Ford Motor Company SIC Consumer Retail Agenda 1

Ford Motor Company SIC Consumer Retail

Agenda 1. Business Overview 2. Financial Indicators and Statements 3. Threats and Opportunities 4. Price Performance and Technical Analysis 5. Earnings Announcement 6. Final Notes and Recommendation

Business Segments • Automotive Services: – Ford & Lincoln – Operate Dealerships and Car Repairs – Provide Cars for Rental Companies and Government • Financial Services – Retail Financing, Direct Financing Leases, Loans to Dealers, and Provides Insurance Services.

Business Breakdowns

Corporate Management • CEO - Mr. Alan R. Mulally since September 2006 • In 2006, Ford borrowed $23. 6 billion to finance a major restructuring and to provide “a cushion” • In 2007, Ford divested Jaguar, Land Rover, Aston Martin, and Volvo. • Ford was the only US auto manufacturer not to declare bankruptcy in 2008 • Due to bankruptcy, General Motors and Chrysler are expected to be dramatically downsized, but Ford is “poised to emerge as the largest US automaker. ”

Basic Info Indicator F TM GM Market Cap P/E (ttm) 59. 24 B 123. 33 B 48. 80 B Industry Average 26. 23 B 9. 41 20. 4 10. 82 13. 5 PEG 0. 48 0. 77 0. 76 0. 48 P/S 0. 46 0. 52 0. 54 na 1. 2% na Dividend

Operating Efficiency/Liquidity Indicator Profit Margin F 5. 09% TM 2. 52% GM 4. 55% Operating Margin ROA 6. 90% 2. 64% 4. 28% 3. 12% 1. 10% 2. 64% 1. 55 1. 18 1. 13 Current Ratio

Balance Sheet

Cash Flow

Opportunities • Domestic Market – Better recovery following the recession in comparison to its major competitors: General Motors and Chrysler. – Adding a Ford Flex model in attempts to capture a greater amount of domestic consumption of hybrid vehicles. • Emerging Markets – Pursuing a major expansion plan, Ford aims to tap into the growing market potential in the countries, especially those in Asia. – The company expects 70% of its growth to come from the Asia Pacific and Africa region in the next decade. – Since last year, Ford has invested $510 million in China and $500 million in India as part of its expansion plan.

Opportunities (cont’d) • Weakness of Toyota – Has been hurt by recall and safety issues – Production remains below capacity after earthquake/tsunami – Strength of the Yen = expensive exports – Also applies to all other Japanese automakers: Nissan, Honda, Mazda, Subaru, others • Debt Reduction – Ford paid down about $3 B in debt in the 1 st Quarter of 2011 (reduced debt from 19. 1 B to 16. 6 B) – Will save $190 M per year in interest – Ford’s credit rating remains BB-minus, but S&P’s said that Ford’s focus on debt reduction is “a positive factor”

Threats • • Slow Economic Recovery Rising Oil/Gas Prices Higher Costs of Production Recalled 1. 3 million Ford F-150 Trucks – Problems with Airbags in its most popular pickup • $16. 6 billion in debt • BB-minus credit rating by S&P

Price Performance (1 yr)

Technical Analysis • (placeholder)

Earnings Announcement • Record first quarter profit since 1998 • Profit per vehicle in US rose more than 30% • Growth driven by higher profitability on compact cars • Seventh straight profitable quarter • Warned of parts shortages and commodities prices

Portfolio Analysis • Durable goods vs. non-durables • Cash position • Stability for summer

Recommendation Buy a full position of $18, 000