Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Company — Q1 2017 Earnings Presentation
92 slides from Ford Mtr Co Del's earnings presentation, Apr 27, 2017
Slide 1: 1Q 2017 Earnings Review
1Q 2017 EARNINGS REVIEW April 27, 2017
Slide 2: Agenda
Business Review Appendix Ford Credit Vision and Strategy 3 Shareholder Distributions A1 Business Financial Headlines 4 Shareholder Payout Ratio A2 Strategy FC2 Creating Value 5 1Q 2017 Highlights FC3 Reconciliations to GAAP Executing Our Strategic Priorities 6 Adjusted Pre-Tax Profit A3 U.S. Financi
Slide 3: Creating Value for Our Stakeholders
CREATING VALUE FOR OUR STAKEHOLDERS FORTIFY TRANSFORM GROW Trucks, Vans, Utilities, Luxury Electrification Performance, Small Vehicles Autonomy Ford Credit, Emerging Markets Mobility Parts & Service Reallocating Capital To Strengthen, De-Risk And Grow The Business 3
Slide 4: Financial Headlines
FINANCIAL HEADLINES EPS Automotive Automotive Total Company Segment Segment Total Company Total Company Adjusted Adjusted Operating Operating Revenue Net Income Pre-Tax Results* EPS EPS* Margin Cash Flow (GAAP) (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) (GAAP) (GAAP) 1Q 2017 $39.1B $1.6B $2.2B $0.40 $0.39
Slide 5: Creating Value – First Quarter 2017
CREATING VALUE – FIRST QUARTER 2017 GROWTH RISK RETURNS REWARDS Company revenue $28 billion Auto cash Solid Company Distributed up 4% YoY, driven by adjusted PBT, $800 million to Healthy breakeven favorable mix; all Automotive operating shareholders, including in NA regions higher except m
Slide 6: Executing Our Strategic Priorities
EXECUTING OUR STRATEGIC PRIORITIES FORTIFY TRANSFORM GROW Profit Pillars Luxury, Small Vehicle, Emerging Markets Electrification, Autonomy, Mobility Trucks – new F-150 on sale this Introduced all-new Lincoln Announced 13 new electric fall; Ranger to NA in 2019 Navigator; on sale this fall vehi
Slide 7: Financial Review
FINANCIAL REVIEW
Slide 8: Key Financial Summary
KEY FINANCIAL SUMMARY 1Q Revenue up; wholesale 2017 B / (W) 2016 volume down Wholesales (000) 1,703 (17) Revenue (Bils) $ 39.1 $ 1.4 Company adj. PBT of Results (Mils) Automotive Segment $ 1,965 $ (1,499) $2.2B and Automotive Financial Services Segment 466 (33) operating cash flow All Other (212) (8
Slide 9: Total Company 1Q 2017 Adjusted Pre-Tax Results
TOTAL COMPANY 1Q 2017 ADJUSTED PRE-TAX RESULTS* (MILS) $2,219 $1,965 Solid Auto and Financial Services PBT All Other primarily net $466 interest expense As expected, all Segments $(212) lower; Automotive the key Total Automotive Financial All Other driver of lower Company Segment Services Segment ad
Slide 10: Automotive Segment 1Q 2017 Pre-Tax Results
AUTOMOTIVE SEGMENT 1Q 2017 PRE-TAX RESULTS (MILS) $1,965 $1,989 Automotive segment PBT driven by NA; Europe and AP also profitable $176 $124 Operations outside NA $(80) about breakeven $(244) SA improved, all other $(24) operations lower; decline in NA the key factor for Total North South Europe Mid
Slide 11: Automotive Segment 1Q 2017 Key Metrics
AUTOMOTIVE SEGMENT 1Q 2017 KEY METRICS Revenue up due to favorable mix; wholesales Wholesales Revenue Market Share Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Pct) (Mils) slightly lower 1,720 1,703 $35.2 $36.5 9.8% $3,464 Global SAAR about flat 7.4% 7.1% Global market share down 5.4% $1,965
Slide 12: Automotive Segment 1Q 2017 Pre-Tax Results
