Nissan ARIYA: Coming 2021
Nissan Motor Acceptance Corporation ABS East December 2020 Disclaimer
This presentation (the “Presentation”) is based on information provided by Nissan Motor Acceptance Corp. (“NMAC” or the “Company”) to the best of its knowledge.
This Presentation may not be photocopied, reproduced, or distributed to others at any time without the prior written consent of the Company. This Presentation and other information made available in connection with the evaluation of the Company is not all-inclusive and does not contain all of the information that you may consider material or desirable in evaluating the Company.
This Presentation contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about NMAC’s beliefs and expectations, are forward-looking statements. Forward- looking statements include, but are not limited to, statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” or similar expressions. These statements may include, among others, statements regarding NMAC’s or Nissan Motor Co., Ltd.’s (Nissan Motor) expected business outlook, anticipated financial and operating results, business strategy and means to implement the strategy, objectives, the amount and timing of future capital expenditures, financing plans, working capital needs and sources of liquidity. Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on management’s beliefs and assumptions, which in turn are based on currently available information. These assumptions could prove inaccurate. Forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond NMAC’s ability to identify, control or predict. Undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them in light of new information or future events.
Nissan Motor’s and NMAC’s fiscal years end on March 31. References to “FY19” are to the fiscal year ended March 31, 2020 and references to “FY20” are to the fiscal year ending March 31, 2020. References in this Presentation to “$” are to U.S. dollars and references to “¥” or “Yen” are to Japanese Yen.
1 . Nissan Motor Co. Limited ("NML") Performance Update
. Nissan Motor Acceptance Corp (“NMAC”) Overview
. ABS Performance Update
. Treasury and Liquidity Update NML Introduction
Company Highlights Globally Recognized Brands . Nissan Motor Co., Ltd is a leading auto manufacturer reaching global markets with FY19 revenue of over $100bn, and sales of 5.52mm units
. Established in Yokohama in 1933
. Market Capitalization: ¥2,079B*1
. Diverse product line includes electric vehicles, compact cars, sedans, sports cars, minivans, SUVs, pickup trucks, LCVs, and light “Kei” cars
. The strategic partnership as a result of the Renault- Nissan-Mitsubishi Alliance offers Nissan increased economies of scale and the brand benefit of being a part of Fiscal Year 2020 Sale Units by Region*2 one of the world’s leading automotive groups Others Japan . NML sales are supported by captive finance entities that 11% 11% provide sales finance services and solidify the automaker’s Europe competitive position 9% North . Corporate Ratings (Long term / Short term / Outlook) America Moody’s: (Baa3 / P3 / -) 28% S&P: (BBB- / A-3 / -)
China *1: Market Capitalization as of November 30th, 2020 41% *2: For the First Half ended September 30th, 2020 3 Nissan Motor FY20 Sales Performance
4 Nissan Motor FY20 Financial Performance
(TSE REPORT BASIS — CHINA JV EQUITY BASIS)
5 US Business Performance
6 US Business Performance – Continued
7 Maintaining Product Momentum
. Improve net revenue per unit while maintaining steady market share . Reduce sales incentives and target improved quality of business Steady Market Share - Retail Sales Volume Enhanced Model Lineup
CUV & Truck
All-new Ariya - EV
Younger Portfolio Age Coming spring 2021…All-new Infiniti QX55
https://www.infinitiusa.com/infiniti-news/blog/infiniti-qx55-crossover-coupe.html 8 . Nissan Motor Co. Limited ("NML") Performance Update
. Nissan Motor Acceptance Corp (“NMAC”) Overview
. ABS Performance Update
. Treasury and Liquidity Update .
. . .
.
. .
