UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☑ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2022~~March 31, 2023

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission file number 1-3950

Ford Motor Company

(Exact name of Registrant as specified in its charter)


Delaware		38-0549190
(State of incorporation)		(I.R.S. Employer Identification No.)

One American Road
Dearborn,	Michigan	48126
(Address of principal executive offices)		(Zip code)

313-322-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbols

Name of each exchange on which registered

Common Stock, par value $.01 per share

New York Stock Exchange

6.200% Notes due June 1, 2059

FPRB

New York Stock Exchange

6.000% Notes due December 1, 2059

FPRC

New York Stock Exchange

6.500% Notes due August 15, 2062

FPRD

New York Stock Exchange

Indicate by check mark if the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~October 21, 2022,~~April 28, 2023, Ford had outstanding ~~3,949,642,023~~3,929,918,250 shares of Common Stock and 70,852,076 shares of Class B Stock.

Exhibit Index begins on page 7165

FORD MOTOR COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended ~~September 30, 2022~~March 31, 2023


	Table of Contents	Page
	Part I - Financial Information
Item 1	Financial Statements	1
	Consolidated Statements of Cash Flows	1
	Consolidated Income Statements	2
	Consolidated Statements of Comprehensive Income	2
	Consolidated Balance Sheets	3
	Consolidated Statements of Equity	4
	Notes to the Financial Statements	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
	~~Key Trends and Economic Factors Affecting Ford and the Automotive Industry~~	3533
	Results of Operations	33
	Ford Blue Segment	35
	Ford Model e Segment	36
	~~Automotive~~Ford Pro Segment	3836
	~~Mobility~~Ford Next Segment	4438
	Ford Credit Segment	4539
	Corporate Other	4842
	Interest on Debt	4842
	Taxes	4842
	Liquidity and Capital Resources	4943
	Credit Ratings	5851
	Outlook	5952
	Cautionary Note on Forward-Looking Statements	6053
	Non-GAAP Financial Measures That Supplement GAAP Measures	6155
	Non-GAAP Financial Measure Reconciliations	6357
	Supplemental Information	6559
	Accounting Standards Issued But Not Yet Adopted	6862
Item 3	Quantitative and Qualitative Disclosures About Market Risk	6963
Item 4	Controls and Procedures	6963

	Part II - Other Information
Item 1	Legal Proceedings	7064
Item 6	Exhibits	7165
	Signature	7266

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements.

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


		For the periods ended September 30,					For the periods ended March 31,
		2021		2022			2022		2023
		First Nine Months					First Quarter
		(unaudited)					(unaudited)
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income/(loss)	Net income/(loss)	$	5,637	$	(3,411)	Net income/(loss)	$	(3,119)	$	1,663
Depreciation and tooling amortization	Depreciation and tooling amortization	5,478		5,669		Depreciation and tooling amortization	1,857		1,897
Other amortization	Other amortization	(1,034)		(876)		Other amortization	(310)		(272)
(Gains)/Losses on extinguishment of debt (Note 4 and Note 15)		8		121
Held for sale impairment charges		—		32
Provision for/(Benefit from) credit and insurance losses	Provision for/(Benefit from) credit and insurance losses	(250)		(70)		Provision for/(Benefit from) credit and insurance losses	(66)		83
Pension and other post-retirement employee benefits (“OPEB”) expense/(income) (Note 14)		(1,115)		(595)
Equity method investment dividends received in excess of (earnings)/losses and impairments (Note 10)		95		2,975
Pension and other postretirement employee benefits (“OPEB”) expense/(income) (Note 13)						Pension and other postretirement employee benefits (“OPEB”) expense/(income) (Note 13)	(213)		303
Equity method investment dividends received in excess of (earnings)/losses and impairments						Equity method investment dividends received in excess of (earnings)/losses and impairments	199		(7)
Foreign currency adjustments	Foreign currency adjustments	348		(71)		Foreign currency adjustments	32		(94)
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments (Note 4)	Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments (Note 4)	(899)		7,365		Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments (Note 4)	5,454		51
Net (gain)/loss on changes in investments in affiliates (Note 4)	Net (gain)/loss on changes in investments in affiliates (Note 4)	(354)		137		Net (gain)/loss on changes in investments in affiliates (Note 4)	125		(4)
Stock compensation	Stock compensation	262		277		Stock compensation	67		100
Provision for/(Benefit from) deferred income taxes	Provision for/(Benefit from) deferred income taxes	652		(1,557)		Provision for/(Benefit from) deferred income taxes	(1,053)		17
Decrease/(Increase) in finance receivables (wholesale and other)	Decrease/(Increase) in finance receivables (wholesale and other)	8,508		(6,601)		Decrease/(Increase) in finance receivables (wholesale and other)	(2,192)		(656)
Decrease/(Increase) in accounts receivable and other assets	Decrease/(Increase) in accounts receivable and other assets	(1,329)		(2,370)		Decrease/(Increase) in accounts receivable and other assets	(956)		(732)
Decrease/(Increase) in inventory	Decrease/(Increase) in inventory	(3,129)		(4,160)		Decrease/(Increase) in inventory	(2,755)		(1,967)
Increase/(Decrease) in accounts payable and accrued and other liabilities	Increase/(Decrease) in accounts payable and accrued and other liabilities	(511)		8,453		Increase/(Decrease) in accounts payable and accrued and other liabilities	1,714		2,323
Other	Other	(111)		357		Other	132		95
Net cash provided by/(used in) operating activities	Net cash provided by/(used in) operating activities	12,256		5,675		Net cash provided by/(used in) operating activities	(1,084)		2,800

Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Capital spending	Capital spending	(4,455)		(4,801)		Capital spending	(1,370)		(1,780)
Acquisitions of finance receivables and operating leases	Acquisitions of finance receivables and operating leases	(34,693)		(32,988)		Acquisitions of finance receivables and operating leases	(10,278)		(12,543)
Collections of finance receivables and operating leases	Collections of finance receivables and operating leases	39,440		35,676		Collections of finance receivables and operating leases	11,988		11,170
Proceeds from sale of business (Note 18)		145		435
Purchases of marketable securities and other investments	Purchases of marketable securities and other investments	(23,243)		(14,115)		Purchases of marketable securities and other investments	(4,319)		(2,545)
Sales and maturities of marketable securities and other investments	Sales and maturities of marketable securities and other investments	28,439		16,208		Sales and maturities of marketable securities and other investments	7,115		4,413
Settlements of derivatives	Settlements of derivatives	(244)		233		Settlements of derivatives	212		(41)
Capital contributions to equity method investments						Capital contributions to equity method investments	(25)		(699)
Other	Other	(381)		(23)		Other	(8)		48
Net cash provided by/(used in) investing activities	Net cash provided by/(used in) investing activities	5,008		625		Net cash provided by/(used in) investing activities	3,315		(1,977)

Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Cash payments for dividends and dividend equivalents	Cash payments for dividends and dividend equivalents	(3)		(1,410)		Cash payments for dividends and dividend equivalents	(405)		(3,193)
Purchases of common stock	Purchases of common stock	—		—		Purchases of common stock	—		—
Net changes in short-term debt	Net changes in short-term debt	1,568		1,650		Net changes in short-term debt	(614)		(2,211)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	19,300		32,855		Proceeds from issuance of long-term debt	12,489		13,912
Payments of long-term debt	Payments of long-term debt	(36,122)		(37,395)		Payments of long-term debt	(12,975)		(12,242)
Other	Other	(163)		(244)		Other	(156)		(140)
Net cash provided by/(used in) financing activities	Net cash provided by/(used in) financing activities	(15,420)		(4,544)		Net cash provided by/(used in) financing activities	(1,661)		(3,874)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(155)		(772)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(24)		70

Net increase/(decrease) in cash, cash equivalents, and restricted cash	Net increase/(decrease) in cash, cash equivalents, and restricted cash	$	1,689	$	984	Net increase/(decrease) in cash, cash equivalents, and restricted cash	$	546	$	(2,981)

Cash, cash equivalents, and restricted cash at beginning of period (Note 7)	Cash, cash equivalents, and restricted cash at beginning of period (Note 7)	$	25,935	$	20,737	Cash, cash equivalents, and restricted cash at beginning of period (Note 7)	$	20,737	$	25,340
Net increase/(decrease) in cash, cash equivalents, and restricted cash	Net increase/(decrease) in cash, cash equivalents, and restricted cash	1,689		984		Net increase/(decrease) in cash, cash equivalents, and restricted cash	546		(2,981)
Cash, cash equivalents, and restricted cash at end of period (Note 7)	Cash, cash equivalents, and restricted cash at end of period (Note 7)	$	27,624	$	21,721	Cash, cash equivalents, and restricted cash at end of period (Note 7)	$	21,283	$	22,359

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(in millions, except per share amounts)


		For the periods ended September 30,									For the periods ended March 31,
		2021		2022		2021		2022			2022		2023
		Third Quarter				First Nine Months					First Quarter
		(unaudited)									(unaudited)
Revenues	Revenues									Revenues
Automotive		$	33,211	$	37,194	$	90,893	$	107,214
Company excluding Ford Credit										Company excluding Ford Credit	$	32,195	$	39,085
Ford Credit	Ford Credit	2,434		2,187		7,700		6,724		Ford Credit	2,281		2,389
Mobility		38		11		70		120
Total revenues (Note 3)	Total revenues (Note 3)	35,683		39,392		98,663		114,058		Total revenues (Note 3)	34,476		41,474

Costs and expenses	Costs and expenses									Costs and expenses
Cost of sales	Cost of sales	30,057		34,354		82,258		96,581		Cost of sales	29,036		34,669
Selling, administrative, and other expenses	Selling, administrative, and other expenses	2,947		2,847		8,667		8,346		Selling, administrative, and other expenses	2,740		2,506
Ford Credit interest, operating, and other expenses	Ford Credit interest, operating, and other expenses	1,337		1,687		3,954		4,416		Ford Credit interest, operating, and other expenses	1,357		2,186
Total costs and expenses	Total costs and expenses	34,341		38,888		94,879		109,343		Total costs and expenses	33,133		39,361
Operating income/(loss)	Operating income/(loss)	1,342		504		3,784		4,715		Operating income/(loss)	1,343		2,113
Interest expense on Company debt excluding Ford Credit	Interest expense on Company debt excluding Ford Credit	439		321		1,365		941		Interest expense on Company debt excluding Ford Credit	308		308
Other income/(loss), net (Note 4 and Note 18)		852		1,318		3,883		(5,355)
Equity in net income/(loss) of affiliated companies (Note 10)		130		(2,626)		260		(2,601)
Other income/(loss), net (Note 4)										Other income/(loss), net (Note 4)	(4,850)		224
Equity in net income/(loss) of affiliated companies										Equity in net income/(loss) of affiliated companies	(33)		130
Income/(Loss) before income taxes	Income/(Loss) before income taxes	1,885		(1,125)		6,562		(4,182)		Income/(Loss) before income taxes	(3,848)		2,159
Provision for/(Benefit from) income taxes	Provision for/(Benefit from) income taxes	63		(195)		925		(771)		Provision for/(Benefit from) income taxes	(729)		496
Net income/(loss)	Net income/(loss)	1,822		(930)		5,637		(3,411)		Net income/(loss)	(3,119)		1,663
Less: Income/(Loss) attributable to noncontrolling interests	Less: Income/(Loss) attributable to noncontrolling interests	(10)		(103)		(18)		(141)		Less: Income/(Loss) attributable to noncontrolling interests	(9)		(94)
Net income/(loss) attributable to Ford Motor Company	Net income/(loss) attributable to Ford Motor Company	$	1,832	$	(827)	$	5,655	$	(3,270)	Net income/(loss) attributable to Ford Motor Company	$	(3,110)	$	1,757

EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 6)	EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 6)									EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 6)
Basic income/(loss)	Basic income/(loss)	$	0.46	$	(0.21)	$	1.42	$	(0.81)	Basic income/(loss)	$	(0.78)	$	0.44
Diluted income/(loss)	Diluted income/(loss)	0.45		(0.21)		1.40		(0.81)		Diluted income/(loss)	(0.78)		0.44

Weighted-average shares used in computation of earnings/(loss) per share	Weighted-average shares used in computation of earnings/(loss) per share									Weighted-average shares used in computation of earnings/(loss) per share
Basic shares	Basic shares	3,995		4,021		3,989		4,017		Basic shares	4,008		3,990
Diluted shares	Diluted shares	4,036		4,021		4,027		4,017		Diluted shares	4,008		4,029

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)


		For the periods ended September 30,									For the periods ended March 31,
		2021		2022		2021		2022			2022		2023
		Third Quarter				First Nine Months					First Quarter
		(unaudited)									(unaudited)
Net income/(loss)	Net income/(loss)	$	1,822	$	(930)	$	5,637	$	(3,411)	Net income/(loss)	$	(3,119)	$	1,663
Other comprehensive income/(loss), net of tax (Note 19)
Other comprehensive income/(loss), net of tax (Note 18)										Other comprehensive income/(loss), net of tax (Note 18)
Foreign currency translation	Foreign currency translation	(302)		(949)		(23)		(1,821)		Foreign currency translation	146		493
Marketable securities	Marketable securities	(23)		(148)		(98)		(484)		Marketable securities	(253)		110
Derivative instruments	Derivative instruments	343		367		154		417		Derivative instruments	144		(55)
Pension and other postretirement benefits	Pension and other postretirement benefits	5		13		18		33		Pension and other postretirement benefits	8		3
Total other comprehensive income/(loss), net of tax	Total other comprehensive income/(loss), net of tax	23		(717)		51		(1,855)		Total other comprehensive income/(loss), net of tax	45		551
Comprehensive income/(loss)	Comprehensive income/(loss)	1,845		(1,647)		5,688		(5,266)		Comprehensive income/(loss)	(3,074)		2,214
Less: Comprehensive income/(loss) attributable to noncontrolling interests	Less: Comprehensive income/(loss) attributable to noncontrolling interests	(10)		(100)		(16)		(142)		Less: Comprehensive income/(loss) attributable to noncontrolling interests	(9)		(94)
Comprehensive income/(loss) attributable to Ford Motor Company	Comprehensive income/(loss) attributable to Ford Motor Company	$	1,855	$	(1,547)	$	5,704	$	(5,124)	Comprehensive income/(loss) attributable to Ford Motor Company	$	(3,065)	$	2,308

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions)


		December 31, 2021		September 30, 2022			December 31, 2022		March 31, 2023
		(unaudited)					(unaudited)
ASSETS	ASSETS					ASSETS
Cash and cash equivalents (Note 7)	Cash and cash equivalents (Note 7)	$	20,540	$	21,548	Cash and cash equivalents (Note 7)	$	25,134	$	22,144
Marketable securities (Note 7)	Marketable securities (Note 7)	29,053		18,625		Marketable securities (Note 7)	18,936		17,369
Ford Credit finance receivables, net of allowance for credit losses of $282 and $229 (Note 8)		32,543		33,902
Trade and other receivables, less allowances of $48 and $98		11,370		14,764
Ford Credit finance receivables, net of allowance for credit losses of $255 and $261 (Note 8)						Ford Credit finance receivables, net of allowance for credit losses of $255 and $261 (Note 8)	38,720		40,350
Trade and other receivables, less allowances of $105 and $93						Trade and other receivables, less allowances of $105 and $93	15,729		14,920
Inventories (Note 9)	Inventories (Note 9)	12,065		15,213		Inventories (Note 9)	14,080		16,212
Assets held for sale (Note 18)		9		100
Other assets	Other assets	3,416		3,936		Other assets	3,877		4,128
Total current assets	Total current assets	108,996		108,088		Total current assets	116,476		115,123
Ford Credit finance receivables, net of allowance for credit losses of $643 and $531 (Note 8)		51,256		47,683
Ford Credit finance receivables, net of allowance for credit losses of $590 and $609 (Note 8)						Ford Credit finance receivables, net of allowance for credit losses of $590 and $609 (Note 8)	49,903		51,084
Net investment in operating leases	Net investment in operating leases	26,361		23,555		Net investment in operating leases	22,772		22,008
Net property	Net property	37,139		35,529		Net property	37,265		37,970
Equity in net assets of affiliated companies (Note 10)		4,545		2,556
Equity in net assets of affiliated companies						Equity in net assets of affiliated companies	2,798		3,448
Deferred income taxes	Deferred income taxes	13,796		15,149		Deferred income taxes	15,552		15,572
Other assets	Other assets	14,942		14,359		Other assets	11,118		11,595
Total assets	Total assets	$	257,035	$	246,919	Total assets	$	255,884	$	256,800

LIABILITIES	LIABILITIES					LIABILITIES
Payables	Payables	$	22,349	$	27,051	Payables	$	25,605	$	26,028
Other liabilities and deferred revenue (Note 13 and Note 21)		18,686		19,066
Debt payable within one year (Note 15)
Other liabilities and deferred revenue (Note 12 and Note 20)						Other liabilities and deferred revenue (Note 12 and Note 20)	21,097		21,827
Debt payable within one year (Note 14)						Debt payable within one year (Note 14)
Company excluding Ford Credit	Company excluding Ford Credit	3,175		1,212		Company excluding Ford Credit	730		522
Ford Credit	Ford Credit	46,517		42,838		Ford Credit	49,434		47,528

Total current liabilities	Total current liabilities	90,727		90,167		Total current liabilities	96,866		95,905
Other liabilities and deferred revenue (Note 13 and Note 21)		27,705		28,591
Long-term debt (Note 15)
Other liabilities and deferred revenue (Note 12 and Note 20)						Other liabilities and deferred revenue (Note 12 and Note 20)	25,497		25,908
Long-term debt (Note 14)						Long-term debt (Note 14)
Company excluding Ford Credit	Company excluding Ford Credit	17,200		19,073		Company excluding Ford Credit	19,200		19,190
Ford Credit	Ford Credit	71,200		65,206		Ford Credit	69,605		72,052
Deferred income taxes	Deferred income taxes	1,581		1,793		Deferred income taxes	1,549		1,548
Total liabilities	Total liabilities	208,413		204,830		Total liabilities	212,717		214,603

EQUITY	EQUITY					EQUITY
Common Stock, par value $0.01 per share (4,067 million shares issued of 6 billion authorized)		40		41
Common Stock, par value $0.01 per share (4,082 million shares issued of 6 billion authorized)						Common Stock, par value $0.01 per share (4,082 million shares issued of 6 billion authorized)	41		41
Class B Stock, par value $0.01 per share (71 million shares issued of 530 million authorized)	Class B Stock, par value $0.01 per share (71 million shares issued of 530 million authorized)	1		1		Class B Stock, par value $0.01 per share (71 million shares issued of 530 million authorized)	1		1
Capital in excess of par value of stock	Capital in excess of par value of stock	22,611		22,768		Capital in excess of par value of stock	22,832		22,889
Retained earnings	Retained earnings	35,769		31,072		Retained earnings	31,754		30,270
Accumulated other comprehensive income/(loss) (Note 19)		(8,339)		(10,193)
Accumulated other comprehensive income/(loss) (Note 18)						Accumulated other comprehensive income/(loss) (Note 18)	(9,339)		(8,788)
Treasury stock	Treasury stock	(1,563)		(1,564)		Treasury stock	(2,047)		(2,047)
Total equity attributable to Ford Motor Company	Total equity attributable to Ford Motor Company	48,519		42,125		Total equity attributable to Ford Motor Company	43,242		42,366
Equity attributable to noncontrolling interests	Equity attributable to noncontrolling interests	103		(36)		Equity attributable to noncontrolling interests	(75)		(169)
Total equity	Total equity	48,622		42,089		Total equity	43,167		42,197
Total liabilities and equity	Total liabilities and equity	$	257,035	$	246,919	Total liabilities and equity	$	255,884	$	256,800


The following table includes assets to be used to settle liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheets above.	The following table includes assets to be used to settle liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheets above.					The following table includes assets to be used to settle liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheets above.
		December 31, 2021		September 30, 2022			December 31, 2022		March 31, 2023
		(unaudited)					(unaudited)
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	3,407	$	2,116	Cash and cash equivalents	$	2,274	$	2,438
Ford Credit finance receivables, net	Ford Credit finance receivables, net	43,001		42,657		Ford Credit finance receivables, net	49,142		50,454
Net investment in operating leases	Net investment in operating leases	7,540		11,016		Net investment in operating leases	12,545		9,472
Other assets	Other assets	39		272		Other assets	264		162
LIABILITIES	LIABILITIES					LIABILITIES
Other liabilities and deferred revenue	Other liabilities and deferred revenue	$	6	$	—	Other liabilities and deferred revenue	$	2	$	3
Debt	Debt	38,274		38,121		Debt	45,451		45,758

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in millions, unaudited)


		Equity Attributable to Ford Motor Company																	Equity Attributable to Ford Motor Company
		Capital Stock		Cap. in Excess of Par Value of Stock		Retained Earnings		Accumulated Other Comprehensive Income/(Loss) (Note 19)		Treasury Stock		Total		Equity Attributable to Non-controlling Interests		Total Equity
Balance at December 31, 2020		$	41	$	22,290	$	18,243	$	(8,294)	$	(1,590)	$	30,690	$	121	$	30,811
Net income/(loss)		—		—		3,262		—		—		3,262		—		3,262
Other comprehensive income/(loss), net		—		—		—		(76)		—		(76)		—		(76)
Common Stock issued (a)		—		(50)		—		—		—		(50)		—		(50)
Treasury stock/other		—		—		—		—		5		5		25		30
Dividends and dividend equivalents declared (b)		—		—		(3)		—		—		(3)		—		(3)
Balance at March 31, 2021		$	41	$	22,240	$	21,502	$	(8,370)	$	(1,585)	$	33,828	$	146	$	33,974
Net income/(loss)		—		—		561		—		—		561		(8)		553
Other comprehensive income/(loss), net		—		—		—		102		—		102		2		104
Common Stock issued (a)		—		168		—		—		—		168		—		168
Treasury stock/other		—		—		—		—		6		6		(20)		(14)
Dividends and dividend equivalents declared (b)		—		—		(1)		—		—		(1)		—		(1)
Balance at June 30, 2021		$	41	$	22,408	$	22,062	$	(8,268)	$	(1,579)	$	34,664	$	120	$	34,784
Net income/(loss)		—		—		1,832		—		—		1,832		(10)		1,822
Other comprehensive income/(loss), net		—		—		—		23		—		23		—		23
Common stock issued (a)		—		69		—		—		—		69		—		69
Treasury stock/other		—		—		—		—		5		5		1		6
Dividends and dividend equivalents declared (b)		—		—		—		—		—		—		—		—
Balance at September 30, 2021		$	41	$	22,477	$	23,894	$	(8,245)	$	(1,574)	$	36,593	$	111	$	36,704
																			Capital Stock		Cap. in Excess of Par Value of Stock		Retained Earnings		Accumulated Other Comprehensive Income/(Loss) (Note 18)		Treasury Stock		Total		Equity Attributable to Non-controlling Interests		Total Equity
Balance at December 31, 2021	Balance at December 31, 2021	$	41	$	22,611	$	35,769	$	(8,339)	$	(1,563)	$	48,519	$	103	$	48,622	Balance at December 31, 2021	$	41	$	22,611	$	35,769	$	(8,339)	$	(1,563)	$	48,519	$	103	$	48,622
Net income/(loss)	Net income/(loss)	—		—		(3,110)		—		—		(3,110)		(9)		(3,119)		Net income/(loss)	—		—		(3,110)		—		—		(3,110)		(9)		(3,119)
Other comprehensive income/(loss), net	Other comprehensive income/(loss), net	—		—		—		45		—		45		—		45		Other comprehensive income/(loss), net	—		—		—		45		—		45		—		45
Common Stock issued (a)	Common Stock issued (a)	1		(61)		—		—		—		(60)		—		(60)		Common Stock issued (a)	1		(61)		—		—		—		(60)		—		(60)
Treasury stock/other	Treasury stock/other	—		—		—		—		(1)		(1)		5		4		Treasury stock/other	—		—		—		—		(1)		(1)		5		4
Dividends and dividend equivalents declared ($0.10 per share) (b)	Dividends and dividend equivalents declared ($0.10 per share) (b)	—		—		(408)		—		—		(408)		—		(408)		Dividends and dividend equivalents declared ($0.10 per share) (b)	—		—		(408)		—		—		(408)		—		(408)
Balance at March 31, 2022	Balance at March 31, 2022	$	42	$	22,550	$	32,251	$	(8,294)	$	(1,564)	$	44,985	$	99	$	45,084	Balance at March 31, 2022	$	42	$	22,550	$	32,251	$	(8,294)	$	(1,564)	$	44,985	$	99	$	45,084

Balance at December 31, 2022																		Balance at December 31, 2022	$	42	$	22,832	$	31,754	$	(9,339)	$	(2,047)	$	43,242	$	(75)	$	43,167
Net income/(loss)	Net income/(loss)	—		—		667		—		—		667		(29)		638		Net income/(loss)	—		—		1,757		—		—		1,757		(94)		1,663
Other comprehensive income/(loss), net	Other comprehensive income/(loss), net	—		—		—		(1,179)		—		(1,179)		(4)		(1,183)		Other comprehensive income/(loss), net	—		—		—		551		—		551		—		551
Common Stock issued (a)	Common Stock issued (a)	—		103		—		—		—		103		—		103		Common Stock issued (a)	—		57		—		—		—		57		—		57
Treasury stock/other	Treasury stock/other	—		—		—		—		—		—		2		2		Treasury stock/other	—		—		—		—		—		—		—		—
Dividends and dividend equivalents declared ($0.10 per share) (b)		—		—		(407)		—		—		(407)		—		(407)
Balance at June 30, 2022		$	42	$	22,653	$	32,511	$	(9,473)	$	(1,564)	$	44,169	$	68	$	44,237
Net income/(loss)		—		—		(827)		—		—		(827)		(103)		(930)
Other comprehensive income/(loss), net		—		—		—		(720)		—		(720)		3		(717)
Common stock issued (a)		—		115		—		—		—		115		—		115
Treasury stock/other		—		—		—		—		—		—		(4)		(4)
Dividends and dividend equivalents declared ($0.15 per share) (b)		—		—		(612)		—		—		(612)		—		(612)
Balance at September 30, 2022		$	42	$	22,768	$	31,072	$	(10,193)	$	(1,564)	$	42,125	$	(36)	$	42,089
Dividends and dividend equivalents declared ($0.80 per share) (b)																		Dividends and dividend equivalents declared ($0.80 per share) (b)	—		—		(3,241)		—		—		(3,241)		—		(3,241)
Balance at March 31, 2023																		Balance at March 31, 2023	$	42	$	22,889	$	30,270	$	(8,788)	$	(2,047)	$	42,366	$	(169)	$	42,197

__________

(a)Includes impact of share-based compensation.