AUTOMOTIVE SEGMENT 1Q 2017 PRE-TAX RESULTS (MILS) Unfavorable cost, volume $3,464 and exchange drove lower Industry $ - Share Stocks (218) (85) Mat’l, Excl. Commodities $(253) PBT Commodities (176) Mix 416 Warranty (467) $1,965 Other (225) Freight / Other 57 Cost higher due to Pricing $ 827 Manuf. I
Slide 13: 2017 Automotive Cost
AUTOMOTIVE SEGMENT 2017 AUTOMOTIVE COST Continue to expect Automotive cost to Cost increase in 2017 vs 2016 Decrease Major factor is investments / costs for emerging opportunities Cost (Increase) Increase is net of efficiencies of nearly $3B YoY Efficiencies Core Auto Price Related Product Emerging
Slide 14: North America 1Q 2017 Key Metrics
AUTOMOTIVE SEGMENT – NORTH AMERICA 1Q 2017 KEY METRICS Wholesales lower due to market share, lower dealer Wholesales Revenue Market Share Operating Margin Pre-Tax Results stock build and industry (000) (Bils) (Pct) (Pct) (Mils) volume; higher revenue 814 771 $23.9 $24.0 14.6% 14.1% $3,080 driven by
Slide 15: North America 1Q 2017 Pre-Tax Results
AUTOMOTIVE SEGMENT – NORTH AMERICA 1Q 2017 PRE-TAX RESULTS (MILS) $3,080 PBT lower due to higher Industry $(117) Share Stocks (196) (212) Mat’l, Excl. Commodities Commodities $(295) (134) cost and lower volume $1,989 Mix 387 Warranty (351) Freight / Other 13 Other (44) Cost increase driven by Pricin
Slide 16: A Disciplined Approach to the U.S. Business
AUTOMOTIVE SEGMENT – NORTH AMERICA A DISCIPLINED APPROACH TO THE U.S. BUSINESS YoY Average Transaction Price (USD)* YoY Incentive Change as Pct. of Vehicle Price* Industry Average Industry Average Ford Ford $2,272 Better $1,885 $1,813 $1,971 1.2 1.1 1.0 1.0 0.3 0.1 - $598 $620 $506 $342 (0.5) Jan Fe
Slide 17: South America 1Q 2017 Key Metrics
AUTOMOTIVE SEGMENT – SOUTH AMERICA 1Q 2017 KEY METRICS All key metrics improved Wholesales Revenue Market Share Operating Margin Pre-Tax Results for 2nd consecutive quarter (000) (Bils) (Pct) (Pct) (Mils) 9.0% Top line higher due to 70 8.4% 63 $1.1 volume, pricing and exchange $0.8 (22.5)% $(256) $(
Slide 18: South America 1Q 2017 Pre-Tax Results
AUTOMOTIVE SEGMENT – SOUTH AMERICA 1Q 2017 PRE-TAX RESULTS (MILS) Pricing $115 Incentives / Other (8) $107 $12 $31 $31 Modest improvement in loss due to higher net pricing and volume $(49) $(36) Industry $81 $(72) Share Stocks (3) (15) Cost up due to continued high local inflation Mix (23) Other (9)
Slide 19: Europe 1Q 2017 Key Metrics
AUTOMOTIVE SEGMENT – EUROPE 1Q 2017 KEY METRICS Double-digit growth and Wholesales* Revenue Market Share Operating Margin Pre-Tax Results continued profitability (000) (Bils) (Pct) (Pct) (Mils) in Europe 449 7.9% 8.1% 399 $7.6 Europe SAAR up 2% $6.9 $434 6.3% Market share higher due to Kuga and comm
Slide 20: Europe 1Q 2017 Pre-Tax Results
AUTOMOTIVE SEGMENT – EUROPE 1Q 2017 PRE-TAX RESULTS (MILS) Industry $112 $434 Share 36 Stocks Mix 100 41 Manuf. Incl. Vol-Rel Engineering $(111) (50) Lower PBT due to higher Other (96) Other 20 cost and weaker sterling $176 $193 Mat’l, Excl. Commodities $ 41 Commodities Warranty (27) (92) Cost up du
Slide 21: Middle East & Africa 1Q 2017 Key Metrics
AUTOMOTIVE SEGMENT – MIDDLE EAST & AFRICA 1Q 2017 KEY METRICS Wholesales Revenue Market Share Operating Margin Pre-Tax Results Decline in key metrics (000) (Bils) (Pct) (Pct) (Mils) driven by lower volume 4.6% (1.5)% 46 $(14) SAAR down 12% in $0.9 3.8% markets where we 30 $0.6 participate (12.4)% $(
Slide 22: Middle East & Africa 1Q 2017 Pre-Tax Results
