Attached files
| file | filename |
|---|---|
| 8-K - 8-K - FORD MOTOR CREDIT CO LLC | earnings8-kdatedjuly282016.htm |
Net income $2.0B, down $190M from a year ago;
Total company adjusted pre-tax profit of $3.0B,
down $293M
Earnings per share $0.49, down $0.05 from a year ago;
adjusted earnings per share $0.52, down $0.02
Automotive segment operating cash flow of $4.2B,
an all-time quarterly record
Automotive segment pre-tax profit of $2.8B, down
$130M; regions outside North America collectively also
were profitable for third consecutive quarter
Automotive segment operating margin 7.7 percent
Europe delivered $467M pre-tax profit, nearly triple year
ago results, best ever second quarter
Ford Credit continued to deliver solid results
Distributed $600M to shareholders in a regular quarterly
dividend
Global market share of 7.5 percent down three-tenths of
a point from a year ago
Launched new Escape, Fusion, Fusion Hybrid, Fusion
Energi Plug-In Hybrid, Lincoln MKZ and MKZ Hybrid;
on track for 12 global product launches in 2016
Invested in Pivotal to further strengthen our cloud-based
software capabilities
Lincoln sales up 25 percent in the quarter
Announced $3.4B manufacturing investments in the
U.S., Mexico and South Africa
Record first-half North America pre-tax profits
First-half strong net income $4.4B, up 33 percent;
Record total company adjusted pre-tax profit $6.8B,
up 35 percent; vehicle wholesales up 150,000;
revenue up 8 percent
2016 Guidance: Expect another strong year of results,
and Ford committed to full year guidance of company pre-
tax profit and operating margin equal to or better than last
year; however, company now sees risks challenging
achieving guidance. Entire Ford team working to mitigate
the risks
2 0 1 6 S E C O N D Q U A R T E R F I N A N C I A L R E S U LT S
Ford Motor Company 2Q July 28, 2016 1
“We delivered another strong quarter
– one of our best second quarters
ever – and record pre-tax profits for
the first half of this year. We remain
committed to delivering another full
year of strong profitability, even as we
address some new risks and market
challenges around the world.”
Mark Fields, President & CEO
Ford Delivers Second Quarter $2.0B Net Income;
$3.0B Adjusted Pre-Tax Profit
Net Income
Adjusted Pre-Tax Profit
(Non-GAAP) Revenue Wholesales
Automotive Segment
Operating Margin
Automotive Segment
Operating Cash Flow
2Q 2016 $2.0B $3.0B $39.5B 1,694K 7.7% $4.2B
B/(W)
2Q 2015 ($190)M ($293)M $2.2B (2)K (0.7) ppts $2.3B
H I G H L I G H T S *
P R O D U C T S
All-new F-150 Raptor SuperCrew,
a high-performance off-road pickup,
will be available in China in 2017,
delivering a new level of capability
to off-road enthusiasts. It features
an exclusive high-output 3.5-liter
EcoBoost® V6 engine, paired with
an all-new 10-speed transmission.
F-150 Raptor Super Crew to China
Ford GT Wins at LeMans
2017 Ford Fusion
Lincoln Navigator Concept
In June, the No. 68 Ford GT ,
featuring the latest in light-
weighting, aerodynamics and
EcoBoost technology, won the 24
hours of LeMans GTE Pro category
50 years after the historic 1-2-3
finish. The Ford Chip Ganassi team
transformed the car into a LeMans
winner in just over one year.
Launched 2017 Ford Fusion, the smartest,
most technology-packed Fusion ever,
includes a pedestrian detection system,
hands-free parallel and perpendicular
parking and SYNC® 3. Fusion Energi plug-in
hybrid allows customers to drive extended
distances using just electricity, then
operating as a conventional gas engine-
powered hybrid when the battery runs low.
Introduced all-new Navigator Concept
introduces quiet luxury to full-size
SUVs and offers a glimpse at what
comes next for the Lincoln’s best-
known nameplate. It is engineered
to provide drivers peace of mind
with a 3.5-liter twin-turbo V6 engine
delivering more than 400 horsepower
and smart, new technologies.
*See endnote on page 4.
For news releases, related materials and high-resolution photos and video, visit www.media.ford.com.
