Ford Motor Company 6% Notes due

Strong Q3 profitability + raised full-year guidance (good surprise) - Ford delivered $2.7B adjusted EBIT in Q3 (called “another strong quarter”). - Raising full-year 2026 adjusted EBIT guidance: now $10.5B to $11.0B (previously a lower range). - Adjusted free cash flow: $4.7B in Q3; cash $25.3B and total liquidity $46.4B ended the quarter. - Dividend announced: $0.15/share regular dividend in Q4.

2026 full-year outlook: revenues pressured by macro/costs, but profit-supporting moves continue - Guidance maintained on cash & capex: Adj. free cash flow $6B–$7B; capex $9.5B–$10.5B. - Key assumptions: U.S. SAAR 16.5M, commodity headwinds ~+$2.5B YoY, plus higher freight/energy costs (not currently seen hurting truck/fleet demand). - Pricing assumption improved slightly: expected U.S. industry pricing ~100 bps higher YoY (i.e., 0.5 point higher than prior assumption). - Cost/warranty target: aiming for $1B material + warranty cost reductions in 2026 (excluding Novelis and tariffs). - Segment outlook (2026): Ford Blue EBIT ~$5.5B, Ford Pro EBIT ~$7B, Model e losses ~ $4B, Ford Credit EBT ~$2.8B.

Model e turnaround: still loss-making near term, but launch pipeline is progressing; profitability path depends on UEV scale - Management reiterated target to reach Model e breakeven by 2029. - Q3 Model e: EBIT loss $1.1B on $1.2B revenue, reflecting ongoing structural right-sizing while still investing. - 2027 described as not “cheap”: expects higher expenses as new plants/production ramps come into focus. - When major step-change is expected: profitability inflection in H1 2028 onward, as Fathom production ramps plus Ford Energy scales; later additional ramp impacts through 2029 (including Europe partnership products). - UEV/Fathom launch derisking: ~90% of validation testing completed; first production-line vehicles built at Louisville; remaining key risk is supplier readiness to run at rate with high quality.