AUTOMOTIVE SEGMENT – MIDDLE EAST & AFRICA 1Q 2017 PRE-TAX RESULTS (MILS) Industry $(22) Share (41) Stocks (74) Mix 22 $28 $28 Other (9) $19 $(6) $(11) $(14) Lower volume drove lower PBT – unfavorable change $(80) in dealer stocks, market share and industry $(124) $(66) Market Factors Total Cost Volu
Slide 23: Asia Pacific 1Q 2017 Key Metrics
AUTOMOTIVE SEGMENT – ASIA PACIFIC 1Q 2017 KEY METRICS China drove decline in key metrics except revenue Wholesales* Revenue Market Share Operating Margin Pre-Tax Results Volume down due to (000) (Bils) (Pct) (Pct) (Mils) payback for strong China 8.2% 398 383 $3.2 $220 4Q; revenue up outside $2.7 Chi
Slide 24: Asia Pacific 1Q 2017 Pre-Tax Results
AUTOMOTIVE SEGMENT – ASIA PACIFIC 1Q 2017 PRE-TAX RESULTS (MILS) $220 China drove PBT decline due to negative industry $124 Industry $ (54) pricing, unfavorable Share Stocks (14) 116 volume and mix and Mix Other (11) (67) weaker RMB $16 $15 Cost about flat $(12) $(15) $(30) $(96) Results in regions
Slide 25: Ford Credit 1Q 2017 Key Metrics
FINANCIAL SERVICES SEGMENT – FORD CREDIT 1Q 2017 KEY METRICS U.S. Retail and Lease Net Managed Pre-Tax Average Over-60-Day Loss-to-Receivables Receivables Receivables* Results Placement Delinquencies (LTR) (Bils) (Bils) (Mils) FICO (Pct) (Pct) Receivables grew globally, $514 732 741 led by retail fi
Slide 26: Ford Credit 1Q 2017 Pre-Tax Results
FINANCIAL SERVICES SEGMENT – FORD CREDIT 1Q 2017 PRE-TAX RESULTS (MILS) $514 $481 Higher supplemental depreciation for lease $95 Residual Gains / (Losses) Supplemental Depreciation $(10) (43) residuals the largest contributor to lower PBT $(26) $(24) $(6) $(19) Volume and mix primarily $(33) $(53) g
Slide 27: U.S. Automotive Financing Trends
FINANCIAL SERVICES SEGMENT – FORD CREDIT U.S. AUTOMOTIVE FINANCING TRENDS Lease Share of Retail Sales (%) Return Volume (000) and Auction Values** Ford Credit Industry* Return Volume 36 Month $17,210 $17,515 $17,400 $17,190 Lease share lower than $16,190 $16,360 29% 32% 31% 29% 29% 31% industry 79 6
Slide 28: U.S. Financing Industry Trends
FINANCIAL SERVICES SEGMENT – FORD CREDIT U.S. FINANCING INDUSTRY TRENDS Included in Outlook vs. Industry Plateauing sales Similar Ford and Ford Credit’s Increased supply of off-lease vehicles Similar outlook incorporates industry trends Lower auction values Similar Ford Credit on track f
Slide 29: Automotive Cash Flow
AUTOMOTIVE SEGMENT CASH FLOW (Bils) 1Q 2017 Cash at end of period $ 28.0 Operating cash flow Cash at beginning of period 27.5 Change in cash $ 0.5 of $2B Automotive segment pre-tax profits $ 2.0 Capital spending on track Capital spending (1.7) for FY outlook of $7B Depreciation and tooling amortizat
Slide 30: Balance Sheet Summary
BALANCE SHEET SUMMARY (Bils) 2016 2017 Dec 31 Mar 31 Automotive Segment Cash, cash equivalents and marketable securities $ 27.5 $ 28.0 Available credit lines* 10.8 10.9 Total liquidity $ 38.3 $ 38.9 Debt Cash net of debt $ 15.9 11.6 $ 16.2 11.8 Auto cash and liquidity Ford Credit balances strong Man
Slide 31: GDP and Industry Planning Assumptions
GDP AND INDUSTRY PLANNING ASSUMPTIONS For 2017, continue to expect growth in global GDP Growth (Pct) Industry (Mils) 2016 2017 2018 2016 2017 2018 GDP and industry volume U.S. industry expected to Global* 3.0% 3.5% 3.7% 92.5 94.3 95.7 decline slightly from high U.S. 1.6% 2.2% 2.1% 17.9 17.7 17.5 lev
Slide 32: 2017 Company Guidance
2017 COMPANY GUIDANCE EPS Total Company Automotive Automotive Automotive Adjusted Adjusted Segment Segment Segment Operating Adjusted Effective Pre-Tax Results* EPS* Revenue Operating Margin Cash Flow Tax Rate* (Pct) B/(W) 2016 2016 FY Results $10.4B $1.76 $141.5B 6.7% $6.4B 31.9% * See Appendix for