Follow at www.facebook.com/ford, www.twitter.com/ford or www.youtube.com/fordvideo1
│ NEWS
www.facebook.com/ford www.twitter.com/ford
A U T O M O T I V E S E G M E N T R E S U LT S
North America pre-tax profit of $2.7B, down $135M; with an
operating margin of 11.3 percent
U.S. market share 15.3 percent, up three-tenths of a point driven by
strong fleet sales and F-Series retail performance
Average U.S. retail transaction prices increased $1,300 per vehicle,
compared to year ago, driven by strong mix
Record first-half profit of $5.8B and operating margin at 12.1 percent
North America
Wholesales Revenue
Operating
Margin
Pre-Tax
Results
2Q 2016 815K $23.8B 11.3% $2.7B
B/(W)
2Q 2015 (1)K $0.5B (0.9) ppts ($135)M
All key metrics declined from a year ago, reflecting the continued
difficult external conditions, particularly in Brazil where the economy
continued to contract and industry volumes declined 22 percent
Higher loss primarily due to high local inflation and weaker local
currencies
Continued to deliver lower costs across the business
South America
Wholesales Revenue
Operating
Margin
Pre-Tax
Results
2Q 2016 83K $1.3B (21.3)% $(265)M
B/(W)
2Q 2015 (15)K $(0.2)B (8.9) ppts $(80)M
Record second quarter pre-tax profit of $467M nearly triple the same
period a year ago
Year-over-year pre-tax profit improvement of $306M was driven by
favorable mix and improved cost performance
All second quarter metrics improved sharply, excluding market share
which was down slightly
Topline growth strong with wholesale volume up 11 percent; revenue
up 16 percent
Year-to-date Ford of Europe pre-tax profits at $901M, up $782M
Europe
Wholesales Revenue
Operating
Margin
Pre-Tax
Results
2Q 2016 430K $8.1B 5.8% $467M
B/(W)
2Q 2015 41K $1.1 3.5 ppts $306M
Pre-tax results adversely were impacted by the external environment
including low oil prices, weak local currency and political strife
Financial results reflect lower industry and unfavorable exchange
primarily the South African rand
Middle East & Africa
Wholesales Revenue
Operating
Margin
Pre-Tax
Results
2Q 2016 38K $1.0B (7.2)% $(65)M
B/(W)
2Q 2015 (6)K -- (2.1) ppts $(19)M
Results driven by market performance in China, higher costs to
support future growth and weaker yuan
Wholesales lower due to planned eight-week shutdown of Chongqing
Plant #1 for facility upgrades; revenue from consolidated operations
improved 17 percent
First-half wholesale volumes, revenue and market share up from
a year ago
Asia Pacific
Wholesales Revenue
Operating
Margin
Pre-Tax
Results
2Q 2016 328K $2.8B (0.3%) ($8)M
B/(W)
2Q 2015 (21)K $0.4B (8.2) ppts ($202)M
F O R D C R E D I T R E S U LT S
Ford Credit delivered another solid quarterly profit
Receivables continued to grow
Lower profits reflect impact of lower auction
values on lease residuals and credit losses
Ford Credit
“We are very pleased to deliver the best-ever quarterly
Automotive operating cash flow of $4.2 billion and
with the continued strength of our balance sheet,
which was recognized by all the major credit rating
agencies with upgrades over the past few months.
Combined with the very robust business structure
we have achieved in North America, this gives us
confidence in fulfilling our commitment to distribute
regular dividends to shareholders throughout a
business cycle.”
