Ford Investor Presentation Deck | Slidebook.io

Ford Investor Presentation Deck

February 2025, 110 slides

west investor presentation | Ford

agenda table of contents corporate ford credit retail lease origination and servicing strategy retail revolving extended variable utilization lease risk management appendix shareholder ford ford finance investor center | Ford

corporate nautilus | Ford

safe harbor statement and disclosures forward looking statements non financial measures additional information | Ford

building a higher growth higher margin more capital efficient and more durable company drives strong margins and cash flow enables deep customer insight our plan to thrive at the intersection of great vehicles iconic brands and innovative and services ford | Ford

full year highlights | Ford

compelling product portfolio offering customer choice | Ford

expanding physical services | Ford

financial results revenue margin ford blue ford model ford pro margin margin margin a a a a | Ford

full year financial results revenue margin ford blue ford model ford pro margin margin margin a | Ford

ford bronco edition | Ford

cash flow cash balance liquidity | Ford

results i a a a | Ford

adjusted blue model pro next credit | Ford

ford blue | Ford

ford model | Ford

ford pro ake | Ford

cash flow and balance sheet | Ford

special items | Ford

ford model | Ford

ford credit ford ranger | Ford

ford credit a strategic asset over the last years ford credit generated billion in earnings before taxes and billion in distributions | Ford

key metrics best in finance company | Ford

net receivables mix | Ford

origination metrics and credit loss drivers | Ford

credit loss metrics | Ford

lease metrics | Ford

cumulative maturities at a | Ford

funding structure | Ford

public term funding plan unsecured | Ford

cautionary note on forward looking statements | Ford

north programs ford credit has a long history in with a publicly registered program for retail contracts that began in in recent history ford credit has typically offered various asset backed securities as summarized in the table below program ticker asset class structure typical term typical offering type fordo retail amortizing a to lease amortizing a to retail revolving public public a wholesale revolving and a public fast fast retail amortizing to a | Ford

syndicate process summary in an effort to promote maximum transparency during transaction marketing ford credit carries out a consistent syndicate process across its platforms the following are key phases of this investors will have all marketing materials including initial price thoughts to facilitate their analysis indications of interest will be taken during this time announcement subject to market conditions the transaction will typically be announced and books will officially open the morning following guidance subscription status and formal price guidance will be provided shortly after a the same day as the announcement of the transaction pricing the transaction will typically price the following day additional timing considerations closing of classes classes may go subject at any time after reaching full subscription of the base size and will go subject after reaching full subscription of the only firm orders within the price guidance i not subject to credit will contribute to this determination and the market will be given approximately minutes notice allocations orders placed before a are expected to receive higher allocations than orders placed after a | Ford

retail lease origination and servicing strategy | Ford

origination process dealers submit credit applications and proposed financing terms to ford credit ford credit obtains a credit report for the applicant and uses its proprietary origination system to complete compliance and other checks including fraud alerts and variations credit decisions are made or by an analyst and returned to dealers the origination process is not governed by strict limits and is judgment based using well established purchasing guidelines and control processes to support consistent credit decisions purchase quality guidelines set portfolio targets for lower and marginal quality contracts risk factor guidelines are applicable to specific application attributes including measures such as payment to income and debt to income ratios fico score and term for less applicants or if there is a discrepancy in the information provided by the applicant the credit analyst may verify the identity employment income residency and other applicant information using ford credit procedures before making a decision credit analysts decisions are reviewed regularly to ensure they are consistent with origination standards and credit approval authority | Ford

origination scoring models | Ford

behavioral scoring models ford credit uses proprietary behavioral scoring models to assess the probability of payment default for each receivable on its payment due date these models assess the risk of a customer defaulting using a number of variables including origination characteristics customer account history payment patterns expected net losses and periodically updated credit bureau information output of the behavioral scoring models is a proprietary score probability of default that determines how soon a customer will be contacted after a payment becomes delinquent how often the customer will be contacted during the delinquency how long the account will remain in early stage collections before it is transferred to late stage new behavioral scoring models are developed on a regular cycle plan ford credit regularly reviews the behavioral scoring models to confirm the continued statistical predictability of the variables adjustments may be made to improve the performance of the behavioral scoring models between development cycles completed launch dates of the most recently redeveloped behavioral scoring models are as follows | Ford

retail | Ford

free writing prospectus registration statement no ford credit auto receivables two the depositor ford credit auto owner trusts the issuer this document constitutes a free writing prospectus for purposes of the securities act of the depositor has filed a registration statement including a prospectus with the sec for any offering to which this communication relates before you invest you should read the prospectus in that registration statement and other documents the depositor has filed with the sec for more complete information about the depositor the issuer and such offering you may get these documents for free by visiting on the sec at sec alternatively you may request that a copy of the prospectus be sent to you by calling | Ford

overview ford credit has been originating retail installment sales contracts since and its retail contracts since ford credit has had an active publicly registered program for retail contracts since and has issued asset backed securities in more than transactions under this program ford credit offers retail asset backed securities through various channels publicly registered transactions rule a transactions other private transactions collateral composition has trended in line with the industry and ford credit strategy pools selected randomly from ford credit eligible portfolio receivables with original terms up to months have been included in widely distributed retail transactions since structural elements have remained consistent minimal adjustments over the past years | Ford

