1
4Q 2017 And Full Year
Earnings Review And 2018 Outlook
January 24, 2018
(Preliminary Results)
2
Appendix
Shareholder Distributions A1
Shareholder Payout Ratio A2
Reconciliations to GAAP
Adjusted Pre-Tax Profit A3
Adjusted Effective Tax Rate A4
Operating Cash Flow A5
Special Items A6
Adjusted Earnings Per Share A7
Managed Receivables A8
Managed Leverage A9
Supplemental Data
Automotive Debt A10
China Unconsolidated Affiliates A11
Return on Invested Capital A12
Employment Data A13
Pension A14
Business Review
Vision and Strategy 3 - 4
Product and Other Highlights 5
Financial Review
Financial Headlines 7
Key Financial Summary 8
Fourth Quarter
Company 9
Automotive 10 - 11
North America 12 - 14
South America 15 - 16
Europe 17 - 18
Middle East & Africa 19 - 20
Asia Pacific 21 - 22
Financial Services – Ford Credit 23 - 25
Cash Flow / Balance Sheet 26 - 27
Full Year
Company 28
Automotive 29 - 30
Planning Assumptions and Guidance 31 - 35
Key Takeaways 37
Cautionary Note On Forward-Looking
Statements 38
Appendix (continued)
Volume Related
Industry A15
Market Share A16
Production Volumes A17
Dealer Stocks A18
Full Year
North America A19
South America A20
Europe A21
Middle East & Africa A22
Asia Pacific A23
Financial Services – Ford Credit A24
Other
Revised Reporting – 2016 / 2017 A25 - A26
Non-GAAP Financial Measures A27
Definitions and Calculations A28
3
1. Rapidly improving our fitness to lower
costs, release capital and finance growth
2. Accelerating the introduction of
connected, smart vehicles and services
3. Re-allocating capital to where we can win
in the future
4. Continuously innovating to create the
most human-centered mobility solutions
5. Empowering our team to work together
effectively to compete and win
Smart Vehicles In A Smart World
CULTURAL IMPLICATIONS
WINNING ASPIRATION
STRATEGIC CHOICES
FITNESS
Reset Revenue
and Attack Costs
Redesign
Business
Operations
FITNESS
4
Fitness Redesign
Customer centricity
Simplicity
Speed & agility
Efficiency
Accountability
Step-change improvement of
financial performance
Company EBIT
EBIT Margin
Capital
Return on Invested Capital
Operating Cash Flow
Total Shareholder Return
5
Product And Other Highlights
Commercial vehicle leader in Europe for
third straight year; began production of
the new EcoSport SUV in Romania
100 percent of Ford’s new U.S. vehicles will
be built with connectivity by 2019 and
90 percent globally by 2020
Announced the introduction of more than
50 new vehicles in China by 2025
Increased investment in Flat Rock for
purpose-built autonomous vehicle;
accelerated and increased BEV investment
Achieved eighth consecutive year as
best-selling brand in the U.S.
F-Series marks 41 years as America’s
best-selling pickup. F-150 diesel added
to lineup
6
Bob Shanks
Chief Financial Officer
Financial Review
7
4Q And Full Year Results
Delivered Fourth Quarter Adjusted EPS of $0.39 And Full Year Adjusted EPS Of $1.78
* See Appendix for detail, reconciliation to GAAP and definitions
Company
Revenue
(GAAP)
Company
Net Income
(GAAP)
Company Adjusted
Pre-Tax Results*
(Non-GAAP)
EPS
(GAAP)
Adjusted
EPS*
(Non-GAAP)
Automotive
Segment
Operating
Margin
(GAAP)
Automotive
Segment
Operating
Cash Flow
(GAAP)
4Q 2017 $41.3B $2.4B $1.7B $0.60 $0.39 3.7% $2.3B
B / (W)
4Q 2016 $2.6B $3.2B $(0.4)B $0.80 $0.09 (2.0) ppts $0.8B
FY 2017 $156.8B $7.6B $8.4B $1.90 $1.78 5.0% $3.9B
B / (W)
FY 2016 $5.0B $3.0B $(1.9)B $0.75 $0.02 (1.7) ppts $(2.5)B
$
8
Wholesale volume up 2% in 4Q,
about flat FY; revenue up 7% in 4Q
and 3% in FY
4Q and FY adj. pre-tax profit lower
4Q and FY net income up
significantly due to lower
remeasurement loss on pension
and OPEB plans and favorable
tax planning
4Q adj. effective tax rate of 10%
and FY at 15.3%, incl. favorable
tax-planning effects
Operating cash flow higher in 4Q,
but lower FY; liquidity strong; net
cash at $10.6B
Key Financial Summary
* See Appendix for detail, reconciliation to GAAP and definitions
B / (W) B / (W)
2017 2016 2017 2016
Wholesales (000) 1,749 42 6,607 (44)
Revenue (Bils) 41.3$ 2.6$ 156.8$ 5.0$
Results (Mils)
Automotive Segment 1,435$ (607)$ 7,259$ (2,163)$
Financial Services Segment 595 211 2,248 428
All Other (293) 1 (1,070) (203)
Total Company adjusted pre-tax results* 1,737$ (395)$ 8,437$ (1,938)$
Special items pre-tax 152 3,401 (289) 3,290
Income / (Loss) before income taxes 1,889$ 3,006$ 8,148$ 1,352$
(Provision for) / Benefit from income taxes 524 188 (520) 1,669
Net income / (Loss) 2,413$ 3,194$ 7,628$ 3,021$
Less: Income / (Loss) attributable to non-controlling interests 4 2 26 15
Net income / (Loss) attributable to Ford 2,409$ 3,192$ 7,602$ 3,006$
Earnings per share (diluted) 0.60$ 0.80$ 1.90$ 0.75$
Adjusted earnings per share (diluted)* 0.39$ 0.09$ 1.78$ 0.02$
Automotive Segment (Bils)
Operating cash flow 2.3$ 0.8$ 3.9$ (2.5)$
Cash 26.5$ (1.0)$ 26.5$ (1.0)$
Debt (15.9) - (15.9) -
Net cash 10.6$ (1.0)$ 10.6$ (1.0)$
4Q Full Year
9
4Q Automotive segment PBT
driven by NA
Auto operations outside NA a loss
in total and down YoY
Strong Financial Services profit
All Other primarily net interest
expense plus FSM LLC
Company
4Q 2017 Adjusted Pre-Tax Results* (Mils)
$1,737 $1,641
$(197)
$56
$(70)
$5
$595
$(293)
South
AmericaTotal
North
America All Other
Asia
PacificEurope
B / (W)
4Q 2016 $(395) $(315) $96 $(110) $1 $(279) $211 $1
Middle East
& Africa
Financial
Services
Segment
Automotive Segment
$1,435
* See Appendix for detail, reconciliation to GAAP and definitions
10
Wholesales
(000)
Revenue
(Bils)
Market Share
(Pct)
Operating Margin
(Pct)
Pre-Tax Results
(Mils)
20172016 2017201620172016 20172016 20172016
Automotive Segment
4Q 2017 Key Metrics
4Q Auto key metrics mixed from a
year ago
Top line up due mainly to higher
volume from consolidated
operations in all regions
except MEA
Global SAAR about flat
Global market share lower – AP
and MEA down; Europe flat; NA
and SA up
Operating margin and PBT lower
driven by NA, AP and Europe
3.7%
5.7%
$1,435
$2,0426.7%
1,7491,707
$38.5$36.0 6.6%
2% 0.1 ppts7% 2.0 ppts 30%
11
Market Factors Total Cost
4Q 20174Q 2016
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost
Automotive Segment
4Q 2017 Pre-Tax Results (Mils)
4Q Auto PBT $607M lower YoY due
mainly to higher commodities,
adverse exchange and higher
warranty cost
Commodities reflects continued
adverse YoY trend since 4Q 2016,
mainly due to metals
Warranty due to recalls in NA and
Europe
Exchange driven by sterling and
balance sheet revaluation
Favorable volume and mix driven
by NA, mainly higher U.S. share
Industry $ (90)
Share 417
Stocks 218
Mix 104
Other (138)
$453 $(987)
Pricing $ 749
Incentives / Other (807)
Commodities $(333)
Warranty (219)
Freight / Other (13)
Manufacturing, Incl. Vol. Related $(157)
Engineering (70)
Advertising & Sales Promo. (52)
Other (143)
Parts & Service $103
Other 36
12
Wholesales
(000)
Revenue
(Bils)
Market Share
(Pct)
Operating Margin
(Pct)
Pre-Tax Results
(Mils)
20172016 2017201620172016 20172016 20172016
Automotive Segment – North America
4Q 2017 Key Metrics
4Q NA top-line metrics up YoY,
including market share; financial
metrics lower
Volume up due to higher U.S.
