Ford Mtr Co del · NYSE:F
Ford Mtr Co del — Ford Motor Company — Q2 2015 Earnings Presentation
42 slides from Ford Mtr Co del's earnings presentation, Jul 28, 2015
Slide 1: 2Q 2015 Earnings Review
Go Further 2Q 2015 EARNINGS REVIEW JULY 28, 2015
Slide 2: One Ford Plan: Acceleration, Product Excellence
OUR FOCUS One Ford THE PLAN Acceleration Product Excellence Delivered with Passion Innovation Asia Americas Large Medium Profits PROFITABLE GROWTH FOR ALL Pacific Europe, + Small + = In Every Part of Our Middle East & Cash & Africa Business SLIDE 1
Slide 3: 2Q 2015 Summary
2Q 2015 SUMMARY* Outstanding quarter for Ford; on track for breakthrough year Net income up 44%; Company pre-tax profit of $2.9 billion; Automotive operating margin of 7.2%; operating-related cash flow of $1.9 billion Wholesale volume up 2% from a year ago; Company revenue about equal; global market
Slide 4: 2Q 2015 Highlights
2Q 2015 HIGHLIGHTS Launched the new Explorer and all-new Lincoln MKX in North America; the new C-MAX and Grand C-MAX and the all-new S-MAX and Galaxy in Europe; and the all-new three-row Edge in China and new Ranger in Asia Pacific Revealed the all-new Taurus in China Introduced Sync 3, the all-new
Slide 5: 2015 Key Financial Summary
2015 KEY FINANCIAL SUMMARY 2Q 1H B / (W) B / (W) 2015 2014 2015 2014 Wholesales (000) 1,696 35 3,264 14 Revenue (Bils) $ 37.3 $ (0.1) $ 71.2 $ (2.1) Operating results* Pre-tax results (Mils) $ 2,868 $ 269 $ 4,273 $ 293 After-tax results (Mils) 1,885 255 2,809 160 Earnings per share 0.47 0.07 0.70 0.
Slide 6: 2Q 2015 Pre-Tax Results by Sector
TOTAL COMPANY 2Q 2015 PRE-TAX RESULTS BY SECTOR* (MILS) $2,868 $2,377 Ford Credit $506 Other (15) $491 Total Automotive Financial Services B / (W) 2Q 2014 $ 269 $ 207 $62 B / (W) 1Q 2015 1,463 1,441 22 * Excludes special items; see Appendix for detail and reconciliation to GAAP SLIDE 5
Slide 7: 2Q 2015 Key Metrics Compared with 2014
AUTOMOTIVE SECTOR 2Q 2015 KEY METRICS COMPARED WITH 2014* Wholesales Revenue Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Mils) 1,661 1,696 $35.3 $2,377 $35.1 7.2% 6.6% $2,170 2014 2015 2014 2015 2014 2015 2014 2015 1H: 3,250 3,264 $69.2 $66.9 5.0% 5.5% $3,089 $3,313 2Q 2014 2015 Global Indu
Slide 8: 2Q 2015 Pre-Tax Results Compared with 2014
AUTOMOTIVE SECTOR 2Q 2015 PRE-TAX RESULTS COMPARED WITH 2014* (MILS) $207 Material Excl. Commodities $(996) Industry $ 274 $2,377 Commodities 103 $2,170 Share (127) Warranty / Freight / Other 473 Stocks 151 Mix / Other 128 Mfg. / Engineering $(426) $1,160 Admin. & Selling (142) Advert. & Sales Promo
Slide 9: 2Q 2015 Pre-Tax Results by Segment
AUTOMOTIVE SECTOR 2Q 2015 PRE-TAX RESULTS BY SEGMENT* (MILS) $2,597 $2,377 Net Interest $(150) Fair Mkt. Value Adj. / Other (17) $192 $(14) $(46) $(185) $(167) North South Middle East Asia Other Total America America Europe & Africa Pacific Automotive B / (W) 2Q 2014 $ 207 $ 157 $110 $(28) $ (69) $3
Slide 10: Key Metrics – North America