(b)Dividends and dividend equivalents declared for Common and Class B Stock. On February 2, 2023, we declared a regular dividend of $0.15 per share and a supplemental dividend of $0.65 per share.

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Table of Contents


Footnote		Page
Note 1	Presentation	6
Note 2	New Accounting Standards	6
Note 3	Revenue	7
Note 4	Other Income/(Loss)	98
Note 5	Income Taxes	98
Note 6	Capital Stock and Earnings/(Loss) Per Share	98
Note 7	Cash, Cash Equivalents, and Marketable Securities	109
Note 8	Ford Credit Finance Receivables and Allowance for Credit Losses	1312
Note 9	Inventories	1716
Note 10	~~Impairment of Equity in Net Assets of Affiliated Companies~~Other Investments	1716
Note 11	~~Other Investments~~Goodwill	1916
Note 12	~~Goodwill~~	19
~~Note 13~~	Other Liabilities and Deferred Revenue	1917
Note 13	Retirement Benefits	18
Note 14	~~Retirement Benefits~~Debt	2019
Note 15	~~Debt~~	21
~~Note 16~~	Derivative Financial Instruments and Hedging Activities	2320
Note 1716	Employee Separation Actions and Exit and Disposal Activities	2522
Note 1817	Acquisitions and Divestitures	2623
Note 1918	Accumulated Other Comprehensive Income/(Loss)	2824
Note 19	Variable Interest Entities	25
Note 20	~~Variable Interest Entities~~Commitments and Contingencies	2926
Note 21	~~Commitments and Contingencies~~	30
~~Note 22~~	Segment Information	3329

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. PRESENTATION

For purposes of this report, “Ford,” the “Company,” “we,” “our,” “us,” or similar references mean Ford Motor Company, our consolidated subsidiaries, and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise. We also make reference to Ford Motor Credit Company LLC, herein referenced to as Ford Credit. Our consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X. We reclassified certain prior year amounts in our consolidated financial statements to conform to the current year presentation.

In the opinion of management, these unaudited financial statements reflect a fair statement of our results of operations and financial condition for the periods, and at the dates, presented. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (“~~2021~~2022 Form 10-K Report”).

NOTE 2. NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

Accounting Standards Update (“ASU”) ~~2021-10, Government Assistance: Disclosures~~2022-02, Financial Instruments – Credit Losses, Troubled Debt Restructurings and Vintage Disclosures. Effective January 1, 2023, we adopted the new standard, which eliminates the troubled debt recognition and measurement guidance and requires disclosure of current period gross charge-offs by ~~Business Entities about Government Assistance.~~ ~~In November 2021,~~year of origination (vintage disclosure). Adoption of the ~~Financial Accounting Standards Board (“FASB”) issued an accounting standards update requiring entities~~new standard did not have a material impact to ~~provide certain disclosures in annual period~~our consolidated financial statements ~~for those transactions with governments~~or financial statement disclosures.

ASU 2022-04, Liabilities – Supplier Finance Programs, Disclosure of Supplier Finance Program Obligations. Effective January 1, 2023, we adopted the new standard, which requires that ~~are accounted for by applying~~entities that use supplier finance programs disclose information about the nature and potential magnitude of the programs, activity during the period, and changes from period to period.

Financial institutions participate in a ~~grant or contribution accounting model via analogy~~supply chain finance (“SCF”) program that enables our suppliers, at their sole discretion, to ~~other applicable accounting standards. We are assessing~~sell their Ford receivables (i.e., our payment obligations to the ~~effect~~suppliers) to the financial institutions on a non-recourse basis in order to be paid earlier than our payment terms provide. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our ~~annual consolidated~~payment terms, the amounts we pay, or our liquidity. We have no economic interest in a supplier’s decision to participate in the SCF program, and we do not provide any guarantees in connection with it. As of March 31, 2023, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial ~~statement disclosures; however, adoption will not impact our consolidated balance sheets or income statements.~~institutions, reported in Payables, was $265 million. The amount settled through the SCF program during the first quarter of 2023 was $452 million.

We also adopted the following ASUs during ~~2022,~~2023, none of which had a material impact to our consolidated financial statements or financial statement disclosures:


ASU		Effective Date
~~2021-04~~2022-01	Derivatives and Hedging – Fair Value Hedging – Portfolio Layer Hedging	January 1, 2023
2022-03	~~Issuer’s Accounting for Certain Modifications or Exchanges~~Fair Value Measurement of ~~Warrants~~Equity Securities Subject to Contractual Sale Restrictions	January 1, ~~2022~~2023
~~2021-05~~2018-12	~~Lessors - Certain Leases with Variable Lease Payments~~Targeted Improvements to the Accounting for Long Duration Contracts (and related amendments)	January 1, ~~2022~~
~~2021-08~~	~~Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~	~~January 1, 2022~~2023

Accounting Standards Issued But Not Yet Adopted

~~ASU 2022-02, Financial Instruments – Credit Losses, Troubled Debt Restructurings and Vintage Disclosures.~~ In March 2022, the FASB issued a new accounting standard that eliminates the troubled debt recognition and measurement guidance. The new standard requires that an entity apply the loan refinancing and restructuring guidance in ASC 310 to all loan modifications and/or receivable modifications. It also enhances disclosure requirements for certain refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and requires disclosure of current-period gross charge-offs by year of origination in the vintage disclosure. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The adoption of the new standard is not expected to have a material impact on our consolidated financial statements or financial statement disclosures.

~~All other~~ ASUs issued but not yet adopted were assessed and determined to be ~~either~~ not applicable or are not expected to have a material impact on our consolidated financial statements or financial statement disclosures.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3. REVENUE

The following tables disaggregate our revenue by major source for the periods ended ~~September 30~~March 31 (in millions):


		Third Quarter 2021							First Quarter 2022
		Company excluding Ford Credit		Ford Credit		Consolidated			Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories	Vehicles, parts, and accessories	$	32,072	$	—	$	32,072	Vehicles, parts, and accessories	$	30,991	$	—	$	30,991
Used vehicles	Used vehicles	450		—		450		Used vehicles	429		—		429
Services and other revenue (a)	Services and other revenue (a)	659		58		717		Services and other revenue (a)	722		19		741
Revenues from sales and services	Revenues from sales and services	33,181		58		33,239		Revenues from sales and services	32,142		19		32,161

Leasing income	Leasing income	68		1,285		1,353		Leasing income	53		1,211		1,264
Financing income	Financing income	—		1,080		1,080		Financing income	—		1,040		1,040
Insurance income	Insurance income	—		11		11		Insurance income	—		11		11
Total revenues	Total revenues	$	33,249	$	2,434	$	35,683	Total revenues	$	32,195	$	2,281	$	34,476

		Third Quarter 2022							First Quarter 2023
		Company excluding Ford Credit		Ford Credit		Consolidated			Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories	Vehicles, parts, and accessories	$	36,111	$	—	$	36,111	Vehicles, parts, and accessories	$	37,927	$	—	$	37,927
Used vehicles	Used vehicles	378		—		378		Used vehicles	469		—		469
Services and other revenue (a)	Services and other revenue (a)	664		13		677		Services and other revenue (a)	645		17		662
Revenues from sales and services	Revenues from sales and services	37,153		13		37,166		Revenues from sales and services	39,041		17		39,058

Leasing income	Leasing income	52		1,123		1,175		Leasing income	44		1,049		1,093
Financing income	Financing income	—		1,037		1,037		Financing income	—		1,301		1,301
Insurance income	Insurance income	—		14		14		Insurance income	—		22		22
Total revenues	Total revenues	$	37,205	$	2,187	$	39,392	Total revenues	$	39,085	$	2,389	$	41,474

		First Nine Months 2021
		Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories		$	86,870	$	—	$	86,870
Used vehicles		1,947		—		1,947
Services and other revenue (a)		1,923		122		2,045
Revenues from sales and services		90,740		122		90,862

Leasing income		223		4,032		4,255
Financing income		—		3,497		3,497
Insurance income		—		49		49
Total revenues		$	90,963	$	7,700	$	98,663

		First Nine Months 2022
		Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories		$	103,933	$	—	$	103,933
Used vehicles		1,180		—		1,180
Services and other revenue (a)		2,063		84		2,147
Revenues from sales and services		107,176		84		107,260

Leasing income		158		3,500		3,658
Financing income		—		3,103		3,103
Insurance income		—		37		37
Total revenues		$	107,334	$	6,724	$	114,058

__________

(a)Includes extended service contract revenue.

~~Item 1. Financial Statements (Continued)~~

~~FORD MOTOR COMPANY AND SUBSIDIARIES~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTE 3. REVENUE~~ ~~(Continued)~~

The amount of consideration we receive and revenue we recognize on our vehicles, parts, and accessories varies with changes in return rights and marketing incentives we offer to our customers and their customers. Estimates of marketing incentives are based on expected retail and fleet sales volumes, mix of products to be sold, and incentive programs to be offered. Customer acceptance of products and programs, as well as other market conditions, will impact these estimates. As a result of changes in our estimate of marketing incentives, we recorded an increase of ~~$110~~$211 million in the ~~third~~first quarter of ~~2021~~2022 and a decrease of ~~$37~~$178 million in the ~~third~~first quarter of ~~2022~~2023 related to revenue recognized in prior periods.

We had a balance of ~~$4.3~~$4.4 billion and $4.5 billion of unearned revenue associated primarily with outstanding extended service contracts reported in Other liabilities and deferred revenue at December 31, ~~2021~~2022 and ~~September 30, 2022~~March 31, 2023, respectively. We expect to recognize approximately ~~$400 million~~$1.1 billion of the unearned amount in the remainder of ~~2022, $1.3~~2023, $1.2 billion in ~~2023,~~2024, and ~~$2.6~~$2.2 billion thereafter. We recognized ~~$333~~$365 million and ~~$343~~$380 million of unearned amounts from prior years as revenue during the ~~third~~first quarter of ~~2021~~2022 and ~~2022, respectively, and $1.0 billion and $1.1 billion in the first nine months of 2021 and 2022,~~2023, respectively.

Amounts paid to dealers to obtain extended service contracts are deferred and recorded as Other assets. We had a balance of ~~$309~~$315 million and ~~$308~~$324 million in deferred costs as of December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively. We recognized ~~$21~~$22 million and ~~$22~~$26 million of amortization during the ~~third~~first quarter of ~~2021~~2022 and ~~2022, respectively, and $60 million and $66 million in the first nine months of 2021 and 2022,~~2023, respectively.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4. OTHER INCOME/(LOSS)

The amounts included in Other income/(loss), net for the periods ended ~~September 30~~March 31 were as follows (in millions):


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Net periodic pension and OPEB income/(cost), excluding service cost (Note 14)		$	590	$	431	$	1,970	$	1,320
Net periodic pension and OPEB income/(cost), excluding service cost (Note 13)										Net periodic pension and OPEB income/(cost), excluding service cost (Note 13)	$	459	$	(165)
Investment-related interest income	Investment-related interest income	60		181		196		331		Investment-related interest income	61		348
Interest income/(expense) on income taxes	Interest income/(expense) on income taxes	3		1		—		8		Interest income/(expense) on income taxes	5		(4)
Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (a)	Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (a)	(7)		609		899		(7,365)		Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (a)	(5,454)		(51)
Gains/(Losses) on changes in investments in affiliates (Note 17 and Note 18)		22		9		354		(137)
Gains/(Losses) on extinguishment of debt (Note 15)		(4)		(135)		(8)		(121)
Gains/(Losses) on changes in investments in affiliates										Gains/(Losses) on changes in investments in affiliates	(125)		4

Royalty income	Royalty income	162		118		461		373		Royalty income	144		103
Other	Other	26		104		11		236		Other	60		(11)
Total	Total	$	852	$	1,318	$	3,883	$	(5,355)	Total	$	(4,850)	$	224

__________

(a) Includes a ~~$646 million gain~~$5.4 billion loss and a ~~$7.3 billion~~$25 million loss on our Rivian investment in the ~~third~~first quarter ~~and first nine months~~ of 2022 and 2023, respectively.

NOTE 5. INCOME TAXES

For interim tax reporting, we estimate one single effective tax rate for tax jurisdictions not subject to a valuation allowance, which is applied to the year-to-date ordinary income/(loss). Tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.

NOTE 6. CAPITAL STOCK AND EARNINGS/(LOSS) PER SHARE

Earnings/(Loss) Per Share Attributable to Ford Motor Company Common and Class B Stock

Basic and diluted earnings/(loss) per share were calculated using the following (in millions):


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Net income/(loss) attributable to Ford Motor Company	Net income/(loss) attributable to Ford Motor Company	$	1,832	$	(827)	$	5,655	$	(3,270)	Net income/(loss) attributable to Ford Motor Company	$	(3,110)	$	1,757

Basic and Diluted Shares	Basic and Diluted Shares									Basic and Diluted Shares
Basic shares (average shares outstanding)	Basic shares (average shares outstanding)	3,995		4,021		3,989		4,017		Basic shares (average shares outstanding)	4,008		3,990
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt (a)	Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt (a)	41		—		38		—		Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt (a)	—		39
Diluted shares	Diluted shares	4,036		4,021		4,027		4,017		Diluted shares	4,008		4,029

__________

(a) In the ~~third~~first quarter ~~and first nine months~~ of 2022, there were 3856 million ~~and 42 million~~ shares ~~respectively,~~ excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES

The fair values of cash, cash equivalents, and marketable securities measured at fair value on a recurring basis were as follows (in millions):


			December 31, 2021								December 31, 2022
		Fair Value Level	Company excluding Ford Credit		Ford Credit		Consolidated			Fair Value Level	Company excluding Ford Credit		Ford Credit		Consolidated
Cash and cash equivalents	Cash and cash equivalents								Cash and cash equivalents
U.S. government	U.S. government	1	$	2,877	$	711	$	3,588	U.S. government	1	$	3,295	$	1,045	$	4,340
U.S. government agencies	U.S. government agencies	2	355		240		595		U.S. government agencies	2	2,245		150		2,395
Non-U.S. government and agencies	Non-U.S. government and agencies	2	55		152		207		Non-U.S. government and agencies	2	1,048		199		1,247
Other cash equivalents									Other cash equivalents	2	10		—		10
Corporate debt	Corporate debt	2	105		940		1,045		Corporate debt	2	593		792		1,385
Total marketable securities classified as cash equivalents	Total marketable securities classified as cash equivalents		3,392		2,043		5,435		Total marketable securities classified as cash equivalents		7,191		2,186		9,377
Cash, time deposits, and money market funds	Cash, time deposits, and money market funds		6,185		8,920		15,105		Cash, time deposits, and money market funds		7,550		8,207		15,757
Total cash and cash equivalents	Total cash and cash equivalents		$	9,577	$	10,963	$	20,540	Total cash and cash equivalents		$	14,741	$	10,393	$	25,134

Marketable securities	Marketable securities								Marketable securities
U.S. government	U.S. government	1	$	4,018	$	864	$	4,882	U.S. government	1	$	4,947	$	187	$	5,134
U.S. government agencies	U.S. government agencies	2	2,270		75		2,345		U.S. government agencies	2	2,641		221		2,862
Non-U.S. government and agencies	Non-U.S. government and agencies	2	3,373		697		4,070		Non-U.S. government and agencies	2	2,625		658		3,283
Corporate debt	Corporate debt	2	6,299		304		6,603		Corporate debt	2	6,755		266		7,021
Equities (a)	Equities (a)	1	10,673		—		10,673		Equities (a)	1	223		—		223
Other marketable securities	Other marketable securities	2	247		233		480		Other marketable securities	2	252		161		413
Total marketable securities	Total marketable securities		$	26,880	$	2,173	$	29,053	Total marketable securities		$	17,443	$	1,493	$	18,936

Restricted cash	Restricted cash		$	69	$	128	$	197	Restricted cash		$	79	$	127	$	206

			September 30, 2022								March 31, 2023
		Fair Value Level	Company excluding Ford Credit		Ford Credit		Consolidated			Fair Value Level	Company excluding Ford Credit		Ford Credit		Consolidated
Cash and cash equivalents	Cash and cash equivalents								Cash and cash equivalents
U.S. government	U.S. government	1	$	3,067	$	30	$	3,097	U.S. government	1	$	1,958	$	1,183	$	3,141
U.S. government agencies	U.S. government agencies	2	1,336		—		1,336		U.S. government agencies	2	2,320		1,045		3,365
Non-U.S. government and agencies	Non-U.S. government and agencies	2	1,401		369		1,770		Non-U.S. government and agencies	2	150		70		220
Other cash equivalents	Other cash equivalents	2	8		—		8		Other cash equivalents	2	—		—		—
Corporate debt	Corporate debt	2	773		663		1,436		Corporate debt	2	68		439		507
Total marketable securities classified as cash equivalents	Total marketable securities classified as cash equivalents		6,585		1,062		7,647		Total marketable securities classified as cash equivalents		4,496		2,737		7,233
Cash, time deposits, and money market funds	Cash, time deposits, and money market funds		8,612		5,289		13,901		Cash, time deposits, and money market funds		8,333		6,578		14,911
Total cash and cash equivalents	Total cash and cash equivalents		$	15,197	$	6,351	$	21,548	Total cash and cash equivalents		$	12,829	$	9,315	$	22,144

Marketable securities	Marketable securities								Marketable securities
U.S. government	U.S. government	1	$	4,332	$	305	$	4,637	U.S. government	1	$	4,605	$	173	$	4,778
U.S. government agencies	U.S. government agencies	2	2,426		245		2,671		U.S. government agencies	2	2,300		270		2,570
Non-U.S. government and agencies	Non-U.S. government and agencies	2	2,613		866		3,479		Non-U.S. government and agencies	2	2,245		548		2,793
Corporate debt	Corporate debt	2	6,265		265		6,530		Corporate debt	2	6,212		421		6,633
Equities (a)	Equities (a)	1	878		—		878		Equities (a)	1	182		—		182
Other marketable securities	Other marketable securities	2	266		164		430		Other marketable securities	2	250		163		413
Total marketable securities	Total marketable securities		$	16,780	$	1,845	$	18,625	Total marketable securities		$	15,794	$	1,575	$	17,369

Restricted cash	Restricted cash		$	71	$	102	$	173	Restricted cash		$	82	$	133	$	215

__________

(a)Includes ~~$10.6 billion~~$194 million and ~~$817~~$147 million of Rivian common shares valued at ~~$103.69~~$18.43 and ~~$32.91~~$15.48 per share as of December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively. In the ~~third~~first quarter of ~~2022,~~2023, we sold ~~51.9~~1 million of our Rivian common shares for about ~~$1.8 billion~~$21.6 million in total proceeds. Net unrealized gains/losses recognized during full year ~~2021~~2022 and the first ~~nine months~~quarter of ~~2022~~2023 on all equity securities held at December 31, ~~2021~~2022 and ~~September 30, 2022~~March 31, 2023 were ~~an $8.3 billion gain~~a $968 million loss and a ~~$1.8 billion~~$22 million loss, respectively.

