Ford Mtr Co del · NYSE:F
Ford Mtr Co del — Ford Motor Company — Investor Presentation (March 2014)
25 slides from Ford Mtr Co del's investor presentation, Mar 17, 2014
Slide 1: Ford University
FORD UNIVERSITY Stuart Rowley Vice President and Controller March 17, 2014
Slide 2: Agenda for today's discussion
FORD UNIVERSITY Agenda for today’s discussion • Automotive Segment Reporting • Production compared with Wholesales • Automotive Segment and Joint Venture Profits • Fixed Asset Depreciation and Impairment Policy • Taxes • Pension Sensitivities • Annual Incentive Compensation Plan (AICP) ----- Topics
Slide 3: Agenda
AGENDA • Automotive Segment Reporting • Production compared with Wholesales • Automotive Segment and Joint Venture Profits • Fixed Asset Depreciation and Impairment Policy • Taxes • Pension Sensitivities • Annual Incentive Compensation Plan (AICP) SLIDE 3
Slide 4: Automotive Segment Reporting Structure Change
AUTOMOTIVE SEGMENT REPORTING Impact STRUCTURE CHANGE • Beginning January 1, 2014 we have restructured our Automotive Segment reporting structure • We now have five Automotive segments that report on a “where sold” basis Prior Structure (2013) New Structure (2014) North America North America South Am
Slide 5: Automotive Segment Reporting Prior Structure (2013)
AUTOMOTIVE SEGMENT REPORTING PRIOR STRUCTURE (2013) North America South America Europe Asia Pacific Africa Direct Export Markets Segments Not Aligned Geographically; Multiple Regions Servicing Direct Export Markets SLIDE 5
Slide 6: Automotive Segment Reporting New Structure (2014)
AUTOMOTIVE SEGMENT REPORTING Impact NEW STRUCTURE (2014) We have reorganized our segments to increase focus on growth markets and to ensure clear responsibility and accountability for all markets within each geographic region Beginning January 1, 2014, we: • Established a fifth Automotive Segment, M
Slide 7: Automotive Segment Reporting New Structure (2014)
AUTOMOTIVE SEGMENT REPORTING NEW STRUCTURE (2014) North America South America Europe Middle East & Africa Asia Pacific Reduces Complexity And Enhances Regional Focus For Profitable Growth SLIDE 7
Slide 8: Middle East & Africa Segment
AUTOMOTIVE SEGMENT REPORTING MIDDLE EAST & AFRICA SEGMENT • Population -- 1.3 billion • Average age -- 23 in Middle East; 19 in Africa • 67 countries and currencies • 1,000+ languages • Three closed markets -- Iran, Syria, and Sudan • Industry size -- about 4 million units, about 22% of which is clo
Slide 9: Segment Results Impact
AUTOMOTIVE SEGMENT REPORTING Impact SEGMENT RESULTS IMPACT • Based on 2013 results, the estimated directional impact of establishing Middle East & Africa would have resulted in the following profit impacts (none of the effects are considered material) − North America -- about unchanged − South Ameri
Slide 10: Industry and Market Share Reporting
AUTOMOTIVE SEGMENT REPORTING Impact INDUSTRY AND MARKET SHARE REPORTING Industry and Market Share 2013 (Prior) 2014 (New) North America Total Segment U.S. U.S. U.S. (Retail) U.S. (Retail) South America SA6* Total Segment Brazil Europe Total Segment EU19* EU20* EU5 (Retail)** EU5 (Retail)** Middle Ea
Slide 11: Agenda
AGENDA • Automotive Segment Reporting • Production compared with Wholesales • Automotive Segment and Joint Venture Profits • Fixed Asset Depreciation and Impairment Policy • Taxes • Pension Sensitivities • Annual Incentive Compensation Plan (AICP) SLIDE 11
Slide 12: Production Compared with Wholesales
PRODUCTION COMPARED WITH WHOLESALES Overall Company 1Q 2Q 3Q 4Q FY Production Base Base Base Base Base +/- Net Imports / Exports ~0 ~0 ~0 ~0 ~0 +/- Changes in Company Stocks - +/- +/- + ~0 Wholesales Lower +/- +/- Higher Similar North America Production Base Base Base Base Base +/- Net Imports / Exp
Slide 13: Agenda
AGENDA • Automotive Segment Reporting • Production compared with Wholesales • Automotive Segment and Joint Venture Profits • Fixed Asset Depreciation and Impairment Policy • Taxes • Pension Sensitivities • Annual Incentive Compensation Plan (AICP) SLIDE 13