Slide 33: 2017 Business Unit Guidance
2017 BUSINESS UNIT GUIDANCE Automotive Business Units North South Middle East Asia Total America America Europe & Africa Pacific Automotive Ford Credit All Other PBT B / (W) 2016 -- Commodities + Net Pricing -- Exchange + Cost + Volume -- Commodities -- Residual -- Emerging (Brexit) Values Opps (FSM
Slide 34: Looking Ahead to 2018
TOTAL COMPANY LOOKING AHEAD TO 2018 Total Company Adjusted Pre-Tax Profit* (Bils) Core Total Emerging Continue to expect $10.4 Total Company adjusted ~$9 PBT to improve for 2018 led by gains in core business 2016 2017 2018 * See Appendix for detail, reconciliation to GAAP and definitions 34
Slide 35: Key Takeaways
KEY TAKEAWAYS On track for Company 2017 guidance, 1Q in line with full year outlook including adjusted PBT of ~$9 billion Continuing to take disciplined Targeting stronger results for 2018 approach across business driven by core business Balance sheet strong; fit for downturn Focused on creating val
Slide 36: A Solid Investment with Attractive Upside
A SOLID INVESTMENT WITH ATTRACTIVE UPSIDE 36
Slide 37: Q&A
C Gerd) Go Further Q&A
Slide 38: 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 39: Appendix
APPENDIX
Slide 40: Shareholder Distributions
SHAREHOLDER DISTRIBUTIONS (BILS) Supplemental Dividend $15.4 Total shareholder Anti-Dilutive Share Repurchases Regular Dividends $1.2 distributions of $15.4B $2.7 2012 - 2017 We paid a first quarter regular dividend of 15¢ per share and a $11.5 supplemental dividend of $3.5 5¢ per share $2.3 $1.0 $2
Slide 41: Shareholder Payout Ratio
SHAREHOLDER PAYOUT RATIO 2015 - 2016 2015 2016 Cumulative Shareholder Payout (Mils) Quarterly cash dividends $ 2,380 $ 2,383 $ 4,763 Targeting total Purchases of common stock 129 145 274 Subsequent year supplemental cash dividends 992 199 1,191 distributions of 40% - 50% Total shareholder payout $ 3
Slide 42: Net Income Reconciliation to Adjusted Pre-Tax Profit
TOTAL COMPANY NET INCOME RECONCILIATION TO ADJUSTED PRE-TAX PROFIT (Mils) 1Q Memo: 2016 2017 FY 2016 Net income / (Loss) attributable to Ford (GAAP) $ 2,452 $ 1,587 $ 4,596 Income / (Loss) attributable to non-controlling interests 3 7 11 Net income / (Loss) $ 2,455 $ 1,594 $ 4,607 Less: (Provision f
Slide 43: Effective Tax Rate Reconciliation to Adjusted Effective Tax Rate
TOTAL COMPANY EFFECTIVE TAX RATE RECONCILIATION TO ADJUSTED EFFECTIVE TAX RATE Memo: 1Q 2017 FY 2016 Pre-Tax Results (Mils) Income / (Loss) before income taxes (GAAP) $ 2,243 $ 6,796 Less: Impact of special items 24 (3,579) Adjusted pre-tax profit (Non-GAAP) $ 2,219 $ 10,375 Taxes (Mils) (Provision
Slide 44: Special Items
TOTAL COMPANY SPECIAL ITEMS (Mils) 1Q 2016 2017 Separation-related actions $ (174) $ (22) Other Items San Luis Potosi plant cancellation $ - $ 46 Japan, Indonesia market closure (12) - Total other items $ (12) $ 46 Total pre-tax special items $ (186) $ 24 Tax special items $ (66) $ (15) Memo: Specia
Slide 45: Earnings Per Share Reconciliation to Adjusted EPS
TOTAL COMPANY EARNINGS PER SHARE RECONCILIATION TO ADJUSTED EARNINGS PER SHARE 1Q 2017 Diluted After-Tax Results (Mils) Diluted after-tax results (GAAP) $ 1,587 Less: Impact of pre-tax and tax special items 9 Adjusted net income – diluted (Non-GAAP) $ 1,578 Basic and Diluted Shares (Mils) Basic shar
Slide 46: Total Net Receivables Reconciliation to Managed Receivables
