Ford Mtr Co del · NYSE:F
Ford Mtr Co del — Ford Motor — Debt Investor Presentation (November 2006)
56 slides from Ford Mtr Co del's debt investor presentation, Nov 29, 2006
Slide 1: Secured Financing Presentation
November 29, 2006 SECURED FINANCING PRESENTATION
Slide 2: Alan Mulally, President and CEO
Alan Mulally President and CEO
Slide 3: Ford Motor Company: Substantial Resources
• Sales and Revenue -- About 6.8 million unit sales and $150 billion of Automotive revenue in 2005 • Valuable Brands -- Ford, Lincoln, Mercury, Volvo, Jaguar, Land Rover, Ford Credit • Global Reach -- Manufacture on six continents, with distribution in over 200 markets FORD MOTOR COMPANY SUBSTANTIAL
Slide 4: Present Situation: Dealing with Our Reality
Industry • Increasingly competitive, changing consumer preferences, and excess capacity • Rising health care and commodity costs • Fragile supply base in North America Ford • Market share declining in North America, stable in Europe and South America, growing in Asia, and stable / growing for Ford’s
Slide 5: Opportunities Going Forward: Developing a Better Plan
• Operate as one company – Leverage global assets – Integrate regional business units – Accelerate product development efforts -- increase scale and efficient designs • North America is top priority – Home market drives profitability – New products to stabilize share – Align capacity with demand • W
Slide 6: Key Investment Highlights: Transforming the Company
KEY INVESTMENT HIGHLIGHTS • Dealing with our reality – Identifying opportunities to enhance our business model • Accelerating actions to improve our cost structure – Personnel reductions – Capacity reductions – Supply base restructuring • Continue to invest in new products – Leveraging our global pr
Slide 7: Don Leclair, Chief Financial Officer
Don Leclair Chief Financial Officer
Slide 8: Overview
OVERVIEW • Present Results • Key Elements of Plan – North America Automotive – International – Ford Credit • Outlook
Slide 9: First Nine Months Pre-Tax Profit / (Loss) by Sector
* Excludes special items; see Appendix (pages 1 and 2) for reconciliation to GAAP Memo: Net Income $(6,988) $(7,992) $1,004 Financial Services (Mils.) Total $(1,208) $1,550 $(2,758) TOTAL COMPANY FIRST NINE MONTHS PRE-TAX PROFIT / (LOSS) BY SECTOR*
Slide 10: First Nine Months Profit / (Loss) by Segment
* Excludes special items; see Appendix (pages 1 and 2) for reconciliation to GAAP Other Auto. North America Europe Asia Pacific & Africa (Mils.) $(2,758) $306 $(3,287) P.A.G. South America $(518) $117 Mazda & Assoc. Operations $(50) Total $237 $437 SECTOR FIRST NINE MONTHS PROFIT / (LOSS) BY SEGMENT
Slide 11: First Nine Months Automotive Pre-Tax Profit Compared with 2005
* Excludes special items; see Appendix (pages 1 and 2) for reconciliation to GAAP (Bils.) $(1.5) Net Pricing Cost Changes $1.1 Volume / Mix $(2.8) Other $(0.4) $(1.9) $(0.9) $(0.5) Exchange $(1.0) Interest $0.4 SECTOR FIRST NINE MONTHS AUTOMOTIVE PRE-TAX PROFIT COMPARED WITH 2005*
Slide 12: First Nine Months Ford Credit Pre-Tax Profit Compared with 2005
(Bils.) $(0.6) $(0.4) Financing Margin Lease Residual $0 Volume $(0.3) SFAS Credit Loss $1.5 $2.4 Other $0.1 $0.3 $(1.2) FINANCIAL SERVICES SECTOR FIRST NINE MONTHS FORD CREDIT PRE-TAX PROFIT COMPARED WITH 2005* $(0.9) * Excludes special items; see Appendix (pages 1 and 2) for reconciliation to GAAP
Slide 13: Overview
OVERVIEW • Present Results • Key Elements of Plan – North America Automotive – International – Ford Credit • Outlook
Slide 14: Ford North America: Key Elements of Plan
SECTOR -- FORD NORTH AMERICA KEY ELEMENTS OF PLAN • Restructuring – Rationalize capacity – Salaried-related and hourly personnel reductions – Sell / close Automotive Component Holdings plants • Competitive costs – Achieve competitive levels of engineering and investment efficiency – Leverage global
Slide 15: Sixteen New / Major Product Actions by End of 2008
SECTOR -- FORD NORTH AMERICA SIXTEEN NEW / MAJOR PRODUCT ACTIONS BY END OF 2008 Expedition Navigator L “Fairlane” Expedition EL F-Series Super Duty MKS (new Lincoln sedan) Navigator Escape F-150 Edge Mariner Fusion MKX Focus Milan MKZ
Slide 16: Ford Edge, Lincoln MKX
Ford Edge Lincoln MKX SECTOR -- FORD NORTH AMERICA These photos cannot be guaranteed to be product correct.
