- Operational fitness, portfolio
rationalization and increased investments in electrification,
autonomy and mobility at core of company strategy
- Company increases planned investments
in electrification to $11 billion by 2022
- Expanded electrified portfolio to
include 40 electrified vehicles globally, including 16 full battery
electric vehicles by 2022
- Announces preliminary results for
full-year 2017 of $1.95 earnings-per-share (EPS) and $1.78 adjusted
EPS, in line with most recent guidance range
- Declares first quarter regular dividend
of $0.15 per share and a $500 million supplemental cash dividend –
or $0.13 per share – for a combined $0.28 per share
- Company issues guidance for 2018 of
adjusted EPS of $1.45 to $1.70
Ford Motor Company (NYSE: F) today detailed plans to improve
operational fitness, refocus capital allocation and accelerate the
introduction of smart vehicles and services.
Presenting at the Deutsche Bank Global Auto Industry Conference
in Detroit, the company provided preliminary results for full-year
2017, issued guidance for 2018 and outlined plans to accelerate
investment in electric vehicles and sport utility vehicles.
“In 2017, F-Series extended its streak as America's best-selling
pickup for the 41st straight year, we set a new company high for
U.S. SUV sales and Lincoln had its best year since the turn of the
millennium thanks to accelerated growth in China,” said Jim Farley,
Ford executive vice president and president, Global Markets. “We
have a rock solid foundation and we have seen growth in key areas,
but we know we must evolve to be even more competitive, and narrow
our full line of nameplates in all markets, to a more focused
lineup that delivers stronger, more profitable growth, with better
returns.”
Bob Shanks, executive vice president and chief financial
officer, said Ford is working rapidly to improve its operational
fitness and reallocate capital to higher-return opportunities that
is expected to fuel profitable growth in the future.
“Since we reinstated a dividend in 2012, we have generated $31
billion in cumulative automotive cash flow, and returned $15.4
billion to shareholders via dividends and share repurchase,” said
Bob Shanks, executive vice president and chief financial officer.
“Notwithstanding this discipline of returning value to
shareholders, we know we can better capture opportunities for
growth, profitability and liquidity.”
The full slide deck of Ford’s presentation can be found at
www.shareholder.ford.com.
Ford is further detailing its fitness initiatives first outlined
at a presentation to analysts last fall. This includes making
changes to products in production today and dramatically improving
the efficiency of the business.
For example, the company is reducing the number of orderable
combinations on Escape, Fusion and EcoSport from thousands, to just
10 to 20 combinations for each vehicle. This will improve costs by
reducing manufacturing expense, lowering inventory and logistics
expense and improve quality, while growing revenue by ensuring
customers can get what they want faster and at the dealer of their
choosing.
The company said it would continue to pursue partnerships,
alliances, and acquisitions as a key component to enhance its
competitiveness. Ford is pursuing partnerships, alliances, and
acquisitions where doing so provides access to technology and
capabilities that will enhance its competitive position, including
with Mahindra in India and Zotye in China to develop vehicles and
services uniquely suited to compete in those markets.
In addition, Ford said it will shift toward a lower volume
passenger car lineup in North America and Europe, while competing
in more profitable sub-segments of the utilities market, as
demonstrated by vehicles such as the new Edge ST and the upcoming
Bronco. In North America, for example, over the next couple of
years, Ford’s SUV mix will increase 10 percentage points, while its
car portfolio will shrink about 10 percentage points.
Ford also will expand its electrified vehicle lineup with a
total of 40 vehicles globally, which will include 16 full battery
electric vehicles by 2022. To support this, the company announced
that it now plans to invest more than $11 billion in
electrification from 2015 to 2022. The company also reiterated that
it is on track to deliver a full battery electric performance SUV
that offers at least a 300-mile range, for launch in 2020.
“We are actively evolving our position to be more competitive,”
Farley said. “At the highest level, we need to narrow our full
lineup of nameplates to a more focused lineup that delivers
stronger growth, less risk and better returns. We are repositioning
the company to offer best-in-class, human-centered vehicles and
mobility services. That’s our vision.”
Regarding self-driving vehicles, Ford is focused on building an
autonomous vehicle business, including a purpose-built vehicle, the
self-driving technology and the operational infrastructure in
parallel, which will allow it to scale quickly as it enters
production in 2021. Collaborations with Dominos, Lyft and Postmates
will help validate its self-driving services business beginning
this quarter though a series of pilot programs in a new city to be
identified soon.
