2Q 2016 EARNINGS REVIEW July 28, 2016 1
Business Review Appendix Financial Headlines 3 Business Unit Guidance A1 Creating Value 4 Reconciliations to GAAP Progress This Quarter 5 Non-GAAP Financial Measures A2 Other Highlights 6 Adjusted Pre-Tax Profit A3 Business Environment 7 Adjusted Effective Tax Rate A4 Special Items A5 Financial Review Adjusted Earnings Per Share A6 Key Financial Summary 8 Managed Receivables A7 Total Company 9 Managed Leverage A8 Automotive 10 - 11 Supplemental Data North America 12 - 13 Automotive Debt A9 South America 14 - 15 China Unconsolidated Affiliates A10 Europe 16 - 17 Volume Related Middle East & Africa 18 Industry SAAR A11 Asia Pacific 19 - 21 Market Share A12 Financial Services – Ford Credit 22 - 24 Production Volumes A13 Cash Flow and Balance Sheet Summary 25 - 26 Dealer Stocks A14 Planning Assumptions and Guidance 27 - 31 Other Key Takeaways 32 Definitions and Calculations A15
FINANCIAL HEADLINES EPS Total Company Automotive Automotive Total Company Adjusted Pre-Tax Adjusted Total Company Global Segment Segment Net Income Results* EPS* Revenue Market Share Operating Margin Operating Cash Flow 2Q $2.0B $3.0B $0.52 $39.5B 7.5% 7.7% $4.2B 2016 B/(W) $0.2B $0.3B $0.02 $2.2B 0.3 ppts 0.7 ppts $2.3B 2Q 2015 * Excludes special items; see Appendix for detail, reconciliation to GAAP, and definitions Strong Second Quarter Results With Higher Revenue And Record Quarterly Automotive Segment Operating Cash Flow 3
CREATING VALUE – PROGRESS THIS QUARTER ! GROWTH RETURNS RISK REWARDS Launched new Escape, Record Automotive Upgraded by Fitch Distributed $600 million Fusion, Fusion HEV, Segment operating of dividends to Operations outside of Fusion PHEV, MKZ and cash flow shareholders North America profitable MKZ HEV Record 2Q pre-tax profit in total for 3 rd Lincoln sales up 25% in Europe consecutive quarter from a year ago Record 1H Company and Extended $13.4 billion Launched Edge in North America adjusted multi-year credit facility Europe pre-tax profits and for another year operating margins Announced investment Achieved $1.6 billion in Pivotal to accelerate Announced significant favorable cost Ford Smart Mobility manufacturing performance versus plan investment in U.S., in 1H Mexico and South Africa 4
OTHER HIGHLIGHTS Focus s RS named Top Gear Ford GT returns to Le Mans and wins Lincol oln and Ford improv roved d in the Magazine’s Car of the Year in the GTE Pro category JD Pow ower In Initial Quality y Study to #7 #7 and #11 #11 respectively Ford 1.0L EcoBoost ost engine voted Announced F-150 0 Raptor Launched Sync Connect t with best in class ss at International Engine SuperC rCrew will be ava vailable in China embedde ded d modem in new Escape of the year awards 5 y years s running in 2017 5
BUSINESS ENVIRONMENT Elevated economic uncertainty restraining business investment, with downside risk to global growth Financial markets continuing to assess outcome of Brexit – Sterling and euro facing downward pressure; global interest rates reverting to recent lows U.S. growth improving after a weak start to the year but with signs of a maturing recovery China economic and industry growth supported by stimulus measures Brazil still under pressure; Russia showing some signs of stabilization 6
FINANCIAL REVIEW
KEY FINANCIAL SUMMARY 2Q YTD B / (W) B / (W) Strong quarter 2016 2015 2016 2015 Wholesales (000) 1,694 (2) 3,414 150 Revenue (Bils) $ 39.5 $ 2.2 77.2 6.0 Wholesales flat; revenue Results (Mils) up 6% Automotive Segment $ 2,832 $ (130) $ 6,296 $ 1,812 Financial Services Segment 385 (106) 884 (76) All Other (224) (57) (350) 29 2nd best Company 2Q Total Company adjusted pre-tax results $ 2,993 $ (293) $ 6,830 $ 1,765 profit Special items pre-tax (118) (118) (304) (304) Income before income taxes $ 2,875 $ (411) $ 6,526 $ 1,461 (Provision for) / Benefit from income taxes (903 ) 222 (2,099) (349) Record quarterly Auto Net Income $ 1,972 $ (189) $ 4,427 $ 1,112 Less: Income / (Loss) attributable to operating cash flow non-controlling interests 2 1 5 3 Net income / (loss) attributable to Ford $ 1,970 $ (190) $ 4,422 $ 1,109 Record Company 1H Earnings per share (Diluted) $ 0.49 $ (0.05) $ 1.11 $ 0.28 Adjusted earnings per share (Diluted) 0.52 (0.02) 1.20 0.37 adjusted pre-tax profit Automotive Segment (Bils) Operating cash flow $ 4.2 $ 2.3 $ 6.9 $ 4.5 Strong liquidity Cash $ 27.2 $ 6.5 $ 27.2 $ 6.5 Debt (13.1 ) 0.6 (13.1) 0.6 Net cash $ 14.1 $ 7.1 $ 14.1 $ 7.1 8