AUTOMOTIVE SECTOR – NORTH AMERICA 2Q 2015 KEY METRICS COMPARED WITH 2014 Wholesales Revenue Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Mils) 816 $23.3 $2,597 760 $21.2 11.6% $2,440 11.1% 2014 2015 2014 2015 2014 2015 2014 2015 1H: 1,477 1,494 $41.6 $43.3 9.5% 9.1% $3,940 $3,937 Explorer 2Q
Slide 11: Pre-Tax Results Compared with 2014 – North America
AUTOMOTIVE SECTOR – NORTH AMERICA 2Q 2015 PRE-TAX RESULTS COMPARED WITH 2014 (MILS) $157 Industry $ 257 Material Excl. Commodities $(990) $2,597 Share (193) Commodities 109 $2,440 Stocks 451 Warranty / Freight 276 Mix / Other 96 Pricing $526 Incentives / Other 219 Mfg. / Engineering $(294) Other (17
Slide 12: Key Metrics – South America
AUTOMOTIVE SECTOR – SOUTH AMERICA 2Q 2015 KEY METRICS COMPARED WITH 2014 Wholesales Revenue Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Mils) 114 $2.1 98 $1.5 $(185) (12.4)% (14.0)% $(295) 2014 2015 2014 2015 2014 2015 2014 2015 1H: 218 199 $4.0 $3.0 (20.1)% (12.4)% $(805) $(374) 2Q 2014 20
Slide 13: Pre-Tax Results Compared with 2014 – South America
AUTOMOTIVE SECTOR – SOUTH AMERICA 2Q 2015 PRE-TAX RESULTS COMPARED WITH 2014 (MILS) Industry $(104) Pricing $248 Share 71 Incentives / Other (26) Stocks (33) Mix / Other 11 $222 $110 $114 $(55) $(41) $(51) $(79) $(185) $(295) Volume / Net Contribution Structural 2Q 2014 2Q 2015 Mix Pricing Cost Cost
Slide 14: Key Metrics – Europe
AUTOMOTIVE SECTOR – EUROPE 2Q 2015 KEY METRICS COMPARED WITH 2014 Wholesales* Revenue Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Mils) 376 389 $8.0 $7.0 0.2% $14 (0.2)% $(14) 2014 2015 2014 2015 2014 2015 2014 2015 1H: 743 765 $15.8 $13.9 (1.1)% (1.4)% $(180) $(199) S-MAX 2Q 2014 2015 EUR
Slide 15: Pre-Tax Results Compared with 2014 – Europe
AUTOMOTIVE SECTOR – EUROPE 2Q 2015 PRE-TAX RESULTS COMPARED WITH 2014 (MILS) Pricing $ 414 Incentives / Other (136) Industry $ 121 $278 Share 4 Stocks (153) Mix / Other 51 Prior Year Reserve Release $(63) Pension / Other (78) $14 $23 $5 $(14) $(11) $(141) $(28) $(182) Volume / Net Contribution Struc
Slide 16: Key Metrics – Middle East & Africa
AUTOMOTIVE SECTOR – MIDDLE EAST & AFRICA 2Q 2015 KEY METRICS COMPARED WITH 2014 Wholesales Revenue Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Mils) 49 $1.1 2.0% $23 44 $0.9 (5.1)% $(46) 2014 2015 2014 2015 2014 2015 2014 2015 1H: 100 91 $2.3 $2.0 3.3% 1.7% $77 $33 2Q 2014 2015 Expedition M
Slide 17: Key Metrics – Asia Pacific
AUTOMOTIVE SECTOR – ASIA PACIFIC 2Q 2015 KEY METRICS COMPARED WITH 2014 Wholesales* Revenue Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Mils) 362 349 $2.9 7.8% $192 $2.4 5.5% $159 $306** $411** 2014 2015 2014 2015 2014 2015 2014 2015 1H: 712 715 $5.5 $4.7 8.1% 6.3% $450 $295 Everest 2Q 2014
Slide 18: Pre-Tax Results Compared with 2014 – Asia Pacific
AUTOMOTIVE SECTOR – ASIA PACIFIC 2Q 2015 PRE-TAX RESULTS COMPARED WITH 2014 (MILS) Material Excl. Commodities $ 73 Commodities 17 Warranty / Freight / Other 171 $33 $261 Industry $ 11 $192 Share (17) $159 Stocks (54) Mix / Other (2) $41 $60 $(62) $(102) $(165) Volume / Net Contribution Structural 2Q
