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FC1
Fixed IncomeInvestor PresentationFirst Quarter 2018
FC2
• Strategy Highlights FC3
• Corporate Overview FC12
• Ford Credit FC24
• Appendix FC41
Agenda
FC3
Strategy Highlights
FC4
1. Rapidly improving our fitness to lower costs, release capital and finance growth
2. Accelerating the introduction of connected, smart vehicles and services
3. Re-allocating capital to where we can win in the future
4. Continuously innovating to create the most human-centered mobility solutions
5. Empowering our team to work together effectively to compete and win
Smart Vehicles In A Smart World
FC5
Partnerships strengthen our competitive position
Markets Technologies Capabilities Mobility
FC6
We continue to evolve, building on our strengths while addressing market challenges
• Strategic choices• Marketing reset and brand plan• Cost reset• Product – play-to-win profitably• 100% connectivity in the U.S. by 2019;
90% globally by 2020
FC7
EV strategy plays to our strengths, builds on our brands, leverages scale and innovates across the value chain
Mach I – Performance BEV
F-150 Hybrid
Mustang Hybrid
Transit Plug-In Hybrid
IonityFast ChargingInfrastructure
FC8
We will spend over $11 billion on electrification by 2022
U.S.• Positioned for EV leadership• HEV offered on all mainstream
models
China• BEVs and hybrids from our CAF and
JMC JVs• Value BEVs from our Zotye JV
Europe• Strong BEV portfolio• Mild hybrids
$4.5
$6.7
>$11
Original Investment
RevisedInvestment
2015 - 2022
Electrification Investment (Bils)
2015 - 2020
50%
FC9
Our approach to AVs is focused on combining scalable, human-centered foundational technology with innovative, robust business models
AV Software Strong software talent Strategic investments in enabling technologies (e.g., LiDAR)
Vehicle Platform
Scale manufacturing Proven track record of commercial vehicle leadership
Diverse partner network to maximize revenue per mile Commercial durability to maximize utilizationAV Business
FC10
Automotive Segment Capital Strategy And Balance Sheet Priorities (Bils)
Shareholder Distribution StrategyGlobal funded pension plans now effectively fully funded
Minimum cash target established to protect for major downturn and liquidity for additional exogenous shock
Sustainable and flexible shareholder distributions strategy
2018 planned distributions of about $3.1B
Cash and LiquidityDebt and Pension Funding Deficit
$(14.3) $(15.9)
$(18.7) $(6.6)
2012 2017
DebtPension
$26.5 $20.0
$10.9 $10.0
Committed Credit FacilitiesCash
4Q 2017 Target$(33.0)
$(22.5)
Fixed Income - U.S. Plans (Pct) 55% 76%Pension Plan Sensitivity (Bils)* $5.7 $2.1
$37.4$30.0
2016
$2.4 $2.4 $2.4
$1.0$0.2 $0.5
Supplemental Dividend Anti-Dilutive Share RepurchasesRegular Dividends
2017 2018
$3.5 $2.7 $3.1
* Net funded status change for + / - 100 bps average change in rates
FC11
Total Company Credit Ratings ( as of M arc h 1 , 2 018)
S&P Moody's Fitch DBRS
Issuer RatingsFord Motor BBB N/A BBB BBBFord Credit BBB N/A BBB BBBFCE Bank plc BBB N/A BBB NR
Long-Term Senior UnsecuredFord Motor BBB Baa2 BBB BBBFord Credit BBB Baa2 BBB BBBFCE Bank plc BBB Baa2 BBB NR
Short-Term UnsecuredFord Credit A-2 P-2 F2 R-2M
Outlook Stable Negative* Stable Stable
* On January 30, 2018, Moody’s changed Ford and Ford Credit’s ratings outlook to “Negative” from “Stable”
FC12
Corporate Overview
FC13
Product And Other Highlights
Commercial vehicle leader in Europe for third straight year; began production of the new EcoSport SUV in Romania
100 percent of Ford’s new U.S. vehicles will be built with connectivity by 2019 and 90 percent globally by 2020
Announced the introduction of more than 50 new vehicles in China by 2025
Increased investment in Flat Rock for purpose-built autonomous vehicle; accelerated and increased BEV investment
Achieved eighth consecutive year as best-selling brand in the U.S.