10 Market Performance
10.0% 20%
17.2% 9.0%
15% 14.3% 8.0% 14.1% 12.5%
7.0% 6.2% 10% 9.4% 6.0% 6.2% 5.0% 4.4% 5% 4.2% 4.1% 3.4% 4.0% 2.2% 4.2%
3.0% 0%
11 Volume Trends
New Vehicle Penetration Contracts Outstanding
2,601 2,511 2,477 2,369 70% 2,246 64% 63% 1000 x 2,067 58% 57% 52%
FY15 FY16 FY17 FY18 FY19 FY20 1H FY15 FY16 FY17 FY18 FY19 FY20 1H (THOUSANDS)
12 NMAC Managed Assets
NMAC’s portfolio has three major types of revenue generating assets: loan, lease, and commercial loans to dealers
$61.4 $62.7 $59.1 $56.8 $10.0 $10.7 $9.8 $51.5 $9.2 $7.8 $46.0 $5.7 $21.3 $22.9 $19.6 $22.1 $20.2 $18.4
$28.0 $29.4 $29.8 $27.2 $23.5 $21.9
FY15 FY16 FY17 FY18 FY19 FY20 1H Loan Lease Commercial
13 Retail Loan Origination Trends
NMAC continues to maintain a high quality of retail loan bookings
Retail Loan Portfolio New Bookings - Retail Tier Distribution as of September 30th (660+ FICO)
47% 89%
85%
81% 81% 80% 81%
10% 9% 8% 8% 7% 5% 4% 2%
14 Retail Loan Origination Characteristics
APR Distribution Weighted Average FICO
FY16 FY17 FY18 FY19 FY20 1H FY15 FY16 FY17 FY18 FY19 FY20 1H
< 2.0% 2.0% - 3.99% >= 4.0% Weighted Average FICO
Weighted Average Original Term New vs. Near-New/Used
FY16 FY17 FY18 FY19 FY20 1H FY16 FY17 FY18 FY19 FY20 1H
Weighted Average Original Term New Near-New/Used
15 Average Loan Principal Outstanding & Net Losses
$29.3 $28.2 $27.9 $24.9 $22.1
1.61% 1.12% 1.37% 1.48% 1.12%
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 1H
Avg. Principal Amount Outstanding ($ in Billions) Net Losses as a % of Avg. Principal Outstanding
16 Lease Origination Trends
NMAC continues to maintain a high quality of lease bookings
Lease Portfolio New Bookings - Lease Tier Distribution as of September 30th (660+ FICO)
61% 90% 89% 88% 87% 85%
9% 9% 6% 5% 4% 2% 1% 3%
17 Average Lease Principal Outstanding & Net Losses
$21.9 $21.8 $20.6 $20.6 $18.5
0.65% 0.47% 0.59% 0.50% 0.50%
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 1H
Avg. Principal Amount Outstanding ($ in Billions) Net Losses as a % of Avg. Principal Outstanding
18 Lease Recovery vs. Base Residual
. Portfolio terminations including payoffs at full contract, credit/repo’s, and auction sales netted 3.50% (Nissan: 4.66%, Infiniti: 1.09%) vs. base residual during the first quarter . Primary drivers of NMAC residual trend:
. Normalization of used car market
. Consistent performance amongst high-volume models – Rogue, Altima, Sentra
. Lower industry inventory levels have led to a sharp recovery following pandemic lockdowns
5%
4% 3.50% 3.83% 3% 3.54%
2%
1%
0% 0.56%
-1% -0.39% -0.36% -1.14% -2% -1.34%
-3% -2.37% -2.29%
-4%
-5% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Q2
19 Remarketing Current State Overview
Industry Current State
. Used car values have experienced a “V-Shaped” recovery since falling in April . Values after June have exceeded all 3rd party forecasts; many models are experiencing recovery values at all time highs . Auction inventory levels are approaching multi-year lows, as demand has outweighed supply
Actions Taken
. Implemented an aggressive sales volume strategy resulting in record sales in July . Marshalling vehicles from the northeast to the South, Central, and Midwest regions to spread supply and increase recovery values . Created a dedicated resource to grow upstream sales channels . Transitioned to a new pricing vendor which uses additional market data which should lead to more accurate pricing . Eliminated physical auction closed sales to allow more buyers the opportunity to bid/buy
20 Floorplan Penetration & Dealer Count
Dealer Penetration Floorplan Dealer Count
703 703 697 690 55% 54% 54% 54% 50% 47% 636 597
FY15 FY16 FY17 FY18 FY19 FY20 Q2 FY15 FY16 FY17 FY18 FY19 FY20 Q2
21 Average Floorplan Receivables & Net Losses
$9.0
