#1Ford FORD CREDIT ABS Investor Presentation February 2019 Ford#2Agenda Strategy Highlights and Corporate Overview 3 Ford Credit 15 Retail Securitization 26 FordREV Securitization 42 Lease Securitization 54 Floorplan Securitization 70 Appendix 89 2 Ford FORD CREDIT FORD CREDIT CONTACT INFORMATION Ryan Hershberger Global Funding (313) 248-1144 [email protected] Song Kim Lease and Floorplan ABS (313) 621-8070 [email protected] Brian Merx Retail ABS (313) 390-7710 [email protected] Karen Rocoff Investor Relations (313) 621-0965 [email protected] www.shareholder.ford.com#3Ford FORD CREDIT Strategy Highlights and Corporate Overview#4Ford Creating Tomorrow, Together Our Belief Our Aspiration Our Plan for Value Creation Our People Ford FORD CREDIT Winning Portfolio Freedom of movement drives human progress. To become the world's most trusted company, designing smart vehicles for a smart world. Passion for Product & Deep Customer Insight Propulsion Choices Autonomous Technology Fitness Operating Leverage Build, Partner, Buy Capital Efficiency Strong Balance Sheet Culture & Values Metrics Growth EBIT Margin ROIC Cash Flow Mobility Experiences#5An Investment Grade Rating And A Strong Balance Sheet Remain The Foundation Of Ford's Financial Strategy Investment Grade Rating / Strong Balance Sheet 5 Ford FORD CREDIT Incremental Cash Funds Fund The Plan New Opportunities#6North America profitable and growing; remake of overseas operations begins in 2019 Ford FORD CREDIT 6 Redesigning Regional Businesses North America • . "Return to 10" margin objective Deep reorganization of salary workforce to enhance effectiveness and reduce costs Significant wave of new truck and SUV product launches in 2019 Europe • • Fundamental redesign of Europe business in-process Actions underway to improve profitability and reduce structural costs Product portfolio built around three customer-focused business groups - commercial vehicles, passenger vehicles and imports China . • • Redesigning China operating model to return to profitable growth Right-sizing inventories and addressing dealer profitability On track to launch more than 30 new products by 2021 South America • • Committed to the region with an optimized footprint, targeted to Ford's strengths Taking action to redesign the business; implementation begins this year Leveraging product strengths to focus on profitable trucks and utilities#7Alliances Are Catalysts For Global Redesign: VW And Mahindra • W VOLKSWAGEN Alliance to deliver medium pickup trucks for global customers starting in 2022, and follow with commercial vans Positions for market leadership in Light Commercial Vehicles Continuing discussions to explore additional areas of opportunity Does not involve cross-ownership between the two companies D MAHINDRA Will co-develop midsize compact sport utility vehicle for India; opportunities in other emerging markets Will enhance market offerings and deliver engineering and commercial synergies Continue to explore further engineering and commercial opportunities in cross-sharing of platforms and geographies 7 Ford FORD CREDIT#8Strategic Highlights Winning Portfolio Propulsion Choices F-Series: Over 1 million sold globally in 2018; largest-ever lead on competition; ATPs about $2k higher than segment Ranger: In the U.S., launched Ranger, the second best selling medium pickup outside of the U.S. All-new Focus in China: Higher ATP than segment; new mid-size SUV Territory in dealer showrooms by the end of January ✓ All-new Shelby GT500 revealed, most powerful street legal Ford in history ✓ Explorer: America's all-time best-selling SUV. All-new in 2019 with performance-tuned ST and no-compromise hybrid. Hybrid is the first of our next generation of advanced hybrids that provide both capability and efficiency ކ New all-electric utility to be revealed this year and go on sale in 2020 Early work started on all-electric F-150 Autonomous Technology Mobility Experiences ✓ Miami AV drive highlighting technology and business models for moving people and goods - exceeded expectations Acquired e-scooter company SPIN to deliver first-mile / last-mile mobility solutions Announced plan to deploy cellular vehicle-to-everything technology (C-V2X) in all-new vehicles in the U.S. beginning in 2022 80 Fitness Ford FORD CREDIT Redesign of our global salaried workforce to increase effectiveness and efficiency complete in 2Q Began consultation with labor partners on restructuring and redesign of European operations to reach sustainable profitability Russia business under strategic review ✓ Auto structural costs flat in 2018 YoY versus average annual increase of $1.7 billion 2013 - 2017 Entered into alliance with VW to develop medium-sized pickup trucks and commercial vans#9Financial Highlights FOURTH QUARTER FULL YEAR ار Company Revenue $41.8B ↑1% $160.3B 2% $ Company Adj. EBIT* $1.5B 3.5% $7.0B 4.4% Company Adj. EBIT Margin* NA EBIT Margin 7.6% 7.9% Ford Credit EBT $0.7B $2.6B 11 SD EPS Company Adj. Op. Cash Flow* Company Cash* Liquidity Adj. EPS* $1.5B $2.8B $23.1B $34.2B $23.1B $34.2B $0.30 $1.30 * See Appendix for reconciliation to GAAP and definitions 9 Ford FORD CREDIT#10ار Company Key Metrics Summary FOURTH QUARTER 2017 2018 FULL YEAR H/(L) 2017 2018 H/(L) Wholesales (000) 1,749 1,474 (16) % 6,607 5,982 Market Share (Pct) 6.6 % 5.9 % (0.7) ppts 7.0 % 6.3 % GAAP Revenue (Bils) Net Income (Bils) Net Income Margin (Pct) EPS (Diluted) Cash Flows From Op. Activities (Bils) Non-GAAP $ 41.3 41.8 1 % $ 156.8 160.3 2 % 2.5 (0.1) $ (2.6) 7.7 6.1 % (0.3) % (6.4) ppts 4.9 % 3.7 2.3 % $ (4.1) (2.6) ppts $ 0.63 $ (0.03) $ (0.66) $ 1.93 $ 0.92 $ (1.01) 3.1 1.4 (1.8) 18.1 15.0 (3.1) (9) % (0.7) ppts • • All 4Q key metrics lower YoY except revenue; mainly reflects performance in China and Europe Company adj. EBIT at $1.5B, down $0.6B; adj. EBIT margin at 3.5%, down 1.4 ppts Company adj. EPS at $0.30, down $0.09; adj. effective tax rate of negative 4.0% Company adj. operating cash flow at $1.5B, down $0.7B due primarily to lower EBIT Net income loss of $0.1B, down $2.6B; includes negative $0.9B non-cash pre-tax mark-to-market adjustment for global pension and OPEB plans Company Adj. EBIT* (Bils) $ 2.0 1.5 $ (0.6) $ 9.6 $ Company Adj. EBIT Margin* (Pct) 4.9 % 3.5 % (1.4) ppts 6.1 % 7.0 4.4 % $ (2.6) (1.7) ppts Adjusted EPS* (Diluted) $ 0.39 $ 0.30 $ (0.09) $ 1.78 $ 1.30 $ (0.48) Company Adj. Op. Cash Flow* (Bils) 2.2 1.5 (0.7) 4.2 2.8 (1.4) Adjusted Cash Conversion* 43 % 40 % Adjusted ROIC* (Trailing Four Qtrs) 11.8 % 7.1 % (3) ppts (4.7) ppts 43 % 40 % (3) ppts 11.8 % 7.1 % (4.7) ppts * See Appendix for reconciliation to GAAP, calculations and definitions 10 Ford FORD CREDIT#11B/(W) FY 2017 FY 2018 Company Results (Mils) $5,422 $(674) $2,627 $(373) $7,002 $(668) $(1,228) $(1,429) Auto Mobility Ford Credit Corporate Other Company Adj. EBIT* Interest On Debt Special Items Taxes / Non- Controlling $3,677 Net Income (GAAP) $(2,662) $(375) $317 $84 $(2,636) $(38) $(1,140) $(240) $(4,054) • • FY Company adj. EBIT of $7B driven by Auto and Ford Credit; YoY decline of $2.6B largely explained by lower China and Europe results in Auto Loss at Mobility due to planned investment increases for development of autonomous vehicle business and mobility services Corporate Other reflects Corporate governance costs offset partially by Auto interest income Special Items mainly non-cash pre-tax mark-to-market adjustment for global pension and OPEB plans and charges for personnel separations * See Appendix for reconciliation to GAAP and definitions 11 Ford FORD CREDIT#12FY 2018 Automotive EBIT By Region (Mils) $5,422 Automotive B/(W) FY 2017 $(2,662) 12 | | | I I I I Ford FORD CREDIT $7,607 $(2,185) $(7) $(398) $(678) $(1,102) North America South America Europe Middle East & Africa Asia Pacific $(450) $75 $(765) $239 $(1,761) • FY Automotive EBIT of $5.4B driven by North America • North America EBIT lower YoY . • due to higher warranty cost Operations outside North America at an EBIT loss of $2.2B, compared to last year's breakeven result. Loss driven by Asia Pacific (China), South America and Europe Non-North America YoY decline represents over 80% of lower Auto EBIT; results down $1.7B in China and $0.8B in Europe#13Company Cash Flow And Balance Sheet (Bils) 2017 2018 2017 4Q 4Q FY 2018 FY Company Cash Flow Company Adj. Op. Cash Flow* $ 2.2 $ 1.5 $ 4.2 $ 2.8 Change in Company Cash 0.3 (0.6) (1.0) (3.4) Balance Sheet and Liquidity Company Excluding Ford Credit 2017 2018 Dec 31 Dec 31 Company Cash* Liquidity Debt Cash Net of Debt $ 26.5 37.4 $ 23.1 34.2 $ (16.5) $ (14.1) 10.0 8.9 Pension Funded Status Funded Plans $ (0.1) $ (0.3) Unfunded Plans (6.5) (6.0) Total Global Pension Total Funded Status OPEB $ (6.6) $ (6.3) EA (6.2) $ (5.6) * See Appendix for reconciliation to GAAP and definitions 13 Ford FORD CREDIT . 4Q and FY Company adj. operating cash flow at $1.5B and $2.8B, respectively Company cash and liquidity balances remain strong • Committed to maintaining an investment grade credit rating and debt capacity; fully funded and de-risked global funded pension plans; and cash balances and liquidity at or above $20B and $30B, respectively#14Company Cash Flow (Bils) FOURTH QUARTER FULL YEAR 2017 2018 2017 2018 Company Adjusted EBIT* $ 2.0 $ 1.5 $ 9.6 $ 7.0 Excluding: Ford Credit EBT (0.6) (0.7) (2.3) (2.6) Subtotal $ 1.4 $ 0.8 $ 7.3 4.4 · Capital spending $ (2.1) $ (2.1) $ (7.0) $ (7.7) Depreciation and tooling amortization 1.3 1.4 5.0 5.4 Net spending $ (0.8) $ (0.7) $ (2.0) SA $ (2.4) Changes in working capital 0.9 0.4 (0.9) Ford Credit distributions - 0.7 0.4 2.7 • All other and timing differences 0.7 0.3 (1.5) (1.1) Company adjusted operating cash flow* $ 2.2 1.5 $ 4.2 2.8 Separation payments (0.2) (0.1) (0.3) (0.2) • Other transactions with Ford Credit (0.1) (0.2) Other, including acquisitions and divestitures (0.2) (0.2) (0.5) Cash flow before other actions $ 1.8 $ SA 1.4 $ 3.6 1.9 Changes in debt Funded pension contributions Shareholder distributions Change in cash * See Appendix for reconciliation to GAAP and definitions (0.2) (1.2) (0.4) (1.8) (0.7) (0.2) (1.4) (0.4) (0.6) (0.6) (2.7) (3.1) $ 0.3 $ (0.6) $ (1.0) $ (3.4) 14 Ford FORD CREDIT 4Q and FY Company adj. operating cash flow positive driven by EBIT and Ford Credit distributions FY global funded pension contributions of $0.4B FY shareholder distributions of $3.1B#15Ford FORD CREDIT Ford Credit FI-0323 7 Go Further#16Ford Credit -- A Strategic Asset Earnings Before Taxes Distributions $4.9 $2.1 $2.5 $2.5 $2.0 $3.7 $2.9 $2.0 $2.0 $3.1 $2.4 $1.7 $1.8 $1.9 $2.1 $2.3 $1.9 inklisation $1.2 $2.6 $(2.6) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Over The Last 20 Years, Ford Credit Generated $43 Billion In Earnings Before Taxes And $28 Billion In Distributions 16 Ford FORD CREDIT#17Key Metrics 2017 FOURTH QUARTER 2018 H/(L) 2017 FULL YEAR 2018 H/(L) Net Receivables (Bils) Managed Receivables* (Bils) Loss-to-Receivables** (LTR) Auction Values*** $ 143 146 3 % $ 143 146 3 % $ 151 $ 155 3 % $ 151 155 3 % 60 bps 55 bps (5) bps 53 bps 46 bps (7) bps $17,505 $17,865 2 % $17,430 $18,055 4 % Earnings Before Taxes (EBT) (Mils) $ 610 663 53 $ 2,310 $ 2,627 $ 317 ROE (Pct) 50 % 14 % (36) ppt 22 % 14 % (8) ppts Other Balance Sheet Metrics Debt (Bils) $ 138 140 2 % Liquidity (Bils) 30 27 (7) % Financial Statement Leverage (to 1) 8.7 9.4 0.7 Managed Leverage* (to 1) 8.0 8.8 0.8 * See Appendix for reconciliation to GAAP and definitions ** U.S. retail and lease *** U.S. 36-month off-lease fourth quarter auction values at 4Q 2018 mix, full year auction values at FY 2018 mix 17 Ford FORD CREDIT Strong 4Q and best FY EBT in 8 years U.S. consumer credit metrics healthy with improved LTR Balance sheet and liquidity remain strong; managed leverage within target range of 8:1 to 9:1#184Q 2018 Net Receivables Mix (Bils) Net Investment in Operating Leases Consumer Financing Non-Consumer Financing $146.3 $27.4 $115.6 4Q 2018 (Pct.) $27.0 SUV / CUV Truck Car 56 27 4 17 (5) $75.8 $56.5 H/(L) 2017 (Ppts.) 1 Operating lease portfolio was 19% of total net receivables U.S. and Canada represent 99% of operating lease portfolio $25.5 $43.1 $32.1 $15.5 $5.2 $9.6 Total Americas Europe Asia Pacific 18 Ford FORD CREDIT#19U.S. Origination Metrics Retail and Lease FICO® and Higher Risk Mix (Pct) Higher Risk Portfolio Mix Average Placement FICO 741 746 746 740 739 6% 6% 6% 6% 5% 2014 2015 2016 Retail ≥ 84 Months Mix Average Retail Placement Term Retail Contract Terms 2017 2018 65 mo 65 mo 65 mo 64 mo 62 mo 4% 2% 0% 0% 1% 2014 2015 2016 2017 2018 19 Ford FORD CREDIT Disciplined and consistent