Ford Motor Company 2Q July 28, 2015 1 Ford Reports Strong Second Quarter Results; Pre-Tax Profit $2.9 Billion; Net Income $1.9 Billion Wholesales Company Revenue Automotive Operating Margin Pre-Tax Results Operating After-Tax Earnings Per Share** Automotive Operating- Related Cash Flow Net Income 2Q 2015 1,696K $37.3B 7.2% $2.9B $0.47 $1.9B $1.9B B/(W) 2Q 2014 35K $(0.1)B 0.6pts $269M $0.07 $(0.7)B $574M HIGHLIGHTS PRODUCT NEWS “We delivered an outstanding second quarter, a great first half of 2015, and we are confident the second half of the year will be even stronger. The entire Ford team is focused on accelerating our One Ford plan, delivering product excellence and driving innovation in every part of our business.” Mark Fields, Ford President and CEO Outstanding second quarter; company on track for a breakthrough year Pre-Tax Profit of $2.9B, up $269M or 10 percent from a year ago Net income of $1.9B, up $574M or 44 percent from a year ago After-tax earnings per share of 47 cents, up 7 cents from a year ago excluding last year’s special items charges Best Automotive quarterly profit since 2000 driven by record quarterly profit in North America and record second quarter profit in Asia Pacific; Europe about break-even Automotive-operating cash flow strong at $1.9B Wholesale volume up 2 percent, driven by North America and Europe Automotive revenue was about equal, with higher net pricing and volume offset by unfavorable translation effects of the strong U.S. dollar on international operations Global market share grew to 7.6 percent, up one-tenth of a percentage point from a year ago 12 of 16 planned global new product launches completed; remainder on track Introduced SYNC® 3, the all-new communications and entertainment system Continued strong profit at Ford Credit; pre-tax profit $506M Ford Smart Mobility plan moved from research to the start of implementation; Ford Credit launched car-sharing pilot in six U.S. cities and London Company reconfirms 2015 pre-tax profit guidance of $8.5B to $9.5B, with higher Automotive revenue, operating margin and operating-related cash flow compared with 2014 2015 SECOND QUARTER FINANCIAL RESULTS* For news releases, related materials and high-resolution photos and video, visit www.media.ford.com. Follow at www.facebook.com/ford, www.twitter.com/ford or www.youtube.com/fordvideo1 Launched the all-new S-Max in Europe with space for seven to travel in style, and the agility and driving pleasure of a smaller car. This is the first Ford globally to feature Ford’s Dynamic LED Headlamps with Glare-Free Highbeams that maintain maximum illumination without distracting other road users. Launched the all-new Ford Edge which is filled with technologies making every drive easier, more comfortable and less stressful. Features new EcoBoost engines that deliver the fuel economy and aggressive performance customers want. A three-row Edge is now available in China. Launched the new Ford Explorer which includes new technology and a 2.3-liter EcoBoost engine – and, for the first time, a high-end Platinum series with the most premium, high-quality interior ever offered on a Ford vehicle in the U.S. Launched the all-new MKX in North America, introducing Quiet Luxury through a safe effortless ride, a warm tailored experience and a thoughtful elegant design. Lincoln’s most luxurious SUV to date.
