APRIL L 25, , 2014 Bank of America Conference (PRELIM IMINARY INARY RESU SULTS) TS) April 1, 2015 Joe Hinrichs Executive Vice President, Ford Motor Company President, The Americas Bank of America Merrill Lynch -- 2015 New York Auto Summit Bank of America Conference April 1, 2015 April 1, 2015
AGENDA • One Ford Plan Update – North America – South America • 2015 Planning Assumptions and Key Metrics • Closing Remarks • Q&A SLIDE 1
OUR FOCUS • One Ford -- Acceleration • Product Excellence -- Delivered With Passion • Innovation -- In Every Part Of Our Business THE PLAN Large Profits PROFITABLE GROWTH Americas & Cash FOR ALL + + = Asia Pacific Medium Small Europe, Middle East & Africa SLIDE 2
ONE FORD LONG-TERM OBJECTIVES People Working Together As A Lean, Global Enterprise For Automotive Leadership Top 5 More Top Quartile Highly Sales / Balanced Total Operating Regarded 10%+ Regional Shareholder Margins By All Global & Segment Return 8%+ Stakeholders Share Profits (TSR) Five Objectives To Deliver An Exciting, Viable Ford Delivering Profitable Growth For All, As Well As Automotive Leadership SLIDE 3
ONE FORD STRATEGIC FRAMEWORK Profit Complete Ford = Strong Serving Family Of Smart Revenue Brands All Markets X Best-In-Class Mobility Margin Vehicles Large Americas PROFITABLE GROWTH PROFITABLE GROWTH FOR ALL FOR ALL Asia Pacific Medium Small Europe, Middle East & Africa “Turbo Machine” Product Excellence Innovation SLIDE 4
NORTH AMERICA -- OVERVIEW Pre-Tax Results (Bils.) • Significant transformation of Ford North America since 2008 $8.8 $8.1 – Continuing to implement global product $6.9 $6.2 strategy and launch new products that $5.4 our customers want and value – Delivering significant improvements in fuel economy – Driving quality improvements $(0.6) – Controlling structural costs – Aligning production capacity with demand $(5.9) – Generating strong cash flow to support 2008 2009 2010 2011 2012 2013 2014 corporate balance sheet improvements Operating Margin (Neg.) (Neg.) 8.4% 8.3% 10.6% 10.2% 8.4% North America Transformation Has Driven Strong Profits In The Last Five Years SLIDE 5
NORTH AMERICA -- KEY PRIORITIES • Deliver profitable growth • Accelerate quality improvements • Develop and launch outstanding products • Continue to revitalize the Lincoln brand • Control costs as we grow the business SLIDE 6
U.S. INDUSTRY SALES RATES SAAR (Millions) 17.0 - 17.5 16.8 16.8 15.9 14.8 2012 2013 2014 Feb. YTD 2015 Full Year 2015 Outlook Retail SAAR (Mils.) 11.7 12.9 13.7 13.4 U.S. Industry Sales Are Projected To Continue To Grow With A 2015 Full Year Outlook Of 17 - 17.5 Million Units SLIDE 7
U.S. INDUSTRY -- PICKUP SALES DRIVERS Housing Starts and Full-Size Pickup Sales Full-Size Pickup Sales (unit -- mils.) Housing Starts (unit -- mils.) 2.3 2.0 1.9 1.8 1.7 1.6 1.4 1.0 0.9 0.9 0.8 0.6 2006 2008 2010 2012 2013 2014 Full-Size Pickup Sales Rebound Supported By Improved Housing Sector SLIDE 8
U.S. MARKET SHARE Total Ford / Lincoln Share (Pct.) 15.7% 15.2% 14.7% 14.6% 2012 2013 2014 Feb. YTD 2015 B / (W) Prior Year (1.3) Pts. 0.5 Pts. (1.0) Pts. (0.5) Pts. Expect Higher Market Share In 2015 Driven By New Product Introductions SLIDE 9
NORTH AMERICA QUALITY IMPROVEMENT ACTIONS Ford U.S. Full Year Things-Gone-Wrong At Three Months In Service 16.4% Better Best -in- Class 2013MY 2014MY Source: Global Quality Research System (GQRS) Accelerated Quality Actions Are Driving Improvement And Closing Gap To Best-In-Class Competition SLIDE 10
2014 launches 2015 launches C-MAX Fusion Mustang Focus Super Duty F-150 Escape Explorer NORTH AMERICA Transit Expedition Taurus Flex Medium Duty Edge Transit Connect Fiesta SLIDE 11
2015 FORD F-150 All-New F-150 Has Won 28 Major Truck Of The Year Awards, Including North American Truck Of The Year (NAIAS) SLIDE 12
2015 FORD F-150 LAUNCH STATUS Dearborn Truck Plant Key Data • Full-scale vehicle production on three crews Key Data Kansas City Assembly Plant • Plant changeover complete • Production began on three crews; ramp to full production capability during Second Quarter • Shipments to customers started late First Quarter The Launch Of The Most Capable F-150 Ever Is On Track SLIDE 13