underwriting practices Portfolio quality evidenced by FICO scores and steady risk mix Extended-term contracts relatively small part of our business#20U.S. Retail And Lease Credit Loss Drivers Over-60-Day Delinquencies (excl. Bankruptcies) Repossessions (000) and Repo. Rate (Pct) Repo. Rate Repossessions 1.13% 1.06% 0.15% 0.98% 1.05% 1.09% 0.14% 0.14% 0.12% 0.12% 36 36 33 28 28 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Severity (000) Charge-Offs (Mils) and LTR Ratio (Pct) LTR Ratio Charge-Offs $10.1 $10.3 $10.0 0.47% 0.53% 0.46% 0.27% 0.33% $8.9 $7.9 $382 $324 $348 $206 $146 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 20 Ford FORD CREDIT Delinquencies and repossessions remain low Charge-offs and LTR improved YOY Strong loss metrics reflect healthy consumer credit conditions#21U.S. Lease Origination Metrics Lease Placement Volume (000) 24-Month 39-Month Other 36-Month 407 393 357 368 385 92 56 43 38 87 276 298 290 288 230 40 39 39 40 54 2014 2015 2016 2017 2018 Lease share continues to be below industry reflecting Ford sales mix Lease Share of Retail Sales (Pct) Ford Credit Industry* 30% 28% 29% 30% 26% 22% 22% 22% 20% 20% 2014 2015 2016 2017 2018 * Source: J.D. Power PIN 21 Ford FORD CREDIT#22U.S. Lease Residual Performance Return Rates Return Volume Lease Return Volume (000) and Return Rates (Pct) 22 22 78% 74% 78% 80% 78% 189 180 246 290 281 2014 2015 2016 2017 2018 24-Month 36-Month Off-Lease Auction Values (at FY 2018 Mix) $22,195 $21,315 $21,285 Healthy used car market supporting lease residual and credit loss performance 36-month auction values up 4% YoY; stronger than expected Expect 2019 FY average auction values to be about 4% lower $21,655 $21,950 YoY at constant mix $18,695 $17,910 $18,055 $17,110 2014 2015 2016 $17,430 2017 2018 Ford FORD CREDIT#23* 23 Funding Structure - Managed Receivables* (Bils) 2016 2017 2018 Dec 31 Dec 31 Dec 31 Term Debt (incl. Bank Borrowings) $ 66 $ 75 $ 70 Term Asset-Backed Securities Commercial Paper 50 53 60 4 Ford Interest Advantage / Deposits 6 Other 9 559 4 6 Equity 13 16 15 Adjustments For Cash (11) (12) (10) Total Managed Receivables $ 137 $ 151 $ 155 Securitized Funding as Pct of Managed Receivables See Appendix for definitions and reconciliation to GAAP Ford FORD CREDIT 10 . Funding is diversified across platforms and markets Well capitalized with a strong balance sheet and ample liquidity 37% 35% 39%#24Public Term Funding Plan* (Bils) 2016 2017 2018 2019 Actual Actual Actual Forecast** Unsecured -- Currency of issuance (USD Equivalent) USD 9 $ 10 $ 6 $ 9-12 CAD 1 2 1 1-2 EUR/GBP 3 3 Other 1 1 4 1 3-4 1 Total unsecured $ 14 $ 16 SA $ 13 $ SA 14-19 Securitizations Total public $ 13 $ 15 $ 14 $ 13-15 $ SA 28 $ 32 $ 27 $ 27-33 * Numbers may not sum due to rounding; see Appendix for definitions ** As of January 23, 2019 24 Ford FORD CREDIT#25Cautionary Note On Forward-Looking Statements 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 number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation: • Ford's long-term competitiveness depends on the successful execution of fitness actions; • • Industry sales volume, particularly in the United States, Europe, or China, could decline if there is a financial crisis, recession, or significant geopolitical event; Ford's new and existing products and mobility services are subject to market acceptance; • Ford's results are dependent on sales of larger, more profitable vehicles, particularly in the United States; • • • Ford may face increased price competition resulting from industry excess capacity, currency fluctuations, or other factors; Fluctuations in commodity prices, foreign currency exchange rates, and interest rates can have a significant effect on results; Ford's production, as well as Ford's suppliers' production, could be disrupted by labor disputes, natural or man-made disasters, financial distress, production difficulties, or other factors; With a global footprint, Ford's results could be adversely affected by economic, geopolitical, protectionist trade policies, or other events; • Ford's ability to maintain a competitive cost structure could be affected by labor or other constraints; • Pension and other postretirement liabilities could adversely affect Ford's liquidity and financial condition; . Ford's vehicles could be affected by defects that result in delays in new model launches, recall campaigns, or increased warranty costs; • . • • • • • • • Economic and demographic experience for pension and other postretirement benefit plans (e.g., discount rates or investment returns) could be worse than Ford has assumed; Safety, emissions, fuel economy, and other regulations affecting Ford may become more stringent; Ford could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, perceived environmental impacts, or otherwise; Ford's receipt of government incentives could be subject to reduction, termination, or clawback; Operational systems, security systems, and vehicles could be affected by cyber incidents; Ford Credit's access to debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors; Ford Credit could experience higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles; Ford Credit could face increased competition from banks, financial institutions, or other third parties seeking to increase their share of financing Ford vehicles; and Ford Credit could be subject to new or increased credit regulations, consumer or data protection regulations, or other regulations. We cannot be certain that any expectation, forecast, or assumption made in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise. For additional discussion, see "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018, as updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 25 Ford FORD CREDIT#26Ford U.S. Retail Securitization <-0323 FORD CREDIT#27U.S. Retail Securitization Free Writing Prospectus Registration Statement No. 333-225949 Ford Credit Auto Receivables Two LLC (the "depositor") Ford Credit Auto Owner Trusts (the "issuer") This document constitutes a free writing prospectus for purposes of the Securities Act of 1933. 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 EDGAR on the SEC website at www.sec.gov. Alternatively, you may request that a copy of the prospectus be sent to you by calling 1-888-603-5847. 27 Ford FORD CREDIT#28U.S. Retail Securitization Overview Ford Credit has been originating retail installment sales contracts since 1959 and has been securitizing its retail contracts since 1988 Ford Credit has had an active publicly registered securitization program for retail contracts since 1989 and has issued asset-backed securities in more than 75 transactions under this program Ford Credit offers retail asset-backed securities through various channels: - - - Publicly registered transactions Rule 144A transactions Other private transactions Collateral composition has trended in line with the industry and Ford Credit's strategy - we securitize what we originate Structural elements have remained consistent - similar structure in place for over 15 years 28 Ford FORD CREDIT#29U.S. Retail Securitization Business Update Number of Retail Installment Contracts Originated (000) 29 839 2014 899 729 719 705 2015 2016 2017 2018 Avg. # of Contracts Outstanding (000) 1,896 63% 2014 2,005 2,106 2,145 Financing Share* Retail Installment and Lease 65% 2015 2,195 58% 56% 55% 2016 * Retail Installment and lease share of Ford/Lincoln retail sales (excludes fleet sales) Ford FORD CREDIT 2017 2018 . . Financing practices have been prudent and consistent for many years, ensuring reliable support for Ford dealers and customers through all cycles Changes in origination volumes generally reflect the changes in Ford's sales and Ford Credit's financing share Changes in financing share are primarily driven by the availability and type of Ford-sponsored marketing programs#30U.S. Retail Securitization Portfolio Credit Metrics Weighted Average FICO® at Origination* 30 741 741 736 736 734 2014 Repossessions as a % of the Average Number of Contracts Outstanding 1.22% 1.29% 1.21% 1.28% 1.12% 2015 2016 2017 2018 2014 2015 2016 2017 2018 Based on year of origination Average Net Loss on Charged-Off Contracts* $4,445 $3,292 2014 2015 $6,245 2016 $6,640 $6,100 2017 2018 Net losses consider losses incurred after the unit has been sold at auction and all legal collection efforts have been completed Ford FORD CREDIT Net Losses as a % of the Average Portfolio Outstanding 0.38% 0.33% 0.61% 0.54% 0.54% 2014 2015 2016 2017 2018#3131 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013-A 745 U.S. Retail Securitization Securitization Pool Metrics Weighted Average FICO 740 735 730 725 720 715 2013-A 2013-B 2013-B 2013-C 2013-D 2014-A 2014-B Ford FORD CREDIT 2013-C 2013-D 2014-A 2014-B 2014-C 2015-A 2015-B 2015-C 2016-A 2016-B New / Used 2014-C 2015-A ■New 2015-B 2015-C 富 2016-A 2016-B 2016-C 2016-C 2017-A 2017-B 2017-C 2018-A 2018-B 2017-A 2017-B 2017-C 2018-A 2018-B 80% 60% 40% 20% 0% 9.1% 8.9% 8.7% 8.5% 8.3% 8.1% 7.9% 7.7% 7.5% 2013-A 2013-B 2013-C 2013-D 2014-A 2014-B Weighted Average Payment-to-Income 2014-C 2015-A 2015-B 2015-C 2016-A 2016-B 100% Car Light Truck / Utility 2013-A 2013-B 2013-C 2013-D 2014-A 2014-B 2014-C 2015-A 2015-B 2015-C * ■Car Light Truck Utility Other* Primarily non-Ford, Lincoln and Mercury vehicles, which Ford Credit does not categorize 2016-A 2016-B 2016-C 2017-A 2017-B 2017-C 2016-C 2017-A 2017-B 2017-C 2018-A 2018-B 2018-A 2018-B#3232 32 100% 95% 90% 85% 80% 2012-A 2012-B 2012-C 2012-D U.S. Retail Securitization Securitization Pool Metrics % Subvened-APR Receivables 70% 65% 60% 55% 50% 45% 40% 35% 2012-B 2012-A 2012-C 2012-D 2013-A 2013-B 2013-C 2013-D 2014-A 2014-B 2014-C 2015-A 2015-B 2015-C 2016-A 2016-B 2016-C 2017-A Weighted Average Loan-to-Value (LTV) 2013-A 2013-B 2013-C 2013-D 2014-A Ford FORD CREDIT 2014-B 2014-C 2015-A 2015-B 2015-C 2016-A 2016-B 2016-C 2017-A 2017-B 2017-C 2018-A 2018-B 2017-B 2017-C 2018-A 2018-B 100% 80% 60% 40% 20% 0% 2012-A 2012-B 2012-C 2012-D 2013-A % of Contracts > 60 Month Original Term 2013-B 2013-C 2013-D 2014-A 2014-B 2014-C 2015-A 2015-B 2015-C 2016-A 2016-B 2016-C 2017-A 2017-B 2017-C 2018-A 2018-B Commentary Ford marketing programs, with subvened rates as low as 0% for 72 months, have influenced the composition of recent pools - Subvened APR receivables increased through 2016 but have been lower since then - Increased mix of contracts with original term > 60 months - Higher LTVs reflect a higher mix of subvened APR receivables#33U.S. Retail Securitization Structure Overview % of Initial Securitization Value Credit enhancement in the retail securitization program includes: • Subordination of junior notes Cash reserve Excess spread (used to build target overcollateralization) Senior/subordinate, sequential pay structure Class A Notes ("AAA") 95.00% Target OC=Sum of: 2. 2.0% of initial adjusted pool balance 3. 1.5% of current pool balance less reserve Class B Notes ("AA") 3.00% Total Initial Class A 1. YSOC Class C Notes ("A") 2.00% Hard Credit Reserve Account 0.25% Enhancement 5.25% Excess Spread Initial Overcollateralization 0.00% 33 Ford FORD CREDIT#34U.S. Retail Securitization Retail Pool Performance: Cumulative Net Losses 2.5% 2.0% 1.5% 1.0% 0.5% 03-A 03-B 04-A 05-A 05-B 05-C 06-A 06-B 06-C 07-A 07-B 08-A 08-B H 08-C 09-A 09-B 09-C 09-D - 09-E 10-A 10-B 11-A 11-B 12-A 12-B 12-C 12-D 13-A 13-B 13-C 13-D 14-A 14-B 14-C 15-A 15-B 15-C 16-A 16-B 16-C 17-A 17-B 17-C 18-A 18-B 0.