109

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

The cash equivalents and marketable securities accounted for as available-for-sale (“AFS”) securities were as follows (in millions):


		December 31, 2021															December 31, 2022
										Fair Value of Securities with Contractual Maturities															Fair Value of Securities with Contractual Maturities
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Within 1 Year		After 1 Year through 5 Years		After 5 Years			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Within 1 Year		After 1 Year through 5 Years		After 5 Years
Company excluding Ford Credit	Company excluding Ford Credit															Company excluding Ford Credit
U.S. government	U.S. government	$	3,821	$	12	$	(14)	$	3,819	$	1,360	$	2,435	$	24	U.S. government	$	4,797	$	1	$	(145)	$	4,653	$	1,008	$	3,645	$	—
U.S. government agencies	U.S. government agencies	2,249		2		(21)		2,230		316		1,802		112		U.S. government agencies	2,508		—		(119)		2,389		1,244		1,109		36
Non-U.S. government and agencies	Non-U.S. government and agencies	2,599		6		(21)		2,584		854		1,708		22		Non-U.S. government and agencies	2,248		—		(132)		2,116		294		1,810		12
Corporate debt	Corporate debt	6,373		21		(23)		6,371		2,645		3,726		—		Corporate debt	7,511		6		(197)		7,320		3,117		4,195		8
Other marketable securities	Other marketable securities	228		1		(1)		228		—		150		78		Other marketable securities	246		—		(9)		237		—		181		56
Total	Total	$	15,270	$	42	$	(80)	$	15,232	$	5,175	$	9,821	$	236	Total	$	17,310	$	7	$	(602)	$	16,715	$	5,663	$	10,940	$	112

		September 30, 2022															March 31, 2023
										Fair Value of Securities with Contractual Maturities															Fair Value of Securities with Contractual Maturities
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Within 1 Year		After 1 Year through 5 Years		After 5 Years			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Within 1 Year		After 1 Year through 5 Years		After 5 Years
Company excluding Ford Credit	Company excluding Ford Credit															Company excluding Ford Credit
U.S. government	U.S. government	$	4,200	$	—	$	(152)	$	4,048	$	868	$	3,159	$	21	U.S. government	$	4,557	$	8	$	(109)	$	4,456	$	1,058	$	3,387	$	11
U.S. government agencies	U.S. government agencies	2,455		—		(131)		2,324		982		1,274		68		U.S. government agencies	2,338		—		(94)		2,244		1,122		1,104		18
Non-U.S. government and agencies	Non-U.S. government and agencies	2,315		—		(140)		2,175		325		1,838		12		Non-U.S. government and agencies	2,320		2		(105)		2,217		407		1,798		12
Corporate debt	Corporate debt	7,240		—		(239)		7,001		3,290		3,701		10		Corporate debt	6,399		13		(157)		6,255		2,007		4,247		1
Other marketable securities	Other marketable securities	262		—		(10)		252		—		180		72		Other marketable securities	233		—		(7)		226		—		170		56
Total	Total	$	16,472	$	—	$	(672)	$	15,800	$	5,465	$	10,152	$	183	Total	$	15,847	$	23	$	(472)	$	15,398	$	4,594	$	10,706	$	98

Sales proceeds and gross realized gains/losses from the sale of AFS securities for the periods ended ~~September 30~~March 31 were as follows (in millions):


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Company excluding Ford Credit	Company excluding Ford Credit									Company excluding Ford Credit
Sales proceeds	Sales proceeds	$	914	$	692	$	4,453	$	5,814	Sales proceeds	$	4,004	$	1,163
Gross realized gains	Gross realized gains	4		—		21		7		Gross realized gains	6		1
Gross realized losses	Gross realized losses	1		5		3		20		Gross realized losses	6		12

1110

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

The present fair values and gross unrealized losses for cash equivalents and marketable securities accounted for as AFS securities that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in millions):


		December 31, 2021													December 31, 2022
		Less than 1 Year				1 Year or Greater				Total					Less than 1 Year				1 Year or Greater				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Company excluding Ford Credit	Company excluding Ford Credit													Company excluding Ford Credit
U.S. government	U.S. government	$	2,598	$	(14)	$	—	$	—	$	2,598	$	(14)	U.S. government	$	2,860	$	(52)	$	1,570	$	(93)	$	4,430	$	(145)
U.S. government agencies	U.S. government agencies	1,809		(19)		73		(2)		1,882		(21)		U.S. government agencies	707		(14)		1,658		(105)		2,365		(119)
Non-U.S. government and agencies	Non-U.S. government and agencies	1,614		(20)		38		(1)		1,652		(21)		Non-U.S. government and agencies	751		(23)		1,271		(109)		2,022		(132)
Corporate debt	Corporate debt	3,637		(21)		71		(2)		3,708		(23)		Corporate debt	4,571		(79)		1,737		(118)		6,308		(197)
Other marketable securities	Other marketable securities	178		(1)		15		—		193		(1)		Other marketable securities	123		(4)		108		(5)		231		(9)
Total	Total	$	9,836	$	(75)	$	197	$	(5)	$	10,033	$	(80)	Total	$	9,012	$	(172)	$	6,344	$	(430)	$	15,356	$	(602)

		September 30, 2022													March 31, 2023
		Less than 1 Year				1 Year or Greater				Total					Less than 1 Year				1 Year or Greater				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Company excluding Ford Credit	Company excluding Ford Credit													Company excluding Ford Credit
U.S. government	U.S. government	$	3,205	$	(110)	$	750	$	(42)	$	3,955	$	(152)	U.S. government	$	1,825	$	(22)	$	1,684	$	(87)	$	3,509	$	(109)
U.S. government agencies	U.S. government agencies	1,185		(35)		1,081		(96)		2,266		(131)		U.S. government agencies	465		(3)		1,658		(91)		2,123		(94)
Non-U.S. government and agencies	Non-U.S. government and agencies	1,099		(41)		1,010		(99)		2,109		(140)		Non-U.S. government and agencies	276		(4)		1,685		(101)		1,961		(105)
Corporate debt	Corporate debt	6,016		(178)		662		(61)		6,678		(239)		Corporate debt	3,152		(50)		2,012		(107)		5,164		(157)
Other marketable securities	Other marketable securities	216		(9)		36		(1)		252		(10)		Other marketable securities	107		(3)		101		(4)		208		(7)
Total	Total	$	11,721	$	(373)	$	3,539	$	(299)	$	15,260	$	(672)	Total	$	5,825	$	(82)	$	7,140	$	(390)	$	12,965	$	(472)

We determine credit losses on AFS debt securities using the specific identification method. During the first ~~nine months~~quarter of ~~2022,~~2023, we did not recognize any credit loss. The unrealized losses on securities are due to changes in interest rates and market liquidity.

Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash, as reported in the consolidated statements of cash flows, were as follows (in millions):


		December 31, 2021		September 30, 2022			December 31, 2022		March 31, 2023
Cash and cash equivalents	Cash and cash equivalents	$	20,540	$	21,548	Cash and cash equivalents	$	25,134	$	22,144
Restricted cash (a)	Restricted cash (a)	197		173		Restricted cash (a)	206		215

Total cash, cash equivalents, and restricted cash	Total cash, cash equivalents, and restricted cash	$	20,737	$	21,721	Total cash, cash equivalents, and restricted cash	$	25,340	$	22,359

__________

(a)Included in Other assets in the non-current assets section of our consolidated balance sheets.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios. The receivables are generally secured by the vehicles, inventory, or other property being financed.

Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses.

For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date.

Ford Credit finance receivables, net were as follows (in millions):


		December 31, 2021		September 30, 2022			December 31, 2022		March 31, 2023
Consumer	Consumer					Consumer
Retail installment contracts, gross	Retail installment contracts, gross	$	69,148	$	64,529	Retail installment contracts, gross	$	66,954	$	68,259
Finance leases, gross	Finance leases, gross	7,318		6,196		Finance leases, gross	6,765		6,990
Retail financing, gross	Retail financing, gross	76,466		70,725		Retail financing, gross	73,719		75,249
Unearned interest supplements	Unearned interest supplements	(3,020)		(2,311)		Unearned interest supplements	(2,305)		(2,435)
Consumer finance receivables	Consumer finance receivables	73,446		68,414		Consumer finance receivables	71,414		72,814
Non-Consumer	Non-Consumer					Non-Consumer
Dealer financing	Dealer financing	11,278		13,931		Dealer financing	18,054		19,490
Non-Consumer finance receivables	Non-Consumer finance receivables	11,278		13,931		Non-Consumer finance receivables	18,054		19,490
Total recorded investment	Total recorded investment	$	84,724	$	82,345	Total recorded investment	$	89,468	$	92,304

Recorded investment in finance receivables	Recorded investment in finance receivables	$	84,724	$	82,345	Recorded investment in finance receivables	$	89,468	$	92,304
Allowance for credit losses	Allowance for credit losses	(925)		(760)		Allowance for credit losses	(845)		(870)
Total finance receivables, net	Total finance receivables, net	$	83,799	$	81,585	Total finance receivables, net	$	88,623	$	91,434

Current portion	Current portion	$	32,543	$	33,902	Current portion	$	38,720	$	40,350
Non-current portion	Non-current portion	51,256		47,683		Non-current portion	49,903		51,084
Total finance receivables, net	Total finance receivables, net	$	83,799	$	81,585	Total finance receivables, net	$	88,623	$	91,434

Net finance receivables subject to fair value (a)	Net finance receivables subject to fair value (a)	$	76,796	$	75,674	Net finance receivables subject to fair value (a)	$	82,200	$	84,812
Fair value (b)	Fair value (b)	77,648		73,216		Fair value (b)	79,521		82,966

__________

(a)Net finance receivables subject to fair value exclude finance leases.

(b)The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy.

Ford Credit’s finance leases are comprised of sales-type and direct financing leases. Financing revenue from finance leases for the ~~third~~first quarter of ~~2021~~2022 and ~~2022~~2023 was ~~$86~~$77 million and ~~$73 million, respectively, and for the first nine months of 2021 and 2022 was $264 million and $223~~$83 million, respectively, and is included in Ford Credit revenues on our consolidated income statements.

At December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, accrued interest was ~~$125~~$187 million and ~~$132~~$198 million, respectively, which we report in Other assets in the current assets section of our consolidated balance sheets.

Included in the recorded investment in finance receivables at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, were consumer receivables of ~~$39~~$43.9 billion and ~~$40.7~~$43.9 billion, respectively, and non-consumer receivables of ~~$12~~$18.2 billion and ~~$14.3~~$17.6 billion, respectively, (including ~~Automotive~~Ford Blue, Ford Model e, and Ford Pro receivables sold to Ford Credit, which we report in Trade and other ~~receivables)~~receivables) that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions.

1312

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Credit Quality

Consumer Portfolio. Credit quality ratings for consumer receivables are based on Ford Credit’s aging analysis. Consumer receivables credit quality ratings are as follows:

•Pass – current to 60 days past due;

•Special Mention – 61 to 120 days past due and in intensified collection status; and

•Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral less costs to sell.

The credit quality analysis of consumer receivables at December 31, ~~2021~~2022 was as follows (in millions):


		Amortized Cost Basis by Origination Year																	Amortized Cost Basis by Origination Year
		Prior to 2017		2017		2018		2019		2020		2021		Total		Percent			Prior to 2018		2018		2019		2020		2021		2022		Total		Percent
Consumer	Consumer																	Consumer
31 - 60 days past due	31 - 60 days past due	$	39	$	52	$	98	$	120	$	186	$	91	$	586	0.8	%	31 - 60 days past due	$	41	$	60	$	91	$	181	$	150	$	126	$	649	0.9	%
61 - 120 days past due	61 - 120 days past due	7		10		20		29		40		21		127		0.2		61 - 120 days past due	9		12		20		39		40		29		149		0.2
Greater than 120 days past due	Greater than 120 days past due	10		6		6		9		11		1		43		—		Greater than 120 days past due	9		4		5		7		7		6		38		0.1
Total past due	Total past due	56		68		124		158		237		113		756		1.0		Total past due	59		76		116		227		197		161		836		1.2
Current	Current	812		2,607		6,559		12,689		22,701		27,322		72,690		99.0		Current	883		2,563		6,137		13,844		18,357		28,794		70,578		98.8
Total	Total	$	868	$	2,675	$	6,683	$	12,847	$	22,938	$	27,435	$	73,446	100.0	%	Total	$	942	$	2,639	$	6,253	$	14,071	$	18,554	$	28,955	$	71,414	100.0	%

The credit quality analysis of consumer receivables at ~~September 30, 2022~~March 31, 2023 was as follows (in millions):


		Amortized Cost Basis by Origination Year																	Amortized Cost Basis by Origination Year
		Prior to 2018		2018		2019		2020		2021		2022		Total		Percent			Prior to 2019		2019		2020		2021		2022		2023		Total		Percent
Consumer	Consumer																	Consumer
31 - 60 days past due	31 - 60 days past due	$	46	$	60	$	85	$	165	$	120	$	63	$	539	0.8	%	31 - 60 days past due	$	75	$	72	$	149	$	135	$	150	$	10	$	591	0.8	%
61 - 120 days past due	61 - 120 days past due	9		12		19		34		30		14		118		0.2		61 - 120 days past due	11		13		28		30		36		1		119		0.2
Greater than 120 days past due	Greater than 120 days past due	10		5		6		7		7		2		37		—		Greater than 120 days past due	12		4		8		10		6		—		40		—
Total past due	Total past due	65		77		110		206		157		79		694		1.0		Total past due	98		89		185		175		192		11		750		1.0
Current	Current	1,273		3,320		7,282		15,402		19,954		20,489		67,720		99.0		Current	2,574		5,065		12,184		16,542		26,921		8,778		72,064		99.0
Total	Total	$	1,338	$	3,397	$	7,392	$	15,608	$	20,111	$	20,568	$	68,414	100.0	%	Total	$	2,672	$	5,154	$	12,369	$	16,717	$	27,113	$	8,789	$	72,814	100.0	%

Gross charge-offs																		Gross charge-offs	$	17	$	12	$	23	$	22	$	22	$	—	$	96

Non-Consumer Portfolio. The credit quality of dealer financing receivables is evaluated based on Ford Credit’s internal dealer risk rating analysis. Ford Credit uses a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance data to identify key factors about a dealer that are considered most significant in predicting a dealer’s ability to meet its financial obligations. Ford Credit also considers numerous other financial and qualitative factors of the dealer’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Ford Credit and other creditors.

Dealers are assigned to one of four groups according to risk ratings as follows:

•Group I – strong to superior financial metrics;

•Group II – fair to favorable financial metrics;

•Group III – marginal to weak financial metrics; and

•Group IV – poor financial metrics, including dealers classified as uncollectible.

1413

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The credit quality analysis of dealer financing receivables at December 31, ~~2021~~2022 was as follows (in millions):


		Amortized Cost Basis by Origination Year														Wholesale Loans													Amortized Cost Basis by Origination Year																												Wholesale Loans
		Dealer Loans																									Dealer Loans
		Prior to 2017		2017		2018		2019		2020		2021		Total				Total				Percent					Prior to 2018				2018				2019				2020				2021				2022				Total								Total			Percent
Group I	Group I	$	391	$	68	$	151	$	45	$	109	$	345	$	1,109			$	6,751			$	7,860			69.7	%	Group I			$	402			$	148			$	35			$	67			$	185			$	224			$	1,061				$	13,888		$	14,949			82.8	%
Group II	Group II	11		7		26		2		4		54		104				2,689				2,793				24.8		Group II			2				21				—				5				2				42				72				2,751			2,823				15.6
Group III	Group III	8		—		1		—		1		20		30		529				559				4.9		Group III			—				—				—				—				—				10				10				233			243			1.4
Group IV	Group IV	—		—		4		—		—		6		10		56				66				0.6		Group IV			—				—				1				—				—				3				4				35			39			0.2
Total (a)	Total (a)	$	410	$	75	$	182	$	47	$	114	$	425	$	1,253	$	10,025			$	11,278			100.0	%	Total (a)			$	404			$	169			$	36			$	72			$	187			$	279			$	1,147			$	16,907		$	18,054		100.0		%

__________

(a)Total past due dealer financing receivables at December 31, ~~2021~~2022 were ~~$62~~$9 million.

The credit quality analysis of dealer financing receivables at ~~September 30, 2022~~March 31, 2023 was as follows (in millions):


		Amortized Cost Basis by Origination Year														Wholesale Loans											Amortized Cost Basis by Origination Year																												Wholesale Loans
		Dealer Loans																							Dealer Loans
		Prior to 2018		2018		2019		2020		2021		2022		Total				Total				Percent			Prior to 2019				2019				2020				2021				2022				2023				Total								Total			Percent
Group I	Group I	$	418	$	153	$	37	$	65	$	196	$	209	$	1,078			$	9,892			$	10,970			78.7	%	Group I	$	516			$	33			$	67			$	179			$	83			$	189			$	1,067				$	15,951		$	17,018			87.3	%
Group II	Group II	2		22		1		5		—		39		69				2,596				2,665				19.1		Group II	3				—				2				2				1				51				59				2,115			2,174				11.1
Group III	Group III	—		—		—		—		—		10		10		250				260				1.9		Group III	—				—				—				—				—				10				10				255			265			1.4
Group IV	Group IV	—		—		1		—		—		3		4		32				36				0.3		Group IV	—				1				—				—				—				3				4				29			33			0.2
Total (a)	Total (a)	$	420	$	175	$	39	$	70	$	196	$	261	$	1,161	$	12,770			$	13,931			100.0	%	Total (a)	$	519			$	34			$	69			$	181			$	84			$	253			$	1,140			$	18,350		$	19,490		100.0		%

Gross charge-offs																										Gross charge-offs	$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—		$	—

__________

(a)Total past due dealer financing receivables at ~~September 30, 2022~~March 31, 2023 were $5$7 million.

Non-Accrual of Revenue. The accrual of financing revenue is discontinued at the time a receivable is determined to be uncollectible or when it is 90 days past due. Accounts may be restored to accrual status only when a customer settles all past-due deficiency balances and future payments are reasonably assured. For receivables in non-accrual status, subsequent financing revenue is recognized only to the extent a payment is received. Payments are generally applied first to outstanding interest and then to the unpaid principal balance.

~~Troubled Debt Restructuring (“TDR”).~~ Loan Modifications.A restructuring of debt constitutes a TDR if Ford Credit grants a concession to a debtor for economic or legal reasons related to the debtor’s financial difficulties that Ford Credit otherwise would not consider. Consumer and non-consumer receivables that have a modified interest rate ~~below market rate~~ and/or a term extension (including receivables that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy ~~Code, except non-consumer receivables that~~Code) are ~~current with minimal risk of loss, are~~typically considered to be ~~TDRs.~~loan modifications. Ford Credit does not grant ~~concessions on~~modifications to the principal balance of the receivables. If a receivable is modified in a reorganization proceeding, all payment requirements of the reorganization plan need to be met before remaining balances are forgiven.

The use of interest rate modifications and term extensions helps Ford Credit mitigate financial loss. Term extensions may assist in cases where Ford Credit believes the customer will recover from short-term financial difficulty and resume regularly scheduled payments. The effect of most loan modifications made to borrowers experiencing financial difficulty is included in the historical trends used to measure the allowance for credit losses. A loan modification that improves the delinquency status of a borrower reduces the probability of default, which results in a lower allowance for credit losses. At March 31, 2023, an insignificant portion of Ford Credit's total finance receivables portfolio had been granted a loan modification, and these modifications are generally treated as a continuation of the existing loan.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Allowance for Credit Losses

The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in finance receivables as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly.

Adjustments to the allowance for credit losses are made by recording charges to Ford Credit interest, operating, and other expenses on our consolidated income statements. The uncollectible portion of a finance receivable is charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the customer or borrower, the value of the collateral, recourse to guarantors, and other factors.

~~Item 1. Financial Statements (Continued)~~

~~FORD MOTOR COMPANY AND SUBSIDIARIES~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES~~ ~~(Continued)~~

Charge-offs on finance receivables include uncollected amounts related to principal, interest, late fees, and other allowable charges. Recoveries on finance receivables previously charged off as uncollectible are credited to the allowance for credit losses. In the event Ford Credit repossesses the collateral, the receivable is charged off and the collateral is recorded at its estimated fair value less costs to sell and reported in Other assets on our consolidated balance sheets.

An analysis of the allowance for credit losses related to finance receivables for the periods ended ~~September 30~~March 31 was as follows (in millions):


		Third Quarter 2021						First Nine Months 2021							First Quarter 2022
		Consumer		Non-Consumer		Total		Consumer		Non-Consumer		Total			Consumer		Non-Consumer		Total
Allowance for credit losses	Allowance for credit losses													Allowance for credit losses
Beginning balance	Beginning balance	$	1,022	$	39	$	1,061	$	1,245	$	60	$	1,305	Beginning balance	$	903	$	22	$	925
Charge-offs	Charge-offs	(58)		(2)		(60)		(210)		(5)		(215)		Charge-offs	(62)		—		(62)
Recoveries	Recoveries	50		1		51		158		6		164		Recoveries	43		1		44
Provision for/(Benefit from) credit losses	Provision for/(Benefit from) credit losses	(58)		(1)		(59)		(242)		(23)		(265)		Provision for/(Benefit from) credit losses	(59)		(5)		(64)
Other (a)	Other (a)	(9)		—		(9)		(4)		(1)		(5)		Other (a)	1		1		2
Ending balance	Ending balance	$	947	$	37	$	984	$	947	$	37	$	984	Ending balance	$	826	$	19	$	845


		Third Quarter 2022						First Nine Months 2022							First Quarter 2023
		Consumer		Non-Consumer		Total		Consumer		Non-Consumer		Total			Consumer		Non-Consumer		Total
Allowance for credit losses	Allowance for credit losses													Allowance for credit losses
Beginning balance	Beginning balance	$	754	$	9	$	763	$	903	$	22	$	925	Beginning balance	$	838	$	7	$	845
Charge-offs	Charge-offs	(73)		—		(73)		(196)		(1)		(197)		Charge-offs	(96)		—		(96)
Recoveries	Recoveries	39		1		40		126		3		129		Recoveries	38		1		39
Provision for/(Benefit from) credit losses	Provision for/(Benefit from) credit losses	40		(1)		39		(67)		(14)		(81)		Provision for/(Benefit from) credit losses	78		(1)		77
Other (a)	Other (a)	(9)		—		(9)		(15)		(1)		(16)		Other (a)	5		—		5
Ending balance	Ending balance	$	751	$	9	$	760	$	751	$	9	$	760	Ending balance	$	863	$	7	$	870

__________

(a) Primarily represents amounts related to translation adjustments.

During the ~~third~~first quarter ~~and first nine months~~ of ~~2022,~~2023, the allowance for credit losses ~~decreased $3~~increased $25 million, ~~and $165 million, respectively, primarily due to~~driven by an increase in Ford ~~Credit’s current expectation that COVID-related losses have been avoided. Although net~~Credit finance receivables. Net charge-offs ~~remained~~increased from a year ago reflecting normalization from extraordinarily low ~~in the third quarter and first nine months of 2022 due, in part, to high vehicle auction values, the~~levels. The impact of ~~rising~~higher inflation ~~high energy prices,~~ and higher interest rates on future credit losses remains uncertain. Ford Credit will continue to monitor economic trends and conditions and portfolio performance and will adjust the reserve accordingly.

1615

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9. INVENTORIES

Inventories were as follows (in millions):

December 31,
2021 September 30,
2022
Raw materials, work-in-process, and supplies $ 5,785 $ 6,292
Finished products 6,280 8,921
Total inventories $ 12,065 $ 15,213

Finished products at September 30, 2022 in the table above includes approximately 40,000 vehicles at our plants that are completed but awaiting installation of components, primarily reflecting supply shortages, after which, the vehicles will proceed through an additional quality review process prior to being shipped to our dealers.