F-Series marks 41 years as America’s best-selling pickup. F-150 diesel added to lineup
FC14
FY Automotive segment PBT driven by NA
Auto operations outside NA a loss in total and down YoY, driven largely by expected Brexit effects in Europe
Strong Financial Services profit
All Other primarily net interest expense plus FSM LLC
CompanyFY 2017 Adjusted Pre-Tax Results* (Mils)
$8,437 $7,511
$(784)
$234
$(263)
$561
$2,248
$(1,070)
SouthAmericaTotal
NorthAmerica All Other
AsiaPacificEurope
B / (W)FY 2016 $(1,938) $(1,490) $325 $(971) $39 $(66) $428 $(203)
Middle East& Africa
FinancialServices
Segment
Automotive Segment
$7,259
* See Appendix for detail, reconciliation to GAAP and definitions
FC15
Wholesales(000)
Revenue(Bils)
Market Share(Pct)
Operating Margin (Pct)
Pre-Tax Results(Mils)
20172016 2017201620172016 20172016 20172016
Automotive SegmentFY 2017 Key Metrics
FY wholesales about flat; revenue up 3% due to favorable mix and higher volume from consolidated operations and net pricing
Global industry up 2% due to AP, Europe and SA
Global market share down due to AP, Europe and MEA; NA flat; SA improved
Auto PBT and operating margin lower than last year
5.0%
6.7%
$7,259
$9,4227.2%6,6076,651$145.7$141.5
7.0%
1% 0.2 ppts3% 1.7 ppts 23%
FC16
Operating Margin (Pct)
Pre-Tax Results(Mils)
Wholesales(000)
Market Share(Pct)
Revenue(Bils)
2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
Automotive Segment – North AmericaFY 2017 Key Metrics
8.0%9.7%
1.7 ppts
$7,511$9,001
17%
2,9673,019
2%
13.9%13.9%
-- ppts
$93.5$92.6
1 %
FC17
Operating Margin (Pct)
Pre-Tax Results(Mils)
Wholesales(000)
Market Share(Pct)
Revenue(Bils)
2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
Automotive Segment – South AmericaFY 2017 Key Metrics
29%$(1,109)
$(784)(13.4)%
(23.0)%9.6 ppts
373325
15%
$5.8$4.8
21%
8.9%8.8%
0.1 ppts
FC18
Operating Margin (Pct)
Pre-Tax Results(Mils)
Wholesales(000)
Market Share(Pct)
Revenue(Bils)
2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
Automotive Segment – EuropeFY 2017 Key Metrics
$234
$1,205
81%0.8%
4.2%
3.4 ppts
7.5%7.7%
0.2 ppts
1,5821,539
3%
$29.7$28.5
4%
*
* Includes Ford brand vehicles produced and sold by our unconsolidated affiliate in Turkey (about 78,000 units in 2016 and 78,000 units in 2017). Revenue does not include these sales.