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Months Since Settlement Over 15 Years Of Consistent Performance Through Multiple Cycles 34 Ford FORD CREDIT#35Ford FORD CREDIT U.S. Retail Origination and Servicing Strategy#36U.S. Retail Originations and Servicing Strategy Origination Process Ford Credit's origination process is supported by proprietary scoring models and electronic decisioning Analyzes a number of factors for each credit application - Produces a proprietary risk score that is updated in real time throughout the evaluation process as inputs change Credit application process Dealers submit credit applications and proposed financing terms electronically to Ford Credit Ford Credit obtains a credit report for the applicant and any co-applicant » Ford Credit uses its proprietary origination system to complete compliance and other checks, including fraud alerts, ID variation or to identify if the applicant is a current or former customer Ford Credit's origination process is judgment-based, using well-established purchasing guidelines and control processes - not governed by strict limits Ford Credit communicates credit decisions electronically to dealers 36 Ford FORD CREDIT#37U.S. Retail Originations and Servicing Strategy Origination Scoring Models • • • Ford Credit classifies credit applications to determine which origination scoring model will be used. Classifications are: ― Applicant type (individual, business entity) Credit profile (high FICO, low FICO) Vehicle type (new vehicle, used vehicle) Ford Credit's proprietary origination scoring models assess the creditworthiness of the applicant using the information in the credit application, information in the credit bureau report and other information. Examples include: Financing product (retail, lease) Contract characteristics (loan-to-value, lease-to-value, term, payment) Other factors (payment-to-income, employment history, capacity to pay, financial stability) Output of the origination scoring models is a proprietary risk score referred to as Probability of Payment The origination scoring models build on the predictive power of credit bureau, credit application data and contract characteristics Updated in real time throughout the evaluation process as inputs change 37 Ford FORD CREDIT#38U.S. Retail Originations and Servicing Strategy Scoring Models Development and Maintenance • · Origination scoring models are developed internally by Ford Credit's analytics team using statistical analysis of contract characteristics, performance of Ford Credit's retail and lease portfolio and other automotive-specific data to identify key variables that predict an applicant's probability of fully paying the amount due under the contract Ford Credit regularly reviews its models to confirm the business significance and statistical predictability of the variables Origination scoring model performance review Scorecard Cycle Plan Committee review Ford Credit develops new origination scoring models on a regular cycle plan Ford Credit may make adjustments to improve the performance of the origination scoring models between development cycles to react quickly to portfolio performance shifts and macroeconomic conditions. Adjustments may include: Uniformly changing the overall credit risk scores Modifying the weight of selected variables Launch dates for most recent redeveloped origination scoring models: Scoring Models Consumer U.S. January 2018 January 2019 Commercial Line of Credit May 2017 Commercial 38 Ford FORD CREDIT#39U.S. Retail Originations and Servicing Strategy Purchasing Guidelines and Control Processes Ford Credit establishes purchasing standards and procedures to support consistent credit and purchase decisions - - - Portfolio Level – Purchasing guidelines set portfolio targets for lower and marginal quality contracts and to manage the overall quality of the portfolio. Credit Application Level - Risk factor guidelines provide a framework for credit application evaluation criteria for specific attributes, including affordability measures such as payment-to-income and debt-to- income ratios, FICO score and contract term >> For less creditworthy 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's procedures before making a decision Ford Credit reviews credit analysts' decisions regularly to ensure they are consistent with origination standards and credit approval authority Ford Credit analyzes risk management portfolio performance quarterly Effective Guidelines And Processes Enable Predictable Portfolio Performance 39 Ford FORD CREDIT#40U.S. Retail Originations and Servicing Strategy 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 loss or severity and periodically updated credit bureau information Before a behavioral scoring model is applied, Ford Credit classifies each customer account to determine which model to use. Classifications include: - - - Financing product (retail, lease) Customer type (individual, business entity) Delinquency level (current, due date delinquent, 30 days past due) Output of the behavioral scoring models is a proprietary risk rating referred to as Probability of Default (POD) that determines - - - How soon an obligor will be contacted after a payment becomes delinquent How often the obligor will be contacted during the delinquency How long the account will remain in early stage collections before it is transferred to a more experienced representative to continue collection efforts 40 Ford FORD CREDIT#41U.S. Retail Originations and Servicing Strategy Scoring Models Development and Maintenance • • • Behavioral scoring models are developed internally by Ford Credit's analytics team using statistical analysis of the contract characteristics and performance of Ford Credit's retail and lease portfolio and other external automotive- specific data to identify key variables that predict a customer's probability of default in the near term Ford Credit regularly reviews the behavioral scoring models to confirm the continued business significance and statistical predictability of the variables - Behavioral scoring model performance review Scorecard Cycle Plan Committee review Ford Credit develops new behavioral scoring models on a regular cycle plan Ford Credit may make adjustments to improve the performance of the behavioral scoring models between development cycles by uniformly changing the overall scores or modifying the weighting of selected variables Completed launch dates of most recent redeveloped POD behavioral scoring models are as follows: 41 Ford FORD CREDIT Scoring Models Consumer Commercial U.S. February 2018 January 2019#42Ford FORD CREDIT U.S. Revolving Extended Variable-Utilization Securitization (Ford REV) H-0323 urther#43FordREV Program Overview Ford Credit has offered 11 transactions from its Ford Credit Revolving Extended Variable-Utilization, or Ford REV, securitization program that launched in May 2014 43 - Ford REV features a 5- or 7-year revolving period and subsequent soft-bullet maturity • - - Currently around $14 billion in outstanding notes Two REV transactions will be redeemed in 2019 (2014-REV1 and 2014-REV2) 2019-REV1 is the most recent issuance, with Class A notes of $1.2 billion and a 5-year tenor Ford REV notes consist of a AAA-rated senior class and two subordinated classes of notes Ford REV notes are backed by U.S. retail auto receivables originated by Ford Credit - comparable to its U.S. public retail securitization program - During the revolving period, monthly collections are deposited into an accumulation account and are available to purchase additional receivables from Ford Credit Ford REV 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 - Ford FORD CREDIT#44FordREV Program Benefits • Ford's Perspective Expands and further diversifies Ford Credit's funding and liquidity Extends the duration of Ford Credit's securitization funding Complements Ford Credit's U.S. public retail securitization program, offering a longer tenor with comparable collateral Aligns with Ford Credit's commitment to a strong balance sheet 44 Investors' Perspective Provides retail auto receivables exposure in unique long-duration format Backed by Ford Credit's U.S. retail auto receivables - ideally suited for a revolving structure Structural protections include collateral composition tests and performance triggers Soft-bullet maturity, with step-up coupon and make-whole payments, to protect against extension and reinvestment risks Ford FORD CREDIT#4545 FordREV Ford Credit's U.S. Retail Auto Receivables Ford Credit's U.S. retail auto receivables are ideally suited for securitization, including a revolving term ABS structure - - Consistent origination and servicing practices Consistent collateral composition Consistent loss performance Historical Cumulative Net Loss Ratio 45 U.S. Public Retail Transactions From 2003 To Present 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 1 5 9 13 17 21 25 29 33 37 41 45 49 Months Since Settlement 49 53 57 760 740 720 700 680 660 Ford FORD CREDIT Weighted Average FICO® - 45 U.S. Public Retail Transactions From 2003 to Present 2009-B 2009-C 2009-D 2009-E 2010-A 2010-B 2011-A 2011-B 2012-A 2012-B 2012-C 2012-D 2013-A 2013-B 2013-C 2013-D 2014-A 2014-B 2014-C 2015-A 2015-B 2015-C 2016-A 2016-B 2016-C 2017-A 2017-B 2017-C 2018-A 2018-B#46FordREV Pool Comparison • Ford Credit selects FordREV pools using the same eligibility criteria and selection procedures as for its U.S. public retail transactions, ensuring consistency between both programs Characteristic 2019-REV1 2018-B* 2018-REV2 2018-A* 2018-REV1 2017-C* 2017-REV2 2017-B* 2017-REV1 2017-A* Initial Pool Balance $1.6bn $1.2bn $1.3bn $1.7bn $2.5bn $2.0bn $1.5bn $1.4bn $1.5bn $1.7bn Number of Receivables 55,774 40,936 50,063 64,956 90,622 78,146 60,184 55,385 58,484 66,537 Average Principal Balance $29,225 $28,374 $26,837 $26,603 $27,034 $25,559 $24,940 $25,465 $26,007 $25,821 WA FICO Score 738 739 737 737 740 739 736 734 736 WA Loan to value (LTV) 97.89% 97.71% 97.07% 96.78% 96.96% 97.32% 98.15% 98.56% 98.16% 736 98.16% WA Payment-to-income (PTI) 8.63% 8.48% 8.63% 8.62% 8.63% 8.63% 8.69% 8.67% 8.72% 8.64% Commercial Use 20.07% 19.88% 22.45% 22.24% 20.02% 19.58% 21.99% 20.05% 20.29% 19.54% % Original Term > 60m 57.45% 57.95% 56.86% 57.59% 60.27% 58.15% 56.14% 56.98% 54.37% 55.08% WA APR 3.48% 3.46% 3.63% 3.55% 3.20% 3.06% 2.84% 2.71% 2.66% Subvened-APR Receivables 64.21% 62.17% 55.09% 54.84% 57.51% 59.89% 63.86% 65.54% 65.36% 2.61% 66.33% WA Original Term 65.4 months 65.4 months 65.2 months 65.2 months 65.6 months 65.3 months WA Remaining Term 58.5 months 58.4 months 56.3 months 57.0 months 57.6 months WA Seasoning 6.9 months 7.0 months 8.9 months 8.2 months 8.1 months 56.2 months 9.1 months 65.0 months 54.7 months 65.2 months 55.9 months 10.3 months 9.3 months 64.8 months 56.3 months 8.5 months 64.9 months 56.5 months 8.4 months % New % Car % Light Truck % Utility 87.88% 86.84% 87.98% 88.34% 90.44% 89.73% 89.38% 89.69% 90.96% 90.68% 13.80% 14.80% 16.14% 16.34% 18.27% 19.76% 21.99% 22.10% 22.02% 22.71% 48.12% 47.47% 49.47% 49.84% 48.17% 46.70% 44.76% 44.17% 44.44% 43.68% 38.08% 34.39% Top 3 States 17.83% Texas 7.89% California 7.75% Florida 37.74% 17.16% Texas 9.85% California 7.52% Florida 16.97% Texas 10.21% California 7.79% Florida 17.09% Texas 10.43% California 7.85% Florida 15.91% Texas 10.39% California 8.06% Florida 16.53% Texas 9.91% California 4.02% Illinois 33.83% 33.50% 33.54% 33.25% 33.73% 33.54% 33.61% 11.53% Texas 11.35% California 8.31% Florida 15.22% Texas 10.91% California 7.86% Florida 14.57% Texas 9.93% California 7.42% Florida 15.20% Texas 9.64% California 7.57% Florida * U.S. public retail transactions 46 Ford FORD CREDIT#47FordREV Pool Composition Tests . Pool composition limits mitigate the risk of adverse changes in composition - Applied to the entire pool when the issuer purchases or sells receivables • • Two levels of pool composition tests, which impact credit enhancement - Failure of any of the more stringent "Floor Credit Enhancement Composition Tests" results in an increase in credit enhancement Failure of any of the "Pool Composition Tests" will require the servicer to identify "ineligible receivables" so that the remaining receivables satisfy the tests - providing dollar-for-dollar credit enhancement for ineligible receivables As Ford Credit aims to securitize its portfolio of receivables consistently across its Ford REV and U.S. public retail transactions, the Pool and Floor Credit Enhancement Composition Tests are subject to periodic review, with modifications made only three times to the program Weighted Average FICO score at origination Recievables with original term > 60m Receivables for used vehicles 2019-REV1 Floor Credit Enhancement Composition Tests ≥ 715 ≤ 70% Receivables for used vehicles with original term > 60m Receivables for new vehicles with original term > 60m and obligors with no FICO score Receivables with consumer obligors with no FICO score Receivables with commercial obligors with no FICO score ≤ 17.5% ≤ 11% ≤ 4% not applicable not applicable Pool Composition Tests ≥ 700 ≤ 75% ≤ 22.5% ≤ 12% ≤ 5% ≤ 2% ≤ 22.5% 47 Ford FORD CREDIT#48FordREV Credit Enhancement Levels • Upon each receivables purchase, one of three levels of credit enhancement is established based upon the entire pool's composition and compliance with a Net Loss Test - - Achieved by varying the discount rate for yield supplement overcollateralization - 2019-REV1 total hard enhancement is consistent with previous 5-year Ford REV transactions Excess Spread* 7.54% 3.99% 4.64% Intital Hard Credit Enhancement** 9.50% 9.50% 9.50% 3.49% 5.25% Enhancement Scenario (1) (2) (3) Memo: 2018-B*** Floor CE Composition Tests Met Failed N/A N/A Pool Composition Tests Met Met N/A N/A Net Losses Test Met Met Failed N/A Yield Supplement Discount Rate 8.40% 9.10% 12.10% 7.50% * Annual excess spread including Yield Supplement ** Initial hard credit enhancement (overcollateralization + subordination + reserves) as a % of Adjusted Pool Balance *** U.S. public retail transaction 48 Ford FORD CREDIT#4949 FordREV Senior Note Break-Even Analysis Cumulative Net Loss Ratio Approximate 2019-REV1 Break-Even Losses Compared With Historical Pool Losses 26.0% 24.0% 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% ..