market share and favorable stock
changes
Revenue up due to higher volume
NA SAAR down 0.5M units, driven
by U.S. and Mexico
NA market share up due to U.S. –
fleet and SUV retail shareFY: 3,019 2,967 $92.6 $93.5 13.9% 13.9% 9.7% 8.0% $9,001 $7,511
13.1%739703 $24.1$23.1
13.7%
5% 0.6 ppts4%
6.8%
8.5%
$1,641
$1,956
1.7 ppts 16%
2% -- ppts1% 1.7 ppts 17%
13
Market Factors Total Cost
4Q 20174Q 2016
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost
Automotive Segment – North America
4Q 2017 Pre-Tax Results (Mils)
4Q NA PBT down $315M driven by
Expedition / Navigator launch,
higher commodities and warranty
cost
Expedition / Navigator launch
effects include lower volume and
launch-related costs
Commodities mainly reflect
metals; warranty cost up due to
recalls
Favorable volume and mix driven
by higher U.S. market share and
favorable dealer stock changes due
to F-150 and EcoSport
Industry $(122)
Share 397
Stocks 198
Mix 40
Other (22)
$416 $(734)
Pricing $ 493
Incentives / Other (568) Engineering $(73)
Advertising & Sales Promo. (96)
Other (99)
Mat’l, Excl. Commodities $ (94)
Commodities (192)
Warranty (173)
Other (7)
14
Automotive Segment – North America
A Disciplined Approach To The U.S. Business
Industry Average
Ford
70 70
60
79 78
68
U.S. Gross Days Supply
4Q Ford ATPs up, about the same as the industry average; FY ATPs
rose more than 2X the industry due to F-Series
4Q Ford incentives, as a percent of vehicle price, up more than
industry average, but Ford incentives in FY increased less than a third
of industry’s average
Ford U.S. stocks at healthy levels and days supply
-
0.2
0.7
0.3
0.7
0.6
1.0
0.8 0.8
0.2
YoY Incentive Change as Pct. of Vehicle Price*YoY Average Transaction Price (USD)*
$869
$1,025
$1,433
$1,127
$573
$766 $717
$1,465
$998
$1,310
Oct Nov Dec 4Q
Industry Average
Ford
Better
Oct Nov Dec
Industry Average
Ford
* Source: J.D. Power PIN ISR data – cash / APR / lease (blended) transaction; industry data includes Ford
FY Oct Nov Dec 4Q FY
15
Wholesales
(000)
Revenue
(Bils)
Market Share
(Pct)
Operating Margin
(Pct)
Pre-Tax Results
(Mils)
20172016 2017201620172016 20172016 20172016
Automotive Segment – South America
4Q 2017 Key Metrics
All 4Q SA key metrics up sharply
YoY as macroeconomic conditions
continue to improve
Volume higher due mainly to
industry and favorable stock
changes
Revenue up double digits due to
volume and pricing
SA SAAR up 13% with Brazil SAAR
up YoY for 3rd consecutive quarter
Market share higher due to Ka
in Brazil
5th consecutive quarter of
improved financial metrics
8.8%
107
90
$1.7
$1.4
8.9%
19% 0.1 ppts22%
(11.6)%
(21.1)%
$(197)
$(293)
9.5 ppts 33%
FY: 325 373 $4.8 $5.8 8.8% 8.9% (23.0)% (13.4)% $(1,109) $(784)
15% 0.1 ppts21% 9.6 ppts 29%
16
Market Factors Total Cost
4Q 20174Q 2016
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost
Automotive Segment – South America
4Q 2017 Pre-Tax Results (Mils)
4Q SA loss narrowed $96M due to
favorable market factors
Relatively small unfavorable
changes in other factors, mainly
driven by local inflation and
unfavorable exchange (primarily
Argentine peso)
Industry $51
Share 4
Stocks 9
Mix 7
Other 7
$172 $(25)
Commodities $(24)
Other 21
17
Wholesales
(000)
Revenue
(Bils)
Market Share
(Pct)
Operating Margin
(Pct)
Pre-Tax Results
(Mils)
20172016 2017201620172016 20172016 20172016
Automotive Segment – Europe
4Q 2017 Key Metrics
4Q Europe top-line metrics up YoY;
financial metrics lower
Volume up mainly due to favorable
stock changes
Higher revenue driven by favorable
mix and higher volume and
net pricing
Europe SAAR up 3%, including
strong improvement in Russia
Market share flat
Ford the best-selling commercial
vehicle brand for the 6th
consecutive quarter
7.4%416390 $8.1
$7.2
7.4%
7% -- ppts12%
0.7%
2.3%
$56
$166
1.6 ppts 66%
FY: 1,539 1,582 $28.5 $29.7 7.7% 7.5% 4.2% 0.8% $1,205 $234
3% 0.2 ppts4% 3.4 ppts 81%
* Includes Ford brand vehicles produced and sold by our unconsolidated affiliate in Turkey (about 28,000 units in 4Q 2016 and
29,000 units in 4Q 2017). Revenue does not include these sales.