Slide 17: F-250 Super Duty
SECTOR -- FORD NORTH AMERICA These photos cannot be guaranteed to be product correct. F-250 Super Duty
Slide 18: "Fairlane" Concept
“Fairlane” Concept SECTOR -- FORD NORTH AMERICA These photos cannot be guaranteed to be product correct.
Slide 19: Lincoln MKS
SECTOR -- FORD NORTH AMERICA These photos cannot be guaranteed to be product correct. Lincoln MKS
Slide 20: U.S. Market Share
10.8% 11.7% 10.6% 11.0% 17.2% 15.5% Second Quarter Third Quarter Fleet Retail 16.7% 6.1% 6.4% 3.8% Target Total Share: 14-15% Fleet Share: Lower * Ford and Lincoln Mercury 16.4% 5.4% First Nine Months SECTOR -- FORD NORTH AMERICA U.S. MARKET SHARE* First Quarter
Slide 21: Personnel Reductions from Year-End 2005
Salaried Equivalent Positions December 31, September 30, Hourly ACH Employees 42,500 38,500 85,600 55,000 – 60,000 Hourly (Excluding ACH) 13,900 12,200 SECTOR -- FORD NORTH AMERICA PERSONNEL REDUCTIONS FROM YEAR-END 2005 December 31, Target September 30, 28,500 79,300 December 31, Target September 3
Slide 22: Assembly Capacity
(Millions - Annualized) Maximum Installed Capacity Manned Straight-Time Capacity Fourth Quarter Fourth Quarter Targets SECTOR -- FORD NORTH AMERICA ASSEMBLY CAPACITY Installed 84% Manned 100 Utilization
Slide 23: Pre-Tax Profit: 2009 Compared with 2006
+ - - SECTOR -- FORD NORTH AMERICA PRE-TAX PROFIT -- 2009 COMPARED WITH 2006 * Excluding special items; see Appendix (pages 1 and 2) (Bils.) $0 Loss* Profit Cost Reductions Non-Repeat of Dealer Inventory Reductions Cost Reductions Loss ~ $4.0 - 2008 Cost Improvement ~ $1.0 - 2008 ~ 4.0 Total $5.0 Ot
Slide 24: Overview
OVERVIEW • Present Results • Key Elements of Plan – North America Automotive – International – Ford Credit • Outlook
Slide 25: Ford Europe
Financial Results - Profitable with three year trend of improving results Market Share - Stable in Western Europe - Growth in Central and Eastern Europe Product - Increasing use of global platforms Manufacturing - Continuing to migrate to lower-cost areas SECTOR FORD EUROPE
Slide 26: Premier Automotive Group
Volvo Financial Results - - 2006 challenging year; reflects end of several old models prior to major new product introductions Market Share - - Product-driven improvements expected Product - More common platforms, shared across brands Manufacturing - Reducing structure; improving efficiency Jaguar /
Slide 27: Rest of World
Asia Pacific and Mazda Financial Results - 2006 difficult; reflects segment shifts in Australia and industry weakness in Taiwan - Mazda continues to perform well Market Share - Strong growth in China and India Product - More common platforms - Continued introduction of new products Manufacturing - P
Slide 28: Increased Application of Common Platforms
Volvo C70 Volvo C30 Global Focus Focus Coupe / Cabriolet C-MAX Mazda5 Hatchback INCREASED APPLICATION OF COMMON PLATFORMS SECTOR -- INTERNATIONAL OPERATIONS Mazda3 Hatchback C Volvo S40
Slide 29: Increased Application of Common Platforms
Ford Mondeo Land Rover LR2 Next-Gen Volvo V70 / XC70 Next –Gen Volvo S60 CD Ford Galaxy Ford S-MAX INCREASED APPLICATION OF COMMON PLATFORMS SECTOR – INTERNATIONAL OPERATIONS Volvo S80
Slide 30: Overview
OVERVIEW • Present Results • Key Elements of Plan – North America Automotive – International – Ford Credit • Outlook
Slide 31: Ford Credit Results and Metrics: 2006 First Nine Months
Receivables (Bils.) On-Balance Sheet $114 $135 Securitized Off-Balance Sheet 35 13 Managed $149 $148 Charge-Offs (Mils.) On-Balance Sheet $493 $334 Managed Loss-to-Receivables Ratio On-Balance Sheet 0.53% 0.33% Managed - U.S. Retail and Lease 0.75 0.50 - Worldwide Total 0.50 0.36 Allowance for Credi