originations and share number of retail receivables originated financing share retail installment and lease ate a a | Ford

portfolio credit metrics weighted average fico at origination number of contracts outstanding | Ford

pool metrics new used car light truck utility | Ford

pool metrics weighted average loan to value weighted average payment to income | Ford

structure overview | Ford

retail pool performance cumulative net losses | Ford

revolving extended variable utilization | Ford

overview since may ford credit has offered revolving extended variable utilization transactions at present more than billion in outstanding notes features a year revolving period year tenor for rev fixed rate coupons and subsequent soft bullet maturity rev is the most recent issuance with class a notes of billion transactions have already been redeemed each at its expected final payment date notes consist of a rated senior and three subordinated classes of notes notes are backed by retail auto receivables originated by ford credit comparable to the receivables in its us publicly registered retail program fordo during the revolving period monthly collections are deposited in an accumulation account and are available to purchase additional receivables notes may be backed by a combination of receivables and cash pool concentration limits safeguard the quality of the collateral backing the notes the notes are expected to be redeemed in full at the end of the revolving period step up or make whole amounts may otherwise be payable embedded month par call option was removed in rev which has never been exercised in prior transactions | Ford

rev changes enhancements | Ford

initial pool comparison | Ford

key collateral attributes | Ford

structure overview reserve account enhancement | Ford

pool composition tests ford credit aims to its portfolio of receivables consistently across its and public retail transactions pool composition tests are subject to occasional modification in the context of new transactions pool composition tests are applied to the entire pool when the trust purchases or sells receivables and mitigate the risk of adverse changes in the pool composition over time two levels of pool composition tests impact the amount of credit enhancement failure of any of the more stringent floor credit enhancement composition tests results in increased credit enhancement failure of any of the pool composition tests requires the to identify ineligible receivables so that the remaining receivables satisfy the tests providing dollar for dollar credit enhancement for ineligible receivables | Ford

credit enhancement levels with each monthly receivables purchase credit enhancement levels are established based upon compliance with various composition and net losses tests if all floor credit enhancement composition tests are not met the minimum discount rate will be increased by if the pool fails to meet all of the pool composition tests the will identify receivables in the pool to be deemed ineligible receivables so that the remaining receivables in the pool will satisfy all of the pool composition tests if the three month rolling average net losses as a percentage of aggregate principal balance of receivables exceeds the minimum discount rate will be increased by yield supplement initial initial initial initial | Ford

credit enhancement levels | Ford

net loss delinquency ratios net loss ratio delinquency ratio | Ford

amortization events amortization period will begin if any of the following events occur on any payment date during the revolving period a the trust fails to pay interest due on the notes within five days of the payment date the required amount is not in the reserve account the required amount is not in the negative carry account or the required amount is not in the accumulation account notes are not paid in full on the expected final payment date three month rolling average net losses as a percentage of aggregate principal balance of receivables exceeds three month rolling average percentage of aggregate principal balance of receivables that are days or more delinquent exceeds adjusted pool balance is less than of the principal amount of the notes a termination event occurs and is continuing an event of default occurs and is continuing in which case notes will be accelerated during an amortization no amounts are paid to the residual interest available funds are used to pay trust expenses interest principal until paid in full and any make whole or step up amounts due the trust will not purchase additional receivables | Ford

note redemption step up and make whole | Ford

collateral performance reporting reporting available at monthly investor reports summary pool stratifications on the entire pool after giving effect to purchases or sales receivables purchase sale date and balance collateral composition test results and amortization event compliance updated yield supplement schedule reporting includes detail of receivables having received a payment extension during the collection period quarterly supplements summary stratifications for each quarterly vintage of additional receivables sold to the trust static pool performance consistent with publicly registered retail program i prepayments delinquencies cumulative net losses for the initial pool and separately for each quarterly vintage of additional receivables sold to the trust quarterly statistical information on the managed portfolio | Ford

lease | Ford

overview ford credit has been leasing vehicles since and its lease contracts since ford credit current lease platform was established in ford credit has offered lease asset backed securities through various channels other private transactions active program since publicly registered transactions since rule a transactions since more than lease transactions have been completed collateral composition has trended in line with the industry and ford credit strategy we what we originate structural elements such as priority of payments have remained consistent over time | Ford

business updates number of leases originated used vehicle value index | Ford

portfolio credit metrics a | Ford

pool metrics original term as of value | Ford

pool metrics model diversification a model concentrations top top top model concentrations top top top | Ford