2017 Preliminary Results and 2018
Guidance*
For full-year 2017, the company is announcing preliminary
results of $1.95 EPS, an increase of 80 cents from a year ago, and
adjusted EPS of $1.78, an increase of 2 cents from a year ago and
in line with the company’s most recent guidance. The company also
anticipates ending the year with a strong balance sheet with
automotive cash of $26.5 billion and automotive liquidity of nearly
$37 billion.
2017 results will also include the impact of a non-cash pre-tax
remeasurement loss of about $150 million related to the year-end
revaluation of global pension and other postretirement employee
benefits (OPEB) plans, also known as pension mark-to-market
adjustment.
As a result of the company’s performance in 2017, Ford’s Board
of Directors declared a first quarter regular dividend of $0.15 per
share and a $500 million supplemental cash dividend that is equal
to $0.13 per share. This provides a combined total of $0.28 per
share of dividends on the company’s outstanding Class B and common
stock.
The first quarter regular dividend maintains the same level as
the dividends paid in 2017. The first quarter regular and
supplemental dividends are payable on March 1, 2018 to shareholders
of record at the close of business on Jan. 30, 2018. Subject to the
approval of the Board of Directors, the company expects to make
distributions totaling about $3.1 billion in 2018. By year-end,
cumulative distributions to shareholders will total more than $18
billion since the company’s regular dividend was restored in
2012.
For 2018, the company is guiding to an adjusted EPS in the range
of $1.45 to $1.70. This guidance reflects higher commodity costs
and further adverse exchange, offset in varying degrees by actions
the company is taking to mitigate their effect.
Ford’s presentation at the Deutsche Bank Global Auto Industry
Conference will begin at approximately 6:30 p.m. EST today. To
access the presentation materials and a listen-only audio webcast,
visit www.shareholder.ford.com.
*This release include Ford’s preliminary view of 2017 results.
Ford’s actual results could differ materially from the preliminary
results included in this release. Ford will provide additional
detail on 2017 results in its earnings presentation on January 24,
2018. Ford’s Annual Report on Form 10-K, which will be filed in
February, will included Ford’s audited financial results.
Note: See table later in this release for reconciliation of the
non-GAAP financial measure designated as “adjusted earnings per
share” to “earnings per share,” the most comparable financial
measure calculated in accordance with U.S. generally accepted
accounting principles (“GAAP”). Adjusted earnings per share is a
non-GAAP financial measure because it excludes special items. The
measure provides investors with useful information to evaluate the
performance of Ford’s business excluding items not indicative of
the underlying run rate. When Ford provides guidance for adjusted
earnings per share, Ford does not provide guidance on an earnings
per share 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.
About Ford Motor Company
Ford Motor Company is a global company based in Dearborn,
Michigan. The company designs, manufactures, markets and services a
full line of Ford cars, trucks, SUVs, electrified vehicles and
Lincoln luxury vehicles, provides financial services through Ford
Motor Credit Company and is pursuing leadership positions in
electrification, autonomous vehicles and mobility solutions. Ford
employs approximately 203,000 people worldwide. For more
information regarding Ford, its products and Ford Motor Credit
Company, please visit www.corporate.ford.com.
Cautionary Note On Forward-Looking
Statements
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;
- Lower-than-anticipated market
acceptance of Ford’s new or existing products or services, or
failure to achieve expected growth;
- Market shift away from sales of larger,
more profitable vehicles beyond Ford’s current planning assumption,
particularly in the United States;
- 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, protectionist trade policies, or other
events;
- 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 other
postretirement liabilities impairing liquidity or financial
condition;
- Worse-than-assumed economic and
demographic experience for pension and other 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;
- Adverse effects on results from a
decrease in or cessation or claw back of government incentives
related to investments;
- 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 regulations,
consumer or data protection regulations, 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, 2016, as
updated by subsequent Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
Company Earnings Per Share
Reconciliation To Adjusted Earnings Per Share
Preliminary FY 2017
Diluted After-Tax
Results (Bils)
Diluted after-tax results (GAAP) $ 7.8 Less: Impact of pre-tax and
tax special items 0.7 Adjusted net income – diluted (Non-GAAP) $
7.1
Basic and Diluted
Shares (Bils)
Basic shares (average shares outstanding) 4.0 Net dilutive options
and unvested restricted stock units - Diluted shares 4.0
Earnings per share – diluted (GAAP) $ 1.95 Less: Net
impact of adjustments 0.17 Adjusted earnings per share – diluted
(Non-GAAP) $ 1.78
For news releases, related materials and
high-resolution photos and video, visit www.media.ford.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20180116006804/en/
Ford Motor CompanyMedia:Brad
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IncomeInvestmentCommunity:Karen
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or313.845.8540stockinf@ford.com
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