FC19
Operating Margin (Pct)
Pre-Tax Results(Mils)
Wholesales(000)
Market Share(Pct)
Revenue(Bils)
2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
Automotive Segment – Asia PacificFY 2017 Key Metrics
3.4%3.7%
0.3 ppts
$561$627
11%
4.0%
5.2%
1.2 ppts
1,5661,607
3%
$14.1$12.0
17%
*
| B6 * Wholesales include Ford brand and Jiangling Motors Corporation (JMC) brand vehicles produced and sold in China by our unconsolidated affiliates (about 1,217,000 units in 2016 and 1,132,000 units in 2017). Revenue does not include these sales
FC20
Market Factors Total Cost
Volume /Mix
NetPricing
StructuralCost Exchange Other
ContributionCost FY 2017FY 2016
Automotive SegmentFY 2017 Pre-Tax Results (Mils)
FY Auto PBT $2.2B lower than 2016 due to higher commodities and adverse exchange; all other factors about offset
Higher commodities driven by metals, mainly steel
Most of adverse exchange caused by Brexit effects of about $600M, along with Canadian dollar, Chinese RMB and Argentine peso
Favorable market factors driven by improved mix in all regions except SA and higher net pricing except in AP (China)
Pricing $ 2,885Incentives / Other (2,668)
Commodities $(1,213)Other (5)
Industry $(146)Share 45Stocks 95Mix 952Other (529)
$634 $(1,928)
Manufacturing, Incl. Vol. Related $(231)Engineering (451)Other (28)
FC21
Automotive Segment – North AmericaA Disciplined Approach To The U.S. Business
Industry AverageFord
70 7060
79 7868
U.S. Gross Days Supply4Q Ford ATPs up, about the same as the industry average; FY ATPs rose more than 2X the industry due to F-Series
4Q Ford incentives, as a percent of vehicle price, up more than industry average, but Ford incentives in FY increased less than a third of industry’s average
Ford U.S. stocks at healthy levels and days supply
-0.2
0.7
0.3
0.7 0.6
1.0 0.8 0.8
0.2
YoY Incentive Change as Pct. of Vehicle Price*YoY Average Transaction Price (USD)*
$869 $1,025
$1,433 $1,127
$573 $766 $717
$1,465
$998 $1,310
Oct Nov Dec 4Q
Industry AverageFordBetter
Oct Nov Dec
Industry AverageFord
* Source: J.D. Power PIN ISR data – cash / APR / lease (blended) transaction; industry data includes Ford
FY Oct Nov Dec 4Q FY
FC22
Commodity Prices*
YoY Profit Impact (Bils)
Ford’s Commodity Costs Generally Move In-Line With Market Prices ( A s of Februar y 8, 2 018)
Annual buy of about $10B; steel and aluminum roughly two-thirds
Benefited in 2015 and 2016 YoY from falling prices as commodities hit cyclical lows
Market pricing began to climb in late 2016
2018 prices – further increase, consistent with market dynamics
About one-third of 2018 exposure is fixed through contracts and hedges; remainder indexed
Steel ($ / Short Ton)Aluminum ($ / Metric Ton)
2010 2012 2014 2016 2017 2018**2009 201520132011
$1.2
$(2.3)
$0.9
$(1.2)
$1,200
$1,700
$2,200
$2,700
$300
$500
$700
$900
2010 2012 2014 2016 2017 20182009 201520132011
* Source: Bloomberg; ticker symbols: HRC2 (Steel) and LOAHDY (Aluminum)** Ford forecast
FC23
Reflects benefits of investment in 2016 and 2017
Fresh products drive improved pricing and mix
Robust Increase In Product Launches In 2018
118
25 6
4
23
11
6
21
17 16
Global* AsiaPacific
Launches
NorthAmerica
SouthAmerica
Europe Middle East & Africa
20172018
* Global launches do not equal the sum of the regional launches
FC24
Ford Credit
FC25
Ford CreditA Strategic Asset
Over The Last 20 Years, Ford Credit Generated $42 Billion In Pre-Tax Profits And $26 Billion In Distributions
$1.8 $2.1
$2.5 $2.5
$4.9
$2.0
$3.7 $2.9
$2.0
$1.2
$(2.6)
$2.0
$3.1 $2.4 $1.7
$1.8 $1.9 $2.1 $1.9 $2.3