Ford Motor Company 2Q July 28, 2015 2 “This is one of the strongest quarters in our recent history with our best Automotive quarterly profit since 2000, record any- quarter profit in North America and record second quarter profit in Asia Pacific. We have four more global vehicle launches this year to complete the 16 planned and we’re on track to deliver great results for the rest of the year.” Bob Shanks, Executive Vice President and CFO Wholesales Revenue Operating Margin Pre-Tax Results 2Q 2015 1,696K $35.1 B 7.2% $ 2.4B B/(W) 2Q 2014 35K $(0.2)B 0.6pts $207M Ford Credit Pre-Tax Results Other Pre-Tax Results Total Pre-Tax Results 2Q 2015 $506M $(15)M $491M B/(W) 2Q 2014 $72M $(10)M $62M Wholesales Revenue Operating Margin Pre-Tax Results 2Q 2015 816K $23.3B 11.1% $2.6B B/(W) 2Q 2014 56K $2.1B (0.5)pts $157M Wholesales Revenue Operating Margin Pre-Tax Results 2Q 2015 98K $1.5B (12.4)% $(185)M B/(W) 2Q 2014 (16)K $(0.6)B 1.6pts $110M Wholesales Revenue Operating Margin Pre-Tax Results 2Q 2015 389K $7.0B (0.2)% $(14)M B/(W) 2Q 2014 13K $(1.0)B (0.4)pts $(28)M Wholesales Revenue Operating Margin Pre-Tax Results 2Q 2015 44K $0.9B (5.1)% $(46)M B/(W) 2Q 2014 (5)K $(0.2)B (7.1)pts $(69)M Wholesales Revenue Operating Margin Pre-Tax Results 2Q 2015 349K $2.4B 7.8% $192M B/(W) 2Q 2014 (13)K $(0.5)B 2.3pts $33M AUTOMOTIVE RESULTS FINANCIAL SERVICES RESULTS Pre-tax profit was an any-quarter record at $2.6 billion, up $157 million from last year’s record profit. Favorable volume, mix and net pricing were offset partially by higher costs and unfavorable exchange. Higher wholesales reflect the non-repeat of last year’s stock reduction and higher industry sales. Market share was a partial offset driven by lower availability of F-150. Higher revenue was driving by higher volume, net pricing and favorable mix; effect of the strong U.S. dollar was a partial offset. North America’s pre-tax profit is expected to exceed last year’s result. North America South America Europe Middle East & Africa Asia Pacific Ford Credit Ford continues to benefit from the strategy of replacing legacy products with One Ford products, even in a difficult business environment. The new Ka drove strong share gains, which at 10 percent, was up 1.1 percentage points. In Brazil, Fusion continues to lead its segment, and as a result of the success of the F-Series and Cargo, Ford led the light and semi-light truck segments. In Argentina, Ford continued to rank second in sales, and EcoSport and Mondeo led their segments. Wholesale volume was down 14 percent due to lower industry sales. This, along with weaker currencies, resulted in a 29 percent decline in revenue. Pre-tax results improved from a year ago due to higher net pricing. For the full-year, pre-tax loss is expected to improve from 2014. Ford continued its European transformation plan focused on product, brand and cost. Wholesale volume improved 3 percent compared with a year ago as a result of higher Europe 20 industry sales, as well as higher industry sales and Ford share in Turkey. These factors were offset partially by the non-repeat of last year’s dealer stock increase. Revenue was down 14 percent due to the adverse translation effects of the strong U.S. dollar. Pre-tax results were largely unchanged from a year ago, however, the underlying operating performance in Europe improved. Ford’s results did not benefit from the usual seasonal stock increase or last year’s one-time reserve release. Volume and mix were favorable, and net pricing improved. Pre-tax loss expected to improve for the full year from 2014. The company remains focused on building its distribution capability, expanding its product offering tailored to the needs of the region, and leveraging its global low-cost sourcing hubs. Wholesale volume and revenue declined 10 percent and 23 percent from a year ago, respectively. Lower volume was a result of unfavorable changes in dealer stocks due to production timing differences, while the lower revenue reflects the adverse translation effects of the stronger U.S. dollar, and lower volume. Pre-tax results declined compared with a year ago due to lower volume. For the full year, pre-tax results expected to be about breakeven. Pre-tax profit was a record for the second quarter. The improved result was driven by lower costs and favorable exchange. In the quarter, wholesale volume decreased 4 percent from a year ago because of lower industry sales and market share. Revenue, which excludes Ford’s China joint ventures, declined 15 percent, reflecting lower volume and weaker currencies. Ford expects 2015 to be a strong year, with results improving in the second half as compared to the first half, as new manufacturing capacity comes on line and the company launches new vehicles. For the full year, pre-tax results expected to be higher than 2014. Second Quarter pre-tax profit improved compared with a year ago as a result of favorable volume and mix, reflecting primarily higher consumer finance receivables globally and an increase in leasing in North America.
