2Q 2017 EARNI NING NGS S REVI VIEW July 26, 2017
Business Review Appendix Ford Credit Shareholder Distributions A1 Vision and Strategy 3 Business Shareholder Payout Ratio A2 Strategy FC2 Product and Other Highlights 4 2Q 2017 Highlights FC3 Reconciliations to GAAP Financial Review Adjusted Pre-Tax Profit A3 Financial Financial Headlines 6 Adjusted Effective Tax Rate A4 Key Financial Information FC5 - FC8 Key Financial Summary 7 Special Items A5 Financing Shares / Contract Placement Volume FC9 - FC11 Total Company 8 Adjusted Earnings Per Share A6 Mix of Net Receivables FC12 Automotive 9 - 11 Managed Receivables A7 U.S. Origination Metrics and Credit Loss Drivers FC13 - FC14 North America 12 - 14 Managed Leverage A8 Worldwide Credit Loss Metrics FC15 South America 15 - 16 U.S. Lease Origination Metrics FC16 - FC17 Supplemental Data Europe 17 - 18 Funding Structure and Public Term Funding Plan FC18 - FC19 Automotive Debt A9 Middle East & Africa 19 - 20 Balance Sheet Metrics FC20 China Unconsolidated Affiliates A10 Asia Pacific 21 - 22 2017 Guidance FC21 Volume Related Financial Services – Ford Credit 23 - 25 Key Takeaways FC22 Industry A11 Cash Flow and Balance Sheet 26 - 27 Appendix FCA1 - FCA6 Market Share A12 Planning Assumptions and Guidance 28 - 30 Production Volumes A13 Key Takeaways 31 Dealer Stocks A14 Other Non-GAAP Financial Measures A15 Definitions and Calculations A16
100 DAY REVIEW UNPACK THE LONG TERM STRATEGY REVENUE look at opportunities FITNESS improve it for the company CAPITAL look for opportunities INNOVATION in all parts of the business CULTURE Creating the environment to win 3
PRODUCT AND OTHER HIGHLIGHTS U.S. F-Series sales totaled 224,579 In China, Ford sold more than Launched full range of all-new Fiesta in 2Q; best 2Q since 2001 282,000 vehicles in 2Q; Lincoln models in Europe achieved best-ever quarterly sales Earned No. 2 ranking of non- Ford’s first software update via Wi -Fi Retooling Kentucky Truck to build premium brands in this year’s U.S. with a SYNC 3 update to more than all-new Expedition and Navigator; J.D. Power Initial Quality Study; best 800,000 model-year 2016 vehicles next-generation Focus for NA to be 4 ranking in report’s 31 -year history sourced primarily from China
FINANCIAL REVIEW
FINANCIAL HEADLINES EPS Automotive Automotive Total Company Segment Segment Total Company Total Company Adjusted Adjusted Operating Operating Revenue Net Income Pre-Tax Results* EPS EPS* Margin Cash Flow (GAAP) (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) (GAAP) (GAAP) 2Q 2017 $39.9B $2.0B $2.5B $0.51 $0.56 5.9% $1.3B B / (W) $0.4B $0.1B $(0.5)B $0.02 $0.04 (1.8) ppts $(2.9)B 2Q 2016 * See Appendix for detail, reconciliation to GAAP and definitions Revenue Growth; Company Adjusted PBT Of $2.5 Billion And Favorable Tax Rate Drove Adjusted EPS Of 56¢, Up 8% YoY 6
KEY FINANCIAL SUMMARY 2Q YTD 2Q wholesale volume lower; B / (W) B / (W) revenue up slightly 2017 2016 2017 2016 Wholesales (000) 1,651 (43) 3,354 (60) Revenue (Bils) $ 39.9 $ 0.4 $ 79.0 $ 1.8 Company adj. PBT of Results (Mils) $2.5B and adj. effective Automotive Segment $ 2,191 $ (641) $ 4,156 $ (2,140) Financial Services Segment 603 218 1,069 185 tax rate of 10.2% drove All Other (287) (63) (499) (149) Total Company adjusted pre-tax results* $ 2,507 $ (486) $ 4,726 $ (2,104) higher adj. EPS Special items pre-tax (248) (130) (224) 80 Income / (Loss) before income taxes $ 2,259 $ (616) $ 4,502 $ (2,024) Special items due to (Provision for) / Benefit from income taxes (209) 694 (858) 1,241 Net income / (Loss) $ 2,050 $ 78 $ 3,644 $ (783) decisions to deploy less Less: Income / (Loss) attributable to non-controlling interests 8 6 15 10 Net income / (Loss) attributable to Ford $ 2,042 $ 72 $ 3,629 $ (793) capital to small cars in NA Earnings per share (diluted) $ 0.51 $ 0.02 $ 0.91 $ (0.20) and SA Adjusted earnings per share (diluted)* $ 0.56 $ 0.04 $ 0.96 $ (0.24) Automotive Segment (Bils) Operating cash flow Operating cash flow $ 1.3 $ (2.9) $ 3.3 $ (3.6) positive; liquidity strong Cash $ 28.4 $ 1.2 $ 28.4 $ 1.2 Debt (16.2) (3.1) (16.2) (3.1) Net cash $ 12.2 $ (1.9) $ 12.2 $ (1.9) 7 * See Appendix for detail, reconciliation to GAAP and definitions
TOTAL COMPANY 2Q 2017 ADJUSTED PRE-TAX RESULTS* (MILS) $2,507 $2,191 Company adj. PBT driven by Auto and Financial Services results $603 All Other primarily net interest expense plus FSM LLC $(287) Decline in Company Total Automotive Financial All Other Segment Services adj. PBT due to Auto Segment B / (W) 2Q 2016 $(486) $(641) $218 $(63) 8 * See Appendix for detail, reconciliation to GAAP and definitions