FINANCIAL SERVICES SEGMENT – FORD CREDIT TOTAL NET RECEIVABLES RECONCILIATION TO MANAGED RECEIVABLES (Bils) 2016 2016 2017 Mar 31 Dec 31 Mar 31 Financial Services finance receivables, net (GAAP)* $ 94.3 $ 96.2 $ 99.3 Net investment in operating leases (GAAP)* 25.9 27.2 26.4 Consolidating adjustments
Slide 47: Financial Statement Leverage Reconciliation to Managed Leverage
FINANCIAL SERVICES SEGMENT – FORD CREDIT FINANCIAL STATEMENT LEVERAGE RECONCILIATION TO MANAGED LEVERAGE (Bils) 2016 2016 2017 Mar 31 Dec 31 Mar 31 Leverage Calculation Total debt* $ 127.4 $ 126.5 $ 129.2 Adjustments for cash** (14.9) (10.8) (11.3) Adjustments for derivative accounting*** (1.0) (0.3
Slide 48: Automotive Debt
AUTOMOTIVE SEGMENT DEBT 2016 2017 (Bils) Dec 31 Mar 31 Public unsecured debt $ 9.2 $ 9.2 U.S. Department of Energy 3.2 3.1 Other debt (including international) 3.5 3.9 Total Automotive debt $ 15.9 $ 16.2 Memo: Automotive debt payable within one year $ 2.7 $ 3.1 A9 48
Slide 49: China Unconsolidated Affiliates
AUTOMOTIVE SEGMENT – ASIA PACIFIC CHINA UNCONSOLIDATED AFFILIATES 1Q Memo: 2016 2017 B / (W) FY 2016 China Unconsolidated Affiliates Wholesales (000) 310 278 (32) 1,217 Ford equity income (Mils)* $ 443 $ 274 $ (169) $ 1,439 China JV net income margin 16.4% 13.0% (3.4) ppts 14.6% * Ford equity share
Slide 50: 1Q Industry SAAR
AUTOMOTIVE SEGMENT 1Q INDUSTRY SAAR Units (Mils) 1Q 2016 2017 Est. B / (W) North America 21.6 21.3 (0.3) U.S. 17.7 17.4 (0.3) South America 3.7 3.8 0.1 Brazil 2.2 2.0 (0.2) Europe 20.1 20.5 0.4 Middle East & Africa 3.8 3.7 (0.1) Asia Pacific 40.0 39.5 (0.5) China 25.0 23.4 (1.6) Global 89.1 88.9 (0.
Slide 51: 1Q Market Share
AUTOMOTIVE SEGMENT 1Q MARKET SHARE (Percent) 1Q 2016 2017 B / (W) Total Share of Total Industry North America 14.6 % 14.1 % (0.5) ppts U.S. 15.5 15.1 (0.4) South America 8.4 9.0 0.6 Brazil 8.8 9.3 0.5 Europe 7.9 8.1 0.2 Middle East & Africa 4.6 3.8 (0.8) Asia Pacific 3.8 3.4 (0.4) China* 5.0 4.4 (0.
Slide 52: Production Volumes
AUTOMOTIVE SEGMENT PRODUCTION VOLUMES (000) 1Q 2017 Actual 2Q 2017 Forecast O / (U) O / (U) Units 2016 Units 2016 Key drivers of 2Q YoY: North America 819 (35) 835 (8) Europe – mainly all-new South America 73 8 91 12 Fiesta launch Europe 448 23 370 (62) Middle East & Africa 21 - 27 9 AP – mainly hig
Slide 53: Dealer Stocks
AUTOMOTIVE SEGMENT - SELECTED MARKETS DEALER STOCKS (000) U.S. Brazil Europe 21 MEA China 1Q March 31, 2017 704 16 275 59 195 December 31, 2016 648 22 262* 64 154 Stock Change H / (L) 56 (6) 13 (5) 41 1Q Prior Year March 31, 2016 755 19 230 70 169 December 31, 2015 676 24 235 67 165 Stock Change H /
Slide 54: Non-GAAP Financial Measures That Supplement GAAP Measures
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
Slide 55: Definitions and Calculations
DEFINITIONS AND CALCULATIONS 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 unconso
Slide 56: 1Q 2017 Ford Credit Earnings Review
1Q 2017 FORD CREDIT EARNINGS REVIEW April 27, 2017
Slide 57: Ford Credit Strategy
FORD CREDIT STRATEGY ORIGINATE SERVICE FUND Support Ford and High customer and dealer Strong liquidity Lincoln sales satisfaction Diverse sources and Strong dealer relationships World-class servicing channels Full spread of business Collections within portfolio Cost effective loss
Slide 58: 1Q 2017 Highlights
1Q 2017 HIGHLIGHTS Solid quarterly pre-tax profit; guidance on track Continued receivables growth globally Credit loss metrics remain strong Prudently managing lease portfolio to support sales, protect residuals and manage the trade cycle Ford Credit outlook incorporates industry trends, i