RISK FACTORS 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: • Decline in industry sales volume, particularly in the United States, Europe, or China due to financial crisis, recession, geopolitical events, or other factors; • Decline in Ford's market share or failure to achieve growth; • Lower-than-anticipated market acceptance of Ford's new or existing products; • Market shift away from sales of larger, more profitable vehicles beyond Ford's current planning assumption, particularly in the United States; • An increase in or continued volatility of fuel prices, or reduced availability of fuel; • Continued or increased price competition resulting from industry excess capacity, currency fluctuations, or other factors; • Fluctuations in foreign currency exchange rates, commodity prices, and interest rates; • Adverse effects resulting from economic, geopolitical, or other events; • Economic distress of suppliers that may require Ford to provide substantial financial support or take other measures to ensure supplies of components or materials and could increase costs, affect liquidity, or cause production constraints or disruptions; • Work stoppages at Ford or supplier facilities or other limitations on production (whether as a result of labor disputes, natural or man-made disasters, tight credit markets or other financial distress, production constraints or difficulties, or other factors); • Single-source supply of components or materials; • Labor or other constraints on Ford's ability to maintain competitive cost structure; • Substantial pension and postretirement health care and life insurance liabilities impairing our liquidity or financial condition; • Worse-than-assumed economic and demographic experience for postretirement benefit plans (e.g., discount rates or investment returns); • Restriction on use of tax attributes from tax law "ownership change”; • The discovery of defects in vehicles resulting in delays in new model launches, recall campaigns, or increased warranty costs; • Increased safety, emissions, fuel economy, or other regulations resulting in higher costs, cash expenditures, and / or sales restrictions; • Unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, perceived environmental impacts, or otherwise; • A change in requirements under long-term supply arrangements committing Ford to purchase minimum or fixed quantities of certain parts, or to pay a minimum amount to the seller ("take-or-pay" contracts); • Adverse effects on results from a decrease in or cessation or clawback of government incentives related to investments; • Inherent limitations of internal controls impacting financial statements and safeguarding of assets; • Cybersecurity risks to operational systems, security systems, or infrastructure owned by Ford, Ford Credit, or a third-party vendor or supplier; • Failure of financial institutions to fulfill commitments under committed credit and liquidity facilities; • Inability of Ford Credit to access debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts, due to credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors; • Higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles; • Increased competition from banks, financial institutions, or other third parties seeking to increase their share of financing Ford vehicles; and • New or increased credit, consumer, or data protection or other regulations resulting in higher costs and / or additional financing restrictions. 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, 2014, as updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Ford Motor Company 2Q July 28, 2015 3