pool performance | Ford

structure overview | Ford

residual maturity enhancement build | Ford

significance of value underlying lease assets present | Ford

residual break even analysis | Ford

residual value models and vehicle residual values for new originations are set quarterly for each vehicle line at various lease terms and mileage allowances ford credit uses proprietary models and leverages its relationship with ford to establish residual values based on a number of predictive factors including wholesale price planned production volume incentives rental and fleet sales consumer acceptance life cycle recent seasonal auction trends and economic factors ford credit works with the vehicle department of ford to manage the disposition of returned vehicles and seeks to maximize net sale proceeds which equal gross auction proceeds less auction fees and costs for reconditioning and transporting the vehicles vehicles returned at lease end are sold through accelerate an upstream application and ford sponsored physical auctions prior to transporting a vehicle to physical auction vehicles are offered for sale to participating dealerships through accelerate ford credit employs proprietary models to establish a market price for vehicles based on recent auction experience and adjusts for miles condition any excess wear and use and option packages ford dealers to purchase returned lease vehicles through accelerate certify those vehicles and sell them to customers under a certified owned program of eligible vehicles purchased through accelerate year end | Ford

| Ford

portfolio overview ford credit has been financing dealer vehicle inventory since and receivables since ford goal is to maintain a profitable network of ford and dealerships that deliver an innovative and engaging sales and service experience for customers as of in the ford and had approximately dealers over the past five years ford credit financed to of ford and dealer new vehicle inventory receivables are secured primarily by the financed vehicles and payment is required when the vehicle is sold ford credit portfolio has historically experienced low losses primarily driven by strong risk management practices and servicing continuous monitoring of the dealer financial health payment performance vehicle collateral status and risk based on site inventory audits use of proprietary risk rating assessment and behavioral scoring models risk management practices which include intensifying risk management actions as dealer risk increases leveraging access to dealer information through ford relationship | Ford

overview ford credit current trust was established in as a master trust similar to a revolving credit card trust and has issued more than series ford credit typically offers asset backed securities through various channels publicly registered transactions rule a transactions other private transactions ford credit is in the process of obtaining a new effective shelf registration statement for its program | Ford

performance overview | Ford

structure overview used vehicle concentration manufacturer concentration | Ford

key series triggers enhancement step up trigger if average monthly principal payment rate for the three preceding collection periods is less than subordination or reserve fund percentage increases by four percentage points during periods when the exceeds certain principal collections may be used for potential shortfalls in interest or fees amortization triggers average monthly principal payment rate for the three preceding collection periods is less than cash balance in the excess funding account exceeds of the adjusted invested amount of all series for three consecutive months available subordinated amount is less than the required subordinated amount bankruptcy insolvency or similar events relating to the depositor the issuer ford credit or ford | Ford

outstanding private variable funding notes trust balance total trust balance of billion private variable funding notes are used to manage fluctuations of trust balance and provide an additional source of liquidity total capacity of billion | Ford

recent history of | Ford

risk management | Ford

underwriting and credit review process a dealership seeking to finance its vehicle inventory with ford credit must submit a request for financing along with its financial and other information ford credit performs a thorough review of the dealer or dealer group including business legal and operations structure including number of manufacturer franchises credit information financial statements or tax returns types of vehicles in the dealer inventory and specialty services provided by the dealer for certain vehicles or customers such as fleet ford credit evaluates the dealer financial resources and the amount and types of financing requested the financing extended to a dealer is tailored to suit the business and operational needs of the dealer and depends on the financial strength and nature of the dealer business the financed vehicles are the primary collateral for dealer loans however for many dealers ford credit also obtains personal guarantees and secondary collateral in the form of additional dealer assets including dealer adjusted net worth and real estate equity due to the ongoing nature of financing arrangements ford credit periodically performs a credit review of each dealer at least biennially following the similar process utilized to evaluate new dealer account originations monthly financial performance data provides ongoing supplemental dealer monitoring | Ford

dealer risk rating assessment group description | Ford

dealer monitoring strategy dealers monitor monthly accounts rating mar no further action mar directed action plans watch report status liquidation a | Ford

audits monitoring status processes inventory audits dealer monitoring dealer status procedures | Ford

benefits of being a captive finance company ford north vehicle information system dealer ford credit dealer receivables system | Ford

appendix | Ford

appendix portfolio performance | Ford

appendix legal trust structure | Ford

appendix company key metrics vee see res | Ford

appendix company key metrics | Ford

appendix company results | Ford

appendix company full year adjusted blue model pro next credit other | Ford

appendix company quarterly results | Ford

appendix company net income loss reconciliation to adjusted | Ford

appendix company net cash provided by used in operating activities reconciliation to company adjusted a | Ford

appendix company earnings loss per share reconciliation to adjusted earnings loss per share | Ford

appendix company effective tax rate reconciliation to adjusted effective tax rate | Ford

appendix company adjusted | Ford

appendix company segment mix in | Ford

appendix ford credit by segment | Ford

appendix ford credit financing shares and contract placement volume year | Ford

appendix ford credit financing shares and contract placement volume | Ford

appendix ford credit origination metrics and credit loss drivers | Ford

appendix ford credit credit loss metrics | Ford

appendix ford credit lease metrics in | Ford

appendix ford credit liquidity sources | Ford

appendix company non financial measures that supplement measures | Ford

appendix company non financial measures that supplement measures | Ford

appendix company definitions and calculations | Ford

appendix ford credit definitions and calculations | Ford

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