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  • FORD UNIVERSITY Stuart Rowley

    Vice President and Controller

    March 17, 2014

  • SLIDE 2

    Agenda for todays discussion Automotive Segment Reporting

    Production compared with Wholesales

    Automotive Segment and Joint Venture Profits

    Fixed Asset Depreciation and Impairment Policy

    Taxes

    Pension Sensitivities

    Annual Incentive Compensation Plan (AICP)

    - - - - - Topics from prior Ford University Presentations are included in the reference section at the end of the slide deck. Also posted for your reference is the updated Ford Credit University deck

    FORD UNIVERSITY

  • SLIDE 3

    AGENDA

    Automotive Segment Reporting

    Production compared with Wholesales

    Automotive Segment and Joint Venture Profits

    Fixed Asset Depreciation and Impairment Policy

    Taxes

    Pension Sensitivities

    Annual Incentive Compensation Plan (AICP)

  • SLIDE 4

    AUTOMOTIVE SEGMENT REPORTING STRUCTURE CHANGE Beginning January 1, 2014 we have restructured our Automotive Segment

    reporting structure

    We now have five Automotive segments that report on a where sold basis

    Impact

    New Reporting Based On Five Automotive Segments

    Prior Structure (2013) New Structure (2014)

    North America North America

    South America South America

    Europe Europe

    Asia Pacific Africa Middle East & Africa

    Asia Pacific

    Memo: Direct Export Markets (included above on a where produced basis)

    Direct Export Markets (included above on a where sold basis)

  • SLIDE 5

    Segments Not Aligned Geographically;

    Multiple Regions Servicing Direct Export Markets

    Direct Export Markets South America North America Europe Asia Pacific Africa

    AUTOMOTIVE SEGMENT REPORTING PRIOR STRUCTURE (2013)

  • SLIDE 6

    We have reorganized our segments to increase focus on growth markets and to ensure clear responsibility and accountability for all markets within each geographic region Beginning January 1, 2014, we: Established a fifth Automotive Segment, Middle East & Africa

    - Includes what were direct export markets in the Middle East & Africa as well as South Africa which was previously included in Asia Pacific Africa reporting

    Realigned remaining export markets on a geographic basis - Direct export markets located within each region are now included in

    these segments Revenue and profits for direct export markets, previously reported as

    part of the Automotive segment which was the production source, will now be reported on a where sold basis

    Impact

    Direct Export Market Reporting Is Now On A Where Sold Basis

    AUTOMOTIVE SEGMENT REPORTING NEW STRUCTURE (2014)

  • SLIDE 7

    Asia Pacific Europe South America

    Reduces Complexity And Enhances Regional Focus For Profitable Growth

    North America Middle East & Africa

    AUTOMOTIVE SEGMENT REPORTING NEW STRUCTURE (2014)

  • SLIDE 8

    Large, Complex, And Diverse Region

    AUTOMOTIVE SEGMENT REPORTING MIDDLE EAST & AFRICA SEGMENT Population -- 1.3 billion

    Average age -- 23 in Middle East; 19 in Africa

    67 countries and currencies

    1,000+ languages

    Three closed markets -- Iran, Syria, and Sudan

    Industry size -- about 4 million units, about 22% of which is closed

    Fords 2013 market share about 5.2%

    Ford 2013 unit sales about 200,000

  • SLIDE 9

    Impact

    No Impact To Automotive Sector Bottom Line

    AUTOMOTIVE SEGMENT REPORTING SEGMENT RESULTS IMPACT Based on 2013 results, the estimated directional impact of establishing

    Middle East & Africa would have resulted in the following profit impacts (none of the effects are considered material)

    North America -- about unchanged

    South America -- about unchanged

    Europe -- positive

    Asia Pacific Africa -- negative

    Revised 2013 results will be updated through the year

    Total Automotive sector bottom line reporting is unchanged

  • SLIDE 10

    Impact

    Industry And Market Share Reporting Revised To Include All Markets Globally

    AUTOMOTIVE SEGMENT REPORTING INDUSTRY AND MARKET SHARE REPORTING

    2013 (Prior) 2014 (New)

    North America Total SegmentU.S. U.S.U.S. (Retail) U.S. (Retail)

    South America SA6* Total SegmentBrazil

    Europe Total SegmentEU19* EU20*EU5 (Retail)** EU5 (Retail)**

    Middle East & Africa N/A Total Segment

    Asia Pacific APA11* Total SegmentChina

    Total Automotive N/A Global

    * See detail of major markets in reference section** Passenger car

    Industry and Market Share

  • SLIDE 11

    Automotive Segment Reporting

    Production compared with Wholesales

    Automotive Segment and Joint Venture Profits

    Fixed Asset Depreciation and Impairment Policy

    Taxes

    Pension Sensitivities

    Annual Incentive Compensation Plan (AICP)