Bob Shanks
Executive Vice President & CFO
Wholesales Revenue Operating Margin Pre-Tax Profit
2Q 2016 1,694K $37B 7.7% $2.8B
B/(W)
2Q2015 (2)K $1.9B (0.7) ppts ($130)M
Pre-Tax Results
2Q 2016 $400M
B/(W)
2Q15 ($106)M
Ford Motor Company 2Q July 28, 2016 2
R I S K F A C T O R S
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;
Decline in Ford's market share or failure to achieve growth;
Lower-than-anticipated market acceptance of Ford's new or existing products or services;
Market shift away from sales of larger, more profitable vehicles beyond Ford's current planning assumption, particularly in the United
States;
An increase in or continued volatility of fuel prices, or reduced availability of fuel;
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, or other events;
Economic distress of suppliers that may require Ford to provide substantial financial support or take other measures to ensure
supplies of components or materials and could increase costs, affect liquidity, or cause production constraints or disruptions;
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 postretirement health care and life insurance liabilities impairing our liquidity or financial condition;
Worse-than-assumed economic and demographic experience for 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;
A change in requirements under long-term supply arrangements committing Ford to purchase minimum or fixed quantities of certain
parts, or to pay a minimum amount to the seller ("take-or-pay" contracts);
Adverse effects on results from a decrease in or cessation or clawback of government incentives related to investments;
Inherent limitations of internal controls impacting financial statements and safeguarding of assets;
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, 2015, as updated by subsequent Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K.
Ford Motor Company 2Q July 28, 2016 3
Ford Motor Company [NYSE:F] releases its 2016 second quarter financial results at 7:00 a.m. EDT today. The following briefings will be held
after the announcement:
At 9:00 a.m. (EDT), Mark Fields, Ford president and chief executive officer, and Bob Shanks, Ford executive vice president and chief
financial officer, will host a conference call to discuss Ford’s 2016 second quarter results.
At 11 a.m. (EDT), Bernard Silverstone, Ford Credit chairman and chief executive officer, and Marion Harris, Ford Credit chief financial officer,
will host a conference call to discuss Ford Credit’s 2016 second quarter results.
The presentations (listen-only) and supporting materials will be available at www.shareholder.ford.com. Representatives of the investment
community will have the opportunity to ask questions on both conference calls, as will representatives of the news media on the first call.
Access Information - Thursday, July 28, 2016
Ford Earnings Call: 9 a.m. EDT
Toll-Free: 1.877.870.8664
International: 1.970.297.2423
Passcode: Ford Earnings
Ford Credit Earnings Call: 11 a.m. EDT
Toll-Free: 1.877.870.8664
International: 1.970.297.2423
Passcode: Ford Credit Earnings
REPLAYS
(Available after 1:00 p.m. EDT the day of the event through Wednesday, August 3, 2016)
www.shareholder.ford.com
Toll-Free: 1.855.859.2056
International: 1.404.537.3406
Passcodes:
Ford Earnings: 50490808
Ford Credit Earnings: 50511787
About Ford Motor Company
Ford Motor Company is a global automotive and mobility company based in Dearborn, Michigan. With about 201,000 employees and 67
plants worldwide, the company’s core business includes designing, manufacturing, marketing, financing and servicing a full line of Ford
cars, trucks, SUVs and electrified vehicles, as well as Lincoln luxury vehicles. At the same time, Ford aggressively is pursuing emerging
opportunities through Ford Smart Mobility, the company’s plan to be a leader in connectivity, mobility, autonomous vehicles, the customer
experience and data and analytics. The company provides financial services through Ford Motor Credit Company. For more information
regarding Ford and its products worldwide or Ford Motor Credit Company, visit www.corporate.ford.com.
* The following applies to the information throughout this release:
See tables at the end of this release for the nature and amount of special items, and reconciliations of the non-GAAP financial
measures designated as “adjusted” to the most comparable financial measures calculated in accordance with U.S. generally
accepted accounting principles (“GAAP”).
Wholesale unit sales and production volumes include Ford brand and Jiangling Motors Corporation (“JMC”) brand vehicles produced
and sold in China by our unconsolidated affiliates; revenue does not includes these sales. See materials supporting the July 28, 2016
conference calls at www.shareholder.ford.com for further discussion of wholesale unit volumes.
Automotive segment operating margin is defined as Automotive segment pre-tax profit divided by Automotive segment revenue.
References to records related to Automotive segment pre-tax profit, Automotive segment operating cash flow, Automotive segment
operating margin and Automotive business unit results are since at least 2000.
Our 2016 Company Guidance includes guidance for Total Company adjusted pre-tax results. We do not provide guidance on our net
income. Full-year net income will include potentially significant special items that have not yet occurred and are difficult to quantify
prior to year end, specifically pension and OPEB remeasurement gains and losses.