။ 11 11 || " "| 11 " Enhancement Scenario 3 Enhancement Scenario 2 Enhancement Scenario 1 2.0% 0.0% U.S. public retail transactions from 2003 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Months Since Settlement Assumptions . Default timing curve of 30% / 40% / 20% / 10% per year • 1.40% ABS • 3-month recovery delay and 50% loss severity Ford FORD CREDIT#50FordREV Amortization Events • - - - Amortization period (full turbo) 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, (b) the required amount is not in the reserve account, (c) required amount is not in the negative carry account, or (d) required amount is not in the accumulation account Notes are not paid in full on the expected final payment date Three-month rolling average annualized net losses as a percentage of aggregate principal balance of receivables exceeds 3.50% Three-month rolling average percentage of aggregate principal balance of receivables that are 61 days or more delinquent exceeds 1.50% - Adjusted pool balance is less than 50% of the principal amount of the notes A servicer termination event occurs and is continuing An event of default occurs and is continuing 50 Ford FORD CREDIT#51FordREV Net Loss To Receivables Ratio 1.9% 1.5% 0.9% 0.8% 0.7% Total Ford Credit Retail Receivables Portfolio Net Losses as % of Average Portfolio Outstanding* Memo: FordREV Amortization Trigger (3.5%)** Memo: FordREV Net Losses Test (2.5%)** 1.5% 1.5% 0.7% 0.6% 0.5% 0.5% 0.5% 0.3% 0.3% 0.3% 0.4% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * ** Portfolio net losses: Net losses of the portfolio as a percentage of average portfolio outstanding FordREV pool loss threshold: 3-month rolling average annualized net losses of the pool as a percentage of pool balance at the end of each month 51 Ford FORD CREDIT#52FordREV Note Redemption, Step-Up And Make-Whole Note Redemption • Note redemption period begins six months prior to the expected final payment date Note redemption achieved through sale of trust assets to the depositor, another Ford Credit special purpose entity, or a third party if sale proceeds are sufficient to fully repay the notes Step-up Amounts If notes are not paid in full by the expected final payment date, step-up amounts will be payable Step-up amounts will accrue on each class of notes at a rate equal to the interest rate for the class less 0.01% Make-whole Payments - - Make-whole payments will be payable on each principal payment made prior to the note redemption period due to: An amortization event resulting from the failure to fund the negative carry account to the required amount or the adjusted pool balance declining to less than 50% of note balance, or The trust's exercise of its option to redeem the notes prior to the note redemption period Make-whole payments will be equal the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on the principal payment until the sixth payment date prior to the expected final payment date and (ii) the principal payment, discounted from the sixth payment date prior to the expected final payment date to the payment date monthly on a 30/360 basis at 0.25% plus the higher of (1) zero and (2) the current maturity matched U.S. Treasury rate over (b) the principal payment 52 52 Ford FORD CREDIT#53FordREV Collateral Performance Reporting . Available at: http://www.ford.com/finance/investor-center/asset-backed-securitization 53 Monthly Investor Report 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 overcollateralization schedule Quarterly Supplement Summary stratification for each quarterly vintage of additional receivables sold to the issuer Static pool performance, consistent with U.S. public retail securitization program, for the initial pool and separately for each quarterly vintage of additional receivables sold to the issuer Existing Transactions Demonstrate the Consistency of Receivables Additions with the Initial Pool* Example: 2016-REV2 Cut-Off Date(s) Number of Receivables Pool Balance Average Principal Balance Average Original Amount Financed Loan to Value (LTV) Payment to Income (PTI) Commercial Use Subvened-APR Receivables WA APR WA Original Term WA Remaining Term WA Seasoning New % Used % Car% Light Truck% Utility% WA FICO® at Origination WA FICO® w/ Original Term > 60 mo. Receivables Receivables Receivables Purchased Quarter Ended Mar. 31, 2017 Receivables Purchased Quarter Ended Jun. 30, 2017 Receivables Purchased Quarter Ended Sep. 31, 2017 July 1, 2017 August 1, 2017 September 1, 2017 Receivables Purchased Quarter Ended Dec. 31, 2017 October 1, 2017 November 1, 2017 December 1, 2017 Receivables Purchased Quarter Ended Mar. 31, 2018 January 1, 2018 February 1, 2018 March 1, 2018 6,271 $170,464,273 $27,183 Receivables Purchased Quarter Ended Jun. 30, 2018 Receivables Purchased Quarter Ended Sep. 31, 2018 July 1, 2018 August 1, 2018 September 1, 2018 Initial Pool Purchased Quarter Ended Sep. 30, 2016 Purchased Quarter Ended Dec. 31, 2016 June 1, 2016 July 1, 2016 August 1, 2016 September 1, 2016 October 1, 2016| November 1, 2016 December 1, 2016 60,144 5,930 5,409 January 1, 2017 February 1, 2017 March 1, 2017 5,654 April 1, 2017 May 1, 2017 June 1, 2017 5,849 6,188 6,338 April 1, 2018 May 1, 2018 June 1, 2018 6,696 6,698 $1,495,820,222 $148,962,940 $137,564,845 $24,871 $25,120 $25,433 $142,640,962 $25,228 $151,931,735 $157,557,964 $161,146,733 $178,267,795 $181,575,077 $25,976 $25,462 $25,425 $26,623 $27,109 $30,195 $30,415 $31,227 $31,271 $32,301 $32,108 $32,138 $33,303 $33,126 $33,121 97.57% 97.83% 97.73% 98.26% 98.71% 98.18% 97.23% 96.90% 96.66% 97.38% 8.63% 8.71% 8.78% 8.71% 8.75% 8.66% 8.73% 8.44% 8.55% 8.57% 19.11% 18.63% 21.12% 18.44% 20.69% 20.46% 19.72% 20.38% 21.85% 21.07% 62.25% 62.91% 65.34% 66.94% 65.68% 61.87% 59.47% 54.88% 53.22% 57.58% 2.96% 2.94% 2.66% 2.62% 2.68% 2.99% 3.10% 3.38% 3.65% 3.68% 64.5 months 64.7 months 64.7 months 65.0 months 65.1 months 56.5 months 56.7 months 56.5 months 56.2 months 56.2 months 64.9 months 55.6 months 65.2 months 65.7 months 65.1 months 65.2 months 56.3 months 57.7 months 57.1 months 57.6 months 8.0 months 8.0 months 8.2 months 8.8 months. 8.9 months 9.3 months 8.9 months. 8.0 months 8.0 months 7.6 months 89.2% new 10.8% used 89.5 % new / 10.5% used 90.2% new / 9.8% used 89.9% new / 10.1 % used 89.3% new / 10.7% used 87.9% new / 12.1% used 89.0% new 11% used 89.4% new / 10.6% used 87.5% new / 12.5% used 86.3% new / 13.7% used 24.10% 24.97% 22.49% 23.04% 21.01% 20.86% 19.17% 16.78% 16.68% 15.56% 41.79% 41.14% 44.33% 42.37% 43.87% 44.58% 46.76% 49.04% 48.72% 47.34% 33.48% 33.38% 32.61% 33.95% 34.48% 33.99% 33.29% 33.46% 33.73% 35.84% 732 734 735 736 734 737 737 739 738 737 708 712 713 715 713 716 718 722 719 717 2016-REV2 receivables are purchased monthly, information reflected quarterly for formatting reasons Ford FORD CREDIT#54Ford U.S. Lease Securitization F1-0323 FORD CREDIT#55U.S. Lease Securitization Free Writing Prospectus Registration Statement No. 333-208514 Ford Credit Auto Lease Two LLC (the "depositor") Ford Credit Auto Lease Trusts (the "issuer") This document constitutes a free writing prospectus for purposes of the Securities Act of 1933. 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 EDGAR on the SEC website at www.sec.gov. Alternatively, you may request that a copy of the prospectus be sent to you by calling toll-free 1-888-603-5847. 55 Ford FORD CREDIT#56U.S. Lease Securitization Overview • • Ford Credit has been in the business of leasing vehicles since 1975 and has been securitizing its lease contracts since 1995 Ford Credit's current lease securitization platform was established in 2006, and more than 30 lease securitization transactions have been completed Ford Credit offers lease asset-backed securities through various channels: - Publicly registered transactions - Rule 144A transactions - Other private transactions Structural elements, such as priority of payments, have remained consistent over time 56 Ford FORD CREDIT#57U.S. Lease Securitization Business Update Number of Leases Originated (000) 414 363 2014 Avg. # of Leases Outstanding (000) 145 135 125 115 105 95 704 401 394 377 2015 2016 2017 2018 841 975 1,006 1,018 Manheim Used Vehicle Value Index m Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Source: Manheim Consulting, December 2018 (January 1996 = 104.3) 57 Ford FORD CREDIT . • • Ford Credit leasing, as a share of retail sales, remains below the industry Ford Credit works with Ford and Lincoln to set guidelines around leasing share, term, model mix and other factors to support brand value and sales Auction values stronger than expected and higher YoY#58U.S. Lease Securitization Portfolio Credit Metrics Weighted Average FICO® at Origination* 747 743 741 2014 Repossessions as a % of Average Number of Leases Outstanding 753 0.79% 751 0.72% 0.69% 0.66% 0.63% 2015 2016 2017 2018 2014 2015 2016 2017 2018 * Based on year of origination Average Net Loss/(Gain) on Charged-Off Leases* Net Losses as a % of Average Portfolio Outstanding $5,707 $5,081 $4,769 $4,421 $4,308 0.23% 0.21% 2014 2015 2016 2017 2018 * Net losses consider losses incurred after the unit has been sold at auction and all legal collection efforts have been completed 58 Ford FORD CREDIT 0.33% 0.38% 0.31% 2014 2015 2016 2017 2018#59U.S. Lease Securitization Securitization Pool Metrics Weighted Average FICO 754 751 751 747 746 746 745 742 742 741 2013-B 2014-A 2014-B 2015-A 2015-B 2016-A 2017-A 2017-B 2018-A 2018-B 100% Original Term as % of Securitization Value Maximum 3-Month Residual Concentration 20% 19% 19% 18% 18% 16% 17% 17% 17% 24% 2013-B 2014-A 2014-B 2015-A 2015-B 2016-A 2017-A 2017-B 2018-A 2018-B 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 2013-B 2014-A ■24 27 2014-B 2015-A 2015-B 2016-A 2017-A 2017-B 2018-A 2018-B 36 ■39 0% 2013-B ■48 59 Ford FORD CREDIT Vehicle Type as % of Securitization Value* 2014-A 2014-B 2015-A 2015-B 2016-A 2017-A 2017-B 2018-A 2018-B ■CUV ■Car ■Truck SUV * Reflects classification of 2011 and newer model year Explorers and 2013 and newer model year Escapes as CUVS rather than SUVS#60U.S. Lease Securitization Pool Metrics - Model Diversification FCALT 2018-A 60 60 Navigator 1.6%. Focus 2.6% MKX 4.3%. MKC 4.5% MKZ 4.7% Edge 8.7% Other 8.0% Fusion 11.9% Escape 18.9% F-150 16.1% Model Concentrations Top 1: 19% Top 3: 54% Top 5: 74% Ford FORD CREDIT FCALT 2018-B Other 8.6% Expedition 1.9%- Navigator 2.4%. MKZ 4.0% MKX 4.3% MKC 4.5% Explorer 18.7% Edge 7.9% Fusion 8.1% Escape 17.4% Model Concentrations Top 1: 22% Top 3: 58% Top 5: 74% F-150 21.7% Explorer 19.3%#61U.S. Lease Securitization Securitization Pool Performance Cumulative Return Rate * 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0 2 4 6 8 10 2014-A 2014-B 2017-A ―-2017-B 12 14 16 18 ---2015-A 2018-A 20 22 24 26 28 2015-B 30 2016-A 32 32 -2018-B Cumulative Net Credit Losses* Cumulative Residual Loss / (Gain)* 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% 0 2 4 6 8 2014-A --2017-A ―2017-B 10 12 14 16 18 20 22 2014-B 2015-A ―2018-A 24 26 28 2015-B 2018-B 30 32 -2016-A * As a percentage of initial base residual value; includes losses/(gains) on retained and returned vehicles Commentary 0.6% • 0.5% For the pool performance in the periods above (2014 to 2018): 0.4% 0.3% 0.2% 0.1% - Lifetime cumulative return rates range between 60% and 75% - Cumulative residual gains but declining; recently, residual gains on larger vehicles have been partially offset by residual losses on smaller vehicles 0.0% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 - 2014-A 2017-A -2014-B 2017-B 2015-A 2018-A -2015-B 2016-A Consistent credit loss performance -2018-B Total credit loss as a percent of initial total securitization value 61 Ford FORD CREDIT#62U.S. Lease Securitization Structure Overview % of Initial Securitization Value Credit enhancement in the lease securitization program includes: • 80.1% Class A Notes ("AAA") • Class B Notes ("AA") Class C Notes ("Not Rated") Overcollateralization 4.5% 4.2% 11.2% Reserve Account 0.25% Excess Spread Total Initial Class A Hard Credit Enhancement ~20.2% . Subordination of junior notes Overcollateralization Cash reserve Excess spread (used to build target overcollateralization) Senior/subordinate, sequential pay structure Target OC: 13.7% of Initial Total Securitization Value 62 Ford FORD CREDIT#63U.S. Lease Securitization Residual Maturity Vs. Enhancement Build 20% Residual Maturity by Vehicle Type vs. Hard Credit Enhancement for Class A Notes* Class A-4 Paid Down % of Residuals Maturing Each Period 15% 10% Class A-1 Paid Down 5% 0% Class A-2 Paid Down T Class A-3 Paid Down T 100% 90% 80% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Total Hard CE ■Car ■CUV ■SUV Truck Hard credit enhancement consists of overcollateralization, subordination and the reserve account; Assumes zero loss, zero prepays 65 63 Ford FORD CREDIT 70% 60% 50% 40% 30% 20% 10% 0% Securitization Value Hard Credit Enhancement as a % of O/S#64U.S. Lease Securitization Significance Of Securitization Value Sample Calculation: Lease Balance Securitization Value Payments Remaining 24 24 Base Monthly Payment Residual Value ᏌᏊ $ 200 $ 16,000 SAS 200 $ 13,000 Discount Rate 2% 5% Present Value $ 20,049 $ 16,275 64 Ford FORD CREDIT Difference of $3,774 $20,049 $16,275 Lease Balance Securitization Value • . For securitization transactions, a "Securitization Value" is calculated for the underlying lease assets Securitization value is calculated using the lower of the contract residual value or the residual value set by Automotive Lease Guide (ALG) Securitization value cash flows are discounted using the higher of the contract lease factor or a minimum discount rate designed to create excess spread#65U.S. Lease Securitization Break-Even Analysis* Break-Even for FCALT 2018-B Compared to Historical Pool Performance Return Rate Cumulative Residual Loss / (Gain) * 100% 90% 80% 70% 60% Break-Even 100% Return Rate Assumed Memo: Worst Recent 12-Month Portfolio Experience = 82% (CY 2008) 100% 80% A-2 Break-Even = 86.8% 60% A-3 Break-Even = 46.0% 40% A-4 Break-Even = 34.3% 50% 40% 20% 30% Memo: Worst Recent 12-Month Portfolio Experience = 18.3% (CY 2008) 20% 0% 10% -20% 0% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 02 4 6 8 10 12 14 16 18 20 22 24 26 26 28 30 32 Period (Months) Period (Months) 2014-A 2014-B 2014-A ―2017-A 2014-B -2017-B 2015-A ―2018-A 2015-B 2018-B 2016-A -2017-A ―2017-B 2015-A 2018-A 2015-B 2016-A -2018-B Assumes cumulative net credit losses stress of 5%; break-evens are specific to FCALT 2018-B 65 Ford FORD CREDIT#66Ford FORD CREDIT U.S. Lease Residual Setting and Remarketing FI-0323 Go Further#67U.S. Lease Residual Setting and Remarketing Residual Values Models • Ford Credit sets residual values 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 MSRP, wholesale price, planned production volume, rental and fleet sales, consumer acceptance, life cycle, recent/seasonal auction trends and economic factors Ford Credit's internal review process considers: - Current or planned marketing programs - Market acceptance of vehicles - Competitive actions with the vehicle segment Ford Credit reviews residual value performance and compares published residual values to: - Historical auction values for returned lease vehicles - Residual value forecasts published independently in industry guides such as Automotive Lease Guide (ALG) 67 Ford FORD CREDIT#68U.S. Lease Residual Setting and Remarketing Vehicle Remarketing • Ford Credit works with Ford's Vehicle Remarketing Department to efficiently dispose of vehicles returned to dealers at lease-end to maximize the net sales proceeds of the vehicle to: - Obtain higher sales prices at disposition Minimize remarketing expenses (auction, reconditioning and transportation costs) Vehicles returned at lease-end are sold through: - - Accelerate TM, an online upstream remarketing application Ford-sponsored physical auctions Upstream Remarketing Vehicle remains at dealer location (grounding dealer) where returned Customer Returns Vehicle Day 1 Day 2 Grounding dealer (Days 1-6) 68 Ford FORD CREDIT Day 3 Day 4 Day 5 Physical Auction Vehicle sold at physical auction Day 6 Ford / Lincoln vehicles to same brand dealers (Days 3 - 6) Ford/Lincoln vehicles to any Ford / Lincoln dealers (Days 4 - 6) Ford vehicles to Adesa.com registered dealers (Days 4-6) Lincoln vehicles to Adesa.com registered dealers (Days 5 - 6) Auction#69U.S. Lease Residual Setting and Remarketing Upstream Remarketing By selling returned lease vehicles upstream, Ford Credit receives a price similar to that expected at a physical auction without incurring transportation, reconditioning and auction expenses Prior to transporting to physical auction, vehicles are offered for sale to participating dealerships through an internet application, Accelerate; - - Ford Credit employs proprietary models to establish a market price for vehicles based on recent auction experience and adjusted for miles, condition, any excess wear and use, and option packages Ford incentivizes U.S. Lincoln dealers to purchase returned lease vehicles through Accelerate, certify those vehicles and sell them to customers under a certified pre-owned program 32% of all eligible vehicles were sold through Accelerate in 2018 69 Ford FORD CREDIT#70Ford FORD CREDIT U.S. Floorplan Securitization#71U.S. Floorplan Securitization Free Writing Prospectus Registration Statement Nos. 333-227766, 333-227766-01 and 333-227766-02 Ford Credit Floorplan Corporation and Ford Credit Floorplan LLC (the "depositors") Ford Credit Floorplan Master Owner Trust A (the "issuer") This document constitutes a free writing prospectus for purposes of the Securities Act of 1933. The depositors have 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 depositors have filed with the SEC for more complete information about the depositors, the issuer and such offering. You may get these documents for free by visiting EDGAR on the SEC Website at www.sec.gov. Alternatively, you may request that a copy of the prospectus be sent to you by calling toll-free 1-888-603-5847. 71 Ford FORD CREDIT#72U.S. Floorplan Securitization Portfolio Overview • • • Ford Credit has been financing dealer vehicle inventory since 1959 and has been securitizing floorplan loans since 1991 Ford's goal is to maintain a profitable dealer network of Ford and Lincoln dealerships that deliver an innovative and engaging sales and service experience for our customers. At year-end 2018, Ford and Lincoln had approximately 3,250 dealers Over the past five years, Ford Credit financed 76% to 78% of Ford and Lincoln dealer new vehicle inventory Floorplan receivables are secured primarily by the financed vehicles, and payment is required when the vehicle is sold Ford Credit's floorplan portfolio has historically experienced very low losses, primarily driven by strong. risk management practices and servicing: - - - Continuous dealer monitoring of financial health, payment performance, vehicle collateral status and risk-based on-site inventory audits Use of proprietary risk rating assessment and behavioral scoring models Intensification of risk management actions as dealer risk increases Leveraging access to dealer information through Ford relationship 72 Ford FORD CREDIT#73U.S. Floorplan Securitization Trust Overview Ford Credit's current floorplan securitization trust was established in 2001 as a master trust (similar to a revolving credit card securitization trust) and has issued more than 50 series offers floorplan asset-backed securities though various channels: - Publicly registered transactions - Rule 144A transactions - Other private transactions 73 Ford FORD CREDIT#74Payment Rate U.S. Floorplan Securitization Performance Overview Floorplan Portfolio Net Losses (Recoveries) as a Percent of Average Principal Balance Losses Recoveries Highest Net Loss Percentage on Floorplan Portfolio since January 2004 was 0.353% in 2009 0.202% 0.004% (0.008)% 2014 (0.004)% 2015 2016 (0.004)% 2017 2018 Trust Pool 3-Month Average of Monthly Principal Payment Rate* 65% 55% 45% 35% Lowest 3-Month Average Payment Rate was 29.9% in February 2005 Payment rate triggers Memo: Days Supply** 73 25% 120 143 15% Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 * The 3-month average monthly principal payment rate for a month equals the average of the monthly payment rate for that month and the prior two months ** Estimated days supply derived from payment rate 74 Ford FORD CREDIT Losses Trust Pool Net Losses (Recoveries) as a Percent of Average Principal Balance No Trust losses realized since inception because depositors elected to accept reassignment of receivables from "status" accounts 0.000% 0.000% 0.000% 0.000% 0.000% 2014 2015 2016 2017 2018 Recoveries Percent of Principal Balance Trust Pool Dealer Risk Ratings 100% 90% 80% 70% Other 60% 50% 40% 30% Group IV (Poor) ■Group III ■Group II 20% 10% ■Group (Strong) 0% Dec-14 Dec-15 Dec-16 Dec-17 Dec-18#75U.S. Floorplan Securitization Historical Balance Historical Trust Balance vs. Required Pool Balance (Bils) Cash funding required as a result of low Trust balance* Trust Balance (excluding EFA) Required Pool Balance $21.1 $18.4 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Excess funding account (EFA) has been funded periodically when the Trust balance declines below the required pool balance (for example, as a result of plant shutdowns or manufacturer vehicle marketing incentive programs) 75 Ford FORD CREDIT#76U.S. Floorplan Securitization Structure Overview % of Receivable Balance Class A Notes ("AAA") 76.0% Credit enhancement in the floorplan securitization program includes: • Subordination of junior notes Available subordinated amount • Cash reserve (0.40% of notes) • Excess spread Structure also provides for 1:1 incremental subordination to cover any ineligible receivables and receivables in excess of the specified concentration limits Concentration Limit Incremental Subordination * * (Mils) - Ineligible receivables N/A 25.0 Class B Notes ("AA") 3.5% - Dealer concentration (5% for AutoNation) 2% 0.0 Class C Notes ("Not Rated") 5.0% - Used vehicle concentration 20% 0.0 Class D Notes ("Not Rated") 3.0% - Fleet concentration 4% 0.0 Available Subordinated Amount 12.5% - Medium/Heavy truck concentration 2% 0.0 - Manufacturer concentration 10% 179.0 Reserve Account 0.35% (2% for lower rated manufacturers) Excess Spread Total Class A Total: $ 204.0 76 Ford FORD CREDIT Hard Credit Enhancement ~24.35% * As of December 31, 2018#77U.S. Floorplan Securitization Key Series Triggers • • Enhancement Step-Up Trigger - If average monthly principal payment rate for the three preceding collection periods is less than 25%, subordination or reserve fund increases by 4 percentage points Amortization Triggers - - - Average monthly principal payment rate for the three preceding collection periods is less that 21% Cash balance in the excess funding account exceeds 30% 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 Motor Company 77 Ford FORD CREDIT#78• • • U.S. Floorplan Securitization Outstanding Series* Private Variable Series Funding Notes 144A Term Series 2006-1, 2014-5 2013-2, 2014-3, 2015-3, 2016-2 Public Term Series 2014-2, 2015-2, 2015-5, 2016-1, 2016-3, 2016-5, 2017-1, 2017-2, 2017-3, Amount Outstanding ($Bils) Senior Hard Enhancement (AAA Notes) Maturity Ranges $0.7 25.75% $1.7 24.27% 2018-1, 2018-2, 2018-3, 2018-4 $11.2 24.35% 25.35% March 2019 - October 2020 March 2020 - March 2023 - Feb 2019 November 2028 Private Variable Funding Notes (VFN) are used to manage seasonal fluctuations of Trust balance and provide an addition source of liquidity Total VFN capacity of $3.13 billion Trust Balance (Bils) Unfunded Assets $5.1 Total Trust balance of $21.1 billion * As of December 31, 2018 78 Ford FORD CREDIT Existing Subordination $2.4 $21.1 Total Funding $13.6#79Ford FORD CREDIT U.S. Floorplan Risk Management FI-0323 Go Further#80U.S. Floorplan Risk Management Underwriting and Credit Review Process Real Estate Holding Company Dealer Principal Holding Company Personal guarantees from many dealers Secondary Collateral Assets • • • Stocks, bonds, cash Non-dealer real estate Other assets, for example, boat, plane, jewelry and furniture Unfloored used Assets Dealer (Borrower) Secondary Collateral Secondary Collateral Assets Land Buildings . inventory Furniture, fixtures, parts, accessories and equipment Dealer net worth Dealer Structure Dealers vary in size and complexity - from single store