*
18
Market Factors Total Cost
4Q 20174Q 2016
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost
Automotive Segment – Europe
4Q 2017 Pre-Tax Results (Mils)
4Q Europe YoY PBT decline of
$110M more than explained by
Brexit effects, higher warranty cost
and commodities
Brexit effects of about $130M
driven by adverse exchange and
lower U.K. industry. FY Brexit
effects of about $600M in line with
original guidance
Higher warranty cost due mainly to
recalls
Russia results improved YoY again
and near breakeven
Industry $ 6
Share 25
Stocks 31
Mix 47
Other (65)
Pricing $168
Incentives / Other (44)
$168 $(263)
Manufacturing, Incl. Volume Related $(102)
Non-Repeat of 2016 Pension Settlement (77)
Other 96
Commodities $(102)
Warranty (121)
Freight / Other 43
$(57)
$166
19
Wholesales
(000)
Revenue
(Bils)
Market Share
(Pct)
Operating Margin
(Pct)
Pre-Tax Results
(Mils)
20172016 2017201620172016 20172016 20172016
Automotive Segment – Middle East & Africa
4Q 2017 Key Metrics
4Q MEA key metrics lower YoY
except for a largely unchanged
pre-tax loss
Volume lower due to unfavorable
stock changes and lower industry
Revenue down due to lower
industry volume
SAAR down 13% in markets where
we participate
Market share lower due to
unfavorable market mix; share
improved in the Middle East
4.5%
35
41 $0.8
$0.9
4.4%
FY: 161 119 $3.6 $2.6 4.5% 3.9% (8.3)% (10.0)% $(302) $(263)
15% 0.1 ppts18%
26% 0.6 ppts27% 1.7 ppts 13%
(8.8)%
(7.3)%
$(70)$(71)
1.5 ppts 1%
20
Market Factors Total Cost
4Q 20174Q 2016
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost
Automotive Segment – Middle East & Africa
4Q 2017 Pre-Tax Results (Mils)
4Q MEA loss about flat from a year
ago with relatively minor changes
across causal factors
Industry $(19)
Share 24
Stocks (43)
Mix 5
Other (17)
$(16) $4
Commodities $(14)
Other (10)
21
Wholesales
(000)
Revenue
(Bils)
Market Share
(Pct)
Operating Margin
(Pct)
Pre-Tax Results
(Mils)
20172016 2017201620172016 20172016 20172016
Automotive Segment – Asia Pacific
4Q 2017 Key Metrics
4Q AP key metrics down YoY
except revenue, with China the key
driver for the unfavorable changes
Volume lower due to market share
in China
Revenue up due to higher volume in
consolidated markets, including
Lincoln (in China) and ASEAN
AP SAAR up 0.4M units with China
SAAR down 0.2M units
Market share lower due to market
performance in China
4Q China JVs net income at $206M,
down $174M; margin at 8.3%,
down 4.5 ppts due to negative
industry pricing and lower volume
3.7%
452
483
$3.8
$3.4 3.4%
FY: 1,607 1,566 $12.0 $14.1 3.7% 3.4% 5.2% 4.0% $627 $561
6% 0.3 ppts11%
3% 0.3 ppts17% 1.2 ppts 11%
0.1%
8.4%
$5
$284
8.3 ppts 98%
* Wholesales include Ford brand and Jiangling Motors Corporation (JMC) brand vehicles produced and sold in China by our
unconsolidated affiliates (about 380,000 units in 4Q 2016 and 341,000 units in 4Q 2017). Revenue does not include these sales
*
22
Market Factors Total Cost
4Q 20174Q 2016
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost
Automotive Segment – Asia Pacific
4Q 2017 Pre-Tax Results (Mils)
4Q AP PBT YoY decline of $279M
due to China factors -- lower
industry pricing and volume
Fourth consecutive quarter of
favorable cost performance driven
by material cost reductions and
lower warranty cost
Pricing $ (25)
Incentives / Other (210)
Industry $ (6)
Share (33)
Stocks 23
Mix 5
Other (41)
$(287) $31
$(235) $(8)
Mat’l, Excl. Commodities $84
Other 24
$284
$(15)
23
20172016 2017201620172016 20172016 2017201620172016
Average
Placement
FICO
Managed
Receivables*
(Bils)
Over-60-Day
Delinquencies
(Pct)
Pre-Tax
Results
(Mils)
Loss-to-Receivables
(LTR)
(Pct)
U.S. Retail and Lease
Net
Receivables
(Bils)
Financial Services Segment – Ford Credit
4Q 2017 Key Metrics
Strong 4Q PBT up sharply YoY
Receivables grew globally, led by
retail financing in all regions
Business and portfolio continue to
perform well
U.S. consumer credit metrics
healthy with improved
delinquencies in 4Q
* See Appendix for reconciliation to GAAP
$610
$398
$151
$137
10% 53%
741
0.13%
0.16%
3 bps 1 bp
0.60%0.59%
10%
$143
$130 750
9 pts
FY: $1,879 $2,310 739 746 0.15% 0.14% 0.47% 0.53%
6 bps1 bp7 pts23%
24
4Q Ford Credit PBT YoY
improvement of $212M
broad-based as all factors
favorable except credit losses
Volume and mix gain due to global
receivables growth
Higher auction values YoY drove
lease residual improvement
Pension improvement reflects
non-repeat of 2016 Ford Credit
Europe plan settlement (fully
offset in Europe Automotive)
Financial Services Segment – Ford Credit
4Q 2017 Pre-Tax Results (Mils)
4Q 20174Q 2016
Volume /
Mix
Financing
Margin
Lease
Residual Exchange Other
Credit
Loss
Residual Losses $106
Supplemental Depreciation (50)
Non-Repeat of 2016 Pension Settlement $ 77
Operating Costs & Other 5
Derivatives Market Valuation (58)
25
Financial Services Segment – Ford Credit
U.S. Automotive Financing Trends
Prudent management of lease mix
Higher auction values YoY
supported lease residual and
credit loss performance
Continue to plan for lower
auction values – about 4% at
constant mix in 2018
Strong loss metrics reflect healthy
consumer credit conditions
60 65
79 80 70 61
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
$17,725
$16,760 $16,910
$17,200
$17,470
$17,155
$10.0
$10.7 $10.6 $10.5
$9.8 $10.2
1.06% 1.16% 1.16% 1.06% 1.12% 1.16%
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Lease Share of Retail Sales (Pct)
Retail and Lease Repossession Ratio (Pct)
and Severity (000)
Lease Return Vol. (000) and Auction Values**
18% 19%
24% 22%
19% 17%
29% 29%
31% 30% 28% 28%
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Retail and Lease Charge-Offs (Mils)
and LTR Ratio (Pct)
$79
$108 $96
$82 $95
$109
0.45%
0.59% 0.54% 0.46% 0.53%
0.60%
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
* Source: JD Power PIN
** At 4Q 2017 mix
36-Month Return VolumeFord Credit Industry*
LTR Charge-offsRepo Ratio Severity
26
Automotive Segment
Cash Flow
Positive 4Q operating cash flow
driven by Automotive profit,
favorable working capital and
timing / other changes
FY capital spending at $7.0B
FY funded pension contributions
of $1.4B
FY shareholder distributions
of $2.7B
(Bils) 4Q 2017 FY 2017
Cash at end of period 26.5$ 26.5$
Cash at beginning of period 26.1 27.5
Change in cash 0.4$ (1.0)$
Automotive segment pre-tax profits 1.4$ 7.3$
Capital spending (2.1) (7.0)
Depreciation and tooling amortization 1.3 5.0
Changes in working capital 0.8 -