Slide 59: U.S. Financing Industry Trends
U.S. FINANCING INDUSTRY TRENDS Included in Outlook vs. Industry Plateauing sales Similar Ford and Ford Credit’s Increased supply of off-lease vehicles Similar outlook incorporates industry trends Lower auction values Similar Ford Credit on track for Increasing credit losses Better 20
Slide 60: Financial Review
FINANCIAL REVIEW
Slide 61: Key Financial Summary
KEY FINANCIAL SUMMARY 1Q B / (W) 2017 2016 Managed receivables grew Total Contract Volumes (000) 508 28 Managed Receivables* (Bils) $ 140 $ 8 across all geographic Debt (Bils) $ 129 $ 2 segments Results (Mils) Americas segment $ 358 $ (65) 1Q Ford Credit PBT was Europe segment 77 (4) solid, lower Yo
Slide 62: 1Q 2017 Pre-Tax Results by Segment
1Q 2017 PRE-TAX RESULTS BY SEGMENT (MILS) $463 $481 $358 Solidly profitable globally Unallocated Other $77 primarily reflects market $28 $18 valuation adjustments to derivatives Unallocated Total Americas Europe Asia Pacific Other* B / (W) 1Q 2016 $(33) $(65) $(4) $11 $25 * See Appendix for definiti
Slide 63: 1Q 2017 Key Metrics
1Q 2017 KEY METRICS U.S. Retail and Lease Net Managed Pre-Tax Average Over-60-Day Loss-to-Receivables Receivables Receivables* Results Placement Delinquencies (LTR) (Bils) (Bils) (Mils) FICO (Pct) (Pct) Receivables grew globally, $514 732 741 led by retail financing $133 $126 $132 $140 0.54% $481 PB
Slide 64: 1Q 2017 Pre-Tax Results
1Q 2017 PRE-TAX RESULTS (MILS) $514 $481 Higher supplemental depreciation for lease $95 Residual Gains / (Losses) Supplemental Depreciation $(10) (43) residuals the largest contributor to lower PBT $(26) $(24) $(6) $(19) Volume and mix primarily $(33) $(53) growth in retail receivables globally Volu
Slide 65: Americas Financing Shares and Contract Placement Volume
AMERICAS FINANCING SHARES AND CONTRACT PLACEMENT VOLUME First Quarter 2016 2017 Financing Shares Retail Installment and Lease Share of Ford Retail Sales (excl. Fleet) United States 57 % 57 % Canada 73 75 Wholesale Share Financing shares and United States Canada 75 % 61 76 % 60 contract volume largel
Slide 66: Europe Financing Shares and Contract Placement Volume
EUROPE FINANCING SHARES AND CONTRACT PLACEMENT VOLUME First Quarter 2016 2017 Financing Shares (incl. Fleet) Retail Installment and Lease Share of Total Ford Sales U.K. Germany 40 % 43 36 % 47 Total segment financing Total Europe Segment 35 35 shares unchanged Wholesale Share U.K. 100 % 100 % Growth
Slide 67: Asia Pacific Financing Shares and Contract Placement Volume
ASIA PACIFIC FINANCING SHARES AND CONTRACT PLACEMENT VOLUME First Quarter 2016 2017 Financing Shares (incl. Fleet) Retail Installment Share of Total Ford Sales China 13 % 24 % India 3 9 Wholesale Share Volume growth primarily China India 53 % 24 51 % 34 reflects improved retail financing share in Ch
Slide 68: 1Q 2017 Receivables Mix
1Q 2017 RECEIVABLES MIX (BILS) $133 Net Investment in Operating $26 $108 Leases SUV / CUV: 55% $26 Car: 25% Ford Credit’s portfolio Truck: 20% Consumer $66 managed with an Finance enterprise view $52 $20 $5 Lease portfolio smaller Non-Consumer $41 $0.3 versus major competitors Finance $30 $11 $3 $9
Slide 69: U.S. Origination Metrics
U.S. ORIGINATION METRICS FICO and Higher Risk Mix Retail and Lease Average Placement FICO Higher Risk Portfolio Mix 741 732 741 743 741 741 Disciplined and consistent underwriting practices for many years 6% 6% 6% 6% 6% 6% Portfolio quality evidenced 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 by FICO scores and