Slide 19: Ford Credit Pre-Tax Results Compared with 2014
FORD CREDIT 2Q 2015 PRE-TAX RESULTS COMPARED WITH 2014 (MILS) $72 $506 $434 $106 $17 $37 $(8) $(31) $(49) Volume / Financing Credit Lease 2Q 2014 2Q 2015 Mix Margin Loss Residual Exchange Other B / (W) 1Q 2015 $23 $24 $38 $(6) $(5) $(6) $(22) Receivables (Bils) Net* $107 $113 Managed** 111 118 * Net
Slide 20: 2015 Cash
AUTOMOTIVE SECTOR 2015 CASH* 2Q 2015 1H 2015 (Bils) (Bils) Gross cash at end of period $ 20.7 $ 20.7 Gross cash at beginning of period 19.5 21.7 Change in gross cash $ 1.2 $ (1.0) Automotive pre-tax profits $ 2.4 $ 3.3 Capital spending (1.7) (3.5) Depreciation and tooling amortization 1.0 2.1 Change
Slide 21: 2015 Automotive Financial Resources
AUTOMOTIVE SECTOR 2015 AUTOMOTIVE FINANCIAL RESOURCES Mar. 31, June 30, 2015 2015 (Bils) (Bils) Automotive gross cash* $ 19.5 $ 20.7 Less: Long-term debt $ (11.4) $ (11.5) Debt payable within one year (2.0) (2.2) Total debt $ (13.4) $ (13.7) Net cash $ 6.1 $ 7.0 Lincoln MKX Memo: Liquidity** $ 30.2
Slide 22: 2015 Business Environment Overview
2015 BUSINESS ENVIRONMENT OVERVIEW Global Global economic growth in the 2.5 - 3% range with solid growth in the U.S., modest gains in Europe, and still-high but slowing growth in China; global industry sales of about 86 - 89 million units Americas U.S. economic growth in the 2.5 - 3% range, with imp
Slide 23: 2015 Planning Assumptions and Key Metrics
2015 PLANNING ASSUMPTIONS AND KEY METRICS Memo: 2014 FY 2015 FY 2015 1H Results Plan Outlook Results Planning Assumptions (Mils) Industry Volume -- U.S. 16.8 17.0 - 17.5 On Track 17.3 -- Europe 20 14.6 14.8 - 15.3 15.7 - 16.2 15.7 -- China 24.0 24.5 - 26.5 23.0 - 24.0 23.8 Key Metrics Automotive (Co
Slide 24: Slide 23
Large Americas Asia Pacific Medium Europe, Middle East & Africa + Small F-150 SLIDE 23
Slide 25: Risk Factors
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
Slide 26: Q&A
Q&A
Slide 27: Appendix
APPENDIX
Slide 28: 2Q 2015 Earnings – Appendix Index
2Q 2015 EARNINGS – APPENDIX INDEX Appendix No. • Calculation of Earnings Per Share 1 • Income from Continuing Operations 2 • Special Items 3 • Sector Income Statement 4 Automotive Sector • Production Volumes 5 • Dealer Stocks 6 • Market Share 7 • Automotive Debt 8 Reconciliation to GAAP (Automotive
Slide 29: Calculation of Earnings Per Share
2015 CALCULATION OF EARNINGS PER SHARE 2Q 1H After-Tax After-Tax Operating Operating Results Results Net Income Excluding Net Income Excluding Attributable Special Attributable Special to Ford Items* to Ford Items* Diluted After-Tax Results (Mils) $ 1,885 $ 1,885 $ 2,809 $ 2,809 Basic and Diluted Sh
Slide 30: Income from Continuing Operations
INCOME FROM CONTINUING OPERATIONS Memo: 2Q 1H 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
Slide 31: Special Items
SPECIAL ITEMS Memo: 2Q 1H 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 Conve