AUTOMOTIVE SEGMENT 2Q 2017 PRE-TAX RESULTS (MILS) $2,191 $2,198 Auto PBT driven by NA; other regions about breakeven in total $143 $88 Europe and AP profitable $(53) $(185) YoY decline in Auto PBT $(7) driven by NA and Europe Total North South Europe Middle East Asia America America & Africa Pacific B / (W) 2Q 2016 $(641) $(505) $80 $(379) $12 $151 9
AUTOMOTIVE SEGMENT 2Q 2017 KEY METRICS Wholesales Revenue Market Share Operating Margin Pre-Tax Results Auto top-line metrics (000) (Bils) (Pct) (Pct) (Mils) mixed YoY; financial $2,832 $37.1 $37.0 1,694 1,651 metrics lower $2,191 7.7% 7.5% 7.4% Global SAAR up 4% due to 5.9% AP, Europe and SA Global market share lower 3% -- % 0.1 ppts 1.8 ppts 23% due to NA, Europe and MEA; share up in AP 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 and SA YTD: 3,414 3,354 $72.2 $73.6 7.5% 7.3% 8.7% 5.6% $6,296 $4,156 2 % 2% 0.2 ppts 3.1 ppts 34% 10
AUTOMOTIVE SEGMENT 2Q 2017 PRE-TAX RESULTS (MILS) Industry $(156) $2,832 Share 4 Lower Auto PBT due to Mat’l, Excl. Commodities $ (40) Stocks 21 $2,191 Commodities (387) Mix 310 Other (64) Freight / Other 99 higher commodity cost, Pricing $ 721 Engineering $(127) unfavorable exchange and Incentives / Other (619) Other (4) non-repeat of gain from $115 $102 asset sale in NA last year $(131) $(154) (in Other) $(245) $(328) $(641) Favorable market factors driven by NA, SA and AP Market Factors Total Cost Volume / Net Contribution Structural 2Q 2016 2Q 2017 Mix Pricing Cost Cost Exchange Other 11
AUTOMOTIVE SEGMENT – NORTH AMERICA 2Q 2017 KEY METRICS Wholesales Revenue Market Share Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Pct) (Mils) $2,703 NA top-line metrics mixed; 815 807 $24.5 $23.8 14.5% 14.4% $2,198 financial metrics lower 11.3% NA and U.S. SAARs each 9.0% down 0.5M units NA market share lower due 1% 3% 0.1 ppts 2.3 ppts 19% to U.S. fleet sales 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 YTD: 1,629 1,578 $47.7 $48.5 14.5% 14.3% 12.1% 8.6% $5,783 $4,187 3% 2% 0.2 ppts 3.5 ppts 28% 12
AUTOMOTIVE SEGMENT – NORTH AMERICA 2Q 2017 PRE-TAX RESULTS (MILS) $2,703 Lower NA PBT mainly due $2,198 Industry $(202) to higher commodity cost Share 7 Mat’l, Excl. Commodities $(177) Stocks 189 and non-repeat of last Commodities (294) Mix 217 Other (34) Freight / Other 28 year’s sale of majority Pricing $ 497 Incentives / Other (399) stake in OEConnection LLC Engineering $(126) Other (48) (in Other) $177 $98 Market factors positive $(13) $(150) $(174) due to favorable mix and $(443) $(505) higher net pricing, despite Market Factors Total Cost lower U.S. industry volume Volume / Net Contribution Structural 2Q 2016 2Q 2017 Mix Pricing Cost Cost Exchange Other 13
AUTOMOTIVE SEGMENT – NORTH AMERICA A DISCIPLINED APPROACH TO THE U.S. BUSINESS YoY Average Transaction Price (USD)* YoY Incentive Change as Pct. of Vehicle Price* Industry Average Industry Average Ford Ford $1,727 $1,716 Better $1,634 $1,476 1.0 0.9 0.9 0.9 0.2 $556 $340 $289 $186 (0.2) (0.3) (0.5) Apr May Jun Apr May Jun 2Q 2Q U.S. Gross Days Supply Ford ATPs rose almost 5x more than the industry Industry Average Ford 83 Ford incentives declined as a percent of vehicle 79 76 73 72 68 price, while the industry’s increased Ford U.S. stocks remain in good shape, up 1 day YoY Apr May Jun 14 * Source: J.D. Power PIN ISR data – cash / APR / lease (blended) transaction; industry data includes Ford
AUTOMOTIVE SEGMENT – SOUTH AMERICA 2Q 2017 KEY METRICS Wholesales Revenue Market Share Operating Margin Pre-Tax Results SA’s key metrics improved (000) (Bils) (Pct) (Pct) (Mils) YoY for 3 rd consecutive 9.2% 93 quarter 8.7% 83 $1.5 $1.3 Top line higher due to (12.6)% $(185) volume and pricing $(265) (21.3)% SA SAAR up 17%; Brazil 12% 18% 0.5 ppts 8.7 ppts 30% SAAR higher for first time since 2Q 2013 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 Market share up due to Ka YTD: 146 163 $2.1 $2.6 8.5% 9.1% (25.0)% (16.8)% $(521) $(429) 12% 22% 0.6 ppts 8.2 ppts 18% 15
AUTOMOTIVE SEGMENT – SOUTH AMERICA 2Q 2017 PRE-TAX RESULTS (MILS) $86 $80 $20 $20 PBT improved in SA due to $(8) $(19) $(19) favorable market factors Industry $ 58 with cost about flat and Share 2 Stocks (17) Mix (11) adverse exchange impact Other (12) $(185) modest $(265) Market Factors Total Cost Volume / Net Contribution Structural 2Q 2016 2Q 2017 Mix Pricing Cost Cost Exchange Other 16
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