Slide 70: U.S. Retail and Lease Credit Loss Drivers
U.S. RETAIL AND LEASE CREDIT LOSS DRIVERS Over-60-Day Delinquencies (Excl. Bankruptcies) Repossessions (000) and Repo. Rate (%) Repossessions (000) Repo. Rate (%) 1.00% 1.04% 0.96% 1.06% 1.16% 1.16% Delinquencies and 0.16% 0.16% 0.16% 0.13% 0.14% 0.12% repossessions remain low Higher severities refl
Slide 71: Worldwide Credit Loss Metrics
WORLDWIDE CREDIT LOSS METRICS Charge-Offs (Mils) and LTR Ratio (%) Charge-Offs (Mils) LTR Ratio (%) Worldwide credit loss 0.32% 0.39% 0.35% 0.27% 0.29% 0.25% metrics remain strong Credit loss reserve based $86 $92 $84 $107 $132 $119 on historical losses, 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 portfolio quali
Slide 72: U.S. Lease Origination Metrics
U.S. LEASE ORIGINATION METRICS Lease Placement Volume (000) 24-Month 36-Month 39-Month / Other 107 106 98 101 89 91 Lease placement volume 16 18 16 10 11 11 lower YoY, reflecting 75 79 80 69 70 77 reduced lease share 10 10 10 9 10 11 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Lease share continues to Lease Share
Slide 73: U.S. Lease Residual Performance
U.S. LEASE RESIDUAL PERFORMANCE Lease Return Volume (000) and Return Rates (%) Return Volume (000) Return Rates (%) Return rates higher 81% 83% reflecting lower used 79% 78% 77% 77% vehicle values Return volumes higher 51 59 62 60 65 79 reflecting growth in leasing and higher return 4Q15 1Q16 2Q16 3
Slide 74: Funding Structure – Managed Receivables
FUNDING STRUCTURE – MANAGED RECEIVABLES*(BILS) $137 $140 $127 $4 $5 $2 $6 $6 $6 Commercial Paper $49 $50 Ford Interest Advantage $50 Funding is diversified Term Asset-Backed Securities** across platforms $66 $69 Well capitalized with $62 Term Debt (incl Bank Borrowings) strong investment grade balan
Slide 75: Public Term Funding Plan
PUBLIC TERM FUNDING PLAN* (BILS) 2017 2015 2016 Through Issuance plans are Actual Actual Forecast April 26 consistent with Unsecured prior years Ford Motor Credit $ 11 $ 10 $ 8 - 10 $ 5 Ford Credit Canada 1 1 1-2 1 Issuance remains FCE Bank 4 3 2-3 2 diversified across Rest of World - - 1 - Total Un
Slide 76: Balance Sheet Metrics
BALANCE SHEET METRICS Leverage (To 1)* Financial Statement Managed 10.4 9.9 9.8 9.4 9.2 9.1 8-9 Managed Leverage continues trending lower 1Q16 4Q16 1Q17 Target toward target range Liquidity Available For Use (Bils) Liquidity remains strong $35 $29 and above target $27 $25+ 1Q16 4Q16 1Q17 Target * Se
Slide 77: 2017 Guidance
2017 GUIDANCE (MILS) 2016 FY 2017 FY Results Plan Outlook Pre-Tax Profit $1,879 ~$1,500 On Track Resuming with Distributions $- On Track Leverage in Target Range FC22
Slide 78: Summary
SUMMARY Solid quarterly pre-tax profit Guidance on track Strategic asset to Ford, delivering Consistent originations, servicing, and profitable growth globally collections; robust portfolio performance Funding plan well-positioned for Ford Credit outlook incorporates business cycles industry trends
Slide 79: 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 80: Ford Credit Appendix
FORD CREDIT APPENDIX
Slide 81: Ford Credit Appendix
Ford Credit Appendix Credit Ratings FCA1 Key Financial Summary FCA2 Americas Financing Shares and Contract Placement Volume FCA3 Europe Financing Shares and Contract Placement Volume FCA4 Asia Pacific Financing Shares and Contract Placement Volume FCA5 Total Net Receivables Reconciliation to Managed