TOTAL COMPANY 2Q 2016 ADJUSTED PRE-TAX RESULTS* (MILS) $2,832 $2,993 Strong Automotive results $2,703 driven by NA and Europe Financial Services solidly profitable $467 $385 All Other primarily net interest expense $(8) $(65) $(224) $(265) Automotive and Financial Automotive Segment Financial Services segments lower Asia Services North South Middle East Total America America Europe & Africa Pacific Segment All Other YOY B / (W) 2Q 2015 $(293) $(135) $(80) $306 $(19) $(202) $(106) $(57) 9 * Excludes special items; see Appendix for detail, reconciliation to GAAP, and definitions
AUTOMOTIVE SEGMENT 2Q 2016 KEY METRICS Automotive key metrics mixed from a year ago Wholesales Revenue Market Share Operating Margin Pre-Tax Results Wholesales flat; revenue (000) (Bils) (Pct) (Pct) (Mils) up 5% 8.4% 7.8% $37.0 $2,962 7.5% 1,696 1,694 $2,832 $35.1 7.7% Global market share lower in all regions except NA Global SAAR up 6% Operating margin and Auto -- % 5% 0.3 ppts 0.7 ppts 4% profit strong but lower 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 YTD metrics strong and up YTD: 3,264 3,414 $66.9 $72.2 7.4% 7.3% 6.7% 8.7% $4,484 $6,296 YOY except global market 5% 8% 0.1 ppts 2.0 ppts 40% share 10
AUTOMOTIVE SEGMENT 2Q 2016 PRE-TAX RESULTS (MILS) $2,962 $2,832 Industry $185 Material Excl. Commodities $ 98 Share (75) Commodities 386 Stocks (117) Warranty (239) Lower profit driven by Mix / Other 537 Freight / Other 97 unfavorable exchange and Manufacturing Incl. Vol. Related $ (52) Pricing $ 718 Engineering (182) Incentives / Other (1,307) market factors net of Spending Related (150) Other 64 $530 $342 improved cost $176 performance $(320) $(269) $(589) $(130) Other mainly gain on sale Market Factors Total Cost of an equity investment Volume / Net Contribution Structural 2Q 2015 2Q 2016 Mix Pricing Cost Cost Exchange Other 11
AUTOMOTIVE SEGMENT – NORTH AMERICA 2Q 2016 KEY METRICS Strong quarter with operating margin at 11.3% Wholesales Revenue Market Share Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Pct) (Mils) Wholesales and revenue 816 815 flat to slightly higher $2,838 $23.8 12.2% 14.4% 14.4% $23.3 $2,703 11.3% Flat NA market share includes higher U.S. share – fleet and retail F-Series -- % 2% -- ppts 0.9 ppt 5% NA SAAR higher but U.S. down 0.1M units 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 Record YTD profit and YTD: 1,494 1,629 $43.3 $47.7 14.2% 14.5% 10.2% 12.1% $4,407 $5,783 operating margin 9% 10% 0.3 ppts 1.9 ppts 31% 12
AUTOMOTIVE SEGMENT – NORTH AMERICA 2Q 2016 PRE-TAX RESULTS (MILS) Lower profit driven by higher Ford and industry incentives $2,838 $2,703 Industry $ (6) Commodities $ 342 Mix remained strong, Share 132 Warranty (191) Stocks (188) Freight / Other 91 Mix / Other 373 driving higher ATPs Engineering $ (69) Pricing $ 323 Spending Related (123) Incentives / Other (999) Favorable cost Other 74 $311 $242 performance – material $144 cost reductions offset $(38) $(118) $(135) product adds $(676) Higher warranty included Market Factors Total Cost Volume / Net Contribution Structural Takata airbag recall 2Q 2015 2Q 2016 Mix Pricing Cost Cost Exchange Other Other includes sale of majority of Ford’s stake in OEConnection LLC 13
AUTOMOTIVE SEGMENT – SOUTH AMERICA 2Q 2016 KEY METRICS Metrics declined as external conditions remain Wholesales Revenue Market Share Operating Margin Pre-Tax Results challenging (000) (Bils) (Pct) (Pct) (Mils) Top line lower due to 10.0% industry and exchange 98 8.7% $1.5 83 $1.3 (12.4)% Market share down – $(185) focused on profitable (21.3)% $(265) share amid higher industry 15% 17% 1.3 ppts 8.9 ppts 43% discounts 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 SA and Brazil SAARs continued to decline YTD: 199 146 $3.0 $2.1 9.8% 8.5% (12.4)% (25.0)% $(374) $(521) 27% 31% 1.3 ppts 12.6 ppts 39% YTD metrics lower 14
AUTOMOTIVE SEGMENT – SOUTH AMERICA 2Q 2016 PRE-TAX RESULTS (MILS) $132 $52 Higher loss mainly due to inflation and weaker local $(52) $(51) currencies net of pricing $(161) $(185) plus lower volume $(265) Industry $(30) Share (50) Stocks 52 Cost performance $(80) Mix / Other (24) continued to be favorable Economics / Volume / Exchange Cost Balance 2Q 2015 2Q 2016 Mix Net of Pricing Performance Sheet Other 15
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