Ford Motor Company

Good day, everyone. My name is Layla and I will be your conference operator today. At this time, I would like to welcome you to the Ford Motor Company first quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please click on the raise hand icon, which can be found in the black bar at the bottom of the webinar window. At this time, I would like to turn the call over to Lynn Antipas Tyson, Chief Investor Relations Officer.

Thank you, Layla. Welcome to Ford Motor Company's first quarter 2025 earnings call. With me today are Jim Farley, President and CEO, Sherry House, CFO, and Kumar Galhotra, Chief Operating Officer. Joining us for Q&A will be John Lawler, Vice Chair, Andrew Frick, President Ford Blue and Model E, and Interim Head of Ford Pro, Kathy O'Callaghan, CEO of Ford Credit, and Steve Crowley, Chief Policy Officer and General Counsel. Today's discussion includes some non-GAAP references. These are reconciled to the most comparable U.S. GAAP measures in the appendix of our earnings deck. You can find the deck along with the rest of our earnings materials and other important content at shareholder.forward.com. Our discussion also includes forward-looking statements about our expectations. Actual results may differ from those stated. The most significant factors that could cause actual results to differ are included on page 20. Unless otherwise noted, all comparisons are year-over-year. Company EBIT, EPS and free cash flow are on an adjusted basis. Lastly, I want to call out two near-term IR engagements. May 28th, John Lawler will participate in a fireside chat in New York with Daniel Rosca at the Bernstein Annual Strategic Decisions Conference. Sherry House will also attend. June 4th, Sherry House will participate in a fireside chat in New York with Joe Spack at the UBS Auto and Auto Tech Conference. Now I'll turn the call over to Jim.

Thanks, Lynn, and thanks to all of you for joining. I'm going to give you an update on the state of the business and on tariffs. Kumar is going to take you through our cost and quality progress, as well as some of our mitigation for tariffs. And then Shira is going to take you through the financial performance and guidance, and hopefully we'll have plenty of time for Q&A. Our underlying business continues to gain traction and perform well. We beat our original expectation for the quarter and before tariff related impacts, we are on track and within our original full year guidance range of seven to eight and a half billion in EBIT. We had our best first quarter US pickup sales in over 20 years, and we deliver sequential share growth in our home market. Additionally, we saw smooth execution of several major product launches in the quarter around the globe. And we continue to deliver progress against our cost and quality targets. On tariffs, Ford supports the administration's goal to strengthen the US economy by growing American manufacturing. And we also support a level playing field globally for domestic and foreign OEMs. We also appreciate the ongoing cooperation we've had with the administration. As America's largest auto manufacturer, our engagement with Washington is helping U.S. policymakers better understand how their proposed policy changes would impact our industry and, of course, our communities. Last year, we assembled over 300,000 more vehicles in the U.S. than our closest competitor. That includes 100% of all our full-size trucks. While some OEMs have open capacity in the U.S., that will partially match our footprint advantage. They have to absorb higher costs, invest capital, and that will take time. It's not as simple as just assembling more vehicles in the US. OEMs must also balance customer affordability, which means the ability to import parts tariff-free. Based on what we know now, our expectations of how certain details will resolve around tariffs We've estimated the gross impact of tariffs for full year total company EBIT of $2.5 billion and a net impact of 1.5 billion. It's still too early to fully understand our competitors' responses to these tariffs. It's also early to gauge the related market dynamics, including the potential industry-wide supply chain disruptions and the impact of Ford's domestic manufacturing advantages. And as a result, we decided to suspend our guidance. It's clear, however, that in this new environment in which automakers with the largest US footprint will have a big advantage, and boy, is that true for Ford. It puts us in the pole position, plus we have the largest value unlock even beyond that because of our improving cost and quality opportunities. Kumar.