~~Item 1. Financial Statements (Continued)~~

~~FORD MOTOR COMPANY AND SUBSIDIARIES~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTE 10. IMPAIRMENT OF EQUITY IN NET ASSETS OF AFFILIATED COMPANIES~~

In 2017, we began investing in Argo AI, an artificial intelligence company that became a consolidated subsidiary, with a commitment to fund $1 billion over five years to develop autonomous vehicle technology. In 2020, we completed a transaction with Volkswagen AG (“VW”) that resulted in Ford and VW holding equal interests in Argo AI, which together comprised a majority ownership of the entity. As a result of this transaction, which included $500 million of proceeds from the sale to VW of a portion of our interest in Argo AI, we deconsolidated Argo AI, remeasured our retained investment in the entity at fair value, and, net of our carrying value in Argo’s net assets, recognized a $3.5 billion pre-tax gain in ~~Other income/(loss), net~~. Immediately following this transaction, our retained investment consisted of a $2.4 billion equity method investment and a $400 million preferred equity security investment, which were reflected on our consolidated balance sheets in ~~Equity in net assets of affiliated companies~~ ~~and~~ ~~Other assets, respectively.~~

Although Argo AI has made progress on developing highly automated driving technology (L4), to achieve commercially viable scale, Argo AI’s technology requires significant additional capital investment and time. In the near term, we see more potential for partial or conditional automated driving technology (L2/L3) to be transformative for customers and our business. Therefore, in the third quarter of 2022, we made the strategic decision to shift our capital spending from L4 technology being developed by Argo AI to advanced L2/L3 systems, which we believe will ultimately be essential to achieve profitable commercialization of L4 autonomy at scale in the future. Additionally, because of the significant additional capital and time required to achieve commercialization of L4, as well as other macroeconomic factors, Argo AI has been unable to attract new investors. After performing external outreach in the third quarter to assess market interest in acquiring either Argo AI or its technology components and conducting internal reviews to evaluate opportunities to leverage Argo AI’s technology, Ford determined that Argo AI no longer has value as a going concern. As a result, we reassessed the carrying value of our investment in Argo AI as of September 30, 2022, and in October, Ford and VW initiated the process of exiting the joint development of L4 technology through Argo AI.


	December 31, 2022		March 31, 2023
Raw materials, work-in-process, and supplies	$	5,997	$	6,464
Finished products	8,083		9,748
Total inventories	$	14,080	$	16,212

Our ~~valuation assumes an orderly conclusion of operations~~finished product inventory at Argo AI, in which the cash required to satisfy the remaining obligations would consume most of Argo AI’s remaining capital. In addition, we assessed whether Argo AI’s technology components have value in isolation,March 31, 2023 was higher than at December 31, 2022, reflecting higher in-transit and ~~we concluded that the cost to integrate into currently anticipated technology ecosystems would be prohibitive.~~in-plant inventory.

Accordingly, we recorded a $2.7 billion pre-tax impairment in the third quarter of 2022, reducing the carrying value of our investment to $64 million, which primarily represents our share of Argo AI’s cash less its obligations. The non-cash charge was reported in ~~Equity in net income/(loss) of affiliated companies, and our remaining investment is in~~ ~~Equity in net assets of affiliated companies~~. The carrying value of our investment in Argo AI immediately prior to the impairment was higher than our net cash investment of approximately $500 million (i.e., our $1 billion investment less proceeds we received from VW) due to the non-cash gain recognized when we deconsolidated Argo AI in 2020 as described above.~~Finally, on October 26, 2022, we announced that Argo AI plans to wind down operations.~~

~~Item 1. Financial Statements (Continued)~~

~~FORD MOTOR COMPANY AND SUBSIDIARIES~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

NOTE ~~11.~~10. OTHER INVESTMENTS

We have investments in entities not accounted for under the equity method for which fair values are not readily available. We record these investments at cost (less impairment, if any), adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We report the carrying value of these investments in Other assets in the non-current assets section of our consolidated balance sheets. These investments were ~~$0.9 billion~~$384 million and ~~$0.4 billion~~$350 million at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively. ~~See Note 10 for additional information about the decrease from December 31, 2021.~~ The cumulative net unrealized gain from adjustments related to Other Investments held at ~~September 30, 2022 is $135~~March 31, 2023 was $101 million.

NOTE ~~12.~~11. GOODWILL

The net carrying amount of goodwill was ~~$619~~$603 million and ~~$575~~$609 million at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively, and is reported in Other assets in the non-current assets section of our consolidated balance sheets.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~13.~~12. OTHER LIABILITIES AND DEFERRED REVENUE

Other liabilities and deferred revenue were as follows (in millions):


		December 31, 2021		September 30, 2022			December 31, 2022		March 31, 2023
Current	Current					Current
Dealer and dealers’ customer allowances and claims	Dealer and dealers’ customer allowances and claims	$	8,300	$	7,806	Dealer and dealers’ customer allowances and claims	$	9,219	$	9,881
Deferred revenue	Deferred revenue	2,349		2,312		Deferred revenue	2,404		2,582
Employee benefit plans	Employee benefit plans	1,687		1,736		Employee benefit plans	2,020		1,505
Accrued interest	Accrued interest	888		795		Accrued interest	935		938
Operating lease liabilities						Operating lease liabilities	404		415
OPEB (a)	OPEB (a)	332		327		OPEB (a)	329		328
Pension (a)	Pension (a)	202		196		Pension (a)	196		198
Operating lease liabilities		345		380
Other (b)	Other (b)	4,583		5,514		Other (b)	5,590		5,980
Total current other liabilities and deferred revenue	Total current other liabilities and deferred revenue	$	18,686	$	19,066	Total current other liabilities and deferred revenue	$	21,097	$	21,827
Non-current	Non-current					Non-current
Dealer and dealers’ customer allowances and claims						Dealer and dealers’ customer allowances and claims	$	6,095	$	6,538
Pension (a)	Pension (a)	$	8,658	$	7,441	Pension (a)	5,673		5,835
OPEB (a)	OPEB (a)	5,708		5,455		OPEB (a)	4,130		4,069
Dealer and dealers’ customer allowances and claims		4,909		5,466
Deferred revenue	Deferred revenue	4,683		4,830		Deferred revenue	4,883		4,835
Operating lease liabilities	Operating lease liabilities	1,048		1,056		Operating lease liabilities	1,101		1,201
Employee benefit plans	Employee benefit plans	1,007		962		Employee benefit plans	834		829
Other (b)	Other (b)	1,692		3,381		Other (b)	2,781		2,601
Total non-current other liabilities and deferred revenue	Total non-current other liabilities and deferred revenue	$	27,705	$	28,591	Total non-current other liabilities and deferred revenue	$	25,497	$	25,908

__________

(a)Balances at ~~September 30, 2022~~March 31, 2023 reflect pension and OPEB liabilities at December 31, ~~2021,~~2022, updated for: service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. The discount rate and rate of expected return assumptions are unchanged from year-end ~~2021.~~2022. Included in Other assets are pension assets of ~~$8.5~~$5.7 billion and ~~$8.8~~$5.8 billion at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively.

(b)Includes current derivative liabilities of ~~$97 million and~~ $1.3 billion at both December 31, ~~2021~~2022 and ~~September 30, 2022, respectively.~~March 31, 2023. Includes non-current derivative liabilities of ~~$535 million~~$1.7 billion and ~~$2.3~~$1.2 billion at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively (see Note ~~16)~~15).

1917

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~14.~~13. RETIREMENT BENEFITS

Defined Benefit Plans - Expense

The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the periods ended ~~September 30~~March 31 were as follows (in millions):


		Third Quarter													First Quarter
		Pension Benefits													Pension Benefits
		U.S. Plans				Non-U.S. Plans				Worldwide OPEB					U.S. Plans				Non-U.S. Plans				Worldwide OPEB
		2021		2022		2021		2022		2021		2022			2022		2023		2022		2023		2022		2023
Service cost	Service cost	$	131	$	125	$	140	$	101	$	12	$	10	Service cost	$	125	$	72	$	111	$	61	$	10	$	5
Interest cost	Interest cost	232		263		107		123		31		36		Interest cost	263		408		134		237		37		58
Expected return on assets	Expected return on assets	(681)		(642)		(283)		(245)		—		—		Expected return on assets	(642)		(486)		(268)		(219)		—		—
Amortization of prior service costs/(credits)	Amortization of prior service costs/(credits)	1		—		5		6		(3)		(1)		Amortization of prior service costs/(credits)	—		—		7		5		(1)		1
Net remeasurement (gain)/loss	Net remeasurement (gain)/loss	(40)		7		—		—		—		—		Net remeasurement (gain)/loss	—		113		—		—		—		—
Separation programs/other	Separation programs/other	10		9		23		11		1		1		Separation programs/other	4		2		7		4		—		—
Settlements and curtailments	Settlements and curtailments	7		1		—		—		—		—		Settlements and curtailments	—		42		—		—		—		—
Net periodic benefit cost/(income)	Net periodic benefit cost/(income)	$	(340)	$	(237)	$	(8)	$	(4)	$	41	$	46	Net periodic benefit cost/(income)	$	(250)	$	151	$	(9)	$	88	$	46	$	64

		First Nine Months
		Pension Benefits
		U.S. Plans				Non-U.S. Plans				Worldwide OPEB
		2021		2022		2021		2022		2021		2022
Service cost		$	396	$	375	$	423	$	319	$	36	$	31
Interest cost		694		790		315		390		95		110
Expected return on assets		(2,047)		(1,927)		(852)		(772)		—		—
Amortization of prior service costs/(credits)		2		1		17		18		(9)		(2)
Net remeasurement (gain)/loss		201		7		(565)		16		—		—
Separation programs/other		15		20		107		28		1		—
Settlements and curtailments		56		1		—		—		—		—
Net periodic benefit cost/(income)		$	(683)	$	(733)	$	(555)	$	(1)	$	123	$	139

The service cost component is included in Cost of sales and Selling, administrative, and other expenses. Other components of net periodic benefit cost/(income) are included in Other income/(loss), net on our consolidated income statements.

In the ~~third~~first quarter of ~~2021~~2023, we paid lump sums for one of our U.S. pension plans, which resulted in a remeasurement and ~~2022, within separation programs/other, we recognized~~settlement expenses of ~~$22~~$113 million and ~~$11~~$42 million, respectively, in non-U.S. pension plans related to ongoing redesign programs. In the first nine months of 2021 and 2022, within separation programs/other, we recognized $106 million and $27 million, respectively, in non-U.S. pension plans related to ongoing redesign programs. Until our Global Redesign programs are completed, we anticipate further adjustments to our plans in subsequent periods.respectively.

Pension Plan Contributions

During ~~2022,~~2023, we continue to expect to contribute ~~about~~between $500 million and $600 million of cash to our global funded pension plans. We also expect to make about $400 million of benefit payments to participants in unfunded plans. In the first ~~nine months~~quarter of ~~2022,~~2023, we contributed ~~$458~~$125 million to our global funded pension plans and made ~~$288~~$99 million of benefit payments to participants in unfunded plans.

2018

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~15.~~14. DEBT

The carrying value of Company debt excluding Ford Credit and Ford Credit debt was as follows (in millions):


		December 31, 2021		September 30, 2022			December 31, 2022		March 31, 2023
Company excluding Ford Credit	Company excluding Ford Credit					Company excluding Ford Credit
Debt payable within one year	Debt payable within one year					Debt payable within one year
Short-term	Short-term	$	286	$	783	Short-term	$	359	$	186
Long-term payable within one year	Long-term payable within one year					Long-term payable within one year
Public unsecured debt securities		86		—
U.S. Department of Energy Advanced Technology Vehicles Manufacturing Incentive Program		953		—
Delayed draw term loan		1,500		—
Other debt	Other debt	348		431		Other debt	372		336
Unamortized (discount)/premium	Unamortized (discount)/premium	2		(2)		Unamortized (discount)/premium	(1)		—
Total debt payable within one year	Total debt payable within one year	3,175		1,212		Total debt payable within one year	730		522
Long-term debt payable after one year	Long-term debt payable after one year					Long-term debt payable after one year
Public unsecured debt securities (a)		13,643		14,936
Convertible notes (b)		2,300		2,300
U.K. Export Finance Program (c)		843		1,518
Public unsecured debt securities						Public unsecured debt securities	14,935		14,935
Convertible notes (a)						Convertible notes (a)	2,300		2,300
U.K. Export Finance Program						U.K. Export Finance Program	1,654		1,702
Other debt	Other debt	768		695		Other debt	682		616
Unamortized (discount)/premium	Unamortized (discount)/premium	(188)		(182)		Unamortized (discount)/premium	(180)		(176)
Unamortized issuance costs	Unamortized issuance costs	(166)		(194)		Unamortized issuance costs	(191)		(187)
Total long-term debt payable after one year	Total long-term debt payable after one year	17,200		19,073		Total long-term debt payable after one year	19,200		19,190
Total Company excluding Ford Credit	Total Company excluding Ford Credit	$	20,375	$	20,285	Total Company excluding Ford Credit	$	19,930	$	19,712
Fair value of Company debt excluding Ford Credit (d)		$	24,044	$	18,390
Fair value of Company debt excluding Ford Credit (b)						Fair value of Company debt excluding Ford Credit (b)	$	18,557	$	19,046
Ford Credit	Ford Credit					Ford Credit
Debt payable within one year	Debt payable within one year					Debt payable within one year
Short-term	Short-term	$	14,810	$	14,696	Short-term	$	19,624	$	17,890
Long-term payable within one year	Long-term payable within one year					Long-term payable within one year
Unsecured debt	Unsecured debt	13,660		8,146		Unsecured debt	7,980		10,128
Asset-backed debt	Asset-backed debt	18,049		19,997		Asset-backed debt	21,839		19,502
Unamortized (discount)/premium	Unamortized (discount)/premium	1		—		Unamortized (discount)/premium	—		—
Unamortized issuance costs	Unamortized issuance costs	(13)		(12)		Unamortized issuance costs	(13)		(16)
Fair value adjustments (e)		10		11
Fair value adjustments (c)						Fair value adjustments (c)	4		24
Total debt payable within one year	Total debt payable within one year	46,517		42,838		Total debt payable within one year	49,434		47,528
Long-term debt payable after one year	Long-term debt payable after one year					Long-term debt payable after one year
Unsecured debt	Unsecured debt	44,337		39,006		Unsecured debt	39,620		41,237
Asset-backed debt	Asset-backed debt	26,654		28,137		Asset-backed debt	31,840		32,449
Unamortized (discount)/premium	Unamortized (discount)/premium	28		24		Unamortized (discount)/premium	23		17
Unamortized issuance costs	Unamortized issuance costs	(199)		(185)		Unamortized issuance costs	(184)		(209)
Fair value adjustments (e)		380		(1,776)
Fair value adjustments (c)						Fair value adjustments (c)	(1,694)		(1,442)
Total long-term debt payable after one year	Total long-term debt payable after one year	71,200		65,206		Total long-term debt payable after one year	69,605		72,052
Total Ford Credit	Total Ford Credit	$	117,717	$	108,044	Total Ford Credit	$	119,039	$	119,580
Fair value of Ford Credit debt (d)		$	120,204	$	105,177
Fair value of Ford Credit debt (b)						Fair value of Ford Credit debt (b)	$	117,214	$	118,688

__________

(a)~~Public unsecured debt securities increased in the third quarter due to green bond and retail bond issuance, which together totaled $2.4 billion, partially offset by a $1.1 billion bond redemption.~~

~~(b)~~As of ~~September 30, 2022,~~March 31, 2023, each $1,000 principal amount of the notes will be convertible into ~~58.7365~~63.0921 shares of our Common Stock, which is equivalent to a conversion price of approximately ~~$17.03~~$15.85 per share. We recognized issuance cost amortization of $2 million ~~and $4 million~~ during both the ~~third~~first quarter ~~and first nine months of 2021, respectively, and $2 million and $5 million during the third quarter and first nine months~~ of 2022 ~~respectively.~~and 2023.

~~(c)We entered into a £750 million 5-year term loan pursuant to the U.K. Export Finance Program in June 2022.~~

~~(d)~~(b)At December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, the fair value of debt includes ~~$209~~$359 million and ~~$717~~$186 million of Company excluding Ford Credit short-term debt, respectively, and ~~$14.1~~$16.9 billion and ~~$13.9~~$14.8 billion of Ford Credit short-term debt, respectively, carried at cost, which approximates fair value. All other debt is categorized within Level 2 of the fair value hierarchy.

~~(e)~~(c)These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of ~~$257~~$31 million and ~~$112~~$(31) million at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively. The carrying value of hedged debt was ~~$37.5~~$33.3 billion and ~~$31.2~~$36.5 billion at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively.

~~Item 1. Financial Statements (Continued)~~

~~FORD MOTOR COMPANY AND SUBSIDIARIES~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTE 15. DEBT~~ ~~(Continued)~~

~~2022 Debt Extinguishment~~

Pursuant to Ford Credit’s June 2022 cash tender offer, Ford Credit repurchased approximately $3 billion principal amount of its public unsecured debt securities for an aggregate cost of approximately $3 billion (including transaction costs and accrued and unpaid interest payments for such tendered securities). As a result of these transactions, Ford Credit recorded a pre-tax gain of $16.6 million (net of unamortized discounts, premiums, fees, and fair value adjustments) in ~~Other income/(loss), net~~ ~~in the second quarter of 2022.~~

In September 2022, Ford redeemed approximately $1.1 billion principal amount of its public unsecured debt securities for an aggregate cost of approximately $1.2 billion (including redemption costs and accrued and unpaid interest payments for such redeemed securities). As a result of this transaction, Ford recorded a pre-tax loss of $135 million (net of unamortized discounts, premiums, and fees) in ~~Other income/(loss), net~~ ~~in the third quarter of 2022.~~

~~2022 Environmental, Social, Governance (“ESG”) Bond~~

In August 2022, Ford issued approximately $1.8 billion aggregate principal amount of green bonds with an interest rate of 6.1% under its sustainable financing framework. Ford is allocating the net proceeds from this issuance to the design, development, and manufacturing of its battery electric vehicles.

2219

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~16.~~15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into highly effective derivative contracts. We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.

Income Effect of Derivative Financial Instruments

The gains/(losses), by hedge designation, reported in income for the periods ended ~~September 30~~March 31 were as follows (in millions):


		Third Quarter				First Nine Months					First Quarter
Cash flow hedges	Cash flow hedges	2021		2022		2021		2022		Cash flow hedges	2022		2023
Reclassified from AOCI to Cost of sales	Reclassified from AOCI to Cost of sales									Reclassified from AOCI to Cost of sales
Foreign currency exchange contracts (a)	Foreign currency exchange contracts (a)	$	(161)	$	(44)	$	(349)	$	(224)	Foreign currency exchange contracts (a)	$	(90)	$	26
Commodity contracts (b)	Commodity contracts (b)	50		9		78		151		Commodity contracts (b)	58		(9)
Fair value hedges	Fair value hedges									Fair value hedges
Interest rate contracts	Interest rate contracts									Interest rate contracts
Net interest settlements and accruals on hedging instruments	Net interest settlements and accruals on hedging instruments	98		(39)		299		62		Net interest settlements and accruals on hedging instruments	76		(140)
Fair value changes on hedging instruments	Fair value changes on hedging instruments	(142)		(600)		(680)		(1,922)		Fair value changes on hedging instruments	(986)		250
Fair value changes on hedged debt	Fair value changes on hedged debt	135		615		638		1,991		Fair value changes on hedged debt	991		(279)
Cross-currency interest rate swap contracts	Cross-currency interest rate swap contracts									Cross-currency interest rate swap contracts
Net interest settlements and accruals on hedging instruments	Net interest settlements and accruals on hedging instruments	(2)		(8)		(6)		(17)		Net interest settlements and accruals on hedging instruments	(3)		(14)
Fair value changes on hedging instruments	Fair value changes on hedging instruments	(28)		(66)		(67)		(164)		Fair value changes on hedging instruments	(37)		22
Fair value changes on hedged debt	Fair value changes on hedged debt	25		67		58		173		Fair value changes on hedged debt	41		(19)
Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments									Derivatives not designated as hedging instruments
Foreign currency exchange contracts (c)	Foreign currency exchange contracts (c)	123		44		209		125		Foreign currency exchange contracts (c)	(46)		(3)
Cross-currency interest rate swap contracts	Cross-currency interest rate swap contracts	(194)		(494)		(390)		(1,164)		Cross-currency interest rate swap contracts	(227)		85
Interest rate contracts	Interest rate contracts	—		130		(25)		342		Interest rate contracts	123		(12)
Commodity contracts	Commodity contracts	25		(41)		153		(72)		Commodity contracts	109		(11)
Total	Total	$	(71)	$	(427)	$	(82)	$	(719)	Total	$	9	$	(104)

__________

(a)For the ~~third~~first quarter of 2022 and ~~first nine months of 2021,~~2023, a ~~$225~~$128 million ~~gain~~loss and a ~~$346~~$63 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax. ~~For the third quarter and first nine months of 2022, a $535 million gain and a $641 million gain, respectively, were reported in~~ ~~Other comprehensive income/(loss), net of tax.~~

(b)For the ~~third~~first quarter of 2022 and ~~first nine months of 2021,~~2023, a ~~$114~~$284 million gain and ~~a $294~~an $8 million gain, ~~respectively, were reported in~~ ~~Other comprehensive income/(loss), net of tax. For the third quarter and first nine months of 2022, a $90 million loss and a $166 million loss,~~ respectively, were reported in Other comprehensive income/(loss), net of tax.

(c)For the ~~third~~first quarter of 2022 and ~~first nine months of 2021,~~2023, a $44 million ~~gain~~loss and a ~~$122~~$19 million gain, respectively, were reported in Cost of sales, and a ~~$79~~$2 million ~~gain~~loss and ~~an $87~~a $22 million ~~gain,~~loss, respectively, were reported in Other income/(loss), net. ~~For the third quarter and first nine months of 2022, a $68 million loss and a $12 million loss, respectively, were reported in~~ ~~Cost of sales, and a $112 million gain and a $137 million gain, respectively, were reported in~~ ~~Other income/(loss), net.~~

2320

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~16.~~15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Balance Sheet Effect of Derivative Financial Instruments

Derivative assets and liabilities are reported on our consolidated balance sheets at fair value and are presented on a gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts exchanged by the parties and are not a direct measure of our financial exposure. We also enter into master agreements with counterparties that may allow for netting of exposures in the event of default or breach of the counterparty agreement. Collateral represents cash received or paid under reciprocal arrangements that we have entered into with our derivative counterparties, which we do not use to offset our derivative assets and liabilities.