CONFERENCE CALL DETAILS Ford Motor Company [NYSE:F] releases its 2015 second quarter financial results at 7:00 a.m. EDT today. The following briefings will be held after the announcement: At 9:00 a.m. (EDT), Mark Fields, president and chief executive officer, and Bob Shanks, executive vice president and chief financial officer, will host a conference call to discuss Ford’s 2015 second quarter results. At 11:00 a.m. (EDT), Neil Schloss, vice president and treasurer; Stuart Rowley, vice president and controller, and Michael Seneski, chief financial officer, Ford Motor Credit Company, will host a conference call focusing on Ford Motor Credit Company’s 2015 second quarter results. The presentations (listen-only) and supporting materials will be available at www.shareholder.ford.com. Representatives of the investment community will have the opportunity to ask questions on both conference calls, as will representatives of the newsmedia on the first call. Access Information - Tuesday, July 28, 2015 Earnings Call: 9 a.m. EDT Toll-Free: 1.877.280.4957 International: 1.857.244.7314 Earnings Passcode: Ford Earnings Fixed Income: 11 a.m. EDT Toll-Free: 1.888.339.2688 International: 1.617.847.3007 Fixed Income Passcode: 891 749 53 REPLAYS (Available after 12:00 p.m. EDT the day of the event through Wednesday, Aug. 5, 2015) www.shareholder.ford.com Toll Free: 1.888.286.8010 International: 1.617.801.6888 Replay Passcodes: Earnings: 86240079 Fixed Income: 90345586 About Ford Motor Company Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 195,000 employees and 66 plants worldwide, the company’s automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford and its products worldwide, please visit www.corporate.ford.com. * The following applies to the information throughout this release: • Pre-tax results exclude special items unless otherwise noted. • See tables at the end of this release for the nature and amount of special items, and reconciliation of items designated as “excluding special items” to U.S. generally accepted accounting principles (“GAAP”). Also see the tables for reconciliation to GAAP of Automotive gross cash, operating-related cash flow and net interest. • Discussion of overall Automotive cost changes is measured primarily at present-year exchange and excludes special items and discontinued operations; in addition, costs that vary directly with production volume, such as material, freight and warranty costs, are measured at present-year volume and mix. • Wholesale unit sales and production volumes include Ford brand and Jiangling Motors Corporation (“JMC”) brand vehicles produced and sold in China by our unconsolidated affiliates; revenue does not includes these sales. See materials supporting the July 28, 2015 conference calls at www.shareholder.ford.com for further discussion of wholesale unit volumes. • Automotive operating margin is defined as Automotive pre-tax results, excluding special items and Other Automotive, divided by Automotive revenue. ** Excludes special items and “Income/(Loss) attributable to non-controlling interests.” See tables at the end of this release for the nature and amount of these special items and reconciliation to GAAP. Ford Motor Company 2Q July 28, 2015 4 Contact(s): Media: Equity Investment Fixed Income Shareholder Whitney Eichinger Community: Erik Eliason Investment Community: Stephen Dahle Inquiries: 1.800.555.5259 or 1.313.390.5565 1.313.594.0613 1.313.621.0881 1.313.845.8540 weiching@ford.com fordir@ford.com fixedinc@ford.com stockinf@ford.com
2015 CALCULATION OF EARNINGS PER SHARE INCOME FROM CONTINUING OPERATIONS Ford Motor Company 2Q July 28, 2015 5 * Excludes income / (loss) attributable to non-controlling interests After-Tax After-Tax Operating Operating Results Results Excluding Excluding Special Special Items* Items* Diluted After-Tax Results (Mils) 1,885$ 1,885$ 2,809$ 2,809$ Basic and Diluted Shares (Mils) Basic shares (Average shares outstanding) 3,974 3,974 3,968 3,968 Net dilutive options and unvested RSUs 33 33 35 35 Diluted shares 4,007 4,007 4,003 4,003 EPS (Diluted) 0.47$ 0.47$ 0.70$ 0.70$ to Ford to Ford 2Q 1H Net Income Net Income Attributable Attributable Memo: FY 2014 2015 2014 2015 2014 (Mils) (Mils) (Mils) (Mils) (Mils) Automotive