel and Dealer-Related Items Personnel-reduction actions $ (86) $ (22) Mercury discontinuation / Other dealer actions (15) (1) Job Security Benefits / Other 38 (1) Total Personnel and Dealer-Related Items $ (63) $ (24) Ot
Slide 33: Revenue Reconciliation to GAAP
TOTAL COMPANY REVENUE RECONCILIATION TO GAAP First Quarter 2010 2011 (Bils.) (Bils.) North America $ 14.1 $ 17.9 South America 2.0 2.3 Europe 7.7 8.7 Asia Pacific Africa 1.6 2.1 Total Automotive (excl. special items) $ 25.4 $ 31.0 Special items -- Volvo 3.5 - Total Automotive $ 28.9 $ 31.0 Financial
Slide 34: Wholesales
TOTAL COMPANY WHOLESALES* First Quarter 2010 2011 (000) (000) North America 547 615 South America 101 114 Europe** 416 432 Asia Pacific Africa*** 189 242 Total Automotive (excl. special items) 1,253 1,403 Special items -- Volvo 92 - Total Automotive 1,345 1,403 * Wholesale unit volumes include all F
Slide 35: Gross Cash Reconciliation to GAAP
AUTOMOTIVE SECTOR GROSS CASH RECONCILIATION TO GAAP Mar. 31, Dec. 31, Mar. 31, 2010 2010 2011 (Bils.) (Bils.) (Bils.) Cash and cash equivalents $ 12.8 $ 6.3 $ 12.6 Marketable securities* 12.5 14.2 8.8 Total cash and marketable securities $ 25.3 $ 20.5 $ 21.4 Securities in transit** - - (0.1) Gross c
Slide 36: Operating-Related Cash Flows Reconciliation to GAAP
AUTOMOTIVE SECTOR OPERATING-RELATED CASH FLOWS RECONCILIATION TO GAAP First Quarter 2010 2011 (Bils.) (Bils.) Cash flows from operating activities of continuing operations* $ - $ 3.1 Items included in operating-related cash flows Capital expenditures (0.9) (0.9) Proceeds from the exercise of stock o
Slide 37: Ford Credit Key Metric Definitions
FORD CREDIT KEY METRIC DEFINITIONS In evaluating Ford Credit’s financial performance, Ford Credit management uses financial measures based on GAAP, as well as financial measures that include adjustments from GAAP; these measures are defined below. Information about the impact of on-balance sheet sec
Slide 38: Ford Credit Ratio Definitions
FINANCIAL SERVICES SECTOR FORD CREDIT RATIO DEFINITIONS In addition to evaluating Ford Credit’s financial performance on a GAAP financial statement basis, Ford Credit management also uses other criteria, some of which were previously disclosed in this presentation and are defined below: Charge-offs
Slide 39: Ford Credit Reconciliations of Managed Leverage to Financial Statement Leverage
FINANCIAL SERVICES SECTOR FORD CREDIT RECONCILIATIONS OF MANAGED LEVERAGE TO FINANCIAL STATEMENT LEVERAGE Mar. 31, Mar. 31, 2010 2011 (Bils.) (Bils.) Leverage Calculation Total Debt* $ 94.2 $ 82.9 Adjustments for Cash, Cash Equivalents, and Marketable Securities** (20.7) (13.0) Adjustments for Deriv
Slide 40: Liquidity Profile of Ford Credit's Balance Sheet
LIQUIDITY PROFILE OF FORD CREDIT’S BALANCE SHEET Cumulative Maturities -- As of December 31, 2010 (Bils.) Assets * Debt ** $97 $90 $81 $83 $69 $64 $61 $47 *** 2011 2012 2013 2014 & beyond Memo: Unsecured Long-term debt maturities (Bils.) $9.1 $6.8 $5.3 $12.7 * Includes finance receivables net of une
Slide 41: Calculation of Earnings Per Share
TOTAL COMPANY CALCULATION OF EARNINGS PER SHARE First Quarter 2011 After-Tax Net Income Oper. Attributable Excl. Special to Ford Items After-Tax Results (Mils.) After-tax results* $ 2,551 $ 2,612 Effect of dilutive 2016 Convertible Notes** 14 14 Effect of dilutive 2036 Convertible Notes** - - Effect
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