The fair value of our derivative instruments and the associated notional amounts were as follows (in millions):


		December 31, 2021						September 30, 2022							December 31, 2022						March 31, 2023
		Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities			Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities
Cash flow hedges	Cash flow hedges													Cash flow hedges
Foreign currency exchange contracts	Foreign currency exchange contracts	$	11,534	$	74	$	346	$	9,353	$	539	$	28	Foreign currency exchange contracts	$	11,536	$	376	$	52	$	16,998	$	316	$	102
Commodity contracts	Commodity contracts	931		182		5		1,003		8		128		Commodity contracts	990		16		56		1,012		15		40
Fair value hedges	Fair value hedges													Fair value hedges
Interest rate contracts	Interest rate contracts	23,893		544		274		19,159		—		1,645		Interest rate contracts	16,883		—		1,653		19,042		15		1,302
Cross-currency interest rate swap contracts	Cross-currency interest rate swap contracts	885		—		49		885		—		220		Cross-currency interest rate swap contracts	885		—		161		1,421		4		135
Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments													Derivatives not designated as hedging instruments
Foreign currency exchange contracts	Foreign currency exchange contracts	28,463		281		198		19,700		351		315		Foreign currency exchange contracts	20,851		162		285		19,718		136		164
Cross-currency interest rate swap contracts	Cross-currency interest rate swap contracts	6,533		117		61		6,583		10		1,108		Cross-currency interest rate swap contracts	6,635		15		653		6,115		38		528
Interest rate contracts	Interest rate contracts	50,060		338		126		50,195		946		572		Interest rate contracts	63,210		931		483		57,312		753		397
Commodity contracts	Commodity contracts	997		54		11		892		2		134		Commodity contracts	841		26		35		949		32		39
Total derivative financial instruments, gross (a) (b)	Total derivative financial instruments, gross (a) (b)	$	123,296	$	1,590	$	1,070	$	107,770	$	1,856	$	4,150	Total derivative financial instruments, gross (a) (b)	$	121,831	$	1,526	$	3,378	$	122,567	$	1,309	$	2,707

Current portion	Current portion			$	924	$	535			$	1,235	$	1,815	Current portion			$	1,101	$	1,656			$	813	$	1,462
Non-current portion	Non-current portion			666		535				621		2,335		Non-current portion			425		1,722				496		1,245
Total derivative financial instruments, gross	Total derivative financial instruments, gross			$	1,590	$	1,070			$	1,856	$	4,150	Total derivative financial instruments, gross			$	1,526	$	3,378			$	1,309	$	2,707

__________

(a)At December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, we held collateral of ~~$26~~$210 million and ~~$225~~$180 million, respectively, and we posted collateral of ~~$71~~$201 million and ~~$182~~$203 million, respectively.

(b)At December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, the fair value of assets and liabilities available for counterparty netting was ~~$719~~$451 million and ~~$527~~$438 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.

2421

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~17.~~16. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES

We generally record costs associated with voluntary separations at the time of employee ~~acceptance, unless the acceptance requires explicit approval by the Company.~~acceptance. We record costs associated with involuntary separation programs when management has approved the plan for separation, the affected employees are identified, and it is unlikely that actions required to complete the separation plan will change significantly. Costs associated with benefits that are contingent on the employee continuing to provide service are accrued over the required service period.

Company Excluding Ford Credit

Employee separation actions and exit and disposal activities include employee separation costs, facility and other asset-related charges (e.g., impairment, accelerated depreciation), dealer and supplier payments, other statutory and contractual obligations, and other expenses, which are recorded in Cost of sales and Selling, administrative, and other expenses. Below are actions ~~initiated, primarily related to the global redesign of our business:~~that have been initiated:

•~~Ford Motor Company Brasil Ltda. exited~~Brazil. Exited manufacturing operations in ~~Brazil, which resulted~~2021 resulting in the closure of facilities in Camaçari, Taubaté, and Troller ~~in 2021~~

•~~Ford Motor Company Limited ceased production at the Bridgend plant in the United Kingdom and the facility was closed in September 2020~~

•India.~~Ford India Private Limited (“Ford India”) ceased~~ Ceased vehicle manufacturing in Sanand in the fourth quarter of 2021 and ceased manufacturing in Chennai in ~~third quarter 2022. In~~ the third quarter of ~~2022, Ford India entered into an agreement to sell~~2022. A sale of the Sanand vehicle assembly and powertrain ~~plants. See~~plants was completed in the first quarter of 2023 (see Note 1817)

•~~Ford Espana S.L. ceased~~Spain. Ceased production of the Mondeo at the Valencia plant in ~~Spain~~the first quarter of 2022

•China. Ceased development of certain product programs in ~~March 2022~~the first quarter of 2023

In addition, we are continuing to reduce our global workforce and take other restructuring actions, including the separation of salaried workers, primarily in ~~North America and India~~Europe, as announced in ~~third~~the first quarter ~~2022.~~of 2023.

The following table summarizes the activities for the periods ended ~~September 30,~~March 31, which are recorded in Other liabilities and deferred revenue (in millions):


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Beginning balance	Beginning balance	$	839	$	691	$	1,732	$	950	Beginning balance	$	950	$	588
Changes in accruals (a)	Changes in accruals (a)	506		329		875		445		Changes in accruals (a)	66		629
Payments	Payments	(294)		(188)		(1,551)		(539)		Payments	(205)		(83)
Foreign currency translation	Foreign currency translation	(51)		(21)		(56)		(45)		Foreign currency translation	18		(8)
Ending balance	Ending balance	$	1,000	$	811	$	1,000	$	811	Ending balance	$	829	$	1,126

__________

(a)Excludes pension costs of ~~$22~~$7 million and ~~$11 million in the third quarter of 2021 and 2022, respectively, and $106 million and $27~~$4 million in the first ~~nine months~~quarter of ~~2021~~2022 and ~~2022,~~2023, respectively.

We recorded ~~$202~~$23 million and ~~$35 million in the third quarter of 2021 and 2022, respectively, and $590 million and $101~~$48 million in the first ~~nine months~~quarter of ~~2021~~2022 and ~~2022,~~2023, respectively,for accelerated depreciation ~~impairment of our India held-for-sale assets,~~ and other non-cash items. In addition, we recognized a ~~$38~~$32 million pre-tax net gain on sale of assets in the first ~~nine months~~quarter of 2022.

We recorded costs of $64 million and $681 million in the first quarter of 2022 and 2023, respectively, related to the actions above. We estimate that we will incur ~~about $1 billion in~~ total charges in ~~2022~~2023 that range between $1.5 billion and $2 billion related to ~~the~~such actions, ~~above,~~ primarily attributable to employee separations and ~~dealer and~~ supplier settlements. ~~We recorded $535 million in the first nine months of 2022 for such actions.~~ We continue to review our global businesses and may take additional restructuring actions ~~in markets~~ where a path to sustained profitability is not feasible when considering the capital allocation required for those ~~markets.~~

~~Item 1. Financial Statements (Continued)~~

~~FORD MOTOR COMPANY AND SUBSIDIARIES~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTE 17.EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES~~ ~~(Continued)~~businesses.

Ford Credit

Accumulated foreign currency translation losses included in Accumulated other comprehensive income/(loss) at ~~September 30, 2022~~March 31, 2023 of $223 million are associated with Ford Credit’s investments in Brazil and Argentina that have ceased operations. We expect to reclassify these losses to income upon substantially complete liquidation of Ford Credit’s investments, which may occur over multiple reporting periods. In the first ~~nine months~~quarter of 2022, we reclassified losses of ~~$155~~$119 million to Other income/(loss), net, upon the liquidation of three investments in Brazil. Although the timing for the completion of the remaining actions is uncertain, we expect the majority of losses to be recognized in 2024 or later.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~18.~~17. ACQUISITIONS AND DIVESTITURES

Company Excluding Ford Credit

Argo AI, LLC (“Argo AI”).In October 2022, Ford and Volkswagen AG (“VW”), who held equal interests that together comprised a majority ownership of Argo AI, initiated the process of exiting the joint development of highly automated driving technology (L4) through Argo AI. Argo AI is in the process of winding down operations. The carrying value of our equity method investment in Argo AI was $0 at both December 31, 2022 and March 31, 2023; in addition, we had $65 million and $4 million at December 31, 2022 and March 31, 2023, respectively, in Other liabilities and deferred revenue related to our funding commitment for our share of Argo AI’s expenses previously incurred.

Sanand, India (“Sanand”) Plants. In the third quarter of 2022, we entered into an agreement to sell our Sanand vehicle assembly and powertrain plants to Tata Passenger Electric Mobility Limited (“Tata”), a subsidiary of Tata Motors Limited. The sale transaction included the land, buildings, and other fixed assets (excluding the powertrain machinery and equipment) for the plants. We recognized, in Cost of sales, pre-tax impairment charges of $32 million in the third quarter of 2022 to adjust the carrying value of the assets to fair value less costs to sell. We determined fair value using the market approach, based on the negotiated value of the assets. Accordingly, we reported $88 million of fixed assets for this operation as held for sale for the period ended December 31, 2022, which we report in Other assets in the current assets section of our consolidated balance sheets.

On January 10, 2023, we completed the sale of the plants to Tata. Ford will continue to operate the powertrain facility by leasing back the associated land and building. As a result of the sale transaction, we derecognized the fixed assets and recognized the powertrain facility operating lease right-of-use asset and related lease liability in the first quarter of 2023. The fair value of the cash consideration received approximated the carrying value of the fixed assets at the time of sale.

Ford Romania S.R.L. (“Ford Romania”). On July 1, 2022, we completed the sale of Ford Romania, our wholly-owned Romanian manufacturing subsidiary, to Ford Otosan, a joint venture in which Ford has a 41% ownership share. The transaction resulted in deconsolidation of our Ford Romania subsidiary in the third quarter of 2022. The fair value of consideration received, consisting of cash and a note receivable, approximated the carrying value of Ford Romania at the time of sale. The Ford Romania plant in Craiova, Romania will continue to manufacture Ford-branded vehicles for Ford and Ford Otosan. Ford’s portion of the output is expected to be significant; as a result, at the time of the sale there were about $100 million of assets, such as embedded leases, and related liabilities that continue to be reported as part of our financial statements.

~~Sanand, India (“Sanand”) Plants.~~ In the third quarter of 2022, we entered into an agreement to sell our Sanand vehicle assembly and powertrain plants to Tata Passenger Electric Mobility Limited (“Tata”), a subsidiary of Tata Motors Limited. The sale transaction will include the land, buildings, and other fixed assets (excluding the powertrain machinery and equipment) for the plants. Accordingly, we have reported $89 million of fixed assets for this operation as held for sale for the period ended September 30, 2022. We recognized, in ~~Cost of sales~~, pre-tax impairment charges of $32 million in the third quarter of 2022 to adjust the carrying value of the held-for-sale assets to fair value less costs to sell. We determined fair value using the market approach, estimated based on the negotiated value of the assets. After the sale to Tata, Ford will continue to operate the powertrain facility by leasing back the associated land and building.

Skinny Labs Inc., dba Spin (“Spin”). On April 1, 2022, we completed the sale of Spin, our wholly-owned micro-mobility provider, to TIER Mobility SE, a German-based micro-mobility provider, which resulted in the deconsolidation of our Spin subsidiary in the second quarter of 2022. In exchange for our shares of Spin, we received preferred equity in TIER Mobility SE, which is reflected in our consolidated balance sheets in Other assets as of the second quarter of 2022. The fair value of the preferred equity approximated the carrying value of Spin at the time of the transaction.

~~Electriphi, Inc. (“Electriphi”).~~ On June 18, 2021, we acquired Electriphi, a California-based provider of charging management and fleet monitoring software for electric vehicles. Assets acquired primarily include goodwill, reported in ~~Other assets, and software, reported in~~ ~~Net property. The acquisition did not have a material impact on our financial statements.~~

~~Ford Lio Ho Motor Co., Ltd. (“FLH”).~~ On April 1, 2021, we completed the sale of our controlling financial interest in FLH and its wholly owned subsidiary FLH Marketing & Service Limited, which resulted in deconsolidation of our Ford Taiwan subsidiary in the second quarter of 2021. FLH will continue to import, manufacture, and sell Ford-branded vehicles through at least 2025. We recognized a pre-tax gain of $161 million, which was reported in ~~Other income/(loss), net~~ ~~in the second quarter of 2021.~~

~~Item 1. Financial Statements (Continued)~~

~~FORD MOTOR COMPANY AND SUBSIDIARIES~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTE 18. ACQUISITIONS AND DIVESTITURES~~ ~~(Continued)~~

~~Getrag Ford Transmissions GmbH (“GFT”).~~ Prior to March 2021, Ford and Magna International Inc. (“Magna”) equally owned and operated the GFT joint venture for the purpose of developing, manufacturing, and selling transmissions. We accounted for our investment in GFT as an equity method investment. During the first quarter of 2021 and prior to our acquisition, GFT recorded restructuring charges, of which our share was $40 million. These charges are included in ~~Equity in net income/(loss) of affiliated companies~~.

On March 1, 2021, we acquired Magna’s shares in the restructured GFT. The purchase price, which was subject to post-closing revisions, was $275 million. The restructured GFT includes the Halewood, UK and Cologne, Germany transmission plants, but excludes the Bordeaux, France transmission plant and China interests acquired by Magna. We concluded with Magna that these businesses would be better served under separate ownership. The Sanand, India transmission plant continues under joint Ford/Magna ownership. As a result of the transaction, we consolidated the restructured GFT, remeasured our prior investment in GFT at its $275 million fair value, and recognized in ~~Other income/(loss), ne~~t a pre-tax gain of $178 million during 2021 and post-closing revisions resulting in a pre-tax gain of $2 million during the first quarter of 2022. We estimated the fair value of GFT in negotiations with Magna based on the income approach. The significant assumptions used in the valuation included GFT’s cash flows that reflect the approved business plan, discounted at a rate typically used for a company like GFT.

2723

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~19.~~18. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The changes in the balances for each component of accumulated other comprehensive income/(loss) attributable to Ford Motor Company for the periods ended ~~September 30~~March 31 were as follows (in millions):


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Foreign currency translation	Foreign currency translation									Foreign currency translation
Beginning balance	Beginning balance	$	(5,249)	$	(6,355)	$	(5,526)	$	(5,487)	Beginning balance	$	(5,487)	$	(6,416)
Gains/(Losses) on foreign currency translation	Gains/(Losses) on foreign currency translation	(236)		(996)		112		(2,063)		Gains/(Losses) on foreign currency translation	(71)		485
Less: Tax/(Tax benefit) (a)	Less: Tax/(Tax benefit) (a)	66		36		133		5		Less: Tax/(Tax benefit) (a)	(96)		(10)
Net gains/(losses) on foreign currency translation	Net gains/(losses) on foreign currency translation	(302)		(1,032)		(21)		(2,068)		Net gains/(losses) on foreign currency translation	25		495
(Gains)/Losses reclassified from AOCI to net income (b)	(Gains)/Losses reclassified from AOCI to net income (b)	—		80		(4)		248		(Gains)/Losses reclassified from AOCI to net income (b)	121		(2)
Other comprehensive income/(loss), net of tax (c)		(302)		(952)		(25)		(1,820)
Other comprehensive income/(loss), net of tax										Other comprehensive income/(loss), net of tax	146		493
Ending balance	Ending balance	$	(5,551)	$	(7,307)	$	(5,551)	$	(7,307)	Ending balance	$	(5,341)	$	(5,923)

Marketable securities	Marketable securities									Marketable securities
Beginning balance	Beginning balance	$	81	$	(355)	$	156	$	(19)	Beginning balance	$	(19)	$	(442)
Gains/(Losses) on available for sale securities	Gains/(Losses) on available for sale securities	(26)		(199)		(112)		(647)		Gains/(Losses) on available for sale securities	(330)		135
Less: Tax/(Tax benefit)	Less: Tax/(Tax benefit)	(6)		(47)		(28)		(153)		Less: Tax/(Tax benefit)	(77)		33
Net gains/(losses) on available for sale securities	Net gains/(losses) on available for sale securities	(20)		(152)		(84)		(494)		Net gains/(losses) on available for sale securities	(253)		102
(Gains)/Losses reclassified from AOCI to net income	(Gains)/Losses reclassified from AOCI to net income	(3)		5		(18)		13		(Gains)/Losses reclassified from AOCI to net income	—		11
Less: Tax/(Tax benefit)	Less: Tax/(Tax benefit)	—		1		(4)		3		Less: Tax/(Tax benefit)	—		3
Net (gains)/losses reclassified from AOCI to net income	Net (gains)/losses reclassified from AOCI to net income	(3)		4		(14)		10		Net (gains)/losses reclassified from AOCI to net income	—		8
Other comprehensive income/(loss), net of tax	Other comprehensive income/(loss), net of tax	(23)		(148)		(98)		(484)		Other comprehensive income/(loss), net of tax	(253)		110
Ending balance	Ending balance	$	58	$	(503)	$	58	$	(503)	Ending balance	$	(272)	$	(332)

Derivative instruments	Derivative instruments									Derivative instruments
Beginning balance	Beginning balance	$	(455)	$	(143)	$	(266)	$	(193)	Beginning balance	$	(193)	$	129
Gains/(Losses) on derivative instruments	Gains/(Losses) on derivative instruments	339		445		(52)		475		Gains/(Losses) on derivative instruments	156		(55)
Less: Tax/(Tax benefit)	Less: Tax/(Tax benefit)	85		105		8		112		Less: Tax/(Tax benefit)	37		(14)
Net gains/(losses) on derivative instruments	Net gains/(losses) on derivative instruments	254		340		(60)		363		Net gains/(losses) on derivative instruments	119		(41)
(Gains)/Losses reclassified from AOCI to net income	(Gains)/Losses reclassified from AOCI to net income	111		35		271		73		(Gains)/Losses reclassified from AOCI to net income	32		(17)
Less: Tax/(Tax benefit)	Less: Tax/(Tax benefit)	22		8		57		19		Less: Tax/(Tax benefit)	7		(3)
Net (gains)/losses reclassified from AOCI to net income ~~(d)~~(c)	Net (gains)/losses reclassified from AOCI to net income ~~(d)~~(c)	89		27		214		54		Net (gains)/losses reclassified from AOCI to net income ~~(d)~~(c)	25		(14)
Other comprehensive income/(loss), net of tax	Other comprehensive income/(loss), net of tax	343		367		154		417		Other comprehensive income/(loss), net of tax	144		(55)
Ending balance	Ending balance	$	(112)	$	224	$	(112)	$	224	Ending balance	$	(49)	$	74

Pension and other postretirement benefits	Pension and other postretirement benefits									Pension and other postretirement benefits
Beginning balance	Beginning balance	$	(2,645)	$	(2,620)	$	(2,658)	$	(2,640)	Beginning balance	$	(2,640)	$	(2,610)
Amortization and recognition of prior service costs/(credits)	Amortization and recognition of prior service costs/(credits)	4		5		24		17		Amortization and recognition of prior service costs/(credits)	6		6
Less: Tax/(Tax benefit)	Less: Tax/(Tax benefit)	4		1		8		4		Less: Tax/(Tax benefit)	1		1
Net prior service costs/(credits) reclassified from AOCI to net income	Net prior service costs/(credits) reclassified from AOCI to net income	—		4		16		13		Net prior service costs/(credits) reclassified from AOCI to net income	5		5
Translation impact on non-U.S. plans	Translation impact on non-U.S. plans	5		9		2		20		Translation impact on non-U.S. plans	3		(2)
Other comprehensive income/(loss), net of tax	Other comprehensive income/(loss), net of tax	5		13		18		33		Other comprehensive income/(loss), net of tax	8		3
Ending balance	Ending balance	$	(2,640)	$	(2,607)	$	(2,640)	$	(2,607)	Ending balance	$	(2,632)	$	(2,607)

Total AOCI ending balance at September 30		$	(8,245)	$	(10,193)	$	(8,245)	$	(10,193)
Total AOCI ending balance at March 31										Total AOCI ending balance at March 31	$	(8,294)	$	(8,788)

__________

(a)We do not recognize deferred taxes for a majority of the foreign currency translation gains and losses because we do not anticipate reversal in the foreseeable future. However, we have made elections to tax certain non-U.S. operations simultaneously in U.S. tax returns, and have recorded deferred taxes for temporary differences that will reverse, independent of repatriation plans, in U.S. tax returns. Taxes or tax benefits resulting from foreign currency translation of the temporary differences are recorded in Other comprehensive income/(loss), net of tax.

(b)Reclassified to Other income/(loss), net.

(c)~~Excludes a $3 million gain and a $1 million loss related to noncontrolling interests in the third quarter and first nine months of 2022, respectively.~~

~~(d)~~Reclassified to Cost of sales. During the next twelve months, we expect to reclassify existing net gains on cash flow hedges of ~~$225~~$147 million (see Note ~~16)~~15).

2824

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~20.~~19. VARIABLE INTEREST ENTITIES

Certain of our affiliates are variable interest entities in which we are not the primary beneficiary. Our maximum exposure to any potential losses associated with these unconsolidated affiliates is limited to our equity investments, ~~and~~accounts receivable, loans, and guarantees and was ~~$2.8~~$1.0 billion and ~~$510 million~~$1.6 billion at December 31, ~~2021~~2022 and ~~September 30,~~March 31, 2023, respectively. Of these amounts, guarantees of $113 million at both December 31, 2022 ~~respectively.~~and March 31, 2023 related to certain obligations of our VIEs also are included in Note 20.

On July 13, 2022, Ford, SK On Co., Ltd., and SK Battery America, Inc. (a wholly owned subsidiary of SK On) completed the creation of BlueOval SK, LLC, a 50/50 joint venture that will build and operate electric vehicle battery plants in Tennessee and Kentucky to supply batteries to Ford and Ford affiliates. BlueOval SK is a variable interest entity of which we are not the primary beneficiary, and we use the equity method of accounting for our investment. As of ~~September 30, 2022,~~March 31, 2023, Ford has contributed to BlueOval SK ~~$312 million~~$1.3 billion of its agreed capital contribution of up to $6.6 billion through 2026, subject to any adjustments agreed to by the parties.

~~The decrease in maximum exposure from December 31, 2021 is primarily explained by Argo AI (see Note 10), partially offset by the investment in BlueOval SK.~~

2925

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~21.~~20. COMMITMENTS AND CONTINGENCIES

Commitments and contingencies primarily consist of guarantees and indemnifications, litigation and claims, and warranty and field service actions.

Guarantees and Indemnifications

Financial Guarantees. Financial guarantees and indemnifications are recorded at fair value at their inception. Subsequent to initial recognition, the guarantee liability is adjusted at each reporting period to reflect the current estimate of expected payments resulting from possible default events over the remaining life of the guarantee. The maximum potential payments for financial guarantees were ~~$357~~$518 million and ~~$395~~$522 million at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively. The carrying value of recorded liabilities related to financial guarantees was ~~$36~~$31 million and ~~$15~~$55 million at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively.

Our financial guarantees consist of debt and lease obligations of certain joint ventures, as well as certain financial obligations of outside third parties, including suppliers, to support our business and economic growth. Expiration dates vary through ~~2033,~~2037, and guarantees will terminate on payment and/or cancellation of the underlying obligation. A payment by us would be triggered by failure of the joint venture or other third party to fulfill its obligation covered by the guarantee. In some circumstances, we are entitled to recover from a third party amounts paid by us under the guarantee.

Non-Financial Guarantees. Non-financial guarantees and indemnifications are recorded at fair value at their inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we will be required to perform under a guarantee or indemnity, the amount of probable payment is recorded. The maximum potential payments for non-financial guarantees were ~~$453~~$273 million and ~~$273~~$165 million at December 31, ~~2021~~2022 and ~~September 30, 2022,~~March 31, 2023, respectively. The carrying value of recorded liabilities related to non-financial guarantees was ~~$38 million and~~ $0 at both December 31, ~~2021~~2022 and ~~September 30, 2022, respectively.~~March 31, 2023.

Included in the ~~$273~~$165 million of maximum potential payments at ~~September 30, 2022~~March 31, 2023 are guarantees for the resale value of vehicles sold in certain arrangements to daily rental companies. The maximum potential payment of ~~$267~~$159 million as of ~~September 30, 2022~~March 31, 2023 represents the total proceeds we guarantee the rental company will receive on resale. Reflecting our present estimate of proceeds the rental companies will receive on resale from third parties, we do not expect we will have to pay under the guarantee.