to multi-point/multi- franchise organizations Many dealers use a holding company structure similar to the one shown here Collateral The financed vehicles are the primary collateral for dealer floorplan loans 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 Dealers have significant "skin in the game," which provides a strong incentive for dealers to repay floorplan loans 80 Ford FORD CREDIT Primary Collateral Financed new and used vehicles#81U.S. Floorplan Risk Management Underwriting and Credit Review Process 81 • • • 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's: - - - Business, legal and operations structure, including number of manufacturer franchises Credit information Financial statements or tax returns Types of vehicles in the dealer's inventory and specialty services provided by the dealer for certain vehicles or customers, such as fleet Ford Credit evaluates the dealer's 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's business Due to ongoing nature of floorplan financing arrangements, Ford Credit periodically performs a credit review of each dealer, at least annually, following the similar process utilized to evaluate new dealer account originations Ford FORD CREDIT#82U.S. Floorplan Risk Management Dealer Risk Rating Assessment • • • • Ford Credit evaluates new dealer account originations (using a proprietary scoring model), performs ongoing credit reviews of dealers and assigns risk ratings Consistent with the prospectus, dealer risk ratings are categorized into groups: Group | II III IV Other Description Strong to superior financial metrics Fair to favorable financial metrics Marginal to weak financial metrics Poor financial metrics, may be uncollectible Includes dealers that have no dealer risk rating because Ford Credit only provides in-transit financing or because Ford Credit is in the process of terminating the financing for such dealer Large sample size and significant historical experience have been analyzed to identify key indicators that predict a dealer's ability to meet financial obligations, including capitalization and leverage, liquidity and cash flow, profitability, credit history and payment performance Ford Credit updated its dealer risk rating model in December 2015. Dealer risk model is validated regularly to ensure the integrity and performance of the model and is updated if necessary 82 Ford FORD CREDIT#83U.S. Floorplan Risk Management Dealer Monitoring Strategy 83 33 Dealers Monitor Monthly Accounts Review (MAR) No Further Action MAR Directed Action Plans Ford FORD CREDIT Watch Report ICU Status Liquidation • Monitor Payoffs Aged Inventory Overline Report • . Financial Statements Monthly Accounts Review Assess dealer risk and determine action plans Watch Report – Medium to High Risk • . Formal review of action plans and results presented to senior management (plans may include more frequent physical audits) Intensive Care Unit (ICU) – High Risk More experienced risk team Increased intensity surrounding action plans and timelines Status On-site control Focus on asset protection Liquidation Focus on loss mitigation#84U.S. Floorplan Risk Management Inventory Audits A dealer's risk rating determines the scheduled frequency of on-site vehicle inventory audits: • Ford Credit engages a vendor to perform on-site vehicle inventory audits - Size of an Audit team varies based on dealer locations and complexity - Dealer group locations are typically audited same day · • Dealer generally does not receive advance notice of an audit Strict controls set how often the same auditor may lead a dealer's audit Ford Credit generally reconciles each audit the same day Immediate payment is required for any sold vehicle Ford Credit follows a robust quality assurance process to monitor the vendor's performance 84 Ford FORD CREDIT#85U.S. Floorplan Risk Management Ford Credit Monitoring Actions If Ford Credit discovers any issues when monitoring a dealer, it may: • Increase frequency of on-site vehicle inventory audits or schedule an immediate on-site vehicle inventory audit Require curtailments, or monthly payments, on aged vehicle inventory • Suspend credit lines • Verify cash balances and organizational structure Assign Ford Credit dealership accounting specialists to perform an in-depth review of the dealership and validate the accuracy and completeness of financial statement(s) • Meet with owners/guarantors Increase risk rating to trigger more extensive monitoring Discuss with Ford or Lincoln sales division to ensure an aligned approach 85 Ford FORD CREDIT#86U.S. Floorplan Risk Management Dealer Status Procedures A dealer status is declared when: • Dealer does not satisfy a sold out-of-trust condition (payment not remitted to Ford Credit upon sale of vehicle) discovered during an audit • Dealer fails to pay principal or interest . Dealer bankruptcy • Other circumstances that warrant immediate action Once a status is declared Ford Credit may then: Suspend credit lines • Maintain Ford Credit personnel on site . Collect titles and keys . Secure dealer inventory • Issue payment demand letters Obtain liens on property of guarantors • Increase the dealer's floorplan interest rate Initiate legal action to exercise rights under the floorplan financing agreement 86 Ford FORD CREDIT#87U.S. Floorplan Risk Management Dealer Status Procedures (Cont.) If Ford Credit does not believe that a dealer can resolve a status situation, Ford Credit will: Liquidate vehicles and any available secondary collateral to obtain greatest value Continue collection efforts against personal and corporate guarantors Should liquidation be necessary, inventory is disposed through the following channels: Transfer of vehicles to other dealers Repurchase by manufacturer and redistribution to other dealers Sale of vehicles at auction 87 Ford FORD CREDIT#88Floorplan Risk Management Captive Finance Company Benefits Ford Ford Credit 2. Information on sold vehicles reported to Ford Credit and matched to floorplan receivables North American Vehicle Information System 1. - Dealer reports vehicle sale to obtain: Warranty registration Manufacturer incentives 88 Ford FORD CREDIT Dealer 3. Dealer Floorplan Receivables System Dealer pays off floorplan receivables Integrated Systems Enable Real Time Controls Other captive finance company benefits: Access to monthly dealer financial statements allows monitoring of dealer financial strength Dealer monitoring by both Ford and Ford Credit Joint Ford and Ford Credit discussions with dealers on various aspects of the business Comparative dealership benchmarking between dealerships of like size or in similar markets#89Ford FORD CREDIT Appendix FI-0323 Go Further#9000 90 Actions to Improve Performance China Growth Profitability Ford FORD CREDIT Europe ✓ Higher than segment average transaction prices on all-new Focus and Escort ✓ 10 new product launches in 2019 ✓ Extend brand leadership in LCV share from 14.1% ✓ Ranger and Transit upgrades; Transit PHEV ✓ Improved dealer engagement and profitability ✓ Right-sized inventory ✓ Lower material costs through local sourcing Significant reduction in structural costs for consolidated operations ✓ Focus on higher margin sub brands ✓ Reduce passenger vehicle complexity ✓ Prioritize higher-margin markets ✓ Significant reduction in personnel and structural costs ✓ Improve or exit unprofitable products and markets#91U.S. Origination Metrics Retail and Lease FICO and Higher Risk Mix (Pct) Higher Risk Portfolio Mix Average Placement FICO 748 750 747 747 745 743 6% 6% 6% 6% 6% 6% 3Q17 4Q17 1Q18 2Q18 Retail ≥ 84 Months Mix Average Retail Placement Term Retail Contract Terms 3Q18 4Q18 66 mo 65 mo 66 mo 65 mo 65 mo 65 mo 2% 3% 4% 4% 4% 5% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 91 Ford FORD CREDIT • Disciplined and consistent underwriting practices Portfolio quality evidenced by FICO scores and steady risk mix Extended-term contracts relatively small part of our business#92U.S. Retail And Lease Credit Loss Drivers Over-60-Day Delinquencies (excl. Bankruptcies) Repossessions (000) and Repo. Rate (Pct) Repo. Rate Repossessions 1.12% 1.16% 1.22% 1.07% 1.07% 0.15% 1.00% 0.13% 0.12% 0.12% 0.12% 0.10% 10 10 9 9 9 8 • 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 • Severity (000) Charge-Offs (Mils) and LTR Ratio (Pct) LTR Ratio Charge-Offs 0.53% 0.60% 0.51% 0.55% $10.2 $10.3 $10.3 0.44% 0.36% $10.0 $9.8 $109 $9.5 $106 $95 $93 $83 $66 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 92 Ford FORD CREDIT Delinquencies and repossessions remained low Severity about flat YoY Strong loss metrics reflect healthy consumer credit conditions#93U.S. Lease Origination Metrics Lease Placement Volume (000) 24-Month 36-Month 39-Month Other 104 91 93 95 93 82 12 10 12 10 9 8 58 75 72 65 80 75 23 9 9 17 9 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 • Ford Credit Lease Share of Retail Sales (Pct) Industry* 31% 30% 28% 28% 29% 29% 23% 23% 21% 21% 19% 17% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 * Source: J.D. Power PIN 93 Ford FORD CREDIT 4Q lease share flat sequentially and below industry reflecting Ford sales mix#94U.S. Lease Residual Performance Lease Return Volume (000) and Return Rates (Pct) Return Rates 94 94 Return Volume 79% 78% 79% 78% 77% 78% 70 61 68 71 71 71 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Off-Lease Auction Values (at 4Q18 Mix) 24-Month 36-Month $22,365 $22,625 $22,360 $22,990 $23,695 $22,425 + $17,830 $18,295 $18,785 $17,505 $17,440 $17,865 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Ford FORD CREDIT • Healthy used car market supporting lease residual and credit loss performance • Expect 2019 FY average auction values to be about 4% lower YoY at constant mix#95Company Special Items (Mils) 4Q FY 2017 2018 2017 2018 Pension and OPEB gain/(loss) Year end net pension and OPEB remeasurement Other pension remeasurement Pension curtailment Total Pension and OPEB gain / (loss) Separation-related actions Other Items San Luis Potosi plant cancellation Next-generation Focus footprint change Focus Active cancellation Chariot closure $ (162) $ (877) $ (162) $ (877) 26 354 354 15 $ 192 $ (877) $ 192 $ (836) $ (38) $ (262) $ (297) $ (537) EA $ (2) 41 $ (225) (9) (7) (40) (40) Total Other Items $ (2) $ (40) $ (184) $ (56) Total pre-tax special items EA $ 152 $ (1,179) $ (289) $ (1,429) Tax special items $ 819 $ (141) $ 897 $ (88) 95 Ford FORD CREDIT#96Company Adjusted ROIC (Bils) 2014 2015 2016 2017 2018 Adjusted Net Operating Profit After Cash Tax Net income attributable to Ford Add: Non-controlling interest Less: Income tax Add: Cash tax $ 1.3 $ 7.3 $ 4.6 $ 7.7 $ 3.7 (0.0) (0.0) 0.0 0.0 0.0 (0.0) (2.9) (2.2) (0.4) (0.7) (0.5) (0.6) (0.7) (0.6) (0.8) Less: Interest on debt (0.9) (0.8) (1.0) (1.2) (1.2) Less: Total pension / OPEB income / (cost) (4.4) (0.5) (2.7) 0.6 (0.4) Add: Pension / OPEB service costs (1.0) (1.2) (1.0) (1.1) (1.2) Net operating profit after cash tax 5.1 $ 9.8 8.6 7.0 $ 4.0 Less: Special items (excl. pension / OPEB) pre-tax (1.9) 0.2 (0.6) (0.5) (0.6) Adj. net operating profit after cash tax $ 7.0 $ 9.6 $ 9.2 $ 7.5 $ 4.6 Invested Capital Equity Redeemable non-controlling interest Debt (excl. Ford Credit) Net pension and OPEB liability Invested capital (end of period) Average invested capital Adjusted ROIC (Non-GAAP)* $ 25.1 $ 29.2 29.7 $ 35.6 $ 36.0 0.3 0.1 0.1 0.1 0.1 14.5 13.4 16.5 16.5 14.1 16.2 13.9 14.7 12.8 11.9 $ 56.1 $ 56.6 $ 61.1 $ 65.0 $ 62.1 $ 57.2 $ 55.6 58.5 $ 63.4 $ 64.0 12.3% 17.3% 15.7% 11.8% 7.1% * Calculated as the sum of adjusted net operating profit after cash tax from the last four quarters, divided by the average invested capital over the last four quarters 96 Ford FORD CREDIT#97Company Net Income Reconciliation To Adjusted EBIT (Mils) 4Q 2017 2018 FY 2017 2018 Net income / (Loss) attributable to Ford (GAAP) Income/ (Loss) attributable to non-controlling interests $ 2,520 $ (116) $ 7,731 $ 3,677 4 4 26 18 Net income (Loss) $ 2,524 $ (112) $ 7,757 $ 3,695 Less: (Provision for) / Benefit from income taxes 652 (95) (402) (650) Income (Loss) before income taxes $ 1,872 $ (17) $ 8,159 $ 4,345 Less: Special items pre-tax 152 (1,179) (289) (1,429) Income (Loss) before special items pre-tax $ 1,720 $ 1,162 $ 8,448 $ 5,774 Less: Interest on debt (308) (295) (1,190) (1,228) Adjusted EBIT (Non-GAAP) $ 2,028 $ 1,457 $ 9,638 $ 7,002 Memo: Revenue (Bils) $ 41.3 $ 41.8 $ 156.8 $ 160.3 Net income margin (GAAP) (Pct) 6.1% (0.3)% 4.9% 2.3% Adjusted EBIT Margin (Pct) 4.9% 3.5% 6.1% 4.4% 97 Ford FORD CREDIT#98Company Net Cash Provided By / (Used In) Operating