All other and timing differences 0.9 (1.4)
Automotive operating cash flow 2.3$ 3.9$
Separation payments (0.2) (0.3)
Transactions with other segments (0.1) 0.2
Other, including acquisitions and divestitures (0.1) (0.3)
Cash flow before other actions 1.9$ 3.5$
Changes in debt (0.2) (0.4)
Funded pension contributions (0.7) (1.4)
Shareholder distributions (0.6) (2.7)
Change in cash 0.4$ (1.0)$
27
Auto cash and liquidity balances
strong
Ford Credit well capitalized with
strong liquidity. Managed leverage
at low end of target range due to
U.S. tax reform effects
Global funded pension plans now
fully funded
Balance Sheet Summary
(Bils) 2016 2017
Dec 31 Dec 31
Automotive Segment
Cash, cash equivalents and marketable securities 27.5$ 26.5$
Available credit lines* 10.8 10.9
Total liquidity 38.3$ 37.4$
Debt 15.9$ 15.9$
Cash net of debt 11.6 10.6
Ford Credit
Managed receivables** 137$ 151$
Debt 126 138
Liquidity 27 30
Managed leverage** (to 1) 9.2 8.0
Total Company Period End Balance Sheet Underfunded Status
U.S. pension 3.8$ 2.2$
Non-U.S. pension 5.1 4.4
Total global pension 8.9$ 6.6$
Total unfunded OPEB 5.9$ 6.2$
* Total available committed Automotive credit lines (including local lines available to foreign affiliates)
** See Appendix for detail, reconciliation to GAAP and definitions
28
FY Automotive segment PBT
driven by NA
Auto operations outside NA a loss
in total and down YoY, driven
largely by expected Brexit effects in
Europe
Strong Financial Services profit
All Other primarily net interest
expense plus FSM LLC
Company
FY 2017 Adjusted Pre-Tax Results* (Mils)
$8,437
$7,511
$(784)
$234
$(263)
$561
$2,248
$(1,070)
South
AmericaTotal
North
America All Other
Asia
PacificEurope
B / (W)
FY 2016 $(1,938) $(1,490) $325 $(971) $39 $(66) $428 $(203)
Middle East
& Africa
Financial
Services
Segment
Automotive Segment
$7,259
* See Appendix for detail, reconciliation to GAAP and definitions
29
Wholesales
(000)
Revenue
(Bils)
Market Share
(Pct)
Operating Margin
(Pct)
Pre-Tax Results
(Mils)
20172016 2017201620172016 20172016 20172016
Automotive Segment
FY 2017 Key Metrics
FY wholesales about flat; revenue
up 3% due to favorable mix and
higher volume from consolidated
operations and net pricing
Global industry up 2% due to AP,
Europe and SA
Global market share down due to
AP, Europe and MEA; NA flat;
SA improved
Auto PBT and operating margin
lower than last year
5.0%
6.7%
$7,259
$9,4227.2%6,6076,651
$145.7$141.5
7.0%
1% 0.2 ppts3% 1.7 ppts 23%
30
Market Factors Total Cost
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost FY 2017FY 2016
Automotive Segment
FY 2017 Pre-Tax Results (Mils)
FY Auto PBT $2.2B lower than 2016
due to higher commodities and
adverse exchange; all other factors
about offset
Higher commodities driven by
metals, mainly steel
Most of adverse exchange caused
by Brexit effects of about $600M,
along with Canadian dollar,
Chinese RMB and Argentine peso
Favorable market factors driven by
improved mix in all regions except
SA and higher net pricing except in
AP (China)
Pricing $ 2,885
Incentives / Other (2,668)
Commodities $(1,213)
Other (5)
Industry $(146)
Share 45
Stocks 95
Mix 952
Other (529)
$634 $(1,928)
Manufacturing, Incl. Vol. Related $(231)
Engineering (451)
Other (28)
31
Major External Factors Assumptions
For 2018, We Expect External Factors To Be Mixed
2017 Est. 2018 Change
Industry Volume (Mils.)
Global 94.9 ~97 Higher
U.S. 17.5 Low 17s Slightly Lower
Brazil 2.2 Mid 2s Higher
Europe 20.9 Low 21s Slightly Higher
China* 28.2 Mid 28s Slightly Higher
Key Commodities Unfavorable
Key Currencies Unfavorable
* Total industry based on data provided by the Chinese Insurance Information Technology Co. (CIITC)
32
Commodity Prices*
YoY Profit Impact (Bils)
Ford’s Commodity Costs Generally Move In-Line With
Market Prices
Annual buy of about $10B; steel and
aluminum roughly two-thirds
Benefited in 2015 and 2016 YoY from
falling prices as commodities hit
cyclical lows
Market pricing began to climb in
late 2016
2018 prices – further increase,
consistent with market dynamics
About one-third of 2018 exposure is
fixed through contracts and hedges;
remainder indexed
Steel ($ / Short Ton)
Aluminum ($ / Metric Ton)
2010 2012 2014 2016 2017 2018**2009 201520132011
$1.2
$(2.3)
$0.9
$(1.2)
$1,200
$1,700
$2,200
$2,700
$300
$500
$700
$900
2010 2012 2014 2016 2017 20182009 201520132011
* Source: Bloomberg; ticker symbols: HRC2 (Steel) and LOAHDY (Aluminum)
** Ford forecast
33
Reflects benefits of investment in
2016 and 2017
Fresh products drive improved
pricing and mix
Robust Increase In Product Launches In 2018
11
8
2
5 6 4
23
11
6
21
17 16
Global* Asia
Pacific
Launches
North
America
South
America
Europe Middle East &
Africa
2017
2018
* Global launches do not equal the sum of the regional launches
34
2018 Full Year Guidance
* See Appendix for detail, reconciliation to GAAP and definitions
Company
Revenue
Flat To Modestly
Higher Than 2017
Adjusted
EPS
$1.45 - $1.70
Company Operating
Cash Flow
Positive But Lower
Than 2017
*
Mobility
Higher Loss
Ford Credit
Strong Profit,
But Lower
Automotive
Flat To Lower Profit
Capital
Spending
About $7.5B
Adj. Effective
Tax Rate
About 15%
Pension
Contributions
About $500M
**
35
Automotive – flat to lower than
2017 with continued headwinds
from commodities and exchange;
higher market factors driven by mix
and net pricing
Mobility – higher loss due to
increased investments in AVs and
mobility services / capabilities
Ford Credit – strong but lower than
2017 due to adverse financing
margin from interest rates and
derivative revaluation
2017 To 2018 Company Adjusted EBIT Margin Bridge*
Company
2018
Adj. EBIT Margin
Company
2017
Adj. EBIT Margin
Ford
Credit
Market
Factors
Commodities /
Exchange
Cost Excl.
Commodities
Automotive
Mobility
Guidance
Range
6.1%
* See Appendix for detail and definitions
36
Questions & Answers
37
• 2017 was a critical year in a pivot to our vision of Smart Vehicles for a Smart World
• Achieving our vision requires a higher level of Company fitness, underscored by our full
year results for 2017
• We are making significant progress across our six Global Fitness Redesign initiatives
now under way
• Our plans for connectivity, electrification and autonomy are accelerating and are
funded by fitness actions and capital re-allocation
• Underpinning our efforts is Ford’s strong balance sheet, with substantial cash and
liquidity balances
Key Takeaways
38
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.