$8.0 $7.6 $7.3 $6.9 $7.0 $6.8 $6.1 $6.0
$5.0 $4.4
$4.0
$3.0
$2.0
$1.0 0.42% 0.02% 0.00% 0.13% 0.07% 0.09% $0.0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Q2 Avg. Principal Amount Outstanding ($ in Billions) Net Losses as a % of Avg. Principal Outstanding
22 . Nissan Motor Co. Limited ("NML") Performance Update
. Nissan Motor Acceptance Corp (“NMAC”) Overview
. ABS Performance Update
. Treasury and Liquidity Update Cumulative Net Credit Losses – Retail Loan ABS
. Current outstanding public transactions . Strong performance due to prime asset quality . Recent transactions have an average FICO of 760+
2.50%
2.25%
2.00% Average Rating Agency Net Credit Loss Expectation for NAROT 20-B 1.75%
1.50%
1.25%
1.00%
0.75%
0.50%
0.25%
0.00% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 (Number of Months Since Closing) 17-A 17-B 17-C 18-A 18-B 18-C 19-A 19-B 19-C 20-A 20-B
24 Cumulative Net Credit Losses – Lease ABS
. Current outstanding public transactions . Cumulative Net Credit Losses as a % of Original Aggregate Securitization Value
1.00%
0.90%
0.80%
0.70% Average Rating Agency Net Credit Loss Expectation for NALT 20-B
0.60%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00% 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 (Number of Months Since Closing) 18-A 19-A 19-B 20-A 20-B
25 Cumulative Retail Lease Residual Losses - ABS
. Current outstanding public transactions . Cumulative Residual Value Losses as a % of Original Aggregate Securitization Value Note: Negative values represent gains on vehicles sold at auction 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 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 -0.50% (Number of Months Since Closing) -1.00% -1.50% -2.00% 18-A 19-A 19-B 20-A 20-B -2.50%
26 Lease ABS Collateral Characteristics
. Model and state concentrations are in line with, or more balanced than peer transactions . Monthly residual distributions are balanced in order to limit exposure to spikes in residual value risk
Concentrations by Model Concentrations by State
Model 1 Model 2 Model 3 State 1 State 2 State 3
52% 49% 51% 44% 12% 13% 40% 8% 37% 10% 8% 11% 15% 18% 20% 14% 13% 14% 21% 25% 20% 16% 15% 20%
NALT 20-B FORDL 2020-B GMALT 2020-3 NALT 20-B FORDL 2020-B GMALT 20-3
Highest Six Month Residual Maturity
32% 32% 25%
NALT 20-B FORDL 20-B GMALT 20-3
27 . Nissan Motor Co. Limited ("NML") Performance Update
. Nissan Motor Acceptance Corp (“NMAC”) Overview
. ABS Performance Update
. Treasury and Liquidity Update NMAC Funding Sources
NMAC uses multiple sources of funding and maintains a combination of securitization, unsecured debt offerings, commercial paper, bank loans, and inter-company borrowings to meet its obligations
$58.5 $54.0 $55.6 $3.0 $55.2 $3.4 $4.0 $2.8 $48.0 $11.3 $5.7 $8.2 $10.4 $2.9 $41.6 $8.5 $0.7 $12.2 $12.4 $11.8 $6.7 $10.9 $3.4 $10.0 $7.6 $5.7 $1.3 $11.9 $4.3 $3.6 $0.8 $7.8 $6.3 $5.5 $0.8 $1.3 $16.0 $15.2 $13.9 $13.8 $12.4 $13.4
$8.6 $9.8 $5.5 $6.1 $6.4 $6.5
FY15 FY16 FY17 FY18 FY19 FY20 Q2 Equity ABS ABCP Inter-Company Bank Loans Unsecured Bonds CP
29 NMAC Liquidity
As of September 30th, NMAC had $9.5 billion in secured ABCP facility commitments, and revolving credit facilities totaling $6.6 billion
ABCP Capacity* Revolving Credit
$7.4
$3.0
$2.0 $1.6 $2.1
1 Yr. 3 Yr. 2021 2022 2023 Facility Tenor Year of Maturity
30 NMAC Available Liquidity & Funding Mix
NMAC’s balance sheet is supported by strong liquidity, with $14.8 billion in committed credit available, and is further stabilized by equity and other liabilities (~23% of managed assets)
Committed Liquidity Available Funding Mix*
$14.8 Equity & Other 23% ABS 30% $6.6 $10.8 $13.8 CP 2% $0.7
$1.3 Unsecured Bonds $6.7 ABCP 15% $0.8 3% $8.2 $11.9 Inter-Company 2%
Bank Loans 26% RCF ABCP
31 NMAC Securitization Program