In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction, such as the sale of a business. These indemnifications might include and are not limited to claims relating to any of the following: environmental, tax, and shareholder matters; intellectual property rights; power generation contracts; governmental regulations and employment-related matters; dealer, supplier, and other commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities generally would be triggered by a breach of contract claim brought by a counterparty, including a joint venture or alliance partner, or a third-party claim. While some of these indemnifications are limited in nature, many of them do not limit potential payment. Therefore, we are unable to estimate a maximum amount of future payments that could result from claims made under these unlimited indemnities.

3026

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~21.~~20. COMMITMENTS AND CONTINGENCIES (Continued)

Litigation and Claims

Various legal actions, proceedings, and claims (generally, “matters”) are pending or may be instituted or asserted against us. These include, but are not limited to, matters arising out of alleged defects in our products; product warranties; governmental regulations relating to safety, emissions, and fuel economy or other matters; government incentives; tax matters, including trade and customs; alleged illegal acts resulting in fines or penalties; financial services; employment-related matters; dealer, supplier, and other contractual relationships; intellectual property rights; environmental matters; shareholder or investor matters; and financial reporting matters. Certain of the pending legal actions are, or purport to be, class actions. Some of the matters involve or may involve claims for compensatory, punitive, or antitrust or other treble damages in very large amounts, or demands for field service actions, environmental remediation programs, sanctions, loss of government incentives, assessments, or other relief, which, if granted, would require very large expenditures.

The extent of our financial exposure to these matters is difficult to estimate. Many matters do not specify a dollar amount for damages, and many others specify only a jurisdictional minimum. To the extent an amount is asserted, our historical experience suggests that in most instances the amount asserted is not a reliable indicator of the ultimate outcome.

We accrue for matters when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood that we will prevail, and the severity of any potential loss. We reevaluate and update our accruals as matters progress over time.

For the majority of matters, which generally arise out of alleged defects in our products, we establish an accrual based on our extensive historical experience with similar matters. We do not believe there is a reasonably possible outcome materially in excess of our accrual for these matters.

For the remaining matters, where our historical experience with similar matters is of more limited value (i.e., “non-pattern matters”), we evaluate the matters primarily based on the individual facts and circumstances. For non-pattern matters, we evaluate whether there is a reasonable possibility of a material loss in excess of any accrual that can be estimated. Our estimate of reasonably possible loss in excess of our accruals for all material matters currently reflects indirect tax, customs, and regulatory matters, for which we estimate the aggregate risk to be a range of up to about $2 billion.

As noted, the litigation process is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. Our assessments are based on our knowledge and experience, but the ultimate outcome of any matter could require payment substantially in excess of the amount that we have accrued and/or disclosed.

3127

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~21.~~20. COMMITMENTS AND CONTINGENCIES (Continued)

Warranty and Field Service Actions

We accrue the estimated cost of both base warranty coverages and field service actions at the time of sale. We establish our estimate of base warranty obligations using a patterned estimation model, using historical information regarding the nature, frequency, and average cost of claims for each vehicle line by model year. We establish our estimates of field service action obligations using a patterned estimation model, using historical information regarding the nature, frequency, severity, and average cost of claims for each model year. In addition, from time to time, we issue extended warranties at our expense, the estimated cost of which is accrued at the time of issuance. Warranty and field service action obligations are reported in Other liabilities and deferred revenue. We reevaluate the adequacy of our accruals on a regular basis.

We recognize the benefit from a recovery of the costs associated with our warranty and field service actions when specifics of the recovery have been agreed with our supplier and the amount of recovery is virtually certain. Recoveries are reported in Trade and other receivables, net and Other assets.

The estimate of our future warranty and field service action costs, net of estimated supplier recoveries, for the periods ended ~~September 30~~March 31 was as follows (in millions):


		First Nine Months					First Quarter
		2021		2022			2022		2023
Beginning balance	Beginning balance	$	8,172	$	8,451	Beginning balance	$	8,451	$	9,193
Payments made during the period	Payments made during the period	(3,109)		(3,063)		Payments made during the period	(984)		(990)
Changes in accrual related to warranties issued during the period	Changes in accrual related to warranties issued during the period	2,819		2,806		Changes in accrual related to warranties issued during the period	793		972
Changes in accrual related to pre-existing warranties	Changes in accrual related to pre-existing warranties	44		449		Changes in accrual related to pre-existing warranties	21		226
Foreign currency translation and other	Foreign currency translation and other	(77)		(241)		Foreign currency translation and other	38		(117)
Ending balance	Ending balance	$	7,849	$	8,402	Ending balance	$	8,319	$	9,284

Changes to our estimated costs are reported as changes in accrual related to pre-existing warranties in the table above. Our estimate of reasonably possible costs in excess of our accruals for material field service actions and customer satisfaction actions is a range of up to about $700 million in the aggregate.

3228

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~22.~~21. SEGMENT INFORMATION

We report segment information consistent with the way our chief operating decision maker (“CODM”) evaluates the operating results and performance of the Company. ~~Accordingly,~~

On January 1, 2023, we implemented a new operating model and reporting structure. As a result of this change, we analyze the results of our business through the following segments: ~~Automotive, Mobility,~~Ford Blue, Ford Model e, and Ford Pro (combined, replacing the previous Automotive segment), Ford Next (previously the Mobility segment), and Ford Credit. Company adjusted earnings before interest and taxes (“EBIT”) include the financial results of these five reportable segments and Corporate Other, and net income comprises the financial results of the five reportable segments and Corporate Other, as well as Interest on Debt, Special Items, and Taxes.

~~Effective with fourth quarter 2021 reporting, special items include gains~~Additionally, past service pension and ~~losses on investments~~OPEB income and expense plus related assets, previously reported in ~~equity securities.~~ the Automotive segment, have been realigned to Corporate Other.

Prior period amounts were adjusted retrospectively to reflect each of the ~~change.~~above changes.

Below is a description of our reportable segments and other activities.

~~Automotive~~Ford Blue Segment

~~The Automotive~~Ford Blue primarily includes the sale of Ford and Lincoln internal combustion engine (“ICE”) and hybrid vehicles, service parts, accessories, and digital services for retail customers, together with the associated costs of development, manufacture, and distribution of the vehicles, parts, accessories, and services. This segment focuses on developing Ford and Lincoln ICE and hybrid vehicles. Additionally, this segment provides hardware engineering and manufacturing capabilities to Ford Model e and manufactures vehicles on behalf of Ford Pro and, in certain cases, Ford Model e. Ford Blue also includes:

•All sales for markets not presently in scope for Ford Model e or Ford Pro (as further described below)

•In markets outside of the United States and Canada, sales to commercial, government, and rental customers of ICE and hybrid vehicles not considered core to Ford Pro

•Sales of electric vehicles (“EVs”) by our unconsolidated affiliates in China

•All sales of vehicles manufactured and sold to other OEMs

Ford Model e Segment

Ford Model e primarily includes the sale of our electric vehicles, service parts, accessories, and digital services for retail customers, together with the associated costs of development, manufacture, and distribution of the vehicles, parts, accessories, and services. This segment focuses on developing EV and digital vehicle technologies, as well as software development. Additionally, Ford Model e provides software and connected vehicle technologies on behalf of the enterprise, and manufactures certain EVs, including for Ford Pro. Ford Model e operates in North America, Europe, and China. Ford Model e also includes EV and related sales not considered core to Ford Pro to commercial, government, and rental customers in Europe, China, and Mexico.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 21. SEGMENT INFORMATION (Continued)

Ford Pro Segment

Ford Pro primarily includes the sale of Ford and Lincoln vehicles, service parts, accessories, and ~~accessories worldwide, together with~~services for commercial, government, and rental customers. Included in this segment are sales of all core Ford Pro vehicles, such as Super Duty and the ~~associated costs~~Transit range of vans in North America and Europe and all sales of Ranger in Europe. In the United States and Canada, Ford Pro also includes all vehicle sales to ~~develop, manufacture, distribute,~~commercial, government, and ~~service the vehicles, parts, and accessories.~~rental customers. This segment ~~includes revenues~~focuses on selling ICE, hybrid, and electric vehicles, and providing digital and physical services to optimize and maintain fleets, including telematics and EV charging solutions. This segment reflects external sales of vehicles produced by Ford Blue and Ford Model e, and the costs ~~related to our electrification vehicle programs~~(including intersegment markup) associated with acquiring vehicles for sale and ~~enterprise connectivity. The segment includes the following regional business units:~~providing services are reflected in this segment. Ford Pro operates in North America ~~South America, Europe, China (including Taiwan),~~ and ~~the International Markets Group.~~Europe.

~~Mobility~~Ford Next Segment

The Ford Next segment (formerly the Mobility ~~segment~~segment) primarily includes ~~development costs~~expenses and investments for ~~Ford’s autonomous vehicles and related businesses, Ford’s equity ownership~~emerging business initiatives aimed at creating value for Ford in ~~Argo AI (a developer of autonomous driving systems), and other mobility businesses and investments. For additional information about our investment in Argo AI, see Note 10.~~vehicle-adjacent market segments.

Ford Credit Segment

The Ford Credit segment is comprised of the Ford Credit business on a consolidated basis, which is primarily vehicle-related financing and leasing activities.

Corporate Other

Corporate Other primarily includes corporate governance expenses, past service pension and OPEB income and expense, interest income (excluding Ford Credit interest income and interest earned on our extended service contract ~~portfolio that is included in our Automotive segment)~~portfolio) and gains and losses from our cash, cash equivalents, and marketable securities (excluding gains and losses on investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, that are not allocated to operating segments. These include expenses related to setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. Corporate Other assets include: cash, cash equivalents and marketable ~~securities;~~securities, tax related ~~assets; other investments;~~assets, defined benefit pension plan net assets, and other assets managed centrally.

Interest on Debt

Interest on Debt is presented as a separate reconciling item and consists of interest expense on Company debt excluding Ford Credit. ~~The underlying liability is reported in the Automotive segment and in Corporate Other.~~

Special Items

Special Items are presented as a separate reconciling item. They consist of (i) pension and OPEB remeasurement gains and losses, (ii) gains and losses on investments in equity securities, (iii) significant personnel expenses, supplier- and dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix, and (iv) other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities. Our management ordinarily excludes these items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. We also report these special items separately to help investors track amounts related to these activities and to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE ~~22.~~21. SEGMENT INFORMATION (Continued)

Segment Revenue, Cost, and Asset Principles for Ford Blue, Ford Model e, and Ford Pro

External vehicle and digital services revenue is generally vehicle-specific and included in the segment responsible for the external vehicle sale. A majority of parts and accessories revenue and cost is attributed to customer sales channels or vehicle lines based on recent end customer sales and is included in the respective segment.

In the normal course of business, Ford Blue, Ford Model e, and Ford Pro transact between segments and cooperate to leverage synergies, including developing and manufacturing vehicles on behalf of another segment. When one segment produces a vehicle that is sold externally by another segment, an intersegment transaction occurs. The producing segment will report intersegment revenue to recoup the costs associated with the unit produced. This includes material cost, labor and overhead (including depreciation and amortization), inbound freight, and an intersegment markup. The intersegment markup amount is set to deliver a competitive return to the producing segment for its manufacturing and distribution service. Costs are reflected in the associated segment externally reporting the vehicle sale, as detailed in the table below:


Income Statement Elements	Examples	Segment Reporting
Costs specific to a particular vehicle	Bill of material cost and initial warranty accrual	Reported in the segment externally selling the vehicle
Costs identifiable by product line	Manufacturing and logistics costs, depreciation & amortization expense, direct research & development costs	Typically identifiable to the product line or production location. Reported in the segment externally selling the vehicle, based on relative volume
Shared costs	Selling, general & administrative expense, and indirect / cross product line research & development costs	Typically shared across all segments, generally based on relative volume. Certain costs clearly linked to a segment are reported in the specific segment
Intersegment markup costs for intersegment vehicle transactions	Contract manufacturing and distribution fees	Reported in the segment externally selling the vehicle, for each applicable vehicle transaction

Assets are reported in each segment, aligned to the appropriate operational responsibility. Manufacturing assets, e.g., our plants and the machinery and equipment therein, are included in our Ford Blue and Ford Model e segments. Manufacturing assets producing only, or primarily, EVs and related components are reflected in Ford Model e. Manufacturing assets that support the production of ICE and hybrid vehicles, including those producing ICE and electric in the same facility, are included in Ford Blue. Vendor tooling dedicated to producing EV parts is reported in Ford Model e. There are no Ford manufacturing assets or vendor tooling reported in Ford Pro. Regardless of the segment reporting the asset, depreciation and amortization expense is reflected on the basis of production volume and reported in the segment that reports the external vehicle sale.

Equity in net income/(loss) of affiliated companies is included in Income/(Loss) before income taxes, based primarily on which segment the entity supports or has the majority of the entity’s purchases or sales. The table below shows the segment reporting for our most significant unconsolidated entities:


Ford Blue	Ford Model e	Ford Pro
∘ Changan Ford Automobile Corporation, Ltd. (“CAF”)	∘ BlueOval SK, LLC	∘ Ford Otomotiv Sanayi Anonim Sirketi (“Ford Otosan”)
∘ Jiangling Motors Corporation, Ltd. (“JMC”)
∘ AutoAlliance (Thailand) Co., Ltd. (“AAT”)

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 21. SEGMENT INFORMATION (Continued)

Key financial information for the periods ended or at ~~September 30~~March 31 was as follows (in millions):


		Automotive		Mobility		Ford Credit		Corporate Other		Interest on Debt		Special Items			Adjustments			Total			Ford Blue		Ford Model e		Ford Pro		Ford Next		Ford Credit		Corporate Other		Interest on Debt		Special Items			Eliminations/Adjustments			Total
Third Quarter 2021
Revenues		$	33,211	$	38	$	2,434	$	—	$	—	$	—		$	—		$	35,683
First Quarter 2022																				First Quarter 2022
External Revenues																				External Revenues	$	20,810	$	972	$	10,324	$	84	$	2,281	$	5	$	—	$	—		$	—		$	34,476
Intersegment Revenues (a)																				Intersegment Revenues (a)	7,254		27		—		—		—		—		—		—			(7,281)			—
Total Revenues																				Total Revenues	$	28,064	$	999	$	10,324	$	84	$	2,281	$	5	$	—	$	—		$	(7,281)		$	34,476

Income/(Loss) before income taxes	Income/(Loss) before income taxes	2,456		(271)		1,077		(269)		(439)		(669)		(a)	—			1,885		Income/(Loss) before income taxes	$	1,328	$	(380)	$	491	$	(242)	$	928	$	201	$	(308)	$	(5,866)	(b)	$	—		$	(3,848)

Equity in net income/(loss) of affiliated companies	Equity in net income/(loss) of affiliated companies	185		(68)		9		—		—		4			—			130		Equity in net income/(loss) of affiliated companies	56		(2)		85		(75)		6		1		—		(104)		(c)	—			(33)
Total assets		68,291		3,471		135,385		46,695		—		—			(1,165)		(b)	252,677

Third Quarter 2022
Revenues		$	37,194	$	11	$	2,187	$	—	$	—	$	—		$	—		$	39,392
Income/(Loss) before income taxes		1,698		(244)		599		(250)		(321)		(2,607)		(c)	—			(1,125)
Equity in net income/(loss) of affiliated companies		185		(87)		8		—		—		(2,732)		(e)	—			(2,626)
Total assets	Total assets	71,983		415		127,088		48,432		—		—			(999)		(b)	246,919		Total assets	58,329		2,951		1,679		3,501		132,582		54,608		—		—			(664)		(d)	252,986

		Automotive		Mobility		Ford Credit		Corporate Other		Interest on Debt		Special Items			Adjustments			Total
First Nine Months 2021
Revenues		$	90,893	$	70	$	7,700	$	—	$	—	$	—		$	—		$	98,663

																					Ford Blue		Ford Model e		Ford Pro		Ford Next		Ford Credit		Corporate Other		Interest on Debt		Special Items			Eliminations/Adjustments			Total
First Quarter 2023																				First Quarter 2023
External Revenues																				External Revenues	$	25,124	$	707	$	13,249	$	1	$	2,389	$	4	$	—	$	—		$	—		$	41,474
Intersegment Revenues (a)																				Intersegment Revenues (a)	9,177		9		—		—		—		—		—		—			(9,186)			—
Total Revenues																				Total Revenues	$	34,301	$	716	$	13,249	$	1	$	2,389	$	4	$	—	$	—		$	(9,186)		$	41,474

Income/(loss) before income taxes	Income/(loss) before income taxes	5,756		(688)		3,662		(772)		(1,365)		(31)		(d)	—			6,562		Income/(loss) before income taxes	$	2,623	$	(722)	$	1,366	$	(44)	$	303	$	(147)	$	(308)	$	(912)	(e)	$	—		$	2,159

Equity in net income/(loss) of affiliated companies	Equity in net income/(loss) of affiliated companies	434		(191)		23		1		—		(7)			—			260		Equity in net income/(loss) of affiliated companies	55		(3)		117		(12)		7		—		—		(34)			—			130

First Nine Months 2022
Revenues		$	107,214	$	120	$	6,724	$	—	$	—	$	—		$	—		$	114,058
Income/(loss) before income taxes		6,911		(707)		2,466		(819)		(941)		(11,092)		(c)	—			(4,182)
Equity in net income/(loss) of affiliated companies		481		(245)		18		1		—		(2,856)		(e)	—			(2,601)
Total assets																				Total assets	57,990		7,242		2,668		371		138,225		52,427		—		—			(2,123)		(d)	256,800

__________

(a)~~Primarily reflects Global Redesign actions, mark-to-market adjustments for our global pension~~Intersegment revenues only reflect finished vehicle transactions between Ford Blue, Ford Model e, and ~~OPEB plans,~~Ford Pro where there is an intersegment markup and ~~gains/(losses) on investments in equity securities.~~are recognized at the time of the intersegment transaction.

(b)~~Includes~~Primarily reflects gains/(losses) on our Rivian investment.

(c)Primarily reflects the full impairment of our Ford Sollers Netherlands B.V. (the parent company of our joint venture in Russia) equity method investment, resulting from the ongoing regulatory and economic uncertainty in Russia.

(d)Primarily includes eliminations of intersegment transactions occurring in the ordinary course of ~~business and deferred tax netting.~~business.

~~(c)~~(e)Primarily reflects ~~gains/(losses) on our Rivian investment~~restructuring actions in Europe and ~~the impairment of our Argo AI equity method investment.~~

~~(d)Primarily reflects gains on our Rivian investment, Global Redesign actions,~~China and mark-to-market adjustments for our global pension and OPEB plans.

~~(e)~~

~~Primarily reflects the impairment of our Argo AI equity method investment.~~

3432

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~KEY TRENDS AND ECONOMIC FACTORS AFFECTING FORD AND THE AUTOMOTIVE INDUSTRY~~

~~COVID-19 and Supplier Disruptions.~~ The impact of COVID-19, including changes in consumer behavior, pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the global economy. Outbreaks in certain regions continue to cause intermittent COVID-19-related disruptions in our supply chain and local manufacturing operations. We also continue to face supplier disruptions due to labor shortages and other production issues, in addition to the continuing semiconductor shortage. Our inconsistent production schedule has been disruptive to our suppliers’ operations, which, in turn, has led to a limited availability of certain parts and delivery delays. Further, actions taken by Russia in Ukraine have impacted and could further impact our suppliers, particularly our lower tier suppliers, as well as our operations in Europe. For additional information on the impact of supplier disruptions, see the Outlook section on page 59.

~~Commodity and Energy Prices.~~ Prices for commodities remain volatile but spot prices have recently diverged somewhat, as anticipated weakening in global industrial activity mitigates price increases for base metals such as steel and aluminum, while precious metals (e.g., palladium), and raw materials that are used in batteries for electric vehicles (e.g., lithium, cobalt, and nickel for batteries) remain at historically elevated price levels. The net impact on us and our suppliers has been higher material costs overall. To help ensure supply of raw materials for critical components (e.g., batteries), we, like others in the industry, have entered into multi-year sourcing agreements and may enter into additional agreements. Similar dynamics are impacting energy markets, with Europe particularly exposed to the risk of both higher prices and constraints on supply of natural gas due to the ongoing conflict in Ukraine. Such shortages may impact facilities operated by us or our suppliers, which could have an impact on us in Europe and other regions. For additional information on commodity costs, see the Outlook section on page 59.

~~Inflation and Interest Rates.~~ We continue to see near-term impacts on our business due to inflation, including ongoing global price pressures in the wake of Russia’s invasion of Ukraine, driving up energy prices, freight premiums, and other operating costs. Inflation in the United States peaked at a year-over-year rate of 9.1% in June, before moderating to a still-elevated 8.2% in September as gasoline prices eased. In Europe, energy price pressures and inflation have remained on an upward path, with September U.K. inflation rebounding to 10.1% and Euro Area inflation at 9.9%, both on a year-over-year basis. Interest rates have increased quickly and substantially as central banks in developed countries raise interest rates in an effort to subdue inflation, while government deficits and debt remain at high levels in many global markets. The eventual implications of higher government deficits and debt, tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital for the business.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)~~

RESULTS OF OPERATIONS

In the ~~third~~first quarter of ~~2022,~~2023, the net ~~loss~~income attributable to Ford Motor Company was ~~$827~~$1,757 million, and Company adjusted EBIT was ~~$1,803~~$3,379 million.

Net income/(loss) includes certain items (“special items”) that are excluded from Company adjusted EBIT. These items are discussed in more detail in Note 2221 of the Notes to the Financial Statements. We report special items separately to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results. Our pre-tax and tax special items were as follows (in millions):


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Global Redesign
Restructuring										Restructuring
Europe	Europe	$	(88)	$	(12)	$	(347)	$	(61)	Europe	$	(22)	$	(370)
India		(369)		(175)		(369)		(250)
South America		(211)		(9)		(666)		(26)
China (including Taiwan)		(5)		(17)		152		(37)
North America		(29)		(180)		(39)		(210)
China										China	—		(309)
Ford Credit - Brazil										Ford Credit - Brazil	(119)		—
Other	Other	—		2		7		20		Other	(36)		12
Subtotal Global Redesign		$	(702)	$	(391)	$	(1,262)	$	(564)
Subtotal Restructuring										Subtotal Restructuring	$	(177)	$	(667)
Pension and OPEB Gain/(Loss)										Pension and OPEB Gain/(Loss)
Pension and OPEB remeasurement										Pension and OPEB remeasurement	$	—	$	(113)
Pension settlements and curtailments										Pension settlements and curtailments	—		(46)
Subtotal Pension and OPEB Gain/(Loss)										Subtotal Pension and OPEB Gain/(Loss)	$	—	$	(159)
Other Items	Other Items									Other Items
Gain/(loss) on Rivian investment (a)		$	—	$	646	$	902	$	(7,250)
Debt extinguishment premium		—		(135)		—		(135)
Argo impairment (see Note 10)		—		(2,708)		—		(2,708)
Ford Credit – Brazil restructuring (see Note 17)		—		—		—		(155)
Gain/(loss) on Rivian investment										Gain/(loss) on Rivian investment	$	(5,449)	$	(25)
Russia suspension of operations/asset write-off	Russia suspension of operations/asset write-off	—		2		—		(130)		Russia suspension of operations/asset write-off	(138)		—
Patent matters related to prior calendar years	Patent matters related to prior calendar years	—		—		—		(121)		Patent matters related to prior calendar years	(135)		—
Other	Other	—		(14)		21		(6)		Other	33		(61)
Subtotal Other Items	Subtotal Other Items	$	—	$	(2,209)	$	923	$	(10,505)	Subtotal Other Items	$	(5,689)	$	(86)
Pension and OPEB Gain/(Loss)
Pension and OPEB remeasurement		$	40	$	(7)	$	364	$	(23)
Pension settlements and curtailments		(7)		—		(56)		—
Subtotal Pension and OPEB Gain/(Loss)		$	33	$	(7)	$	308	$	(23)
Total EBIT Special Items	Total EBIT Special Items	$	(669)	$	(2,607)	$	(31)	$	(11,092)	Total EBIT Special Items	$	(5,866)	$	(912)

Cash effect of Global Redesign (incl. separations)		$	(293)	$	(185)	$	(1,608)	$	(35)

Provision for/(Benefit from) tax special items (b)		$	(460)	$	(544)	$	(318)	$	(2,273)
Provision for/(Benefit from) tax special items (a)										Provision for/(Benefit from) tax special items (a)	$	(1,192)	$	(144)

__________

(a)~~As of September 30, 2022, we held 24.8 million Rivian common shares valued at $32.91 per share.~~

~~(b)~~Includes related tax effect on special items and tax special items.