Cautionary Note On Forward-Looking Statements
39
Appendix
40
Total shareholder distributions of
$18.4B 2012 - 2018
First quarter regular dividend of
15¢ per share and a supplemental
dividend of 13¢ per share
2018 planned distributions of
about $3.1B
Shareholder Distributions (Bils)
$1.7 $2.4 $2.4 $2.4
Average
2012 - 2015
2012 - 2018
$2.7$1.0
2016
$0.6
$2.3
Supplemental Dividend
Anti-Dilutive Share Repurchases
Regular Dividends
2017
$1.7
$2.9
$13.8
$18.4
$3.5
$3.1
2018
A1
41
Targeting total payout of
40% - 50% of prior year net
income less pension and OPEB
remeasurement and tax only
special items
Payout includes quarterly cash
dividends, purchases of
common stock and supplemental
cash dividends
2015 - 2017 shareholder payouts
within target range
Shareholder Payout Ratio
2015 - 2017
2015 2016 2017 Cumulative
Shareholder Payout (Mils)
Quarterly cash dividends 2,380$ 2,383$ 2,385$ 7,149$
Purchases of common stock 129 145 131 405
Subsequent year supplemental cash dividends 992 199 517 1,708
Total shareholder payout 3,502$ 2,727$ 3,033$ 9,261$
Net Income Adjustments (Mils)
Net income attributable to Ford (GAAP) 7,373$ 4,596$ 7,602$ 19,571$
Less: Pre-tax net pension and OPEB remeasurement gains / (losses) (698) (2,996) (162) (3,856)
Less: Tax impact of net pension and OPEB remeasurement gains / (losses) 264 1,015 24 1,303
Less: Tax only special items - (89) 717 628
Net income adjusted for pension and
OPEB remeasurement and tax only special items 7,807$ 6,666$ 7,023$ 21,496$
Shareholder Payout Ratio (Pct)
Based on net income less pension and
OPEB remeasurement and tax only special items 44.8% 40.9% 43.2% 43.1%
Based on net income (GAAP) 47.5% 59.3% 39.9% 47.3%
A2
42
Company
Net Income Reconciliation To Adjusted Pre-Tax Profit
(Mils)
2016 2017 2016 2017
Net income / (Loss) attributable to Ford (GAAP) (783)$ 2,409$ 4,596$ 7,602$
Income / (Loss) attributable to non-controlling interests 2 4 11 26
Net income / (Loss) (781)$ 2,413$ 4,607$ 7,628$
Less: (Provision for) / Benefit from income taxes 336 524 (2,189) (520)
Income / (Loss) before income taxes (1,117)$ 1,889$ 6,796$ 8,148$
Less: Special items pre-tax (3,249) 152 (3,579) (289)
Adjusted pre-tax profit (Non-GAAP) 2,132$ 1,737$ 10,375$ 8,437$
4Q FY
A3
43
Company
Effective Tax Rate Reconciliation To
Adjusted Effective Tax Rate
2017 Memo:
4Q FY FY 2016
Pre-Tax Results (Mils)
Income / (Loss) before income taxes (GAAP) 1,889$ 8,148$ 6,796$
Less: Impact of special items 152 (289) (3,579)
Adjusted pre-tax profit (Non-GAAP) 1,737$ 8,437$ 10,375$
Taxes (Mils)
(Provision for) / Benefit from income taxes (GAAP) 524$ (520)$ (2,189)$
Less: Impact of special items 697 775 1,121
Adjusted (provision for) / benefit from income taxes (Non-GAAP) (173)$ (1,295)$ (3,310)$
Tax Rate (Pct)
Effective tax rate (GAAP) (27.7)% 6.4% 32.2%
Adjusted effective tax rate (Non-GAAP) 10.0% 15.3% 31.9%
A4
44
Company
Net Cash Provided By / (Used in) Operating Activities
Reconciliation To Company Operating Cash Flow
(Mils) 2016 2017
Company net cash provided by / (used in) operating activities (GAAP) 19,850$ 18,096$
Less: Items not included in Company operating cash flows
Ford Credit operating cash flows 8,810 9,300
Funded pension contributions (1,155) (1,434)
Separation payments (336) (281)
Other (128) (51)
Add: Items included in Company operating cash flows
Automotive and Mobility capital spending (6,947) (7,004)
Settlement of derivatives 610 217
Company operating cash flow (Non-GAAP) 6,322$ 3,775$
A5
45
Company
Special Items
* Includes related tax effect on special items and tax special items
(Mils)
2016 2017 2016 2017
Pension and OPEB gain / (loss)
Year end net pension and OPEB remeasurement loss (2,985)$ (162)$ (2,985)$ (162)$
Other pension remeasurement loss - - (11) -
Pension curtailment gain - 354 - 354
Separation-related actions (11) (38) (304) (297)
Other Items
San Luis Potosi plant cancellation (199) - (199) 41
Japan, Indonesia market closure (54) - (80) -
Next-generation Focus footprint change - (2) - (225)
Total pre-tax special items (3,249)$ 152$ (3,579)$ (289)$
Tax special items 1,248$ 697$ 1,121$ 775$
Memo:
Special items impact on earnings per share* (0.50)$ 0.21$ (0.61)$ 0.12$
4Q FY
A6
46
Company
Earnings Per Share Reconciliation To
Adjusted Earnings Per Share
2017
4Q FY
Diluted After-Tax Results (Mils)
Diluted after-tax results (GAAP) 2,409$ 7,602$
Less: Impact of pre-tax and tax special items 849 486
Adjusted net income – diluted (Non-GAAP) 1,560$ 7,116$
Basic and Diluted Shares (Mils)
Basic shares (average shares outstanding) 3,973 3,975
Net dilutive options and unvested restricted stock units 27 23
Diluted shares 4,000 3,998
Earnings per share – diluted (GAAP) 0.60$ 1.90$
Less: Net impact of adjustments 0.21 0.12
Adjusted earnings per share – diluted (Non-GAAP) 0.39$ 1.78$
A7
47
* Includes finance receivables (retail and wholesale) sold for legal purposes and net investment in operating leases included in securitization transactions that
do not satisfy the requirements for accounting sale treatment. These receivables and operating leases are reported on Ford Credit’s balance sheet and are
available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they
are not available to pay the other obligations of Ford Credit or the claims of Ford Credit’s other creditors
** Primarily includes Automotive segment receivables purchased by Ford Credit which are classified to Trade and other receivables on our consolidated Balance
Sheet. Also includes eliminations of intersegment transactions
Financial Services Segment – Ford Credit
Total Net Receivables Reconciliation To
Managed Receivables (Bils)
2015 2016 2017
Dec 31 Dec 31 Dec 31
Financial Services finance receivables, net (GAAP)* 90.7$ 96.2$ 108.4$
Net investment in operating leases (GAAP)* 25.1 27.2 26.7
Consolidating adjustments** 6.1 6.8 7.6
Ford Credit total net receivables 121.9$ 130.2$ 142.7$
Unearned interest supplements and residual support 4.5 5.3 6.1
Allowance for credit losses 0.4 0.5 0.7
Other, primarily accumulated supplemental depreciation 0.4 0.9 1.0
Total managed receivables (Non-GAAP) 127.2$ 136.9$ 150.5$
A8
48
Financial Services Segment – Ford Credit
Financial Statement Leverage Reconciliation To
Managed Leverage (Bils)
2015 2016 2017
Dec 31 Dec 31 Dec 31