    AGENDA

  • SLIDE 12

    PRODUCTION COMPARED WITH WHOLESALES Overall Company 1Q 2Q 3Q 4Q FY

    Production Base Base Base Base Base+/- Net Imports / Exports ~ 0 ~ 0 ~ 0 ~ 0 ~ 0+/- Changes in Company Stocks - +/- +/- + ~ 0

    Wholesales Lower +/- +/- Higher Similar

    North America

    Production Base Base Base Base Base+/- Net Imports / Exports - - - - -+/- Changes in Company Stocks - +/- +/- + ~ 0

    Wholesales Lower Lower Lower +/- Lower

  • SLIDE 13

    Automotive Segment Reporting

    Production compared with Wholesales

    Automotive Segment and Joint Venture Profits

    Fixed Asset Depreciation and Impairment Policy

    Taxes

    Pension Sensitivities

    Annual Incentive Compensation Plan (AICP)

    AGENDA

  • SLIDE 14

    Impact AUTOMOTIVE SEGMENT AND JOINT VENTURE PROFITS Fords operations include investments in major unconsolidated joint

    ventures Fords equity share of after-tax profit of the joint ventures is included in

    the respective Automotive segment results Engineering and other costs for Fords global platforms are allocated to

    our Automotive segments as they are incurred, based on expected volumes over the vehicles cycle life. These costs are included in Automotive segment results, but are not in joint venture results

    Joint ventures pay royalties to Ford for use of related intellectual property as compensation for Fords investment in engineering

    In total, Fords Automotive segment results include the following related to joint ventures: - Fords share of joint venture profits - Royalty income - Engineering and other costs incurred for Joint Venture products

    and support

  • SLIDE 15

    Automotive Segment Reporting

    Production compared with Wholesales

    Automotive Segment and Joint Venture Profits

    Fixed Asset Depreciation and Impairment Policy

    Taxes

    Pension Sensitivities

    Annual Incentive Compensation Plan (AICP)

    AGENDA

  • SLIDE 16

    Depreciation A systematic and rational manner to allocate costs of investments with

    the benefits of their use Included in operating expense, even in situations where we accelerate

    depreciation (Europe, Australia)

    Impairment A write-off of a fixed asset group when significant triggering events

    cause the fair value to fall below its carrying value Testing is performed at lowest grouping of assets where we have

    independent cash flows. We use our segments -- North America, South America, Europe, Middle East & Africa, Asia Pacific, and Ford Credit

    If segment cash flows do not support the level of related fixed assets -- we record an impairment

    Impairments are infrequent; treated as special items Last recorded impairments* were in 2008 -- North America $5.3 billion and

    Ford Credit $2.1 billion (related to investments in vehicles on lease)

    FIXED ASSET DEPRECIATION & IMPAIRMENT POLICY

    * Excludes impairment on asset groups that were held for sale (Volvo, JLR, and ACH)

  • SLIDE 17

    Automotive Segment Reporting

    Production compared with Wholesales

    Automotive Segment and Joint Venture Profits

    Fixed Asset Depreciation and Impairment Policy

    Taxes

    Pension Sensitivities

    Annual Incentive Compensation Plan (AICP)

    AGENDA

  • SLIDE 18

    Equity In Net Income Of Affiliated Companies Excluded From Denominator In Our Calculation Of An Operating Effective Tax Rate

    (Provision for) / Benefit from income taxes

    Adjusted pre-tax results = Effective tax rate

    TAXES OPERATING EFFECTIVE TAX RATE

    1Q 2Q 3Q 4Q FY(Mils.) (Mils.) (Mils.) (Mils.) (Mils.)

    Operating results*Pre-tax results 2,146$ 2,555$ 2,589$ 1,279$ 8,569$ ALess: Equity in net income ofaffiliated companies** 214 273 293 289 1,069 BAdjusted pre-tax results 1,932$ 2,282$ 2,296$ 990$ 7,500$ C

    (Provision for) / Benefit fromincome taxes (503)$ (721)$ (767)$ (19)$ (2,010)$ D

    Effective tax rate 26.0 % 31.6 % 33.4 % 1.9 % 26.8 % E

    * Excludes special items; see reference section for detail and reconciliation to GAAP** Available in Appendix 4 of Earnings Review and page FS-2 of 2013 Form 10-K

    2013 Actual

    Reference

    Calculation

    E = C D

  • SLIDE 19

    Cash Taxes Remain Low

    TAXES CASH TAXES Worldwide cash taxes to remain low for a number of years

    Worldwide tax assets generated in prior periods reduce current period

    cash

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