Slide 14: Automotive Segment and Joint Venture Profits
AUTOMOTIVE SEGMENT AND JOINT VENTURE Impact PROFITS • Ford’s operations include investments in major unconsolidated joint ventures • Ford’s equity share of after-tax profit of the joint ventures is included in the respective Automotive segment results • Engineering and other costs for Ford’s global
Slide 15: Agenda
AGENDA • Automotive Segment Reporting • Production compared with Wholesales • Automotive Segment and Joint Venture Profits • Fixed Asset Depreciation and Impairment Policy • Taxes • Pension Sensitivities • Annual Incentive Compensation Plan (AICP) SLIDE 15
Slide 16: Fixed Asset Depreciation & Impairment Policy
FIXED ASSET DEPRECIATION & IMPAIRMENT POLICY Depreciation • A systematic and rational manner to allocate costs of investments with the benefits of their use • Included in operating expense, even in situations where we accelerate depreciation (Europe, Australia) Impairment • A write-off of a fixed as
Slide 17: Agenda
AGENDA • Automotive Segment Reporting • Production compared with Wholesales • Automotive Segment and Joint Venture Profits • Fixed Asset Depreciation and Impairment Policy • Taxes • Pension Sensitivities • Annual Incentive Compensation Plan (AICP) SLIDE 17
Slide 18: Taxes Operating Effective Tax Rate
TAXES OPERATING EFFECTIVE TAX RATE 2013 Actual 1Q 2Q 3Q 4Q FY Reference (Mils.) (Mils.) (Mils.) (Mils.) (Mils.) Operating results* Pre-tax results $ 2,146 $ 2,555 $ 2,589 $ 1,279 $ 8,569 A Less: Equity in net income of affiliated companies** 214 273 293 289 1,069 B Adjusted pre-tax results $ 1,932 $
Slide 19: Taxes Cash Taxes
TAXES CASH TAXES • Worldwide cash taxes to remain low for a number of years • Worldwide tax assets generated in prior periods reduce current period cash tax liabilities Cash Taxes Remain Low SLIDE 19
Slide 20: Agenda
AGENDA • Automotive Segment Reporting • Production compared with Wholesales • Automotive Segment and Joint Venture Profits • Fixed Asset Depreciation and Impairment Policy • Taxes • Pension Sensitivities • Annual Incentive Compensation Plan (AICP) SLIDE 20
Slide 21: Pension Sensitivities: Global Pension Funded Status Sensitivity to Interest Rates
PENSION SENSITIVITIES GLOBAL PENSION FUNDED STATUS SENSITIVITY TO INTEREST RATES • Our strategy is to fully fund and de-risk global funded pension plans • As plans de-risk, asset allocation will migrate to a higher percentage of fixed income assets that better match plan liabilities • At year-end 20
Slide 22: Pension Sensitivities: Global Pension Funded Status Sensitivity to Interest Rates
PENSION SENSITIVITIES GLOBAL PENSION FUNDED STATUS SENSITIVITY TO INTEREST RATES Increase / (Decrease) in Funded Status 2013 Year End 2012 Year End + 100 bps - 100 bps + 100 bps - 100 bps (Bils.) (Bils.) (Bils.) (Bils.) U.S. Plans Liabilities $ 4.3 $ (5.3) $ 5.2 $ (6.4) Assets* (3.5) 4.3 (2.9) 3.6 N
Slide 23: Agenda
AGENDA • Automotive Segment Reporting • Production compared with Wholesales • Automotive Segment and Joint Venture Profits • Fixed Asset Depreciation and Impairment Policy • Taxes • Pension Sensitivities • Annual Incentive Compensation Plan (AICP) SLIDE 23
Slide 24: AICP Metrics and Linkage to TSR
AICP METRICS AND LINKAGE TO TSR 2013 METRICS TSR DRIVERS 2014 METRICS Automotive Market Share Revenue 10% 20% Revenue Growth Automotive Operating Corporate PBT* 35% 30% Margin* Corporate Cost Performance Operating Margin Ford Credit PBT 10% 10% Shareholder Automotive Operating-Related Automotive Ope
Slide 25: Reference Material
REFERENCE MATERIAL Subjects from prior Ford University Presentations • Auto University Major Markets Defined Automotive Operating Margin Special Items Reporting on a “Where Sold” Basis Treatment of Chinese Joint Ventures Production / Wholesales / Retail Sales Profit Variance Analysis
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