Leverage Calculation
Total debt* 119.6$ 126.5$ 137.8$
Adjustments for cash** (11.2) (10.8) (11.8)
Adjustments for derivative accounting*** (0.5) (0.3) -
Total adjusted debt 107.9$ 115.4$ 126.0$
Equity**** 11.7$ 12.8$ 15.9$
Adjustments for derivative accounting*** (0.3) (0.3) (0.1)
Total adjusted equity 11.4$ 12.5$ 15.8$
Financial statement leverage (to 1) (GAAP) 10.2 9.9 8.7
Managed leverage (to 1) (Non-GAAP) 9.5 9.2 8.0
* Includes debt issued in securitization transactions and payable only out of collections on the underlying securitized assets and related enhancements. Ford
Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties
to those securitization transactions
** Cash and cash equivalents, and Marketable securities reported on Ford Credit’s balance sheet, excluding amounts related to insurance activities
*** Related primarily to market valuation adjustments to derivatives due to movements in interest rates. Adjustments to debt are related to designated fair value
hedges and adjustments to equity are related to retained earnings
**** Total shareholder’s interest reported on Ford Credit’s balance sheet A9
49
Automotive Segment
Debt
2016 2017
(Bils) Dec 31 Sep 30 Dec 31
Public unsecured debt 9.2$ 9.2$ 9.2$
U.S. Department of Energy 3.2 2.8 2.7
Other debt (including international) 3.5 4.2 4.0
Total Automotive debt 15.9$ 16.2$ 15.9$
Memo:
Automotive debt payable within one year 2.7$ 3.6$ 3.4$
A10
50
Automotive Segment – Asia Pacific
China Unconsolidated Affiliates
2016 2017 2016 2017
China Unconsolidated Affiliates
Wholesales (000) 380 341 1,217 1,132
Ford equity income (Mils)* 380 $ 206 $ 1,439 $ 916 $
China JV net income margin 12.8% 8.3% 14.6% 10.9%
4Q FY
* Ford equity share of China joint ventures net income
A11
51
Return On Invested Capital Calculation (Bils)
* Reflects total pension & OPEB (income) / expense except service cost
** Calculated as five-year average NOPAT divided by five-year average invested capital
Note: Results may not sum due to rounding
2013 2014 2015 2016 2017
Net Operating Profit After Tax (NOPAT)
Pre-tax profit (incl. special items) 14.4$ 1.2$ 10.3$ 6.8$ 8.1$
Add back: Costs related to invested capital
Automotive interest expense 0.8 0.8 0.8 0.9 1.1
Funding-related pension and OPEB costs* (6.1) 3.4 (0.7) 1.6 (1.8)
Less: Cash taxes (0.5) (0.5) (0.6) (0.7) (0.6)
Net operating profit after tax 8.6$ 5.0$ 9.8$ 8.6$ 6.9$
Invested capital
Equity 26.2$ 24.5$ 28.7$ 29.2$ 34.9$
Redeemable non-controlling interest 0.3 0.3 0.1 0.1 0.1
Automotive debt 15.7 13.8 12.8 15.9 15.9
Net pension and OPEB liability 14.9 16.2 13.9 14.7 12.8
Invested capital (end of year) 57.0$ 54.8$ 55.5$ 59.9$ 63.7$
Average year invested capital 56.5$ 55.7$ 55.1$ 57.7$ 61.8$
Annual ROIC 15.2% 8.9% 17.7% 14.9% 11.2%
Five-year average ROIC** 17.4% 16.2% 15.7% 14.6% 13.5%
A12
52
Employment Data By Business Unit*
* Employment data includes the approximate number of individuals employed by consolidated entities
(000)
2016
Dec 31
2017
Dec 31
North America 101 100
South America 15 14
Europe 52 54
Middle East & Africa 3 3
Asia Pacific 23 23
Total Automotive 194 194
Financial Services 7 7
All Other - 1
Total Company 201 202
A13
53
Underfunded status of pension
plans at $6.6B
Funded status improved by
$2.3B versus a year ago
Funded plans are now fully funded
Expect 2018 funded pension
contributions to be about $500M
Pension Update
* Excludes all pension-related special items, primarily remeasurement
** Reflects pension and OPEB remeasurement loss of about $0.2 billion and curtailment gain of about $0.4 billion
2016 2017
2017
B / (W)
2016
Year End Underfunded Status (Bils)
U.S. plans 3.8$ 2.2$ 1.6$
Non-U.S. plans 5.1 4.4 0.7
Total underfunded status 8.9$ 6.6$ 2.3$
Year-End Discount Rate (Weighted Average)
U.S. plans 4.03 % 3.60 % (0.43) ppts
Non-U.S. plans 2.44 2.33 (0.11)
Actual Asset Returns
U.S. plans 8.6 % 13.4 % 4.8 ppts
Non-U.S. plans 14.0 4.5 (9.5)
Pension Plan Contributions (Bils)
Funded plans 1.2$ 1.4$ (0.2)$
All plans 1.5 1.8 (0.3)
Pension plan (expense) / income* (Bils) 0.5$ 0.6$ 0.1$
Pension & OPEB Special items (Bils) (3.0)$ 0.2$ 3.2$ **
A14
54
Automotive Segment
4Q Industry SAAR / FY Industry
Units (Mils)
2016 2017 B / (W) 2016 2017 B / (W)
North America 22.6 22.1 (0.5) 21.8 21.5 (0.3)
U.S. 18.4 18.2 (0.2) 17.9 17.5 (0.4)
South America 3.8 4.3 0.5 3.7 4.2 0.5
Brazil 2.0 2.3 0.3 2.1 2.2 0.1
Europe 20.6 21.2 0.6 20.1 20.9 0.8
Middle East & Africa 3.6 3.5 (0.1) 3.7 3.6 (0.1)
Asia Pacific 47.8 48.2 0.4 43.4 44.8 1.4
China 31.6 31.4 (0.2) 27.5 28.2 0.7
Global 98.3 99.3 1.0 92.7 94.9 2.2
4Q SAAR FY Industry
A15
55
Automotive Segment
4Q Market Share
(Percent)
Total Share of Total Industry
North America 13.1 % 13.7 % 0.6 ppts 13.9 % 13.9 % - ppts
U.S. 13.9 14.7 0.8 14.6 14.8 0.2
South America 8.8 8.9 0.1 8.8 8.9 0.1
Brazil 9.4 10.0 0.6 9.2 9.6 0.4
Europe 7.4 7.4 - 7.7 7.5 (0.2)
Middle East & Africa 4.5 4.4 (0.1) 4.5 3.9 (0.6)
Asia Pacific 3.7 3.4 (0.3) 3.7 3.4 (0.3)
China* 4.5 4.0 (0.5) 4.6 4.2 (0.4)
Global 6.7 % 6.6 % (0.1) ppts 7.2 % 7.0 % (0.2) ppts
Retail Share of Retail Industry
U.S.** 12.4 % 13.0 % 0.6 ppts 12.7 % 12.8 % 0.1 ppts
Europe*** 7.3 7.1 (0.2) 7.8 7.4 (0.4)
2016 2017 B / (W)
4Q FY
2016 2017 B / (W)
* Total industry sales based on data provided by the Chinese Insurance Information Technology Co. (CIITC)
** Present quarter is estimated, prior quarters are based on latest Polk data
*** Europe passenger car retail share of retail industry reflects the five major markets (U.K., Germany, France, Italy and Spain); present quarter is estimated, prior
quarters are based on latest Data Force data
A16
56
Automotive Segment
Production Volumes
Key drivers of 1Q YoY:
AP – matching production
to demand
(000)
O / (U) O / (U)
Units 2016 Units 2017
North America 720 10 805 (14)
South America 89 12 86 13
Europe 416 59 454 6
Middle East & Africa 23 - 24 3
Asia Pacific 442 (38) 357 (41)
Total 1,690 43 1,726 (33)
4Q 2017 Actual 1Q 2018 Forecast
A17
57
Automotive Segment – Selected Markets
Dealer Stocks
(000) U.S. Brazil Europe 21 MEA China
4Q
December 31, 2017 628 22 281 43 173
September 30, 2017 617 20 246 47 168
Stock Change H / (L) 11 2 35 (4) 5
4Q Prior Year
December 31, 2016 648 22 226 64 154
September 30, 2016 658 22 206 63 150
