2015 ACURA TLX Investor Presentation August 2014 Presentation August 2014 2015 ACURA TLX American...
Transcript of 2015 ACURA TLX Investor Presentation August 2014 Presentation August 2014 2015 ACURA TLX American...
Investor Presentation
August 2014
2015
ACURA TLX
American Honda Finance Corporation
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Caution with Respect to Forward-Looking Statements:
These slides may contain “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Certain such forward-
looking statements can be identified by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “will,” “should,” “seeks,” “scheduled,” or “anticipates” or similar expressions or the
negative thereof or other variations thereof or comparable terminology, or by discussions of strategy,
plans or intentions. Such forward-looking statements are necessarily dependent on assumptions, data,
or methods that may be incorrect or imprecise and that may be incapable of being realized. Factors such
as declines in the financial condition or performance of Honda or AHFC or the sales of Honda or Acura
products, changes in general business and economic conditions, and fluctuations in interest rates and
currency exchange rates, among others, could cause actual results and other matters to differ materially
from those in such forward-looking statements.
Accounting Standards:
Our consolidated financial information is prepared in conformity with U.S. generally accepted accounting
principles.
This information is presented as of August 12, 2014 and does not purport to be accurate as of any other
date. We undertake no obligation to update this information.
This presentation does not constitute an offer to sell or a solicitation of an offer to purchase any
securities. Any offer or sale of securities will be made only by means of an offering memorandum and
related documents.
American Honda Finance Corporation 3
Honda Corporate Structure
Su
pp
ort A
gre
em
ent
Honda Motor Co., Ltd.
“Honda”
American Honda
Motor Co., Inc.
“AHM”
American Honda
Finance Corporation
“AHFC”
100%
100%
If necessary, provide liquidity for AHFC to meet our obligations
Ensure AHFC maintains a positive net worth
Keep Well Highlights
Maintain 80% ownership
American Honda Finance Corporation 4
AHFC Operations
5 American Honda Finance Corporation
Business Highlights
Total receivable increase 3.6 bil over prior year
Underwriting remains consistent
Premier customer service
Low charge-offs continue
Strong residual values continue
Strong credit ratings
6 American Honda Finance Corporation
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AHFC Income Before Income Taxes
1,990
1,6521,445
316 453
5,637 5,760 5,986
1,466 1,550
0
1,000
2,000
3,000
4,000
5,000
6,000
0200400600800
1,0001,2001,4001,6001,8002,000
FY12 FY13 FY14 3moEndingJun 13
3moEndingJun 14
Income Before Income Taxes
Total Finance RevenuesUS$ (millions)
American Honda Finance Corporation
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AHFC Income Before Income Taxes
1,811 1,7061,551
399 4220
400
800
1,200
1,600
2,000
FY12 FY13 FY14 3moEndingJun 13
3moEndingJun 14
Excludes valuation adjustments and reclassifications
US$ (millions)
American Honda Finance Corporation
Lease includes both direct finance leases and operating leases.
Retail excludes securitized assets
AHFC Portfolio Mix
$55,561 $58,852 $62,930 $63,992
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
FY12 FY13 FY14 Jun 14
Retail $24,359 $24,356 $26,430 $26,981
Lease $21,134 $22,706 $23,952 $25,013
Dealer $3,249 $4,208 $4,371 $4,123
Securitized Assets $6,819 $7,582 $8,177 $7,875
Debt $40,567 $42,149 $45,634 $46,076
US$ (millions)
As of June 30, 2014:
Retail Loans are approx. 54% of
outstanding receivables (including
ABS assets)
Leases are 39% of outstanding
receivables
Securitized Assets are Retail
Loans. We do not currently
securitize other asset classes.
Dealer Loans
Flooring 30% of the Honda/Acura
Auto dealers
Flooring 97% of the Honda/Acura
Motorcycle dealers
American Honda Finance Corporation 9
AHFC CFS Originations, Penetration & Outstanding
1,118 1,176 1,361
369 351
71%
63%
71% 71% 66%
43% 43% 39% 37% 36%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
500
1,000
1,500
2,000
2,500
3,000
FY12 FY13 FY14 3mo EndingJun 13
3mo EndingJun 14
Originations
Retail Auto Lease Auto Other
Unit (thousands) Penetration New Auto
Motorcycle
Outstanding 3,440 3,491 3,660 3,523 3,713
Penetration FY12, FY14 and the period
ending June 2013 show
higher new auto penetration
as a result of higher
incentive programs
sponsored by our parent,
American Honda Motor Co.,
Inc.