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Pre-Tax ResultsDistributions
FC26
Ford Credit Strategy
Ford Credit Maintains A Relentless Focus On Business Fundamentals
SERVICEORIGINATE FUND• Support Ford and
Lincoln sales• Strong dealer relationships• Full spread of business• Consistent underwriting• Robust credit evaluation and
verification• Efficient use of capital
• High customer and dealer satisfaction
• World-class servicing• Credit losses within
expectations• Operationally fit with lean
cost structure
• Strong liquidity• Diverse sources and channels• Cost effective• Credit availability through
economic cycles
FC27
PBT improved $431M YoY reflecting favorable volume and mix, lease residual improvement and financing margin
Volume and mix up due to global receivables growth
Lease residual improvement driven by higher than expected auction values
Ford CreditFY 2017 Pre-Tax Results (Mils)
20172016Volume /
MixFinancing
MarginLease
Residual Exchange OtherCredit Loss
Residual Losses $118Supplemental Depreciation (62)
Non-Repeat of 2016 Pension Settlement $ 77Operating Costs & Other (37)
FC28
Solidly profitable globally
Improved YoY in all segments
Ford CreditFY 2017 Pre-Tax Results By Segment (Mils)
$2,310
$1,795
$329$85 $101
Total Americas EuropeAsia
PacificB / (W)FY 2016 $ 431 $284 $91 $24 $32
$2,209
Unallocated Other*
* See Appendix for definitions
FC29
20172016 2017201620172016 20172016 2017201620172016
Average Placement
FICO
Managed Receivables*
(Bils)
Over-60-DayDelinquencies
(Pct)
Pre-Tax Results(Mils)
Loss-to-Receivables (LTR)(Pct)
U.S. Retail and LeaseNet
Receivables(Bils)
Ford CreditFY 2017 Key Metrics
Strong and improved YoY PBT
Business and portfolio continue to perform well
U.S. consumer credit metrics remain healthy
* See Appendix for reconciliation to GAAP
10% 23% 1 bp 6 bps10% 7 pts
$130$143
$137$151
$1,879$2,310
739 746
0.15%0.14%
0.47%0.53%
FC30
$41.4$29.8
$9.2
$74.6
$55.1
$15.0
$26.7
$26.4
Total Asia PacificAmericas
Net Investment in Operating LeasesConsumer FinancingNon-Consumer Financing
Europe
$11.5
$142.7
$111.3
$24.5
$6.9
YE 2017 H/(L) 2016(Pct.) (Ppts.)
SUV / CUV 55 1 Car 22 (4)Truck 23 3
Prudent management of lease mix
Operating lease portfolio was 19% of total net receivables
U.S. and Canada represent 99% of operating lease portfolio
YE 2017 Net Receivables Mix (Bils)
FC31
60 mo 62 mo 64 mo 65 mo 65 mo
0% 1% 4% 4% 6%
2013 2014 2015 2016 2017
738 741 740 739746
5% 5% 6% 6% 6%
2013 2014 2015 2016 2017
Disciplined and consistent underwriting practices
Portfolio quality evidenced by FICO scores and steady risk mix
Extended-term contracts relatively small part of our business
U.S. Origination MetricsFICO and Higher Risk Mix (Pct)
Retail Contract TermsRetail ≥ 73 Months MixAverage Retail Placement Term
Higher Risk Portfolio MixRetail and Lease Average Placement FICO
FC32
29 28 2833 36
1.18% 1.06% 0.98% 1.05% 1.13%
05
1015202530354045505560657075
2013 2014 2015 2016 2017
Repo. RateRepossessions
Delinquencies and repossessions remain low
Severity increased reflecting longer term financing and lower auction values
Charge-offs and LTR continue to be within our placement expectations
Strong loss metrics reflect healthy consumer credit conditions
U.S. Retail And Lease Credit Loss Drivers
$127 $146$206
$324$382
0.26% 0.27%0.33%
0.47%0.53%
$-
$100
$200
$300
$400
$500
$600
$700
2013 2014 2015 2016 2017
$7.6 $7.9
$8.9
$10.1 $10.3
2013 2014 2015 2016 2017
Severity (000) Charge-Offs (Mils) and LTR Ratio (Pct)
Repossessions (000) and Repo. Rate (Pct)