Stock Change H / (L) (10) - 20 1 4
Year-Over-Year Stock Change 21 2 15 (5) 1
A18
58
Market Factors Total Cost
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost FY 2017FY 2016
Automotive Segment – North America
FY 2017 Pre-Tax Results (Mils)
NA PBT down $1.5B driven by
higher commodities, Expedition /
Navigator launch and adverse
exchange
Expedition / Navigator launch
effects reflect lower volume and
higher cost offset partially by
favorable net pricing
Favorable mix driven by strength of
F-Series and utilities
Ford ATPs rose more than 2X the
industry due to F-Series
Industry $(433)
Share 181
Stocks (52)
Mix 681
Other (113)
$439 $(1,653)
Engineering $(389)
Administrative (207)
Other 86Pricing $ 1,826
Incentives / Other (1,651)
Mat’l, Excl. Commodities $(473)
Commodities (820)
Warranty 155
Other (5)
A19
59
Market Factors Total Cost
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost FY 2017FY 2016
Automotive Segment – South America
FY 2017 Pre-Tax Results (Mils)
Pre-tax loss improved $325M due
to higher industry and favorable
net pricing
Unfavorable cost performance due
to high inflation and higher product
cost net of efficiencies driven by
all-new EcoSport
Unfavorable exchange due to
Argentine peso
Industry $260
Share (22)
Stocks (12)
Mix (20)
Other (31)
Pricing $411
Incentives / Other 3
$589 $(110)
Mat’l, Excl. Commodities $(79)
Commodities (88)
Other 18
A20
60
Market Factors Total Cost
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost FY 2017FY 2016
Automotive Segment – Europe
FY 2017 Pre-Tax Results (Mils)
Europe pre-tax result $971M lower
due to Brexit effects, commodities,
Fiesta launch and warranty
Brexit effects reflect adverse
exchange, lower U.K. industry and
higher pricing in the U.K.
Higher commodities mainly steel
and other metals
Fiesta launch effects include lower
volume, higher net pricing net of
product cost increases and higher
structural cost
Industry $ 79
Share (34)
Stocks 100
Mix 190
Other (275)
Pricing $ 625
Incentives / Other (492)
$193 $(749)
Commodities $(267)
Warranty (245)
Freight / Other 113
Manufacturing, Incl. Volume Related $(267)
Engineering (81)
Spending Related (98)
Other 96
A21
61
Market Factors Total Cost
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost FY 2017FY 2016
Automotive Segment – Middle East & Africa
FY 2017 Pre-Tax Results (Mils)
MEA’s pre-tax result improved
$39 million, or 13%
All factors improved other than
volume
Exchange reflects South African
rand and euro
Industry $ (92)
Share (80)
Stocks (139)
Mix 27
Other (83)
$(354) $242
Mat’l, Excl. Commodities $164
Other (20)
A22
62
Market Factors Total Cost
Volume /
Mix
Net
Pricing
Structural
Cost Exchange Other
Contribution
Cost FY 2017FY 2016
Automotive Segment – Asia Pacific
FY 2017 Pre-Tax Results (Mils)
AP PBT down $66M YoY due to
China
Market factors lower reflecting
lower net pricing, mainly China
industry pricing, partially offset by
favorable volume and mix
Improved cost performance driven
by material cost reductions
Unfavorable exchange driven by
Chinese RMB and Thai baht
Industry $ 40
Share -
Stocks 198
Mix 74
Other (26)
$(231) $342
Pricing $ (32)
Incentives / Other (485)
Mat’l, Excl. Commodities $277
Other 52
A 3
63
PBT improved $431M YoY
reflecting favorable volume and
mix, lease residual improvement
and financing margin
Volume and mix up due to global
receivables growth
Lease residual improvement driven
by higher than expected auction
values
Financial Services Segment – Ford Credit
FY 2017 Pre-Tax Results (Mils)
20172016
Volume /
Mix
Financing
Margin
Lease
Residual Exchange Other
Credit
Loss
Non-Repeat of 2016 Pension Settlement $ 77
Operating Costs & Other (37)
Residual Losses $118
Supplemental Depreciation (62)
30A24
64
Revised Reporting – 2015 And 2016 (Mils)
2015 2016
Full Year 1Q 2Q 3Q 4Q Full Year
North America 9,573$ 3,167$ 2,796$ 1,372$ 2,059$ 9,394$
South America (800) (249) (257) (287) (284) (1,077)
Europe 350 461 495 168 194 1,318
Middle East & Africa 45 (10) (61) (148) (66) (285)
Asia Pacific 827 241 14 152 305 712
Automotive 9,995$ 3,610$ 2,987$ 1,257$ 2,208$ 10,062$
Mobility - (12) (20) (42) (43) (117)
Ford Credit 2,086 514 400 567 398 1,879
Corporate Other (452) (60) (149) (117) (173) (499)
Company adjusted EBIT 11,629$ 4,052$ 3,218$ 1,665$ 2,390$ 11,325$
Interest on debt (829) (215) (225) (252) (258) (950)
Special items pre-tax (548) (186) (118) (26) (3,249) (3,579)
Taxes (2,881) (1,196) (903) (426) 336 (2,189)
Less: Non-controlling interests (2) 3 2 4 2 11
Net income attributable to Ford 7,373$ 2,452$ 1,970$ 957$ (783)$ 4,596$
Company operating cash flow (Bils) 7.2$ 6.3$
Automotive EBIT operating margin (Pct) 7.1% 10.2% 8.1% 3.8% 6.1% 7.1%
Company adjusted EBIT margin (Pct) 7.8% 10.7% 8.1% 4.6% 6.2% 7.5%
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Revised Reporting – 2017 (Mils)
2017
1Q 2Q 3Q 4Q Full Year
North America 2,122$ 2,325$ 1,811$ 1,788$ 8,046$
South America (237) (177) (150) (189) (753)
Europe 209 122 (53) 89 367
Middle East & Africa (75) (49) (56) (66) (246)
Asia Pacific 148 167 314 30 659
Automotive 2,167$ 2,388$ 1,866$ 1,652$ 8,073$
Mobility (64) (63) (72) (100) (299)
Ford Credit 481 619 600 610 2,310
Corporate Other (72) (146) (122) (118) (458)
Company adjusted EBIT 2,512$ 2,798$ 2,272$ 2,044$ 9,626$
Interest on debt (293) (291) (298) (307) (1,189)
Special items pre-tax 24 (248) (217) 152 (289)
Taxes (649) (209) (186) 524 (520)
Less: Non-controlling interests 7 8 7 4 26
Net income attributable to Ford 1,587$ 2,042$ 1,564$ 2,409$ 7,602$
Company operating cash flow (Bils) 3.8$
Automotive EBIT operating margin (Pct) 5.9% 6.4% 5.5% 4.3% 5.5%
Company adjusted EBIT margin (Pct) 6.4% 7.0% 6.2% 4.9% 6.1%
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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
information to their equivalent GAAP measures, to aid investors in better understanding our financial results. We believe that these non-GAAP measures provide useful perspective on underlying business results and trends, and a means to assess our period-
over-period results. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP measures may not be the same as similarly titled measures
used by other companies due to possible differences in method and in items or events being adjusted.