NMAC is a programmatic ABS issuer as noted below with issuance history for the previous ten years:
Auto Lease Auto Loan Date Name Notes Issued, $M Pool Factor Date Name Notes Issued, $M Pool Factor 10-May NALT 2010-A $750 Paid Off 10-Sep NAROT 2010-A $1,301 Paid Off 10-Nov NALT 2010-B $750 Paid Off 11-Apr NAROT 2011-A $1,200 Paid Off 11-Jul NALT 2011-A $875 Paid Off 11-Nov NAROT 2011-B $1,250 Paid Off 11-Sep NALT 2011-B $970 Paid Off 12-Feb NAROT 2012-A $1,541 Paid Off 12-Mar NALT 2012-A $1,111 Paid Off 12-Aug NAROT 2012-B $1,400 Paid Off 12-Oct NALT 2012-B $750 Paid Off 13-Jan NAROT 2013-A $1,364 Paid Off 13-May NALT 2013-A $1,260 Paid Off 13-Jul NAROT 2013-B $1,418 Paid Off 13-Oct NALT 2013-B $800 Paid Off 13-Dec NAROT 2013-C $800 Paid Off 14-Jun NALT 2014-A $850 Paid Off 14-Feb NAROT 2014-A $1,000 Paid Off 14-Oct NALT 2014-B $946 Paid Off 14-Dec NAROT 2014-B $850 Paid Off 15-Jun NALT 2015-A $750 Paid Off 15-Apr NAROT 2015-A $1,401 Paid Off 15-Nov NALT 2015-B $1,000 Paid Off 15-Jul NAROT 2015-B $1,303 Paid Off 16-May NALT 2016-A $1,393 Paid Off 15-Oct NAROT 2015-C $1,181 Paid Off 16-Aug NALT 2016-B $1,357 Paid Off 16-Feb NAROT 2016-A $1,000 Paid Off 17-Jun NALT 2017-A $1,047 Paid Off 16-Apr NAROT 2016-B $1,500 Paid Off 17-Oct NALT 2017-B $1,250 Paid Off 16-Aug NAROT 2016-C $1,250 Paid Off 18-Oct NALT 2018-A $750 31% 17-Mar NAROT 2017-A $1,000 10% 19-Apr NALT 2019-A $1,250 50% 17-Aug NAROT 2017-B $1,383 14% 19-Jul NALT 2019-B $1,250 63% 17-Dec NAROT 2017-C $1,500 20% 20-Jan NALT 2020-A $1,258 83% 18-Mar NAROT 2018-A $1,000 25% 20-Sep NALT 2020-B $1,275 97% 18-Jul NAROT 2018-B $775 36% Auto Lease Total 21 $21,642 18-Dec NAROT 2018-C $1,000 45% 19-Feb NAROT 2019-A $1,250 47% Auto Dealer Floorplan 19-May NAROT 2019-B $1,250 54% Date Name Notes Issued, $M Pool Factor 19-Sep NAROT 2019-C $1,250 67% 10-Feb NMOTR 2010-A $900 Paid Off 20-Apr NAROT 2020-A $1,000 86% 12-May NMOTR 2012-A $1,000 Paid Off 20-Jun NAROT 2020-B $1,300 84% 12-May NMOTR 2012-B $250 Paid Off Auto Loan Total 27 $32,467 13-Feb NMOTR 2013-A $1,000 Paid Off 15-Jan NMOTR 2015-A $900 Paid Off 17-May NMOTR 2017-A $515 Paid Off 16-Jul NMOTR 2016-A $1,600 Paid Off 17-May NMOTR 2017-B $760 Paid Off 17-May NMOTR 2017-C $1,250 Paid Off 19-Mar NMOTR 2019-A $1,000 100% 19-Nov NMOTR 2019-B $1,000 100%
32 APPENDIX NAROT Collateral Characteristics
34 NALT Collateral Characteristics
35 Summary of COVID-20 Initiatives
NMAC is fully operational and supporting customers through the COVID-20 Pandemic
Customer Initiatives Operations
• Service agents are ready to offer assistance to • All Operations have been transitioned to work from home customers through phone, chat, IVR & website since March 23rd and are fully operational • Customer options include payment extensions, late fee • Very limited critical functions working at NCCD location waivers, and suspended credit bureau reporting; • Collection personnel able to make outbound & receive Similar to approach during natural disaster inbound calls • Customer messaging through website & mobile app. • Re-marketing operations are fully functional as dealers, auctions, and consignors have increased electronic utilization • Application and funding volumes continue to increase from lowest points in early April
36 Nissan Next Goals
37 Global Automotive Market Trend
38 Global Operations Update
39 Global Sales Finance Performance
• •
• •
40 Nissan North America – Vice Chairman Appointment
Jeremie Papin is vice chairman, Nissan North America, a role he was appointed to in June 2020. Papin oversees Nissan’s operations in the U.S., Canada, and Mexico. His scope includes responsibility for Sales and Marketing; Regional Planning, Administration and Finance; Manufacturing and Purchasing; and, Research and Development within the region.