We recorded ~~$2.6 billion~~$912 million of pre-tax special item charges in the ~~third~~first quarter of ~~2022,~~2023, driven primarily by ~~an impairment on our Argo investment. For additional information on the impairment on our Argo investment, see Note 10 of the Notes to the Financial Statements.~~restructuring actions in Europe and China.

In Note 2221 of the Notes to the Financial Statements, special items are reflected as a separate reconciling item, as opposed to being allocated among ~~the Automotive, Mobility, and Ford Credit~~our segments. This reflects the fact that management excludes these items from its review of operating segment results for purposes of measuring segment profitability and allocating resources.

3633

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

COMPANY KEY METRICS

The table below shows our ~~third~~first quarter ~~and first nine months 2022~~2023 key metrics for the Company, compared to a year ago.


		Third Quarter									First Nine Months										First Quarter
		2021			2022			H / (L)			2021			2022			H / (L)				2022			2023			H / (L)
GAAP Financial Measures	GAAP Financial Measures																			GAAP Financial Measures
Cash Flows from Operating Activities ($B)	Cash Flows from Operating Activities ($B)	$	7.0		$	3.8		$	(3.2)		$	12.3		$	5.7		$	(6.6)		Cash Flows from Operating Activities ($B)	$	(1.1)		$	2.8		$	3.9
Revenue ($M)	Revenue ($M)	35,683			39,392			10		%	98,663			114,058			16		%	Revenue ($M)	34,476			41,474			20		%
Net Income/(Loss) ($M)	Net Income/(Loss) ($M)	1,832			(827)			$	(2,659)		5,655			(3,270)			$	(8,925)		Net Income/(Loss) ($M)	(3,110)			1,757			$	4,867
Net Income/(Loss) Margin (%)	Net Income/(Loss) Margin (%)	5.1		%	(2.1)		%	(7.2) ppts			5.7		%	(2.9)		%	(8.6) ppts			Net Income/(Loss) Margin (%)	(9.0)		%	4.2		%	13.2 ppts
EPS (Diluted)	EPS (Diluted)	$	0.45		$	(0.21)		$	(0.66)		$	1.40		$	(0.81)		$	(2.21)		EPS (Diluted)	$	(0.78)		$	0.44		$	1.22

Non-GAAP Financial Measures (a)	Non-GAAP Financial Measures (a)																			Non-GAAP Financial Measures (a)
Company Adj. Free Cash Flow ($B)	Company Adj. Free Cash Flow ($B)	$	7.8		$	3.6		$	(4.2)		$	2.3		$	6.6		$	4.4		Company Adj. Free Cash Flow ($B)	$	(0.6)		$	0.7		$	1.3
Company Adj. EBIT ($M)	Company Adj. EBIT ($M)	2,993			1,803			(1,190)			7,958			7,851			(107)			Company Adj. EBIT ($M)	2,326			3,379			1,053
Company Adj. EBIT Margin (%)	Company Adj. EBIT Margin (%)	8.4		%	4.6		%	(3.8) ppts			8.1		%	6.9		%	(1.2) ppts			Company Adj. EBIT Margin (%)	6.7		%	8.1		%	1.4 ppts
Adjusted EPS (Diluted)	Adjusted EPS (Diluted)	$	0.51		$	0.30		$	(0.21)		$	1.33		$	1.37		$	0.04		Adjusted EPS (Diluted)	$	0.38		$	0.63		$	0.25
Adjusted ROIC (Trailing Four Quarters)	Adjusted ROIC (Trailing Four Quarters)	9.7		%	10.7		%	1.0 ppts												Adjusted ROIC (Trailing Four Quarters)	7.8		%	13.5		%	5.8 ppts

__________

(a)See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP.

In the ~~third~~first quarter of ~~2022,~~2023, our diluted earnings per share of Common and Class B Stock was ~~a loss of $0.21~~$0.44, and our diluted adjusted earnings per share was ~~$0.30.~~$0.63.

Net income/(loss) margin was ~~negative 2.1%~~4.2% in the ~~third~~first quarter of ~~2022, down 7.2~~2023, up 13.2 percentage points from a year ago. Company adjusted EBIT margin was ~~4.6%~~8.1% in the ~~third~~first quarter of ~~2022, down 3.8~~2023, up 1.4 percentage points from a year ago.

The year-over-year ~~decrease~~increase of ~~$2.7~~$4.9 billion in net income/(loss) in the ~~third~~first quarter of ~~2022~~2023 was driven by ~~an impairment~~the non-recurrence of a mark-to-market loss on our ~~Argo~~Rivian investment ~~which is included~~(included in special items in the first quarter of 2022) and ~~lower Automotive EBIT~~higher Ford Blue and Ford ~~Credit EBT.~~Pro EBIT. The year-over-year ~~decrease~~increase of ~~$1.2~~$1.1 billion in Company adjusted EBIT was driven by higher Ford Blue and Ford Pro EBIT as well as a lower ~~Automotive EBIT~~loss in Ford Next. Partial offsets included lower Ford Credit EBT, lower past service pension and OPEB income in Corporate Other, and lower Ford ~~Credit EBT.~~Model e EBIT.

The table below shows our ~~third~~first quarter ~~and first nine months 2022~~2023 net income/(loss) attributable to Ford and Company adjusted EBIT by segment.


		Third Quarter						First Nine Months							First Quarter
		2021		2022		H / (L)		2021		2022		H / (L)			2022		2023		H / (L)
Automotive		$	2,456	$	1,698	$	(758)	$	5,756	$	6,911	$	1,155
Mobility		(271)		(244)		27		(688)		(707)		(19)
Ford Blue														Ford Blue	$	1,328	$	2,623	$	1,295
Ford Model e														Ford Model e	(380)		(722)		(342)
Ford Pro														Ford Pro	491		1,366		875
Ford Next														Ford Next	(242)		(44)		198
Ford Credit	Ford Credit	1,077		599		(478)		3,662		2,466		(1,196)		Ford Credit	928		303		(625)
Corporate Other	Corporate Other	(269)		(250)		19		(772)		(819)		(47)		Corporate Other	201		(147)		(348)
Company Adjusted EBIT (a)	Company Adjusted EBIT (a)	2,993		1,803		(1,190)		7,958		7,851		(107)		Company Adjusted EBIT (a)	2,326		3,379		1,053
Interest on Debt	Interest on Debt	(439)		(321)		(118)		(1,365)		(941)		(424)		Interest on Debt	(308)		(308)		—
Special Items	Special Items	(669)		(2,607)		1,938		(31)		(11,092)		11,061		Special Items	(5,866)		(912)		(4,954)
Taxes / Noncontrolling Interests	Taxes / Noncontrolling Interests	(53)		298		(351)		(907)		912		(1,819)		Taxes / Noncontrolling Interests	738		(402)		1,140
Net Income/(Loss)	Net Income/(Loss)	$	1,832	$	(827)	$	(2,659)	$	5,655	$	(3,270)	$	(8,925)	Net Income/(Loss)	$	(3,110)	$	1,757	$	4,867

__________

(a)See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP.

3734

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

~~Automotive Segment~~

~~The table below shows our third quarter and first nine months 2022 Automotive segment EBIT by business unit (in millions).~~

Third Quarter First Nine Months
2021 2022 H / (L) 2021 2022 H / (L)
North America $ 2,420 $ 1,309 $ (1,111) $ 5,555 $ 6,169 $ 614
South America 2 149 147 (157) 303 460
Europe (52) 204 256 5 421 416
China (including Taiwan) (39) (193) (154) (177) (367) (190)
International Markets Group 125 229 104 530 385 (145)
Automotive Segment $ 2,456 $ 1,698 $ (758) $ 5,756 $ 6,911 $ 1,155

The tables below and on the following pages provide ~~third~~first quarter ~~and first nine months 2022~~2023 key metrics and the change in ~~third~~first quarter ~~2022~~2023 EBIT compared with ~~third~~first quarter ~~2021~~2022 by causal factor for each of our ~~Automotive segment and its regional business units: North America, South America, Europe, China (including Taiwan), and the International Markets Group.~~segments. For a description of these causal factors, see Definitions and Information Regarding ~~Automotive~~Ford Blue, Ford Model e, Ford Pro Causal Factors.

Third Quarter First Nine Months
Key Metrics 2021 2022 H / (L) 2021 2022 H / (L)
Market Share (%) 4.9 % 4.9 % — ppts 5.1 % 5.0 % (0.1) ppts
Wholesale Units (000) 1,012 1,086 74 2,838 3,084 246
Revenue ($M) $ 33,211 $ 37,194 $ 3,983 $ 90,893 $ 107,214 $ 16,321
EBIT ($M) 2,456 1,698 (758) 5,756 6,911 1,155
EBIT Margin (%) 7.4 % 4.6 % (2.8) ppts 6.3 % 6.4 % 0.1 ppts


~~Change in EBIT by Causal Factor (in millions)~~
~~Third Quarter 2021 EBIT~~	$	~~2,456~~
~~Volume / Mix~~	~~(277)~~
~~Net Pricing~~	~~3,398~~
~~Cost~~	~~(3,542)~~
~~Exchange~~	~~(127)~~
~~Other~~	~~(210)~~
~~Third Quarter 2022 EBIT~~	$	~~1,698~~

~~In the third quarter of 2022, wholesales increased 7% from a year ago, driven by reduced supply constraints (including semiconductors) on production and electric vehicle scaling.Third quarter 2022 revenue increased 12%, driven by higher net pricing and wholesales, offset partially by weaker currencies.~~

~~Our third quarter 2022 Automotive segment EBIT was $1.7 billion, a decrease of $758 million from a year ago, and our third quarter 2022 Automotive EBIT margin was 4.6%.~~The lower EBIT was driven by inflationary increases on commodity, material, and freight costs, unfavorable mix, and weaker currencies, offset partially by higher net pricing and higher wholesales. Our results include inflation-related supplier payments of $1.3 billion, primarily in North America, which were about $1 billion higher than originally expected, as indicated in our Current Report on Form 8-K dated September 19, 2022.Ford Blue Segment

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)~~

~~North America~~

Third Quarter First Nine Months
Key Metrics 2021 2022 H / (L) 2021 2022 H / (L)
Market Share (%) 11.2 % 12.8 % 1.7 ppts 11.3 % 12.6 % 1.3 ppts
Wholesale Units (000) 546 568 22 1,407 1,700 293
Revenue ($M) $ 24,032 $ 26,340 $ 2,308 $ 61,992 $ 77,714 $ 15,722
EBIT ($M) 2,420 1,309 (1,111) 5,555 6,169 614
EBIT Margin (%) 10.1 % 5.0 % (5.1) ppts 9.0 % 7.9 % (1.1) ppts


~~Change in EBIT by Causal Factor (in millions)~~
~~Third Quarter 2021 EBIT~~	$	~~2,420~~
~~Volume / Mix~~	~~(672)~~
~~Net Pricing~~	~~2,061~~
~~Cost~~	~~(2,341)~~
~~Exchange~~	96
~~Other~~	~~(255)~~
~~Third Quarter 2022 EBIT~~	$	~~1,309~~

~~In North America, third quarter 2022 wholesales increased 4% from a year ago.Third quarter 2022 revenue increased 10%, driven by higher net pricing and wholesales, offset partially by unfavorable mix.~~

~~North America’s third quarter 2022 EBIT was $1.3 billion, a decrease of $1.1 billion from a year ago, with an EBIT margin of 5.0%.~~The lower EBIT was driven by inflationary increases on commodity, material, and freight costs and unfavorable mix, offset partially by higher net pricing. Our results include inflation-related supplier payments of $1.2 billion, which were about $1 billion higher than originally expected, as indicated in our Current Report on Form 8-K dated September 19, 2022.

~~South America~~

Third Quarter First Nine Months
Key Metrics 2021 2022 H / (L) 2021 2022 H / (L)
Market Share (%) 2.4 % 2.0 % (0.5) ppts 2.8 % 2.1 % (0.7) ppts
Wholesale Units (000) 20 23 3 55 57 1
Revenue ($M) $ 627 $ 883 $ 256 $ 1,605 $ 2,160 $ 555
EBIT ($M) 2 149 147 (157) 303 460
EBIT Margin (%) 0.3 % 16.9 % 16.6 ppts (9.8) % 14.0 % 23.8 ppts


~~Change in EBIT by Causal Factor (in millions)~~
~~Third Quarter 2021 EBIT~~	$	2
~~Volume / Mix~~	~~(16)~~
~~Net Pricing~~	~~302~~
~~Cost~~	~~(156)~~
~~Exchange~~	~~(14)~~
~~Other~~	31
~~Third Quarter 2022 EBIT~~	$	~~149~~

~~In South America, third quarter 2022 wholesales increased 17% from a year ago. Third quarter 2022 revenue increased 41%, driven by higher net pricing, offset partially by weaker currencies.~~

South America’s third quarter 2022 EBIT was $149 million, an improvement of $147 million from a year ago, with an EBIT margin of 16.9%. The EBIT improvement was driven by higher net pricing, offset partially by inflationary increases on commodity, material, and freight costs. The strong results in South America reflect our restructuring efforts and pricing and were further aided by currencies, including a balance sheet revaluation, the effect of which is not expected to be sustained.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)~~

~~Europe~~


		Third Quarter								First Nine Months									First Quarter
Key Metrics	Key Metrics	2021			2022			H / (L)		2021			2022			H / (L)		Key Metrics	2022			2023			H / (L)
Market Share (%)		6.2		%	6.6		%	0.4 ppts		6.5		%	6.5		%	— ppts
Wholesale Units (000) (a)	Wholesale Units (000) (a)	218			273			55		678			749			71		Wholesale Units (000) (a)	663			706			43
Revenue ($M)	Revenue ($M)	$	6,066		$	6,757		$	691	$	18,726		$	19,428		$	702	Revenue ($M)	$	20,810		$	25,124		$	4,314
EBIT ($M)	EBIT ($M)	(52)			204			256		5			421			416		EBIT ($M)	1,328			2,623			1,295
EBIT Margin (%)	EBIT Margin (%)	(0.9)		%	3.0		%	3.9 ppts		0.0		%	2.2		%	2.2 ppts		EBIT Margin (%)	6.4		%	10.4		%	4.1 ppts

__________

(a)Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated ~~affiliate in Turkey~~affiliates (about ~~12,000~~128,000 units in ~~Q3 2021~~Q1 2022 and ~~18,000~~97,000 units in ~~Q3 2022)~~Q1 2023). ~~Revenue does not include these sales.~~


Change in EBIT by Causal Factor (in millions)
~~Third~~First Quarter ~~2021~~2022 EBIT	$	~~(52)~~1,328
Volume / Mix	~~306~~2,230
Net Pricing	~~793~~116
Cost	~~(781)~~(1,011)
Exchange	~~(139)~~(133)
Other	7793
~~Third~~First Quarter ~~2022~~2023 EBIT	$	~~204~~2,623

In ~~Europe, third~~the first quarter ~~2022~~of 2023, Ford Blue’s wholesales increased ~~25%~~6% from a year ago, ~~primarily reflecting reduced~~driven by improvements in production-related supply constraints (including semiconductors) ~~on production. Third~~. First quarter ~~2022~~2023 revenue increased ~~11%~~21%, driven by favorable mix as well as higher wholesales and net pricing, offset partially by weaker currencies.

~~Europe’s third~~Ford Blue’s first quarter ~~2022~~2023 EBIT was ~~$204 million,~~$2.6 billion, an ~~improvement~~increase of ~~$256 million~~$1.3 billion from a year ago, with an EBIT margin of ~~3.0%~~10.4%. The higher EBIT was driven by favorable mix as well as higher wholesales and net ~~pricing and wholesales, offset partially by~~pricing. Partial offsets included inflationary cost increases on ~~commodity, material,~~commodities, materials, and freight, higher material costs for new products, as well as higher volume-related structural costs, weaker currencies, and ~~weaker currencies.~~

higher warranty costs.

4035

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

~~China (Including Taiwan)~~Ford Model e Segment

Third Quarter First Nine Months
Key Metrics 2021 2022 H / (L) 2021 2022 H / (L)
Market Share (%) 2.5 % 2.0 % (0.5) ppts 2.3 % 2.2 % (0.2) ppts
Wholesale Units (000) (a) 162 137 (26) 463 378 (84)
Revenue ($M) $ 592 $ 432 $ (160) $ 1,966 $ 1,431 $ (535)
EBIT ($M) (39) (193) (154) (177) (367) (190)
EBIT Margin (%) (6.6) % (44.7) % (38.1) ppts (9.0) % (25.6) % (16.6) ppts
China Unconsolidated Affiliates
Wholesale Units (000) (b) 160 134 (27) 449 370 (79)
Ford Equity Income/(Loss) ($M) $ 77 $ 58 $ (19) $ 144 $ 175 $ 31


	First Quarter
Key Metrics	2022			2023			H / (L)
Wholesale Units (000)	18			12			(6)
Revenue ($M)	$	972		$	707		$	(265)
EBIT ($M)	(380)			(722)			(342)
EBIT Margin (%)	(39.1)		%	(102.1)		%	(63.0) ppts


Change in EBIT by Causal Factor (in millions)
First Quarter 2022 EBIT	$	(380)
Volume / Mix	(42)
Net Pricing	7
Cost	(380)
Exchange	34
Other	39
First Quarter 2023 EBIT	$	(722)

In the first quarter of 2023, Ford Model e’s wholesales decreased 32% from a year ago, driven by downtime at the Cuautitlan assembly plant for changes to increase production capacity of Mustang Mach-E. First quarter 2023 revenue decreased 27%, primarily driven by lower wholesales, offset partially by favorable mix.

Ford Model e’s first quarter 2023 EBIT loss was $722 million, a $342 million higher loss than a year ago, with an EBIT margin of negative 102.1%. The lower EBIT was driven by higher engineering and spending-related expense, inflationary cost increases on commodities and materials, and lower wholesales.

Ford Pro Segment


	First Quarter
Key Metrics	2022			2023			H / (L)
Wholesale Units (000) (a)	285			337			53
Revenue ($M)	$	10,324		$	13,249		$	2,925
EBIT ($M)	491			1,366			875
EBIT Margin (%)	4.8		%	10.3		%	5.6 ppts

__________

(a)Includes Ford brand vehicles produced and sold by our unconsolidated ~~affiliates. Revenue does not include these sales.~~

~~(b)Includes~~affiliate Ford Otosan in Türkiye (about 13,000 units in Q1 2022 and ~~Lincoln brand and JMC brand vehicles produced and sold~~22,000 units in ~~China and Ford brand vehicles produced in Taiwan by Lio Ho Group.~~Q1 2023).


Change in EBIT by Causal Factor (in millions)
~~Third~~First Quarter ~~2021~~2022 EBIT	$	~~(39)~~491
Volume / Mix	~~(63)~~497
Net Pricing	81,505
Cost	~~(25)~~(1,025)
Exchange	~~(33)~~
~~Other (Including Joint Ventures)~~	~~(41)~~
~~Third Quarter 2022 EBIT~~	$	~~(193)~~

In China, third quarter 2022 wholesales decreased 16% from a year ago, driven by lower commercial vehicle and compact segment sales. Third quarter 2022 revenue at our consolidated operations decreased 27%, primarily driven by lower component sales to our joint ventures in China.

China’s third quarter 2022 EBIT loss was $193 million, a $154 million higher loss than a year ago, with an EBIT margin of negative 44.7%. The EBIT decrease was driven by lower volume, weaker currencies, higher marketing expenses on new products, and lower profits at our joint ventures.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)~~

~~International Markets Group~~

Third Quarter First Nine Months
Key Metrics 2021 2022 H / (L) 2021 2022 H / (L)
Market Share (%) 1.8 % 1.4 % (0.4) ppts 1.8 % 1.2 % (0.5) ppts
Wholesale Units (000) (a) 66 86 20 235 201 (34)
Revenue ($M) $ 1,894 $ 2,782 $ 888 $ 6,604 $ 6,481 $ (123)
EBIT ($M) 125 229 104 530 385 (145)
EBIT Margin (%) 6.6 % 8.2 % 1.6 ppts 8.0 % 5.9 % (2.1) ppts

~~__________~~

~~(a)Includes Ford brand vehicles produced and sold by our unconsolidated affiliate in Russia (about 5,000 units in Q3 2021 and 0 units in Q3 2022). Revenue does not include these sales.~~


~~Change in EBIT by Causal Factor (in millions)~~
~~Third Quarter 2021 EBIT~~	$	~~125~~
~~Volume / Mix~~	~~167~~
~~Net Pricing~~	~~233~~
~~Cost~~	~~(239)~~
~~Exchange~~	~~(38)~~(58)
Other	~~(19)~~(44)
~~Third~~First Quarter ~~2022~~2023 EBIT	$	~~229~~1,366

In ~~our International Markets Group, third~~the first quarter ~~2022~~of 2023, Ford Pro’s wholesales increased ~~30%~~18% from a year ago, ~~primarily reflecting the positive impact of the next generation Ranger and Everest launches. Third~~driven by improvements in production-related supply constraints (including semiconductors). First quarter ~~2022~~2023 revenue increased ~~47%~~28%, driven by higher ~~wholesales and~~ net pricing and ~~favorable mix,~~wholesales, offset partially by weaker currencies.

~~Our International Markets Group’s third~~Ford Pro’s first quarter ~~2022~~2023 EBIT was ~~$229 million,~~$1.4 billion, an increase of ~~$104~~$875 million from a year ago, with an EBIT margin of ~~8.2%~~10.3%. The improvement in EBIT ~~increase~~ was driven by higher net pricing and ~~wholesales, offset partially by~~wholesales. Partial offsets included inflationary cost increases (including commodities), new Super Duty product and launch expense, as well as higher ~~material cost for our new products, inflationary increases on commodity, material,~~volume-related structural costs, weaker currencies, and ~~freight costs, and weaker currencies.~~

higher warranty costs.