0.15% 0.14%0.12%
0.15% 0.14%
2013 2014 2015 2016 2017
Over-60-Day Delinquencies (excl. Bankruptcies)
LTR RatioCharge-offs
FC33
24% 26% 28% 30% 29%
18% 20% 22% 22% 20%
2013 2014 2015 2016 2017
41 40 39 39 40
189 230 276 298 29094 87
92 56 38324 357407 393 368
2013 2014 2015 2016 2017 Lease share continues to be below industry reflecting Ford sales mix
U.S. Lease Origination MetricsLease Placement Volume (000)
Lease Share of Retail Sales (Pct)
* Source: JD Power PIN
24-Month36-Month
39-Month / Other
Ford CreditIndustry*
FC34
$17,385 $17,865 $17,975 $17,210 $16,825
$19,000 $18,765$19,785 $19,085 $19,535
2013 2014 2015 2016 2017
114 189 180 246 290
71% 78% 74% 78%80%
2013 2014 2015 2016 20170
100
200
300
400
Healthy used car market supporting lease residual and credit loss performance
Auction values stronger than expected
Continue to plan for lower auction values -- about 4% at constant mix in 2018
U.S. Lease Residual PerformanceLease Return Volume (000) and Return Rates (Pct)
Off-Lease Auction Values (at incurred Mix)24-Month36-Month
Return RatesReturn Volume
FC35
Securitized Funding as Pctof Managed Receivables 39% 37% 35%
Funding is diversified across platforms and markets
Well capitalized with strong investment grade balance sheet profile
Funding Structure – Managed Receivables* (Bils)
$11 $11 $12$12 $13 $16$6 $9 $9
$62 $66$75
$50$50
$53$6
$6$5
$2$4
$5$127$137
$151
YE 2015 YE 2016 YE 2017
Commercial Paper
Term Debt (incl Bank Borrowings)
Ford Interest Advantage / Deposits
Term Asset-Backed Securities
CashEquityOther
* See Appendix for reconciliation to GAAP and definitions
FC36
U.S. Canada Europe Mexico ChinaSecuritizationRetail
- Public -
- Private -Lease
- Public - - - -- Private - -
Wholesale- Public - - -- Private -
Unsecured Debt- Term
- CP - - -- Bank Loans - -
Ford CreditGlobal Funding Strategy
Ford Credit Is A Global Leader In The Capital Markets, Which Has Allowed It To Develop A Diversified Funding Structure
Funding Platforms* Global Funding Mix**
50%35%
4%11%
Securitization
UnsecuredDebt
OtherEquity
** Percent of managed receivables as of December 31, 2017* Includes most markets
FC37
Public Term Funding Plan* (Bils) ( A s of February 8, 2 018)
* Numbers may not sum due to rounding; see Appendix for definitions
2015 2016 2017Actual Actual Actual
Unsecured -- Currency of issuance(USD Equivalent)USD 11$ 9$ 10$ $ 10 - 12CAD 1 1 2 1 - 2EUR / GBP 4 3 3 2 - 3Other 1 1 1 1
Total unsecured 17$ 14$ 16$ $ 14 - 18
Securitizations 13$ 13$ 15$ $ 13 - 15
Total public 30$ 28$ 32$ $ 27 - 33
Forecast2018
FC38
$24 $27 $30$25+
YE15 YE16 YE17 Target
10.2 9.9 8.79.5 9.2 8.0
YE15 YE16 YE17 Target
Managed leverage at low end of target range reflecting favorable one-time tax adjustment
Liquidity remains strong and above target
Balance Sheet MetricsLeverage (to 1 )*
Liquidity Available For Use (Bils)
8 - 9
* See Appendix for reconciliation to GAAP
ManagedFinancial Statement
FC39
Ford Investor Relations Contacts:Fixed Income Investors:Karen Rocoff Justin Fischer313-621-0965 [email protected] [email protected]
Information on Ford:• www.shareholder.ford.com• 10-K Annual Reports• 10-Q Quarterly Reports• 8-K Current Reports
Information on Ford Motor Credit Company:• www.fordcredit.com/investor-center• 10-K Annual Reports• 10-Q Quarterly Reports• 8-K Current Reports
Further Information
FC40