Most recently, Papin was senior vice president, Administration & Finance, Nissan North America, responsible for overseeing the corporate finance and administration functions. Prior to that he was senior vice president, Finance.
Before joining the region in 2018, Papin was Alliance global director, Finance, Renault-Nissan- Mitsubishi Alliance, and vice president, Corporate Strategy & Business Development, Groupe Renault. He has held a variety of leadership roles in finance, corporate planning, corporate strategy and business development for the Alliance and Renault.
Papin joined the Alliance in 2009 after more than a decade as a financial analyst specializing in the European automotive sector at Deutsche Bank, Lehman Brothers and Nomura.
Papin holds a bachelor’s degree in economics and political science from Institut d’Etudes Politiques de Paris and a master’s degree in capital markets and corporate finance (French DESS) from the University of Paris Nanterre. He has also completed the Harvard Business School Advanced Management Program.
41 Corporate Governance
. On June 25, 2019, a new corporate structure was selected, consisting of a company with three statutory committees, clearly separating management functions and supervisory, oversight and auditing functions . In the past, directors supervised the execution of important business operations as well as the duties of individual directors, but the new structure, with three statutory committees has separated execution from supervision Supervision Propose board member changes to shareholders, and Nomination committee executive officer changes to board
Determine compensation for executive officers and Board of Directors Compensation committee board members Determines committee members Reports audit findings to/from internal control committee, Audit committee global internal audit office, accounting auditors, and the board of directors
Supervise Report/Submit
Execution Representative Executive Officer
Executive Committee, Executive Internal Control Committee Officers Delegation Report/Proposal Monitoring
Management committee, Each function, Group Companies
Details on corporate governance guidelines are available at: www.Nissan-global.com/EN/COMPANY/PROFILE/CORPORATEGOVERNANCE/pdf/Guidelines_EN.pdf 42 Nissan Sustainability
. In fiscal year 2019, Nissan unveiled a new sustainability strategy called Nissan Sustainability 2022, including sustainability goals designed to meet the expectations of society and stakeholders. . Goals are established to cover the three aspects of Environmental (E), Social (S), and Governance (G), and the initiatives to meet these goals are on track to achieve their targets.
Environmental: Under its environmental philosophy of “a Symbiosis of People, Vehicles and Nature,” Nissan contributes to resolving environmental challenges based on social needs together with long-term vision.
Social: Nissan respects the rights of all stakeholders.
Governance: Nissan complies with laws, regulations and rules and engages in business activities that are just, fair and transparent.
For additional details on Nissan Sustainability, please visit: https://www.nissan-global.com/EN/SUSTAINABILITY/ 43 Keepwell Agreement
Nissan Motor Co., Ltd. Under the Keepwell Agreement, (“NML”) NML will: . Maintain, directly or indirectly, 100% ownership of, and beneficial interest 100% in, the voting stock of NMAC Nissan North America, Inc. Keepwell . Cause NMAC’s consolidated GAAP (“NNA”) Agreement tangible net worth to be positive . Cause NMAC to maintain sufficient liquidity to punctually meet its debt 100% obligations Nissan Motor Acceptance . Not modify, amend or terminate the Corporation Keepwell Agreement to adversely (“NMAC”) affect note holders’ interests
44