Slide 32: Ford Credit: Operating and Funding
Operating • Ford Credit is a key part of Ford Motor Company’s strategy • Continuing to improve on operating excellence - Consolidating field and customer operations to improve process efficiencies, reduce costs, and provide flexibility - Receivables are high quality; portfolio continues to perform w
Slide 33: Overview
OVERVIEW • Present Results • Key Elements of Plan – North America Automotive – International – Ford Credit • Outlook
Slide 34: Projected Corporate Earnings Before Taxes
(Bils.) $0 TOTAL COMPANY PROJECTED CORPORATE EARNINGS BEFORE TAXES* Total Total Company * Excluding special items; see Appendix (pages 1 and 2) for 2006 year-to-date reconciliation to GAAP
Slide 35: Projected Automotive Earnings Before Interest and Taxes
(Bils.) $0 - Adverse product mix in Ford N.A. - Market share in N.A. - Dealer inventory adj. - Commodity costs - Currency exchange + Reduce low-margin business (e.g., daily rental) - Lower N.A. production in 1H + Growth in volume outside U.S. + Structural cost reductions - Commodity costs + Volume a
Slide 36: Present Liquidity
$24 Automotive Gross Cash * $20 Automotive Gross Cash* SECTOR PRESENT LIQUIDITY $6 Auto. Credit Lines ~$(3) Operating Cash Flow** * Cash and cash equivalents, marketable and loaned securities, and short-term VEBA assets. See Appendix (page 6) for September 30 reconciliation to GAAP ** Includes affec
Slide 37: Ford Plans to Maintain Substantial On-Going Liquidity
$20 Automotive Gross Cash* $17 Automotive Gross Cash* SECTOR FORD PLANS TO MAINTAIN SUBSTANTIAL ON-GOING LIQUIDITY $10 Funded New Debt ~$(7) Cash Restructuring Costs ~$(10) Operating-Related Cash Outflow ~$4 Long-Term VEBA, Divestitures & Other Liquidity for operating needs and a cushion for recessi
Slide 38: Key Credit Strengths
• Large global enterprise with well known brands • Plan to restore Automotive profitability and operating cash flow by • Substantial liquidity resources to support the plan • New credit facilities are secured by a substantial portion of Automotive assets (including equity in foreign subsidiaries and
Slide 39: Ann Marie Petach, Vice President and Treasurer
Ann Marie Petach Vice President and Treasurer
Slide 40: Transaction Overview
Backup Secured Bank Revolver $ New Funding Secured Term Loan B $ Unsecured Capital Markets Transactions* TBD New Funding $10 ü Total Facilities $ * May include unsecured convertible debt securities Amount (Bils.) Maturity TRANSACTION OVERVIEW
Slide 41: Pro Forma Automotive Liquidity
$38 At December 31, 2006 (Bils.) $8 Auto. Credit Lines $30 Gross Cash* Liquidity Debt Liquidity Net of Debt $13 Unsecured Debt $5 Unsecured Subordinated Debt** $7 Funded New Secured $28 $10 Assumes $8 Billion Revolver and $10 Billion Funded New Debt -- Total $18 Billion * Cash and cash equivalents,
Slide 42: Pro Forma Automotive Debt Maturities
$27.7 December 31, 2006 (Bils.) 0-5 Years 6-10 Years 11-15 Years 16-20 Years 21-25 Years 26-30 Years 31-50 Years ► Years $10.0 $0.5 $0.7 $5.7 $5.5*** $3.1* $1.7 $0.5 $7.0 New Secured Term Loan B $3 .0 New Unsecured Debt** PRO FORMA AUTOMOTIVE DEBT MATURITIES * 2007 maturities total $1 billion ** May
Slide 43: Collateral and Borrowing Base Overview
U.S. Receivables $ 0.3 75% $ 0.2 U.S. Inventory 3.3 2.0 Pledge of Intercompany Notes 7.8 N/A 4.6 Pledge of Equity in Ford Credit and Certain Foreign Subsidiaries 11.9 75 9.0 U.S. PP&E Subject to Bond Indenture Limitation 6.8 N/A 3.2 Other U.S. Machinery and Equipment 3.9 40 1.6 Intellectual Property
Slide 44: Credit Ratings -- Ford