Slide 32: Sector Income Statement
SECTOR INCOME STATEMENT Second Quarter First Half For the periods ended June 30 2014 2015 2014 2015 (unaudited) (Mils.) (Mils.) (Mils.) (Mils.) AUTOMOTIVE Revenues $35,365 $ 35,105 $ 69,241 $ 66,905 Costs and Expenses Cost of sales 31,247 30,602 62,268 59,304 Selling, administrative, and other expen
Slide 33: Production Volumes
AUTOMOTIVE SECTOR PRODUCTION VOLUMES 2015 2Q Actual 3Q Forecast O / (U) O / (U) Units 2014 Units 2014 (000) (000) (000) (000) North America 815 13 825 130 South America 94 (9) 90 (7) Europe 403 1 375 49 Middle East & Africa 23 3 20 - Asia Pacific 362 (3) 370 18 Total 1,697 5 1,680 190 APPENDIX 5
Slide 34: Dealer Stocks
SELECTED MARKETS DEALER STOCKS 2Q U.S. Brazil Europe 20 MEA China (000) (000) (000) (000) (000) 2015 June 30 611 29 182 68 163 March 31 619 35 181 73 155 Stock Change H / (L) (8) (6) 1 (5) 8 2014 June 30 643 34 192 84 106 March 31 683 35 160 82 98 Stock Change H / (L) (40) (1) 32 2 8 Year-Over-Year
Slide 35: Market Share
AUTOMOTIVE SECTOR MARKET SHARE 2Q 1H 2014 2015 B / (W) 2014 2015 B / (W) (Pct) (Pct) (Pts) (Pct) (Pct) (Pts) Total Share of Total Industry North America Total 14.8 14.4 (0.4) 14.7 14.2 (0.5) U.S. 15.3 15.0 (0.3) 15.3 14.9 (0.4) South America Total 8.9 10.0 1.1 8.7 9.8 1.1 Brazil 9.1 10.9 1.8 9.1 10.
Slide 36: Automotive Debt
AUTOMOTIVE SECTOR AUTOMOTIVE DEBT Dec. 31, 2015 2014 Mar. 31 June 30 (Bils) (Bils) (Bils) Public unsecured debt $ 6.6 $ 6.5 $ 6.5 U.S. Department of Energy 4.4 4.3 4.1 Other debt (including International) 2.8 2.6 3.1 Total Automotive debt $ 13.8 $ 13.4 $ 13.7 Memo: Automotive debt payable within one
Slide 37: Net Interest Reconciliation to GAAP
AUTOMOTIVE SECTOR NET INTEREST RECONCILIATION TO GAAP Memo: 2Q 1H 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 (GAA
Slide 38: Gross Cash Reconciliation to GAAP
AUTOMOTIVE SECTOR GROSS CASH RECONCILIATION TO GAAP 2014 2015 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
Slide 39: Operating-Related Cash Flows Reconciliation to GAAP
AUTOMOTIVE SECTOR OPERATING-RELATED CASH FLOWS RECONCILIATION TO GAAP Memo: 2Q 1H 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
Slide 40: 2015 Business Unit Key Metrics
2015 BUSINESS UNIT KEY METRICS Memo: 2014 FY 2015 FY 2015 1H Results Plan Outlook Results Automotive (Mils) North America $ 6,898 Higher* On Track $ 3,937 - Operating Margin 8.4% 8% - 9% 8.5% - 9.5% 9.1% South America $ (1,162) Substantially Improved* Improved* $ (374) Europe (1,062) Improved* On Tr
Slide 41: China Unconsolidated Affiliates – Asia Pacific
AUTOMOTIVE SECTOR – ASIA PACIFIC CHINA UNCONSOLIDATED AFFILIATES Memo: 2Q 1H FY 2014 2015 2014 2015 2014 China Unconsolidated Affiliates Wholesales (000) 269 273 531 562 1,077 Ford Equity Income (Mils)* $ 306 $ 411 $ 659 $ 771 $ 1,280 * Ford equity share of China joint ventures net income APPENDIX 1
Slide 42: Definitions and Calculations
DEFINITIONS AND CALCULATIONS 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