C O N F E R E N C E C A L L D E TA I L S
Contact(s): Media Inquiries: Equity Investment Fixed Income Shareholder
Mike Moran
Community:
Erik Eliason
Investment Community:
Stephen Dahle
Inquiries:
1.800.555.5259 or
1.313.322.1602 1.313.594.0613 1.313.621.0881 1.313.845.8540
mmoran@ford.com fordir@ford.com fixedinc@ford.com stockinf@ford.com
Ford Motor Company 2Q July 28, 2016 4
C O N S O L I D AT E D I N C O M E S T AT E M E N T
Ford Motor Company 2Q July 28, 2016 5
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
(in millions, except per share amounts)
For the periods ended June 30,
2016 2015 2016 2015
Second Quarter First Half
(unaudited)
Revenues
Automotive $ 36,932 $ 35,105 $ 72,189 $ 66,905
Financial Services 2,553 2,158 5,014 4,258
Total revenues 39,485 37,263 77,203 71,163
Costs and expenses
Cost of sales 32,348 30,326 62,629 58,798
Selling, administrative, and other expenses 2,661 2,544 5,223 5,016
Financial Services interest, operating, and other expenses 2,258 1,745 4,318 3,458
Total costs and expenses 37,267 34,615 72,170 67,272
Interest expense on Automotive debt 212 190 412 355
Non-Financial Services interest income and
other income/(loss), net 389 272 793 462
Financial Services other income/(loss), net 82 70 173 144
Equity in net income of affiliated companies 398 486 939 923
Income before income taxes 2,875 3,286 6,526 5,065
Provision for/(Benefit from) income taxes 903 1,125 2,099 1,750
Net income 1,972 2,161 4,427 3,315
Less: Income/(Loss) attributable to noncontrolling interests 2 1 5 2
Net income attributable to Ford Motor Company $ 1,970 $ 2,160 $ 4,422 $ 3,313
EARNINGS PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK
Basic income $ 0.50 $ 0.54 $ 1.11 $ 0.83
Diluted income 0.49 0.54 1.11 0.83
Cash dividends declared 0.15 0.15 0.55 0.30
C O N S O L I D AT E D B A L A N C E S H E E T
Ford Motor Company 2Q July 28, 2016 6
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
June 30,
2016
December 31,
2015
(unaudited)
ASSETS
Cash and cash equivalents $ 17,063 $ 14,272
Marketable securities 22,234 20,904
Financial Services finance receivables, net 47,860 45,137
Trade and other receivables, less allowances of $366 and $372 10,728 11,042
Inventories 9,829 8,319
Other assets 3,053 2,913
Total current assets 110,767 102,587
Financial Services finance receivables, net 47,427 45,554
Net investment in operating leases 29,468 27,093
Net property 31,940 30,163
Equity in net assets of affiliated companies 3,349 3,224
Deferred income taxes 9,822 11,509
Other assets 6,905 4,795
Total assets $ 239,678 $ 224,925
LIABILITIES
Payables $ 23,084 $ 20,272
Other liabilities and deferred revenue 21,463 19,089
Automotive debt payable within one year 2,417 1,779
Financial Services debt payable within one year 42,444 41,196
Total current liabilities 89,408 82,336
Other liabilities and deferred revenue 23,416 23,457
Automotive long-term debt 10,654 11,060
Financial Services long-term debt 84,399 78,819
Deferred income taxes 552 502
Total liabilities 208,429 196,174
Redeemable noncontrolling interest 95 94
EQUITY
Common Stock, par value $.01 per share (3,975 million shares issued of 6 billion authorized) 40 40
Class B Stock, par value $.01 per share (71 million shares issued of 530 million authorized) 1 1
Capital in excess of par value of stock 21,546 21,421
Retained earnings 16,652 14,414
Accumulated other comprehensive income/(loss) (5,976 ) (6,257 )
Treasury stock (1,122 ) (977 )
Total equity attributable to Ford Motor Company 31,141 28,642
Equity attributable to noncontrolling interests 13 15