• Company Adjusted Pre-tax Profit (Most Comparable GAAP Measure: Net income attributable to Ford) – The non-GAAP measure is useful to management and investors because it allows users to evaluate our pre-tax results excluding pre-tax special items.
Pre-tax special items consist of (i) pension and OPEB remeasurement gains and losses that are not reflective of our underlying business results, (ii) significant restructuring actions related to our efforts to match production capacity and cost structure to market
demand and changing model mix, and (iii) other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities. When we provide guidance for adjusted pre-tax profit, we do not provide guidance on a net income 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.
• Adjusted Earnings Per Share (Most Comparable GAAP Measure: Earnings Per Share) – Measure of Company’s diluted net earnings per share adjusted for impact of pre-tax special items (described above), and tax special items. The measure provides investors
with useful information to evaluate performance of our business excluding items not indicative of underlying run rate of our business. When we provide guidance for adjusted earnings per share, we do 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.
• Adjusted Effective Tax Rate (Most Comparable GAAP Measure: Effective Tax Rate) – Measure of Company’s tax rate excluding pre-tax special items (described above) and tax special items. The measure provides an ongoing effective rate which investors find
useful for historical comparisons and for forecasting. When we provide guidance for adjusted effective tax rate, we do not provide guidance on an effective tax rate 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.
• Company Adjusted EBIT (Most Comparable GAAP Measure: Net income attributable to Ford) – Earnings before interest and taxes (EBIT) includes non-controlling interests and excludes interest on debt (excl. Ford Credit Debt), taxes and pre-tax special items.
This non-GAAP measure is useful to management and investors because it allows users to evaluate our operating results aligned with industry reporting. Pre-tax special items consist of (i) pension and OPEB remeasurement gains and losses that are not
reflective of our underlying business results, (ii) significant restructuring actions related to our efforts to match production capacity and cost structure to market demand and changing model mix, and (iii) other items that we do not necessarily consider to be
indicative of earnings from ongoing operating activities. When we provide guidance for adjusted pre-tax profit, we do not provide guidance on a net income 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.
• Company Adjusted EBIT Margin (Most Comparable GAAP Measure: Automotive Operating Margin) – Company Adjusted EBIT margin is Company adjusted EBIT divided by Company revenue. This non-GAAP measure is useful to management and investors
because it allows users to evaluate our operating results aligned with industry reporting.
• Company Operating Cash Flow (Most Comparable GAAP Measure: Net cash provided by / (used in) operating activities) – Measure of Company’s operating cash flow excluding Ford Credit’s operating cash flows. The measure contains elements management
considers operating activities, including Automotive and Mobility capital spending and settlement of derivatives. The measure excludes cash outflows for Automotive and Mobility funded pension contributions, separation payments, and other items that are
considered operating cash outflows under U.S. GAAP. This measure is useful to management and investors because it is consistent with management’s assessment of the Company’s operating cash flow performance.
• Ford Credit Managed Receivables – (Most Comparable GAAP Measure: Net Finance Receivables plus Net Investment in Operating Leases) – Measure of Ford Credit’s Total net receivables, excluding unearned interest supplements and residual support,
allowance for credit losses, and other (primarily accumulated supplemental depreciation). The measure is useful to management and investors as it closely approximates the customer’s outstanding balance on the receivables, which is the basis for earning
revenue.
• Ford Credit Managed Leverage (Most Comparable GAAP Measure: Financial Statement Leverage) – Ford Credit’s debt-to-equity ratio adjusted (i) to exclude cash, cash equivalents, and marketable securities (other than amounts related to insurance
activities), and (ii) for derivative accounting. The measure is useful to investors because it reflects the way Ford Credit manages its business. Cash, cash equivalents, and marketable securities are deducted because they generally correspond to excess debt
beyond the amount required to support operations and on-balance sheet securitization transactions. Derivative accounting adjustments are made to asset, debt, and equity positions to reflect the impact of interest rate instruments used with Ford Credit’s
term-debt issuances and securitization transactions. Ford Credit generally repays its debt obligations as they mature, so the interim effects of changes in market interest rates are excluded in the calculation of managed leverage.
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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 unconsolidated affiliate) that are sold to dealerships, units manufactured by Ford
that are sold to other manufacturers, units distributed by Ford for other manufacturers, and local brand units produced by our China joint venture, Jiangling Motors Corporation, Ltd.
(“JMC”), that are sold to dealerships. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option (i.e., rental repurchase), as well as other sales of
finished vehicles for which the recognition of revenue is deferred (e.g., consignments), also are included in wholesale unit volumes. Revenue from certain vehicles in wholesale unit
volumes (specifically, Ford badged vehicles produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our revenue
Automotive Segment Operating Margin
• Automotive segment operating margin is defined as Automotive segment pre-tax results divided by Automotive segment revenue
Industry Volume and Market Share
• Industry volume and market share are based, in part, on estimated vehicle registrations; includes medium and heavy duty trucks
SAAR
• SAAR means seasonally adjusted annual rate
Automotive Cash
• Automotive cash includes cash, cash equivalents, and marketable securities
Market Factors
• Volume and Mix – primarily measures profit variance from changes in wholesale volumes (at prior-year average contribution margin per unit) driven by changes in industry volume,
market share, and dealer stocks, as well as the profit variance resulting from changes in product mix, including mix among vehicle lines and mix of trim levels and options within a vehicle
line
• Net Pricing – primarily measures profit variance driven by changes in wholesale prices to dealers and marketing incentive programs such as rebate programs, low-rate financing offers,
special lease offers and stock accrual adjustments on dealer inventory
Definitions And Calculations
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