American Honda Finance Corporation 10
AHFC Performance Data
FY12 FY13 FY14 Jun 13 Jun 14
Delinquency (60 or more days)(1),(3) 0.10% 0.10% 0.10% 0.14% 0.13%
Allowance for Credit Losses(1),(3) 0.42% 0.23% 0.24% 0.24% 0.23%
Charge-Offs (Net of Recoveries)(2),(3),(4) 0.30% 0.28% 0.27% 0.18% 0.18%
(1) Percentages based on ending receivable balances for respective periods.
(2) Percentages based on average receivable balances for respective periods.
(3)
(4) Percentages for the three months ended June 30, 2013 and 2014 have been annualized.
Fiscal Year Ending 3 mo Ending
Ending and average receivable balances exclude the allowance for credit losses, write-down of lease residual values, unearned subvention
income related to our incentive f inancing programs and deferred originat ion costs. Average receivable balances are calculated based on
the average of each month’s ending receivables balance for that f iscal period.
American Honda Finance Corporation
AHFC’s underwriting standards are reflected in our low charge-off and delinquency numbers.
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Conservative approach to markets
Access to various domestic and international markets
Recognize windows of opportunity
Maintain prudent maturity profile
AHFC Funding Strategy
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AHFC’s Inaugural SEC–registered Debt
Sept. 5 ,2013 Shelf Registration
(S-3)
Sept. 25, 2013 MTN Program
Active
Oct. 3, 2013 Inaugural
Transaction
Inaugural transaction details
$ 750 mil 3 year Floater
$1.0 bil 3 year Fixed
$1.0 bil 5 year Fixed
Investor Comments • Appreciate transparency a public program offers
• SEC registration is helpful especially being index eligible
• Registered programs offer ability to allocate to many more of our funds
• Will buy bigger/larger orders of a transaction with registered programs
American Honda Finance raised $2.75bn by issuing three-
year floaters, three-year fixed and five-year fixed that
attracted an order book of slightly over $9bn.
This was the first time the issuer was issuing in the SEC-
registered format and investors charged into the different
tranches even as the company tightened pricing from IPT
levels. The three-year fixed tranche saw most of the
demand, followed by the five-year fixed and three-year
floater. IFR Markets Reuters
Source: Honda
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- Commercial Paper Program
US $7 billion, CAD $2 billion (HCFI)
(supported by US $7 billion and CAD $1.6
billion (HCFI) Bank Credit Facilities)
- Related Party Debt
- Bank Loans
- US $16 billion Shelf USMTN Public
Program
- US $25 billion USMTN Private 144a
Program (Inactive)
- US $11 billion EMTN Program (Inactive)
- Private Placement Issuance (HCFI)
- Public & Private Securitization (AHFC &
HCFI)
AHFC Funding Flexibility
Diversified AHFC Funding Programs
American Honda Finance Corporation
9% 11% 9%13%
12%11% 10%
11%
17%16% 14%
14%
28%
32%36%
34%
14%
8%
8%7%
4%4%
3% 3%17%18%
18% 17%$40,567$42,149
$45,634 $46,076
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
FY12 FY13 FY14 Jun 14
US$ (millions)
Commercial Paper Related Party Debt Bank Loan US MTN Euro MTN Other ABS
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FY14 & FYTD15 Debt Issuance
$3,750
$3,000
$1,161$800
$5,750
$1,000 $1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
USMTN (Public) USMTN (Private) EMTN Bank Loan Securitization
US$ (millions)Funding Activities(US Operations Only)
FY14 3 mo EndingFYTD Jun 14
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Excludes unamortized discount and fees
Euro MTN by Currency
61%11%
28%
EMTN by Currency
EURO JPY USD
American Honda Finance Corporation
As of June 30, 2014
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Term Debt Maturity Profile
American Honda Finance Corporation
34%
24%
21%
7%
14%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
<1yr 1yr - 2yr 2yr - 3yr 3yr - 4yr >4yr
US$ (millions)
As of June 30, 2014
Excludes Commercial Paper and Related Party Debt
Does not include unamortized discounts and fees
Foreign debt based on exchange rates as of June 30, 2014
Repayment schedule of secured debt reflects payment performance assumptions on underlying receivables
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