Cautionary Note on Forward-Looking StatementsStatements 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;• With a global footprint, Ford’s results could be adversely affected by economic, geopolitical, protectionist trade policies, or other events;• 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;• 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;• 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;• Ford’s vehicles could be affected by defects that result in delays in new model launches, recall campaigns, or increased warranty costs;• 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, 2017, as updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
FC41
Appendix
FC42
$380 $359 $422 $548 $668
0.37%0.32% 0.33%
0.40% 0.44%
2013 2014 2015 2016 2017
$176 $209 $271 $415 $481
0.18% 0.19% 0.23%0.31% 0.34%
2013 2014 2015 2016 20170
100200300400500600700
Worldwide credit loss metrics remain strong
Credit loss reserve based on historical losses, portfolio quality and receivables level
YoY reserve growth reflects credit loss trends and growth in receivables
Ford Credit - Worldwide Credit Loss MetricsCharge-Offs (Mils) and LTR Ratio (Pct)
Credit Loss Reserve (Mils) and Reserve as a Pct of EOP Managed Receivables (Pct)Reserve as a Pct of EOP Managed ReceivablesCredit Loss Reserve
LTR RatioCharge-offs
FC43
Ford Credit - Liquidity Sources* (Bils)
* See Appendix for definitions
2015 2016 2017Dec 31 Dec 31 Dec 31
Liquidity SourcesCash 11.2$ 10.8$ 11.8$ Committed ABS facilities 33.2 34.6 33.4 Other unsecured credit facilities 2.3 2.5 3.3 Ford corporate credit facility allocation 3.0 3.0 3.0
Total liquidity sources 49.7$ 50.9$ 51.5$
Utilization of LiquiditySecuritization cash (4.3)$ (3.4)$ (3.8)$ Committed ABS facilities (20.6) (19.9) (17.2) Other unsecured credit facilities (0.8) (0.7) (1.1) Ford corporate credit facility allocation - - -
Total utilization of liquidity (25.7)$ (24.0)$ (22.1)$
Gross liquidity 24.0$ 26.9$ 29.4$ Adjustments (0.5) 0.1 0.1
Net liquidity available for use 23.5$ 27.0$ 29.5$
FC44
Ford CreditAmericas Financing Shares And Contract Placement Volume
2013 2014 2015 2016 2017
Financing Shares (%)Retail Installment and Lease Share of Ford Retail Sales (excl. Fleet)United States 56 % 63 % 65 % 56 % 55 Canada 65 67 73 75 77
Wholesale ShareUnited States 77 % 77 % 76 % 76 % 76 Canada 65 64 64 61 61
Contract Placement Volume - New and Used Retail / Lease (000)United States 1,122 1,231 1,342 1,159 1,119 Canada 140 149 160 181 184 Mexico 4 25 26 47 40
Total Americas Segment 1,266 1,405 1,528 1,387 1,343
FC45
Europe Financing Shares And Contract Placement Volume
2013 2014 2015 2016 2017
Financing Shares (incl. Fleet) (%)Retail Installment and Lease Share of Total Ford Sales U.K. 38 % 40 % 40 % 38 % 35 Germany 45 48 48 47 48 Total Europe Segment 34 36 37 37 37
Wholesale ShareU.K. 100 % 100 % 100 % 100 % 100 Germany 92 92 93 93 94 Total Europe Segment 98 98 98 98 98
Contract Placement Volume - New and Used Retail / Lease (000)U.K. 171 195 207 201 174 Germany 127 135 140 149 155 All Other 106 130 158 177 212
Total Europe Segment 404 460 505 527 541
FC46
Asia Pacific Financing Shares And Contract Placement Volume
2013 2014 2015 2016 2017
Financing Shares (incl. Fleet) (%)Retail Installment Share of Total Ford Sales China 13 % 13 % 12 % 19 % 28 %India - - 1 5 10
Wholesale ShareChina 59 % 62 % 56 % 58 % 57 %India - - 14 29 36
Contract Placement Volume - New and Used Retail (000)China 92 109 108 192 256 India - - - 5 9
Total Asia Pacific Segment 92 109 108 197 265
FC47
Automotive SegmentCash Flow
Positive 4Q operating cash flow driven by Automotive profit, favorable working capital and timing / other changes
FY capital spending at $7.0B
FY funded pension contributions of $1.4B