Total equity 31,154 28,657
Total liabilities and equity $ 239,678 $ 224,925
C O N S O L I D AT E D S T AT E M E N T O F C A S H F L O W S
Ford Motor Company 2Q July 28, 2016 7
FORD MOTOR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
For the periods ended June 30,
2016 2015
First Half
(unaudited)
Cash flows from operating activities
Net cash provided by/(used in) operating activities $ 11,834 $ 7,623
Cash flows from investing activities
Capital spending (3,206 ) (3,533 )
Acquisitions of finance receivables and operating leases (27,501 ) (26,505 )
Collections of finance receivables and operating leases 19,732 18,844
Purchases of equity and debt securities (16,757 ) (21,282 )
Sales and maturities of equity and debt securities 15,491 23,222
Settlements of derivatives 111 192
Other 21 112
Net cash provided by/(used in) investing activities (12,109 ) (8,950 )
Cash flows from financing activities
Cash dividends (2,184 ) (1,190 )
Purchases of Common Stock (145 ) (91 )
Net changes in short-term debt 934 176
Proceeds from issuance of other debt 25,574 24,912
Principal payments on other debt (21,104 ) (19,787 )
Other (30 ) (279 )
Net cash provided by/(used in) financing activities 3,045 3,741
Effect of exchange rate changes on cash and cash equivalents 21 (274 )
Net increase/(decrease) in cash and cash equivalents $ 2,791 $ 2,140
Cash and cash equivalents at January 1 $ 14,272 $ 10,757
Net increase/(decrease) in cash and cash equivalents 2,791 2,140
Cash and cash equivalents at June 30 $ 17,063 $ 12,897
E A R N I N G S P E R S H A R E R E C O N C I L I AT I O N T O A D J U S T E D E A R N I N G S P E R S H A R E
N E T I N C O M E R E C O N C I L I AT I O N T O A D J U S T E D P R E - T A X P R O F I T
Ford Motor Company 2Q July 28, 2016 8
(Mils) 2Q YTD Memo:
2015 2016 2015 2016 FY 2015
Net income / (loss) attributable to Ford (GAAP) $ 2,160 $ 1,970 $ 3,313 $ 4,422 $ 7,373
Income / (Loss) attributable to non-controlling interests 1 2 2 5 (2)
Net income $ 2,161 $ 1,972 $ 3,315 $ 4,427 $ 7,371
Less: (Provision for) / Benefit from income taxes (1,125) (903) (1,750) (2,099) (2,881)
Income before income taxes $ 3,286 $ 2,875 $ 5,065 $ 6,526 $ 10,252
Less: Special items pre-tax -- (118) -- (304) (548)
Adjusted pre-tax profit / (loss) (Non-GAAP) $ 3,286 $ 2,993 $ 5,065 $ 6,830 $ 10,800
2016
2Q YTD
Diluted After-Tax Results (Mils)
Diluted After-tax results (GAAP) $ 1,970 $ 4,422
Less: Impact of Pre-tax and tax special items (119) (371)
Adjusted Net Income (Non-GAAP) $ 2,089 $ 4,793
Basic and Diluted Shares (Mils)
Basic shares (Average shares outstanding) 3,973 3,972
Net dilutive options and unvested restricted stock units 24 24
Adjusted Diluted shares 3,997 3,996
Earnings Per Share – Diluted (GAAP) $ 0.49 $ 1.11
Net impact of adjustments 0.03 0.09
Adjusted Earnings Per Share – Diluted (Non-GAAP) $ 0.52 $ 1.20
T O TA L C O M P A N Y S P E C I A L I T E M S
Ford Motor Company 2Q July 28, 2016 9
(Mils, except amounts per share data) 2Q YTD Memo:
2015 2016 2015 2016 FY 2015
Pre-tax Special Items
Separation-related actions $ -- $ (102) $ -- $ (276) $ --
Japan / Indonesia market closure -- (5) -- (17) --
Nemak IPO -- -- -- -- 150
Pension & OPEB remeasurement gains / (losses) -- (11) -- (11) (698)
Total Pre-tax special items $ -- $ (118) $ -- $ (304) $ (548)
Tax Special Items
Net tax effect of Pre-tax special items $ -- $ 42 $ -- $ 107 $ 205
Tax expense of entity restructurings -- (43) -- (174) --
Total tax special items $ -- $ (1) $ -- $ (67) $ 205
Memo:
Special items impact on earnings per share $ -- $ (0.03) $ -- $ (0.09) $ (0.09)