Activities Reconciliation To Company Adjusted Operating Cash Flow (Mils) 4Q 2017 2018 2017 FY 2018 Net cash provided by (used in) operating activities (GAAP) $ 3,147 $ 1,357 $ 18,096 $ 15,022 Less: Items not included in Company Adjusted Operating Cash Flows Ford Credit operating cash flows Funded pension contributions Separation payments Other, net (174) (1,232) 9,300 8,171 (714) (153) (1,434) (437) (181) (117) (281) (179) (25) (21) (52) 65 Add: Items included in Company Adjusted Operating Cash Flows Automotive and Mobility capital spending (2,103) (2,102) (7,004) (7,737) Ford Credit distributions 660 406 2,723 Settlement of derivatives 107 70 217 132 Pivotal conversion to a marketable security 263 Company adjusted operating cash flow (Non-GAAP) EA $ 2,244 EA $ 1,507 $ 4,182 $ 2,781 98 Ford FORD CREDIT#99Company Reconciliation To Company Adjusted Operating Cash Flow Trailing Five Quarters (Mils) 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 Net cash provided by / (Used in) operating activities (GAAP) $ 3,147 $ 3,514 $ 4,972 $ 5,179 $1,357 Less: Items Not Included in Company Adjusted Operating Cash Flows Ford Credit operating cash flows Funded pension contributions Separation payments Other, net Add: Items Included in Company Adjusted Operating Cash Flows Automotive and Mobility capital spending Ford Credit distributions Settlement of derivatives Pivotal conversion to a marketable security (174) (315) 5,907 3,811 (1,232) (714) (88) (72) (123) (153) (181) (16) (18) (28) (117) (25) 53 (112) 146 (21) (2,103) (1,769) (1,898) (1,968) (2,102) 1,013 450 600 660 107 (161) 114 109 70 263 $ 2,244 $ 2,963 $ (1,804) $ 115 $ 1,507 Company adjusted operating cash flow (Non-GAAP) Cash Conversion Calculation Company Adj. operating cash flow (Non-GAAP) (sum of Trailing Four Qtrs) $ Adj. EBIT (Non-GAAP) (sum of Trailing Four Qtrs) 4,182 $ 9,638 Adj. cash conversion (Non-GAAP) (Trailing Four Qtrs)* 43% * 99 Most comparable GAAP Measure: Net Cash Provided By / (Used In) Operating Activities divided by Net Income Attributable to Ford is equivalent to 234% in 2017 and 409% in 2018 Ford FORD CREDIT $ 2,781 $ 7,002 40%#100Company Earnings Per Share Reconciliation To Adjusted Earnings Per Share Diluted After-Tax Results (Mils) 4Q FY 2017 2018 2017 2018 Diluted after-tax results (GAAP) $ 2,520 $ (116) $ Less: Impact of pre-tax and tax special items 971 (1,320) 7,731 608 $ 3,677 (1,517) Adjusted net income - diluted (Non-GAAP) $ 1,549 $ 1,204 $ 7,123 $ 5,194 Basic and Diluted Shares (Mils) Basic shares (average shares outstanding) 3,973 3,970 3,975 3,974 Net dilutive options, unvested restricted stock units and restricted stock 27 27 23 24 Diluted shares 4,000 3,997 3,998 3,998 Earnings per share - diluted (GAAP)* $ 0.63 (0.03) $ 1.93 $ 0.92 Less: Net impact of adjustments 0.24 (0.33) 0.15 (0.38) Adjusted earnings per share – diluted (Non-GAAP) - $ 0.39 $ 0.30 $ 1.78 $ 1.30 * The 2018 fourth quarter calculation of Earnings Per Share - Diluted (GAAP) excludes the 27 million shares of net dilutive options, unvested restricted stock units and restricted stock due to their antidilutive effect 100 Ford FORD CREDIT#101Company Effective Tax Rate Reconciliation To Adjusted Effective Tax Rate Pre-Tax Results (Mils) 2018 4Q FY Memo: FY 2017 Income (Loss) before income taxes (GAAP) Less: Impact of special items Adjusted earnings before taxes (Non-GAAP) Taxes (Mils) (Provision for) / Benefit from income taxes (GAAP) Less: Impact of special items $ (17) $ 4,345 (1,179) $ 8,159 (1,429) (289) $ 1,162 $ 5,774 $ 8,448 (95) $ (650) $ (402) (141) (88) 897 Adjusted (provision for) / benefit from income taxes (Non-GAAP) $ 46 $ (562) $ (1,299) Tax Rate (Pct) Effective tax rate (GAAP) Adjusted effective tax rate (Non-GAAP) 101 Ford FORD CREDIT (558.8)% 15.0% 4.9% (4.0)% 9.7% 15.4%#102Ford Credit Liquidity Sources* (Bils) 2016 2017 2018 Dec 31 Dec 31 Dec 31 Liquidity Sources Cash $ 10.8 $ 11.8 $ 10.2 Committed ABS facilities 34.6 33.4 35.4 Other unsecured credit facilities 2.5 3.3 3.0 Ford corporate credit facility allocation 3.0 3.0 3.0 Total liquidity sources $ 50.9 SA $ 51.5 $ 51.6 Utilization of Liquidity Securitization cash $ (3.4) $ (3.8) $ (3.0) Committed ABS facilities (19.9) (17.2) (20.7) Other unsecured credit facilities (0.7) (1.1) (0.7) Ford corporate credit facility allocation - Total utilization of liquidity $ (24.0) $ (22.1) $ (24.4) Gross liquidity SA $ 26.9 $ 29.4 $ 27.2 Adjustments 0.1 0.1 0.1 Net liquidity available for use $ 27.0 $ 29.5 $ 27.3 * See Appendix for definitions 102 Ford FORD CREDIT#103Ford Credit Total Net Receivables Reconciliation To Managed Receivables (Bils) Ford Credit finance receivables, net (GAAP)* Net investment in operating leases (GAAP)* Consolidating adjustments** Total net receivables Ford Credit unearned interest supplements and residual support Allowance for credit losses Other, primarily accumulated supplemental depreciation Total managed receivables (Non-GAAP) 2016 Dec 31 2017 Dec 31 2018 Dec 31 $ 96.2 $ 108.4 $ 109.9 27.2 26.7 27.4 6.8 7.6 8.9 $ 130.2 $ 142.7 $ 146.3 5.3 6.1 6.8 0.5 0.7 0.7 0.9 1.0 1.1 $ 136.9 $ 150.5 $ 154.9 * Includes finance receivables (retail and wholesale) sold for legal purposes and net investment in operating leases included in securitization transactions that do not satisfy the requirements for accounting sale treatment. These receivables and operating leases are reported on Ford Credit's balance sheet and are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations of Ford Credit or the claims of Ford Credit's other creditors ** Primarily includes Automotive segment receivables purchased by Ford Credit which are classified to Trade and other receivables on our consolidated balance sheet. Also includes eliminations of intersegment transactions 103 Ford FORD CREDIT#104Ford Credit Financial Statement Leverage Reconciliation To Managed Leverage (Bils) 2016 Dec 31 2017 Dec 31 2018 Dec 31 Leverage Calculation Total debt* $ 126.5 $ 137.8 $ 140.1 Adjustments for cash* ** Adjustments for derivative accounting*** Total adjusted debt (10.8) (0.3) (11.8) - (10.2) 0.2 $ 115.4 $ 126.0 $ 130.1 Equity**** $ 12.8 $ 15.9 $ 15.0 Adjustments for derivative accounting*** (0.3) (0.1) (0.2) Total adjusted equity $ 12.5 $ 15.8 $ 14.8 Financial statement leverage (to 1) (GAAP) Managed leverage (to 1) (Non-GAAP) 9.9 9.2 8.7 8.0 9.4 8.8 * Includes debt issued in securitization transactions and payable only out of collections on the underlying securitized assets and related enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions ** Cash and cash equivalents, and Marketable securities reported on Ford Credit's balance sheet, excluding amounts related to insurance activities *** Related primarily to market valuation adjustments to derivatives due to movements in interest rates. Adjustments to debt are related to designated fair value hedges and adjustments to equity are related to retained earnings **** Total shareholder's interest reported on Ford Credit's balance sheet 104 Ford FORD CREDIT#105U.S. Floorplan Portfolio Performance 2018 2017 Year ended December 31, 2016 2015 2014 (Dollars in Millions) Average principal balance* $23,250 $22,519 $22,312 $19,261 $19,072 Net losses (recoveries)** $46.9 $(0.9) $0.9 ($0.7) ($1.5) Ford Credit Portfolio Net losses (recoveries)/average principal balance 0.202% (0.004)% 0.004% (0.004)% (0.008)% Liquidations*** $116,325 $114,264 $109,982 $108,187 $97,427 Net losses (recoveries)/liquidations 0.040% (0.001)% 0.001% (0.001)% (0.002)% * ** *** Average principal balance is the average of the principal balances of the receivables at the beginning of each month in the period indicated Net losses in any period are gross losses, including actual losses and estimated losses, less any recoveries, including actual recoveries and reductions in the amount of estimated losses, in each case, for the period. This loss experience takes into account financial assistance provided by Ford to dealers in limited instances. If Ford does not provide this assistance in the future, the loss experience of Ford Credit's dealer floorplan portfolio may be adversely affected. This loss experience also reflects recoveries from dealer assets other than the financed vehicles. However, because the interest of the trust in any other dealer assets will be subordinated to Ford Credit's interest in those assets, the net losses experienced by the trust may be higher Liquidations represent payments and net losses that reduce the principal balance of the receivables for the period indicated 105 Ford FORD CREDIT#106U.S. Floorplan Product Features Advance Rates New vehicles – 100% of invoice amount, including taxes, destination charges, and dealer holdback Auction vehicles - auction price plus auction fee, transportation, and taxes Used vehicles - up to 100% of wholesale value (as determined by selected trade publications) Payment Terms Principal due generally upon sale of related vehicle Interest and other administrative charges are billed and payable monthly in arrears Curtailment Terms Insurance . 106 Ford FORD CREDIT Ford Credit requires higher risk dealers to make periodic principal payments, or "curtailments," prior to the sale or lease of the related vehicle The amount of monthly curtailment payments is 10% of the amount financed on a vehicle, starting after a specified period of time after the vehicle is financed, over a year for new and demonstrator vehicles and less than a year for program and used vehicles Application of the curtailment policy to a particular dealer may be modified or waived by the appropriate approval authority Comprehensive insurance coverage for the financed vehicles is mandatory and generally is included with the financing Over half of the dealers purchase collision coverage through Ford Credit from The American Road Insurance Company and the remainder purchase it from other insurance companies In-Transit vehicles are also covered by comprehensive insurance arranged by Ford#107U.S. Floorplan Product Features (Cont.) Floorplan Interest Rate Prime rate plus generally 1.50% for both new and used vehicles Floorplan rates are not risk based In-transit Vehicle Adjustment Fee* • • Prime rate plus a spread (which may be negative) agreed upon by Ford and Ford Credit The spread has ranged from -0.72% to 0.30% per annum over the past five years New Vehicle Lines** Based on a 60-day vehicle supply Not a strict credit limit and Ford Credit typically permits dealers to exceed their new vehicle credit lines for business reasons, including seasonal variations in sales patterns Ford Credit generally sets vehicle credit lines below anticipated peak inventory levels Used Vehicle Lines Based on a 30 to 45-day vehicle supply depending on dealer risk rating Strictly monitored credit limit and Ford Credit generally does not allow dealers to exceed their used vehicle credit lines without specific approval * ** In-transit floorplan receivable is created at vehicle shipment to dealer New floorplan receivable is created on the date the vehicle is delivered to the dealer 107 Ford FORD CREDIT#108Appendix - Floorplan U.S. Floorplan Trust Legal Structure Ford Motor Company * Ford Credit Floorplan LLC (Depositor) US Bank (Owner Trustee) The Bank of New York Mellon (Indenture Trustee) Ford Motor Credit Company LLC (Sponsor, Servicer and Administrator) Ford Credit Floorplan Master Owner Trust A (Issuer) Outstanding Series Ford Credit Floorplan Corp. (Depositor) Wells Fargo Bank, N.A. (Back-up Servicer)* Clayton Fixed Income Services LLC (Asset Representations Reviewer) The servicer may terminate the back-up servicer, without being required to appoint a successor back-up servicer, if the long-term debt ratings of Ford Credit are at least "BBB-" from Standard & Poor's and "Baa3" from Moody's 108 Ford FORD CREDIT#109Non-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 supplemental information to their equivalent GAAP measures, to aid investors in better understanding our financial results. We believe that these non-GAAP measures provide useful perspective on underlying business results and trends, and a means to assess our period-over-period results. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP measures may not be the same as similarly titled measures used by other companies due to possible differences in method and in items or events being adjusted. • • Company Adjusted EBIT (Most Comparable GAAP Measure: Net income attributable to Ford) - Earnings before interest and taxes (EBIT) includes non-controlling interests and excludes interest on debt (excl. Ford Credit Debt), taxes and pre-tax special items. This non-GAAP measure is useful to management and investors because it allows users to evaluate our operating results aligned with industry reporting. Pre-tax special items consist of (i) pension and OPEB remeasurement gains and losses, (ii) significant personnel and dealer-related costs stemming from our efforts to match production capacity and cost structure to market demand and changing model mix, and (iii) other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities. When we provide guidance for adjusted EBIT, we do not provide guidance on a net income basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and OPEB remeasurement gains and losses. Company Adjusted EBIT Margin (Most Comparable GAAP Measure: Company Net Income Margin) - Company Adjusted EBIT margin is Company adjusted EBIT divided by Company revenue. This non-GAAP measure is useful to management and investors because it allows users to evaluate our operating results aligned with industry reporting. Adjusted Earnings Per Share (Most Comparable GAAP Measure: Earnings Per Share) - Measure of Company's diluted net earnings per share adjusted for impact of pre-tax special items (described above), and tax special items. The measure provides investors with useful information to evaluate performance of our business excluding items not indicative of underlying run rate of our business. When we provide guidance for adjusted earnings per share, we do not provide guidance on an earnings per share basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and OPEB remeasurement gains and losses. Adjusted Effective Tax Rate (Most Comparable GAAP Measure: Effective Tax Rate) - Measure of Company's tax rate excluding pre-tax special items (described above) and tax special items. The measure provides an ongoing effective rate which investors find useful for historical comparisons and for forecasting. When we provide guidance for adjusted effective tax rate, we do not provide guidance on an effective tax rate basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and OPEB remeasurement gains and losses. 109 Ford FORD CREDIT#110110 Non-GAAP Financial Measures That Supplement GAAP Measures • • • • • Company Adjusted Operating Cash Flow (Most Comparable GAAP Measure: Net Cash Provided By / (Used In) Operating Activities) - Measure of Company's operating cash flow excluding Ford Credit's operating cash flows. The measure contains elements management considers operating activities, including Automotive and Mobility capital spending, Ford Credit distributions to its parent, and settlement of derivatives. The measure excludes cash outflows for funded pension contributions, separation payments, and other items that are considered operating cash outflows under U.S. GAAP. This measure is useful to management and investors because it is consistent with management's assessment of the Company's operating cash flow performance. When we provide guidance for Company adjusted operating cash flow, we do not provide guidance for net cash provided by/(used in) operating activities because the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, including cash flows related to the Company's exposures to foreign currency exchange rates and certain commodity prices (separate from any related hedges), Ford Credit's operating cash flows, and cash flows related to special items, including separation payments, each of which individually or in the aggregate could have a significant impact to our net cash provided by/(used in) our operating activities. Adjusted Cash Conversion (Most Comparable GAAP Measure: Net Cash Provided By / (Used In) Operating Activities divided by Net Income Attributable to Ford) - Company Adjusted Cash Conversion is Company adjusted operating cash flow divided by Adjusted EBIT. This non-GAAP measure is useful to management and investors because it allows users to evaluate how much of Ford's Adjusted EBIT is converted into cash flow. Adjusted ROIC This calculation provides management and investors with useful information to evaluate the Company's after-cash tax operating return on its invested capital for the period presented. Adjusted net operating profit after cash tax measures operating results less special items, interest on debt (excl. Ford Credit Debt), and certain pension/OPEB costs. Average invested capital is the sum of average balance sheet equity, debt (excl. Ford Credit Debt), and net pension/OPEB liability. Ford Credit Managed Receivables - (Most Comparable GAAP Measure: Net Finance Receivables plus Net Investment in Operating Leases) - Measure of Ford Credit's Total net receivables, excluding unearned interest supplements and residual support, allowance for credit losses, and other (primarily accumulated supplemental depreciation). The measure is useful to management and investors as it closely approximates the customer's outstanding balance on the receivables, which is the basis for earning revenue. Ford Credit Managed Leverage (Most Comparable GAAP Measure: Financial Statement Leverage) - Ford Credit's debt-to-equity ratio adjusted (i) to exclude cash, cash equivalents, and marketable securities (other than amounts related to insurance activities), and (ii) for derivative accounting. The measure is useful to investors because it reflects the way Ford Credit manages its business. Cash, cash equivalents, and marketable securities are deducted because they generally correspond to excess debt beyond the amount required to support operations and on-balance sheet securitization transactions. Derivative accounting adjustments are made to asset, debt, and equity positions to reflect the impact of interest rate instruments used with Ford Credit's term-debt issuances and securitization transactions. Ford Credit generally repays its debt obligations as they mature, so the interim effects of changes in market interest rates are excluded in the calculation of managed leverage. Ford FORD CREDIT#111Non-GAAP Financial Measures That Supplement GAAP Measures • • Ford Credit Managed Receivables - (Most Comparable GAAP Measure: Net Finance Receivables plus Net Investment in Operating Leases) - Measure of Ford Credit's Total net receivables, excluding unearned interest supplements and residual support, allowance for credit losses, and other (primarily accumulated supplemental depreciation). The measure is useful to management and investors as it closely approximates the customer's outstanding balance on the receivables, which is the basis for earning revenue. Ford Credit Managed Leverage (Most Comparable GAAP Measure: Financial Statement Leverage) - Ford Credit's debt-to-equity ratio adjusted (i) to exclude cash, cash equivalents, and marketable securities (other than amounts related to insurance activities), and (ii) for derivative accounting. The measure is useful to investors because it reflects the way Ford Credit manages its business. Cash, cash equivalents, and marketable securities are deducted because they generally correspond to excess debt beyond the amount required to support operations and on-balance sheet securitization transactions. Derivative accounting adjustments are made to asset, debt, and equity positions to reflect the impact of interest rate instruments used with Ford Credit's term-debt issuances and securitization transactions. Ford Credit generally repays its debt obligations as they mature, so the interim effects of changes in market interest rates are excluded in the calculation of managed leverage. 111 Ford FORD CREDIT#112Company Definitions And Calculations Automotive Records . References to Automotive records for EBIT margin and business units are since at least 2009 Wholesales and Revenue . Wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that are sold to dealerships, units manufactured by Ford that are sold to other manufacturers, units distributed by Ford for other manufacturers, and local brand units produced by our China joint venture, Jiangling Motors Corporation, Ltd. ("JMC"), that are sold to dealerships. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option (i.e., rental repurchase), as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), also are included in wholesale unit volumes. Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our revenue Industry Volume and Market Share . Industry volume and market share are based, in part, on estimated vehicle registrations; includes medium and heavy duty trucks SAAR • SAAR means seasonally adjusted annual rate Company Cash Company cash includes cash, cash equivalents, marketable securities and restricted cash; excludes Ford Credit's cash, cash equivalents, marketable securities and restricted cash Market Factors Volume and Mix - primarily measures EBIT variance from changes in wholesale volumes (at prior-year average contribution margin per unit) driven by changes in industry volume, market share, and dealer stocks, as well as the EBIT variance resulting from changes in product mix, including mix among vehicle lines and mix of trim levels and options within a vehicle line . • Net Pricing - primarily measures EBIT variance driven by changes in wholesale prices to dealers and marketing incentive programs such as rebate programs, low-rate financing offers, special lease offers and stock accrual adjustments on dealer inventory Market Factors exclude the impact of unconsolidated affiliate wholesales ROE • • Reflects an annualized return on equity. This metric is calculated by taking net income for the period divided by average equity for the period and annualizing the result by dividing by the number of days in the quarter and multiplying by 365. Earnings Before Taxes (EBT) Reflects Income before income taxes 112 Note: Calculated results may not sum due to rounding Ford FORD CREDIT#113113 Ford Credit 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 future sales of receivables Cash (as shown on the Funding Structure, Liquidity Sources and Leverage charts) • Cash and cash equivalents and Marketable securities reported on Ford Credit's balance sheet, excluding amounts related to insurance activities Committed Asset-Backed Security ("ABS") Facilities (as shown on the Liquidity Sources chart) • Committed ABS facilities are subject to availability of sufficient assets, ability to obtain derivatives to manage interest rate risk, and exclude FCE Bank plc ("FCE") access to the Bank of England's Discount Window Facility Earnings Before Taxes (EBT) . Reflects Income before income taxes as reported on Ford Credit's income statement ROE (as shown on the Key Metrics chart) • Reflects an annualized return on equity. This metric is calculated by taking net income for the period divided by average equity for the period and annualizing the result by dividing by the number of days in the quarter and multiplying by 365 Securitizations (as shown on the Public Term Funding Plan chart) • Public securitization transactions, Rule 144A offerings sponsored by Ford Motor Credit, and widely distributed offerings by Ford Credit Canada Securitization Cash (as shown on the Liquidity Sources chart) . Securitization cash is cash held for the benefit of the securitization investors (for example, a reserve fund) Term Asset-Backed Securities (as shown on the Funding Structure chart) • Obligations issued in securitization transactions that are payable only out of collections on the underlying securitized assets and related enhancements Total Debt (as shown on the Leverage chart) . Debt on Ford Credit's balance sheet. Includes debt issued in securitizations and payable only out of collections on the underlying securitized assets and related enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions Total Net Receivables (as shown on the Total Net Receivables Reconciliation To Managed Receivables chart) • Includes finance receivables (retail and wholesale) sold for legal purposes and net investment in operating leases included in securitization transactions that do not satisfy the requirements for accounting sale treatment. These receivables and operating leases are reported on Ford Credit's balance sheet and are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations of Ford Credit or the claims of Ford Credit's other creditors Unallocated Other (as shown on the EBT By Segment chart) • Items excluded in assessing segment performance because they are managed at the corporate level, including market valuation adjustments to derivatives and exchange-rate fluctuations on foreign currency-denominated transactions Ford FORD CREDIT