Slide 82: Credit Ratings
CREDIT RATINGS S&P Moody's Fitch DBRS Issuer Ratings Ford Motor BBB N/A BBB BBB Ford Credit BBB N/A BBB BBB FCE Bank plc BBB N/A BBB NR Long-Term Senior Unsecured Ford Motor BBB Baa2 BBB BBB Ford Credit BBB Baa2 BBB BBB FCE Bank plc BBB Baa2 BBB NR Short-Term Unsecured Ford Credit A-2 P-2 F2 R-2M Ou
Slide 83: Key Financial Summary – Results History
KEY FINANCIAL SUMMARY – RESULTS HISTORY 2014 2015 2016 Total Contract Volumes (000s) 1,974 2,141 2,111 Managed Receivables* (Bils) $ 113 $ 127 $ 137 Debt (Bils) $ 105 $ 120 $ 126 Results (Mils) Americas segment $ 1,509 $ 1,763 $ 1,511 Europe segment 338 297 238 Asia Pacific segment 13 27 61 Total Se
Slide 84: Americas Financing Shares and Contract Placement Volume
AMERICAS FINANCING SHARES AND CONTRACT PLACEMENT VOLUME 2012 2013 2014 2015 2016 Financing Shares Retail Installment and Lease Share of Ford Retail Sales (excl. Fleet) United States 54 % 56 % 63 % 65 % 56 % Canada 55 65 67 73 75 Wholesale Share United States 78 % 77 % 77 % 76 % 76 % Canada 66 65 64
Slide 85: Europe Financing Shares and Contract Placement Volume
EUROPE FINANCING SHARES AND CONTRACT PLACEMENT VOLUME 2012 2013 2014 2015 2016 Financing Shares (incl. Fleet) Retail Installment and Lease Share of Total Ford Sales U.K. 32 % 38 % 40 % 40 % 38 % Germany 46 45 48 48 47 Total Europe Segment 32 34 36 37 37 Wholesale Share U.K. 100 % 100 % 100 % 100 % 1
Slide 86: Asia Pacific Financing Shares and Contract Placement Volume
ASIA PACIFIC FINANCING SHARES AND CONTRACT PLACEMENT VOLUME 2012 2013 2014 2015 2016 Financing Shares (incl. Fleet) Retail Installment Share of Total Ford Sales China 14 % 13 % 13 % 12 % 19 % India - - - 1 5 Wholesale Share China 58 % 59 % 62 % 56 % 58 % India - - - 14 29 Contract Placement Volume –
Slide 87: Total Net Receivables Reconciliation to Managed Receivables
TOTAL NET RECEIVABLES RECONCILIATION TO MANAGED RECEIVABLES 2016 2016 2017 (Bils) Mar 31 Dec 31 Mar 31 Net Receivables * Finance receivables – Americas Consumer retail financing $ 49.9 $ 54.1 $ 54.4 Non-consumer: Dealer financing ** 27.8 27.9 28.4 Non-consumer: Other 0.9 1.1 1.8 Total finance receiv
Slide 88: Net Receivables Reconciliation to Managed Receivables – Annually
TOTAL NET RECEIVABLES RECONCILIATION TO MANAGED RECEIVABLES – ANNUALLY 2014 2015 2016 (Bils) Dec 31 Dec 31 Dec 31 Net Receivables * Finance receivables – Americas Consumer retail financing $ 44.4 $ 49.6 $ 54.1 Non-consumer: Dealer financing 23.7 26.3 27.9 Non-consumer: Other 1.0 0.9 1.1 Total financ
Slide 89: Financial Statement Leverage Reconciliation to Managed Leverage
FINANCIAL STATEMENT LEVERAGE RECONCILIATION TO MANAGED LEVERAGE* (Bils) 2016 2016 2017 Mar 31 Dec 31 Mar 31 Leverage Calculation Total debt $ 127.4 $ 126.5 $ 129.2 Adjustments for cash (14.9) (10.8) (11.3) Adjustments for derivative accounting (1.0) (0.3) (0.2) Total adjusted debt $ 111.5 $ 115.4 $
Slide 90: Liquidity Sources
LIQUIDITY SOURCES* 2016 2016 2017 (Bils) Mar 31 Dec 31 Mar 31 Liquidity Sources Cash $ 14.9 $ 10.8 $ 11.3 Committed ABS facilities 36.4 34.6 34.8 Committed Other Unsecured Credit Facilities 2.5 2.5 2.6 Capacity $40.4 billion Ford Corporate Credit Facility Allocation 3.0 3.0 3.0 Total Liquidity Sourc
Slide 91: Non-GAAP Financial Measures That Supplement GAAP Measures
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
Slide 92: Definitions and Calculations
DEFINITIONS AND CALCULATIONS 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