2015 FORD F-150 SALES AND MARKETING UPDATE • Pre-launch on-line media content has accumulated over 52 million video views from combined sources, including YouTube and Ford’s F-150 reveal website • Demand metrics remain strong, with over 1.2 million online build and price actions taken by consumers, and additional 410,000 requests for more information • 2015 MY F-150 is turning very quickly -- in February, it averaged only 18 days on dealer lots; new model represented 21% of total F-150 retail sales in February • Initial mix has been rich, with a high mix of sales reflecting 4x4 drivetrain, crew cab body style, and Lariat or even higher-spec vehicles Strong Demand For The All-New F-150 SLIDE 14
2015 FORD EDGE The All-New Ford Edge Began Shipping To Dealers In March SLIDE 15
2016 FORD EXPLORER New Ford Explorer -- Americas Best-Selling SUV Over The Past 25 Years Available In Dealerships Later This Year SLIDE 16
INNOVATION THROUGH PERFORMANCE All-New Ford Explorer -- Americas Best Selling SUV For 25 Years More Than 12 New Ford Performance Vehicles Through 2020 SLIDE 17
LINCOLN MOTOR COMPANY Strategic Priorities Opportunities Ahead • Rapidly growing global luxury segment with about a third of the Distinct Brand global industry profit pool • U.S. and China to represent nearly 50% of global luxury sales by 2020 Unique And Compelling • Well positioned to retain Ford Products customers moving to luxury segment • Lincoln and its long heritage is well regarded by consumers in China Superior Client Experience • Advantage in our size and geographic footprint as we grow the brand We Are Fully Committed To Re- Establishing Lincoln’s Position Among The Top Luxury Segment Brands SLIDE 18
LINCOLN JOURNEY LINCOLN DEALERSHIPS OPEN IN CHINA MKC CAMPAIGN WITH LINCOLN BRAND MATTHEW LAUNCHES IN McCONAUGHEY CHINA MKX REVEAL MKZ LAUNCH BLACK LABEL LAUNCHES IN LOS ANGELES LINCOLN MOTOR COMPANY NAVIGATOR ANNOUNCEMENT CONTINENTAL LAUNCH LINCOLN CONCEPT ANNOUNCES REVEAL AT NEW REVEL YORK AUTO BLACK LABEL PARTNERSHIP SHOW REVEAL MKC LAUNCH AT PEBBLE BEACH 2012 2013 2014 2015 Re-Establishing Lincoln As A Top Luxury Brand SLIDE 19
2014 launches 2015 launches MKX SLIDE 20
2016 LINCOLN MKX All-New Lincoln MKX Is The Third All-New Vehicle In The Lincoln Transformation Plan -- Available In Dealerships Later This Year SLIDE 21
LINCOLN CONTINENTAL CONCEPT Elegant, Effortlessly Powerful, Serene, Lincoln Continental Concept Is The Future Of Quiet Luxury SLIDE 22
NORTH AMERICA -- KEY TAKEAWAYS • Industry sales growth is forecasted to continue this year • Ford North America is focused on delivering key 2015 launches and growing market share • Accelerated quality actions are driving improvement and closing the gap to best-in-class • Strong margins projected to continue; First Quarter results reflect impact of product launches • Lean cost structure is key to maintaining / improving operating efficiency • Lincoln growth plan is on track Continue To Focus On Driving Profitability, Growing Market Share, And Improving Quality SLIDE 23
SOUTH AMERICA -- OVERVIEW Pre-Tax Results (Bils.) • South America generated strong $1.2 pre-tax profit and operating margins $1.0 $0.9 through 2011. A more challenging $0.8 macroeconomic and political environment started in 2012 $0.2 • 2014 results reflect: – Weakening industry $ - * – Exchange weakness, high inflation, and capital controls – Change in regional trade policies • Fully transitioned to global products $(1.2) in 2014 2008 2009 2010 2011 2012 2013 2014 • Venezuela results no longer reported Operating Margin in consolidated financials beginning 14.1% 9.7% 10.2% 7.8% 2.1% (0.3)% (13.2)% in 2015 * 2013 pre-tax results were $(33) million Results For 2014 Were Lower Than 2013, Reflecting Volatile Business Environment SLIDE 24
SOUTH AMERICA -- BUSINESS ENVIRONMENT • South America macroeconomic and political challenges continue to escalate and include: – Recessionary to low-growth economies – Tough competition and excess capacity – High inflation – Capital controls and limited access to foreign reserves – Restrictive trade policies – Contested tax incentives – Political and social uncertainty in some countries South America Faces Numerous Macroeconomic And Political Challenges SLIDE 25
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