FY shareholder distributions of $2.7B
(Bils) 4Q 2017 FY 2017Cash at end of period 26.5$ 26.5$ Cash at beginning of period 26.1 27.5
Change in cash 0.4$ (1.0)$
Automotive segment pre-tax profits 1.4$ 7.3$ Capital spending (2.1) (7.0) Depreciation and tooling amortization 1.3 5.0 Changes in working capital 0.8 - All other and timing differences 0.9 (1.4)
Automotive operating cash flow 2.3$ 3.9$
Separation payments (0.2) (0.3) Transactions with other segments (0.1) 0.2 Other, including acquisitions and divestitures (0.1) (0.3)
Cash flow before other actions 1.9$ 3.5$
Changes in debt (0.2) (0.4) Funded pension contributions (0.7) (1.4) Shareholder distributions (0.6) (2.7)
Change in cash 0.4$ (1.0)$
FC48
Auto cash and liquidity balances strong
Ford Credit well capitalized with strong liquidity. Managed leverage at low end of target range due to U.S. tax reform effects
Global funded pension plans now effectively fully funded
Balance Sheet Summary(Bils) 2016 2017
Dec 31 Dec 31Automotive SegmentCash, cash equivalents and marketable securities 27.5$ 26.5$ Available credit lines* 10.8 10.9
Total liquidity 38.3$ 37.4$
Debt 15.9$ 15.9$ Cash net of debt 11.6 10.6
Ford CreditManaged receivables** 137$ 151$ Debt 126 138 Liquidity 27 30 Managed leverage** (to 1) 9.2 8.0
Total Company Period End Balance Sheet Underfunded StatusU.S. pension 3.8$ 2.2$ Non-U.S. pension 5.1 4.4
Total global pension 8.9$ 6.6$
Total unfunded OPEB 5.9$ 6.2$
* Total available committed Automotive credit lines (including local lines available to foreign affiliates)** See Appendix for detail, reconciliation to GAAP and definitions
FC49
Total shareholder distributions of $18.4B 2012 - 2018
First quarter regular dividend of 15¢ per share and a supplemental dividend of 13¢ per share
2018 planned distributions of about $3.1B
Shareholder Distributions (Bils)
$1.7 $2.4 $2.4 $2.4
Average2012 - 2015
2012 - 2018
$2.7$1.0
2016
$0.6$2.3
Supplemental Dividend Anti-Dilutive Share RepurchasesRegular Dividends
2017
$1.7
$2.9
$13.8
$18.4
$3.5 $3.1
2018
FC50
Ford Credit - Total Net Receivables Reconciliation To Managed Receivables* (Bils)
2015 2016 2017 Dec 31 Dec 31 Dec 31
Americas SegmentConsumer financing 47.3$ 51.2$ 55.1$ Non-Consumer financing 27.2 28.9 29.8 Net investment In operating leases 24.9 26.9 26.4
Total Americas Segment 99.4$ 107.0$ 111.3$
Europe SegmentConsumer financing 10.3$ 10.8$ 15.0$ Non-Consumer financing 8.2 7.4 9.2 Net investment In operating leases 0.2 0.3 0.3
Total Europe Segment 18.7$ 18.5$ 24.5$
Asia Pacific SegmentConsumer financing 2.0$ 2.9$ 4.5$ Non-Consumer financing 1.8 1.8 2.4 Net investment In operating leases - - -
Total Asia Pacific Segment 3.8$ 4.7$ 6.9$ Total net receivables 121.9$ 130.2$ 142.7$
Managed ReceivablesConsumer financing 59.6$ 64.9$ 74.6$ Non-Consumer financing 37.2 38.1 41.4
Finance receivables, net (GAAP) 96.8$ 103.0$ 116.0$ Net investment In operating leases (GAAP) 25.1 27.2 26.7
Total net receivables 121.9$ 130.2$ 142.7$ Unearned interest supplements and residual support 4.5 5.3 6.1 Allowance for credit losses 0.4 0.5 0.7 Other, primarily accumulated supplemental depreciation 0.4 0.9 1.0
Total managed receivables (Non-GAAP) 127.2$ 136.9$ 150.5$
* See Appendix for definitions
FC51
Ford CreditFinancial Statement Leverage Reconciliation To Managed Leverage*(Bils)
2015 2016 2017Dec 31 Dec 31 Dec 31
Leverage CalculationTotal debt 119.6$ 126.5$ 137.8$ Adjustments for cash (11.2) (10.8) (11.8) Adjustments for derivative accounting (0.5) (0.3) -
Total adjusted debt 107.9$ 115.4$ 126.0$
