Ford Motor Company 6.20% Notes

Strong Q3 profitability + guidance raise (good) - Ford delivered $2.7B adjusted EBIT in Q3 and $4.7B adjusted free cash flow (FCF); ended the quarter with $25.3B cash and $46.4B total liquidity. - Adjusted EBIT full-year guidance raised: now $10.5B to $11.0B (raising the low end of prior guidance). - FCF and capex unchanged: FCF $6B–$7B; capex $9.5B–$10.5B.

Strategic roadmap for a “more profitable, capital efficient” Ford (opportunity) - Targets 8% adjusted EBIT margins by 2029 (goal of sustained earnings/cash flow/returns). - Key pillars: 1) Grow auto business (portfolio focused on truck/vans/utilities, North America; “transform EV business with much less capital”). 2) Expand auto adjacencies: software, services, parts, and strengthen financing (Ford Credit/Ford Pro leasing). 3) Diversify via Ford Energy (grid-scale battery storage). - “Adjacencies” were a major driver: software/services + parts hit record revenue in Q3 with strong, accretive margins; management cited ~10% of Q3 revenue from these auto adjacency businesses.

Vehicle execution + quality/cost actions remain central (good, with specific milestones) - Truck strength: F-Series captured the highest retail share of full-size truck brands and is on pace for the 50th straight year as America’s best-selling truck; Maverick is #1 hybrid pickup. - Demand channels/used strategy: Ford Blue Oval Advantage (certified pre-owned) positioning supports resale; used customers are cited as ~50% more likely than typical used buyers to buy a new Ford. - Cost/industrial system: warranty + material improvement: - Excluding Novelis and tariffs, reduced warranty & material costs by $1.5B in 2025. - On track to reduce another ~$1B in 2026 (excluding Novelis/tariffs). - Important manufacturing ramp proof points: Super Duty launch ramp in Oakville is exceeding planned daily volumes; OK-to-Buy achieved and quality is “fully competitive.” - Next-gen prep: F-150 next-generation testing is being scaled dramatically (management cited ~4 million test miles and major increases in endurance/durability testing). - Surprise / positive narrative: CFO and CEO emphasized that operational discipline is already absorbing headwinds (Middle East conflict + commodities) with AI-enabled efficiencies.