North America 2,440$ 2,597$ 3,940$ 3,937$ 6,898$ South America (295) (185) (805) (374) (1,162) Europe 14 (14) (180) (199) (1,062) Middle East & Africa 23 (46) 77 33 (20) Asia Pacific 159 192 450 295 589 Other Automotive (171) (167) (393) (379) (755) Total Automotive (excl. special items) 2,170$ 2,377$ 3,089$ 3,313$ 4,488$ Special items -- Automotive (481) - (603) - (1,940) Total Automotive 1,689$ 2,377$ 2,486$ 3,313$ 2,548$ Financial Services Ford Credit 434$ 506$ 933$ 989$ 1,854$ Other (5) (15) (42) (29) (60) Total Financial Services 429$ 491$ 891$ 960$ 1,794$ Company Pre-tax results 2,118$ 2,868$ 3,377$ 4,273$ 4,342$ (Provision for) / Benefit from income taxes (803) (982) (1,073) (1,462) (1,156) Net income 1,315$ 1,886$ 2,304$ 2,811$ 3,186$ Less: Income / (Loss) attributable to non-controlling interests 4 1 4 2 (1) Net income attributable to Ford 1,311$ 1,885$ 2,300$ 2,809$ 3,187$ Memo: Excluding special items Pre-tax results 2,599$ 2,868$ 3,980$ 4,273$ 6,282$ (Provision for) / Benefit from income taxes (965) (982) (1,327) (1,462) (1,650) Less: Income / (Loss) attributable to non-controlling interests 4 1 4 2 (1) After-tax results 1,630$ 1,885$ 2,649$ 2,809$ 4,633$ 2Q 1H
SPECIAL ITEMS AUTOMOTIVE SECTOR NET INTEREST RECONCILIATION TO GAAP Ford Motor Company 2Q July 28, 2015 6 * Primarily related to separation costs for personnel at the Genk and U.K. facilities ** Includes related tax effect on special items and tax special items Memo: FY 2014 2015 2014 2015 2014 (Mils) (Mils) (Mils) (Mils) (Mils) Personnel-Related Items Separation-related actions* (152)$ -$ (274)$ -$ (685)$ Other Items Venezuela accounting change -$ -$ -$ -$ (800)$ Ford Sollers equity impairment (329) - (329) - (329) 2016 Convertible Notes settlement - - - - (126) Total Other Items (329)$ -$ (329)$ -$ (1,255)$ Total Special Items (481)$ -$ (603)$ -$ (1,940)$ Tax Special Items 162$ -$ 254$ -$ 494$ Memo: Special items impact on earnings per share** (0.08)$ -$ (0.08)$ -$ (0.36)$ 2Q 1H * Excludes mark-to-market adjustments of our investment in Mazda Memo: FY 2014 2015 2014 2015 2014 (Mils) (Mils) (Mils) (Mils) (Mils) Interest expense (GAAP) (207)$ (190)$ (415)$ (355)$ (797)$ Investment-related interest income (GAAP) 41 56 80 101 193 Interest income / (expense) on income taxes (GAAP) 11 10 37 1 108 Subtotal (155)$ (124)$ (298)$ (253)$ (496)$ Adjusted for items included / excluded from net interest Include: Gains / (Losses) on cash equiv. and marketable securities* 17 (13) 30 11 9 Include: Gains / (Losses) on extinguishment of debt - - (5) 1 (5) Other (28) (13) (56) (46) (91) Net Interest (166)$ (150)$ (329)$ (287)$ (583)$ 2Q 1H
AUTOMOTIVE SECTOR GROSS CASH RECONCILIATION TO GAAP AUTOMOTIVE SECTOR OPERATING-RELATED CASH FLOWS RECONCILIATION TO GAAP Ford Motor Company 2Q July 28, 2015 7 * The purchase or sale of marketable securities for which the cash settlement was not made by period end and the related payable or receivable remained on the balance sheet June 30 Dec. 31 Mar. 31 June 30 (Bils) (Bils) (Bils) (Bils) Cash and cash equivalents 4.7$ 4.6$ 5.1$ 6.1$ Marketable securities 21.1 17.1 14.4 14.6 Total cash and marketable securities (GAAP) 25.8$ 21.7$ 19.5$ 20.7$ Securities in transit* - - - - Gross cash 25.8$ 21.7$ 19.5$ 20.7$ 2014 2015 Memo: FY 2014 2015 2014 2015 2014 (Bils) (Bils) (Bils) (Bils) (Bils) Net cash provided by / (used in) operating activities (GAAP) 4.1$ 3.5$ 6.1$ 4.5$ 8.8$ Items included in operating-related cash flows Capital spending (1.9) (1.7) (3.4) (3.5) (7.4) Proceeds from the exercise of stock options - - 0.1 0.1 0.2 Net cash flows from non-designated derivatives 0.1 (0.1) 0.1 - 0.2 Items not included in operating-related cash flows Separation payments 0.1 0.1 0.1 0.5 0.2 Funded pension contributions 0.3 0.1 0.8 0.9 1.5 Tax refunds and tax payments from affiliates - - (0.2) - (0.2) Other (0.1) - 0.2 (0.1) 0.3 Operating-related cash flows 2.6$ 1.9$ 3.8$ 2.4$ 3.6$ 2Q 1H