Equity 11.7$ 12.8$ 15.9$ Adjustments for derivative accounting (0.3) (0.3) (0.1)
Total adjusted equity 11.4$ 12.5$ 15.8$
Financial statement leverage (to 1) (GAAP) 10.2 9.9 8.7 Managed leverage (to 1) (Non-GAAP) 9.5 9.2 8.0
* See Appendix for definitions
FC52
Total CompanyNet Income Reconciliation To Adjusted Pre-Tax Profit
(Mils)
2016 2017 2016 2017
Net income / (Loss) attributable to Ford (GAAP) (783)$ 2,409$ 4,596$ 7,602$
Income / (Loss) attributable to non-controlling interests 2 4 11 26
Net income / (Loss) (781)$ 2,413$ 4,607$ 7,628$
Less: (Provision for) / Benefit from income taxes 336 524 (2,189) (520)
Income / (Loss) before income taxes (1,117)$ 1,889$ 6,796$ 8,148$
Less: Special items pre-tax (3,249) 152 (3,579) (289)
Adjusted pre-tax profit (Non-GAAP) 2,132$ 1,737$ 10,375$ 8,437$
4Q FY
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Total CompanySpecial Items
* Includes related tax effect on special items and tax special items
(Mils)2016 2017 2016 2017
Pension and OPEB gain / (loss)Year end net pension and OPEB remeasurement loss (2,985)$ (162)$ (2,985)$ (162)$ Other pension remeasurement loss - - (11) - Pension curtailment gain - 354 - 354
Separation-related actions (11) (38) (304) (297)
Other ItemsSan Luis Potosi plant cancellation (199) - (199) 41 Japan, Indonesia market closure (54) - (80) - Next-generation Focus footprint change - (2) - (225)
Total pre-tax special items (3,249)$ 152$ (3,579)$ (289)$
Tax special items 1,248$ 697$ 1,121$ 775$
Memo:Special items impact on earnings per share* (0.50)$ 0.21$ (0.61)$ 0.12$
4Q FY
FC54
Non-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 Pre-tax Profit (Most Comparable GAAP Measure: Net income attributable to Ford) – The non-GAAP measure is useful to management and investors because it allows users to evaluate our pre-tax results excluding pre-tax special items. Pre-tax special items consist of (i) pension and OPEB remeasurement gains and losses that are not reflective of our underlying business results, (ii) significant restructuring actions related to 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 pre-tax profit, 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.
• 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.
FC55
Automotive Records• References to Automotive records for operating cash flow, operating margin and business units are since at least 2000
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
Automotive Segment Operating Margin• Automotive segment operating margin is defined as Automotive segment pre-tax results divided by Automotive segment 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
Automotive Cash• Automotive cash includes cash, cash equivalents, and marketable securities
Market Factors• Volume and Mix – primarily measures profit 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 profit 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 profit 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
Ford Motor Company
Definitions And Calculations
FC56
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 activitiesCommitted 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 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 CanadaSecuritization 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 enhancementsTotal 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 transactionsTotal 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 Pre-Tax Results 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 Credit
Definitions And Calculations