S&P Issuer Rating B Negative Secured Facility TBA TBA Senior Unsecured Debt CCC+ Moody’s Issuer Rating B3 Negative Secured Facility Ba3 Negative Senior Unsecured Debt Caa1 Negative Fitch Issuer Rating B Negative Secured Facility TBA TBA Senior Unsecured Debt B Negative Rating Outlook CREDIT RATINGS
Slide 45: Key Terms -- Senior Secured Credit Facilities
KEY TERMS -- SENIOR SECURED CREDIT FACILITIES Borrower: Guarantors: Facility: Security: Purpose: Ford Motor Company Substantially all existing and future, direct and indirect, material domestic subsidiaries other than Ford Motor Credit Company Tranche Amount Maturity Bank Revolver $8 billion 5 years
Slide 46: Key Terms -- Senior Secured Credit Facilities
KEY TERMS -- SENIOR SECURED CREDIT FACILITIES Facility Fee: Pricing: Term Loan Amortization: Term Loan Optional Redemption: Non-loan Exposure: Incremental Facilities: Borrowing Base: basis points per annum Market based 1% per annum with balance due at maturity Non-callable for 2 years. Thereafter, c
Slide 47: Transaction Timetable
TRANSACTION TIMETABLE Lenders’ Meeting and Conference Call November 29 Final Commitments on Loans Due from Lenders December Closing and Funding December 15 Timing Plan
Slide 48: Questions and Answers
QUESTIONS AND ANSWERS
Slide 49: Risk factors and forward-looking statements
• Continued decline in market share; • Continued or increased price competition resulting from industry overcapacity, currency fluctuations or other factors; • A market shift (or an increase in or acceleration of market shift) away from sales of trucks or sport utility vehicles, or from sales of oth
Slide 50: Appendix
APPENDIX
Slide 51: Total Company 2006 First Nine Months Pre-Tax Profits
North America $(2,004) $ (9,955) $(736) $(6,668) $(1,268) $(3,287) South America 268 437 Total Americas $(1,736) $ (9,408) $(736) $(6,558) $(1,000) $(2,850) Europe $ 0 $ $ (49) $ (44) $ 49 $ P.A.G. (217) (2,208) (66) (1,690) (151) (518) Total Europe / P.A.G. $ (217) $ (2,015) $ (115) $ (1,734) $ (10
Slide 52: Total Company Pre-Tax Special Items
Americas Jobs Bank / Employee Separation $ (2.5) $ (2.5) Fixed Asset Impairment -- North America (2.2) (2.2) Pension / OPEB Curtailment Charges (1.3) (2.4) - (1.9) Additional North America Personnel Reductions (0.4) (1.5) - (1.1) Facility-Related U.S. Plant Idling Costs (0.3) (0.3) South American Le
Slide 53: Ford Credit Key Metric Definitions
FORD CREDIT KEY METRIC DEFINITIONS In addition to evaluating Ford Credit’s financial performance on a GAAP financial statement basis, Ford Credit management also uses other criteria, some of which were previously disclosed in this presentation and are defined below. Information about the impact of o
Slide 54: Ford Credit Ratio Definitions
FORD CREDIT RATIO DEFINITIONS In addition to evaluating Ford Credit’s financial performance on a GAAP financial statement basis, Ford Credit management also uses other criteria, some of which were previously disclosed in this presentation and are defined below: Leverage: Total Debt - Financial State
Slide 55: Ford Credit Reconciliations of Managed Leverage to Financial Statement Leverage
FORD CREDIT RECONCILIATIONS OF MANAGED LEVERAGE TO FINANCIAL STATEMENT LEVERAGE Total Debt* $120.4 $134.5 Securitized Off-Balance Sheet Receivables Outstanding 35.0 12.9 Retained Interest in Securitized Off-Balance Sheet Receivables (4.4) (1.1) Adjustments for Cash, Cash Equivalents and Marketable S
Slide 56: Gross Cash Reconciliation to GAAP
SECTOR GROSS CASH RECONCILIATION TO GAAP Cash and Cash Equivalents $13.4 $13.5 $ 0.1 $ 9.1 Marketable Securities 6.9 7.8 0.9 7.9 Loaned Securities 3.4 0.6 (2.8) 0.6 Total $23.7 $21.9 $(1.8) $17.6 Short-Term VEBA 1.4 1.7 0.3 2.0 Gross Cash $25.1 $23.6 $(1.5) $19.6 Sept. 30, B / (W) Dec. 31, 2005 (Bil
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