4236

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Definitions and Information Regarding ~~Automotive~~Ford Blue, Ford Model e, Ford Pro Causal Factors

In general, we measure year-over-year change in ~~Automotive segment~~Ford Blue, Ford Model e, and Ford Pro EBIT using the causal factors listed below, with net pricing and cost variances calculated at present-period volume and mix and exchange:

•Market Factors (exclude the impact of unconsolidated affiliate wholesale units):

◦Volume and Mix – primarily measures EBIT variance from changes in wholesale unit volumes (at prior-year average contribution margin per unit) driven by changes in industry volume, market share, and dealer stocks, as well as the EBIT variance resulting from changes in product mix, including mix among vehicle lines and mix of trim levels and options within a vehicle line

◦Net Pricing – primarily measures EBIT variance driven by changes in wholesale unit prices to dealers and marketing incentive programs such as rebate programs, low-rate financing offers, special lease offers, and stock adjustments on dealer inventory

•Cost:

◦Contribution Costs – primarily measures EBIT variance driven by per-unit changes in cost categories that typically vary with volume, such as material costs (including commodity and component costs), warranty expense, and freight and duty costs

◦Structural Costs – primarily measures EBIT variance driven by absolute change in cost categories that typically do not have a directly proportionate relationship to production volume. Structural costs include the following cost categories:

▪Manufacturing, Including Volume-Related – consists primarily of costs for hourly and salaried manufacturing personnel, plant overhead (such as utilities and taxes), and new product launch expense. These costs could be affected by volume for operating pattern actions such as overtime, line-speed, and shift schedules

▪Engineering and Connectivity – consists primarily of costs for vehicle and software engineering personnel, prototype materials, testing, and outside engineering and software services

▪Spending-Related – consists primarily of depreciation and amortization of our manufacturing and engineering assets and capital project expense, but also includes asset retirements and operating leases

▪Advertising and Sales Promotions – includes costs for advertising, marketing programs, brand promotions, customer mailings and promotional events, and auto shows

▪Administrative, Information Technology, and Selling – includes primarily costs for salaried personnel and purchased services related to our staff activities, information technology, and selling functions

▪~~Pension and OPEB~~ –~~consists primarily of past service pension costs and other postretirement employee benefit costs~~

•Exchange – primarily measures EBIT variance driven by one or more of the following: (i) transactions denominated in currencies other than the functional currencies of the relevant entities, (ii) effects of converting functional currency income to U.S. dollars, (iii) effects of remeasuring monetary assets and liabilities of the relevant entities in currencies other than their functional currency, or (iv) results of our foreign currency hedging

•Other – includes a variety of items, such as parts and services earnings, royalties, government incentives, and compensation-related changes

In addition, definitions and calculations used in this report include:

•Wholesales and Revenue – wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that are sold to dealerships or others, units manufactured by Ford that are sold to other manufacturers, units distributed by Ford for other manufacturers, and local brand units produced by our China joint venture, Jiangling Motors Corporation, Ltd. (“JMC”), that are sold to dealerships ~~and Ford badged vehicles produced in Taiwan by Lio Ho Group.~~or others. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option (i.e., rental repurchase), as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), also are included in wholesale unit volumes. Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our ~~revenue~~revenue. Excludes transactions between Ford Blue, Ford Model e, and Ford Pro segments

•Industry Volume and Market Share – based, in part, on estimated vehicle registrations; includes medium and heavy duty trucks

•SAAR – seasonally adjusted annual rate

4337

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

~~Mobility~~Ford Next Segment

The ~~Mobility~~Ford Next segment (formerly Mobility) primarily includes ~~development costs~~expenses and investments for ~~Ford’s autonomous vehicles and related businesses, Ford’s equity ownership~~emerging business initiatives aimed at creating value for Ford in ~~Argo AI (a developer of autonomous driving systems), and other mobility businesses and investments.~~vehicle-adjacent market segments.

In ~~our Mobility~~this segment, our ~~third~~first quarter ~~2022~~2023 EBIT loss was ~~$244~~$44 million, a ~~$27~~$198 million improvement from a year ago. ~~The loss reflects our strategic investments~~Ford Next has evolved from primarily investing in ~~our~~the development of autonomous vehicle capabilities to focus exclusively on incubating and ~~support of our mobility initiatives.~~

Although Argo AI has made progress on developing highly automated driving technology (L4), to achieve commercially viable scale, Argo AI’s technology requires significant additional capital investment and time. In the third quarter of 2022, we made thelaunching new businesses creating strategic decision to shift our capital spending from L4 technology being developed by Argo AI to advanced L2/L3 systems, which we believe will ultimately be essential to achieve profitable commercialization of L4 autonomy at scale in the future. Additionally, because of the significant additional capital and time required to achieve commercialization of L4, as well as other macroeconomic factors, Argo AI has been unable to attract new investors. After performing external outreach in the third quarter to assess market interest in acquiring either Argo AI or its technology components and conducting internal reviews to evaluate opportunities to leverage Argo AI’s technology, Ford determined that Argo AI no longer has value as a going concern. As a result, we reassessed the carrying value of our investment in Argo AI as of September 30, 2022, and in October, Ford and VW initiated the process of exiting the joint development of L4 technology through Argo AI. Accordingly, in the third quarter of 2022, we recorded as a special item a $2.7 billion pre-tax impairment on our Argo AI investment, and on October 26, 2022, we announced that Argo AI plans to wind down operations.for Ford.

4438

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Ford Credit Segment

Ford Credit files periodic reports with the SEC that contain additional information regarding Ford Credit. The reports are available through Ford Credit’s website located at www.fordcredit.com/investor-center and can also be found on the SEC’s website located at www.sec.gov. The foregoing information regarding Ford Credit’s website and its content is for convenience only and not deemed to be incorporated by reference into this Report nor filed with the SEC.

The tables below provide ~~third~~first quarter ~~and year-to-date 2022~~2023 key metrics and the change in ~~third~~first quarter ~~2022~~2023 EBT compared with ~~third~~first quarter ~~2021~~2022 by causal factor for the Ford Credit segment. For a description of these causal factors, see Definitions and Information Regarding Ford Credit Causal Factors.


		Third Quarter									First Nine Months										First Quarter
Key Metrics	Key Metrics	2021			2022			H / (L)			2021			2022			H / (L)			Key Metrics	2022			2023			H / (L)
Total Net Receivables ($B)	Total Net Receivables ($B)	$	117		$	116		(1)		%	$	117		$	116		(1)		%	Total Net Receivables ($B)	$	117		$	124		6		%
Loss-to-Receivables (bps) (a)	Loss-to-Receivables (bps) (a)	—			18			18			5			10			5			Loss-to-Receivables (bps) (a)	8			35			27
Auction Values (b)	Auction Values (b)	$	30,350		$	30,305		—		%	$	26,715		$	30,635		15		%	Auction Values (b)	$	34,410		$	31,185		(9)		%
EBT ($M)	EBT ($M)	1,077			599			$	(478)		3,662			2,466			$	(1,196)		EBT ($M)	928			303			$	(625)
ROE (%)	ROE (%)	29		%	15		%	(14) ppts			32		%	21		%	(11) ppts			ROE (%)	22		%	8		%	(14) ppts

Other Balance Sheet Metrics	Other Balance Sheet Metrics																			Other Balance Sheet Metrics
Debt ($B)	Debt ($B)										$	119		$	108		(9)		%	Debt ($B)	$	116		$	120		4		%
Net Liquidity ($B)	Net Liquidity ($B)										33			21			(36)		%	Net Liquidity ($B)	28			26			(8)		%
Financial Statement Leverage (to 1)	Financial Statement Leverage (to 1)										9.6			9.4			(0.2)			Financial Statement Leverage (to 1)	9.5			9.8			0.3

__________

(a)U.S. retail financing only.

(b)U.S. 36-month off-lease ~~third~~first quarter auction values at ~~Q3 2022 mix and first nine months amounts at first nine months 2022~~Q1 2023 mix.


Change in EBT by Causal Factor (in millions)
~~Third~~First Quarter ~~2021~~2022 EBT	$	~~1,077~~928
Volume / Mix	~~(46)~~23
Financing Margin	~~(136)~~(288)
Credit Loss	~~(96)~~(141)
Lease Residual	~~(211)~~(139)
Exchange	~~(15)~~(8)
Other	26 (72)
~~Third~~First Quarter ~~2022~~2023 EBT	$	~~599~~303

Ford Credit’s total net receivables of ~~$116~~$124 billion were $1$7 billion ~~(1%) lower~~higher than a year ago, reflecting the impact of ~~currency exchange rates, lower~~increased non-consumer financing and consumer financing, ~~and~~partially offset by fewer operating ~~leases, offset partially by increased non-consumer financing.~~leases. The loss-to-receivables (“LTR”) ratio remained at a low level in the ~~third~~first quarter of ~~2022,~~2023, at 1835 basis points, though higher than a year ago as losses begin to normalize from historic lows. U.S. auction values in the ~~third~~first quarter of ~~2022~~2023 were ~~about flat~~lower compared to a year ago.

Ford Credit’s ~~third~~first quarter ~~2022~~2023 EBT of ~~$599~~$303 million was ~~$478~~$625 million lower than a year ago, primarily reflecting lower ~~lease residual gains driven by lower lease return volume, unfavorable changes in net~~ financing margin ~~and lower~~due to higher borrowing costs, higher credit losses, the non-recurrence of credit loss reserve releases, ~~offset partially by positive~~unfavorable lease residual performance, the non-recurrence of market valuation gains, and unfavorable market valuation adjustments to derivatives ~~which is included~~(included in ~~Other.~~Other).

4539

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Definitions and Information Regarding Ford Credit Causal Factors

In general, we measure year-over-year changes in Ford Credit’s EBT using the causal factors listed below:

•Volume and Mix:

◦Volume primarily measures changes in net financing margin driven by changes in average net receivables excluding the allowance for credit losses at prior period financing margin yield (defined below in financing margin) at prior period exchange rates. Volume changes are primarily driven by the volume of new and used vehicles sold and leased, the extent to which Ford Credit purchases retail financing and operating lease contracts, the extent to which Ford Credit provides wholesale financing, the sales price of the vehicles financed, the level of dealer inventories, Ford-sponsored special financing programs available exclusively through Ford Credit, and the availability of cost-effective funding

◦Mix primarily measures changes in net financing margin driven by period-over-period changes in the composition of Ford Credit’s average net receivables excluding the allowance for credit losses by product within each region

•Financing Margin:

◦Financing margin variance is the period-to-period change in financing margin yield multiplied by the present period average net receivables excluding the allowance for credit losses at prior period exchange rates. This calculation is performed at the product and country level and then aggregated. Financing margin yield equals revenue, less interest expense and scheduled depreciation for the period, divided by average net receivables excluding the allowance for credit losses for the same period

◦Financing margin changes are driven by changes in revenue and interest expense. Changes in revenue are primarily driven by the level of market interest rates, cost assumptions in pricing, mix of business, and competitive environment. Changes in interest expense are primarily driven by the level of market interest rates, borrowing spreads, and asset-liability management

•Credit Loss:

◦Credit loss is the change in the provision for credit losses at prior period exchange rates. For analysis purposes, management splits the provision for credit losses into net charge-offs and the change in the allowance for credit losses

◦Net charge-off changes are primarily driven by the number of repossessions, severity per repossession, and recoveries. Changes in the allowance for credit losses are primarily driven by changes in historical trends in credit losses and recoveries, changes in the composition and size of Ford Credit’s present portfolio, changes in trends in historical used vehicle values, and changes in forward looking macroeconomic conditions. For additional information, refer to the “Critical Accounting Estimates - Allowance for Credit Losses” section of Item 7 of Part II of our ~~2021~~2022 Form 10-K Report

•Lease Residual:

◦Lease residual measures changes to residual performance at prior period exchange rates. For analysis purposes, management splits residual performance primarily into residual gains and losses, and the change in accumulated supplemental depreciation

◦Residual gain and loss changes are primarily driven by the number of vehicles returned to Ford Credit and sold, and the difference between the auction value and the depreciated value (which includes both base and accumulated supplemental depreciation) of the vehicles sold. Changes in accumulated supplemental depreciation are primarily driven by changes in Ford Credit’s estimate of the expected auction value at the end of the lease term and changes in Ford Credit’s estimate of the number of vehicles that will be returned to it and sold. ~~Accumulated depreciation reflects~~Depreciation on vehicles subject to operating leases includes early termination losses on operating leases due to customer default events. For additional information, refer to the “Critical Accounting Estimates - Accumulated Depreciation on Vehicles Subject to Operating Leases” section of Item 7 of Part II of our ~~2021~~2022 Form 10-K Report

•Exchange:

◦Reflects changes in EBT driven by the effects of converting functional currency income to U.S. dollars

•Other:

◦Primarily includes operating expenses, other revenue, insurance expenses, and other income/(loss) at prior period exchange rates

◦Changes in operating expenses are primarily driven by salaried personnel costs, facilities costs, and costs associated with the origination and servicing of customer contracts

◦In general, other income/(loss) changes are primarily driven by changes in earnings related to market valuation adjustments to derivatives (primarily related to movements in interest rates) and other miscellaneous items

4640

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

In addition, the following definitions and calculations apply to Ford Credit when used in this ~~report:~~Report:

•Cash (as shown in the Funding Structure and Liquidity tables) – Cash, cash equivalents, and marketable securities, excluding amounts related to insurance activities

•Debt (as shown in the Key Metrics and Leverage tables) – Debt on Ford Credit’s balance sheets. Includes debt issued in securitizations and payable only out of collections on the underlying securitized assets and related enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions

•Earnings Before Taxes (“EBT”) – Reflects Ford Credit’s income before income taxes

•Loss-to-Receivables (“LTR”) Ratio – LTR ratio is calculated using net charge-offs divided by average finance receivables, excluding unearned interest supplements and the allowance for credit losses

•Return on Equity (“ROE”) (as shown in the Key Metrics table) – Reflects return on equity calculated by annualizing net income for the period and dividing by monthly average equity for the period

•Securitization and Restricted Cash (as shown in the Liquidity table) – Securitization cash is held for the benefit of the securitization investors (for example, a reserve fund). Restricted cash primarily includes cash held to meet certain local governmental and regulatory reserve requirements and cash held under the terms of certain contractual agreements

•Securitizations (as shown in the Public Term Funding Plan table) – Public securitization transactions, Rule 144A offerings sponsored by Ford Credit, and widely distributed offerings by Ford Credit Canada

•Term Asset-Backed Securities (as shown in the Funding Structure table) – Obligations issued in securitization transactions that are payable only out of collections on the underlying securitized assets and related enhancements

•Total Net Receivables (as shown in the Key Metrics table) – Includes finance receivables (retail financing and wholesale) sold for legal purposes and net investment in operating leases included in securitization transactions that do not satisfy the requirements for accounting sale treatment. These receivables and operating leases are reported on Ford Credit’s balance sheets and are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations of Ford Credit or the claims of Ford Credit’s other creditors

4741

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Corporate Other

Corporate Other primarily includes corporate governance expenses, past service pension and OPEB income and expense, interest income (excluding Ford Credit interest income and interest earned on our extended service contract ~~portfolio that is included in our Automotive segment)~~portfolio) and gains and losses from our cash, cash equivalents, and marketable securities (excluding gains and losses on investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, that are not allocated to operating segments. These include expenses related to setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. In the ~~third~~first quarter of ~~2022,~~2023, Corporate Other had a ~~$250~~$147 million loss, compared with a ~~$269~~$201 million ~~loss~~profit a year ago. The ~~improvement~~loss was driven by lower past service pension and OPEB income, which was partially offset by higher ~~Automotive~~Company excluding Ford Credit interest income due to increases in interest rates (primarily Fed Funds).

Interest on Debt

Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was ~~$321~~$308 million in the ~~third~~first quarter of ~~2022, $118 million lower than~~2023, unchanged from a year ~~ago, primarily explained by U.S. debt restructuring actions undertaken during the fourth quarter of 2021 and third quarter of 2022.~~ago.

Taxes

Our Provision for/(Benefit from) income taxes for the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 was a ~~benefit~~provision of ~~$195~~$496 million, ~~and $771 million, respectively. This resulted~~resulting in an effective tax ~~rates~~rate of ~~17.3% and 18.4%, respectively.~~23.0%.

Our ~~third~~first quarter ~~and first nine months of 2022~~2023 adjusted effective tax ~~rates,~~rate, which ~~exclude~~excludes special items, ~~were 23.5% and 21.7%, respectively.~~was 20.8%.

We regularly review our organizational structure and income tax elections for affiliates in non-U.S. and U.S. tax jurisdictions, which may result in changes in affiliates that are included in or excluded from our U.S. tax return. Any future changes to our structure, as well as any changes in income tax laws in the countries that we operate, could cause increases or decreases to our deferred tax balances and related valuation allowances.

4842

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

LIQUIDITY AND CAPITAL RESOURCES

At ~~September 30, 2022,~~March 31, 2023, total balance sheet cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was ~~$40.3~~$39.7 billion.

We consider our key balance sheet metrics to be: (i) Company cash, which includes cash equivalents, marketable securities, and restricted cash, including cash held for sale, excluding Ford Credit’s cash, cash equivalents, marketable securities, and restricted cash; and (ii) Company liquidity, which includes Company cash, less restricted cash, and total available committed credit lines, excluding Ford Credit’s total available committed credit lines.

Company excluding Ford Credit


		December 31, 2021		September 30, 2022			December 31, 2022		March 31, 2023
Balance Sheets ($B)	Balance Sheets ($B)					Balance Sheets ($B)
Company Cash	Company Cash	$	36.5	$	32.0	Company Cash	$	32.3	$	28.7
Liquidity	Liquidity	52.4		49.2		Liquidity	48.0		46.2
Debt	Debt	(20.4)		(20.3)		Debt	(19.9)		(19.7)
Cash Net of Debt	Cash Net of Debt	16.1		11.8		Cash Net of Debt	12.3		9.0

Pension Funded Status ($B) (a)	Pension Funded Status ($B) (a)					Pension Funded Status ($B) (a)
Funded Plans	Funded Plans	$	5.8	$	7.2	Funded Plans	$	4.1	$	4.1
Unfunded Plans	Unfunded Plans	(6.1)		(6.0)		Unfunded Plans	(4.3)		(4.3)
Total Global Pension	Total Global Pension	$	(0.3)	$	1.2	Total Global Pension	$	(0.2)	$	(0.2)

Total Funded Status OPEB	Total Funded Status OPEB	$	(6.0)	$	(5.8)	Total Funded Status OPEB	$	(4.5)	$	(4.4)

__________

(a)Balances at ~~September 30, 2022~~March 31, 2023 reflect net funded status at December 31, ~~2021,~~2022, updated for service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. The discount rate and rate of expected return assumptions are unchanged from year-end ~~2021.~~2022.

Liquidity. One of our key priorities is to maintain a strong balance sheet, while at the same time having resources available to invest in and grow our business. At ~~September 30, 2022,~~March 31, 2023, we had Company cash of ~~$32.0~~$28.7 billion and liquidity of ~~$49.2 billion, including approximately $800 million of Rivian marketable securities. In the third quarter, we sold approximately 52 million of our Rivian shares resulting in proceeds of~~$46.2 billion. At March 31, 2023, about ~~$1.8 billion. As marketable securities increase or decrease in value, Company cash and liquidity will likewise increase or decrease. At September 30, 2022, about 91%~~90% of Company cash was held by consolidated entities domiciled in the United States.

To be prepared for an economic downturn, we target an ongoing Company cash balance at or above $20 billion plus significant additional liquidity above our Company cash target. We expect to have periods when we will be above or below this amount due to: (i) future cash flow expectations, such as for investments in future opportunities, capital investments, debt maturities, pension contributions, or restructuring requirements, (ii) short-term timing differences, and (iii) changes in the global economic environment.

Our Company cash investments ~~(excluding the Rivian marketable securities)~~ primarily include U.S. Department of Treasury obligations, federal agency securities, bank time deposits with investment-grade institutions, investment-grade corporate securities, investment-grade commercial paper, and debt obligations of a select group of non-U.S. governments, non-U.S. governmental agencies, and supranational institutions. The average maturity of these investments is approximately one year and adjusted based on market conditions and liquidity needs. We monitor our Company cash levels and average maturity on a daily basis.

4943

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Material Cash Requirements. Our material cash requirements include:

•Capital expenditures (for additional information, see the “Changes in Company Cash” section below) and other payments for engineering, software, product development, and implementation of our plans for battery electric vehicles

•Purchase of raw materials and components to support the manufacturing and sale of vehicles (including electric vehicles), parts, and accessories (for additional information, see the Aggregate Contractual Obligations table and the accompanying description of our “Purchase obligations” in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 of our ~~2021~~2022 Form 10-K Report)

•Marketing incentive payments to dealers

•Payments for warranty and field service actions (for additional information, see Note 2120 of the Notes to the Financial Statements herein)

•Debt repayments (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 19 of the Notes the Financial Statements in our ~~2021~~2022 Form 10-K Report)

•Discretionary and mandatory payments to our global pension plans (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 of our ~~2021~~2022 Form 10-K Report, the “Changes in Company Cash” section below, and Note 1413 of the Notes to the Financial Statements herein)

•Employee wages, benefits, and incentives

•Operating lease payments (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 18 of the Notes to the Financial Statements in our ~~2021~~2022 Form 10-K Report)

•Cash effects related to the ~~global redesign~~restructuring of our business ~~(for additional information, see the “Changes in Company Cash” section below)~~

•Strategic acquisitions and investments to grow our business, including electrification

Subject to approval by our Board of Directors, shareholder distributions in the form of dividend payments and/or a share repurchase program (including share repurchases to offset the anti-dilutive effect of increased shared-based compensation) may require the expenditure of a material amount of cash. Moreover, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions, and other matters.

We plan to utilize our liquidity (as described above) and our cash flows from business operations to fund our material cash requirements.

5044

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Changes in Company Cash. In managing our business, we classify changes in Company cash into operating and non-operating items. Operating items include: Company adjusted EBIT excluding Ford Credit EBT, capital spending, depreciation and tooling amortization, changes in working capital, Ford Credit distributions, interest on debt, cash taxes, and all other and timing differences (including timing differences between accrual-based EBIT and associated cash flows). Non-operating items include: ~~global redesign (including separation payments),~~restructuring costs, changes in Company debt excluding Ford Credit, contributions to funded pension plans, shareholder distributions, and other items (including gains and losses on investments in equity securities, acquisitions and divestitures, equity investments, and other transactions with Ford Credit).

With respect to “Changes in working capital,” in general, ~~we carry~~the Company excluding Ford Credit carries relatively low ~~Automotive segment~~ trade receivables compared with our trade payables because the majority of our ~~Automotive~~ wholesales are financed (primarily by Ford Credit) immediately upon the sale of vehicles to dealers, which generally occurs shortly after being produced. In contrast, our ~~Automotive~~ trade payables are based primarily on industry-standard production supplier payment terms of about 45 days. As a result, our cash flow deteriorates if wholesale volumes (and the corresponding revenue) decrease while trade payables continue to become due. Conversely, our cash flow improves if wholesale volumes (and the corresponding revenue) increase while new trade payables are generally not due for about 45 days. For example, the suspension of production at most of our assembly plants and lower industry volumes due to COVID-19 in early 2020 resulted in an initial deterioration of our cash flow, while the subsequent resumption of manufacturing operations and return to pre-COVID-19 production levels at most of our assembly plants resulted in a subsequent improvement of our cash flow. Even in normal economic conditions, however, these working capital balances generally are subject to seasonal changes that can impact cash flow. For example, we typically experience cash flow timing differences associated with inventories and payables due to our annual summer and December shutdown periods when production, and therefore inventories and wholesale volumes, are usually at their lowest levels, while payables continue to come due and be paid. The net impact of this typically results in cash outflows from changes in our working capital balances during these shutdown periods.

Our finished product inventory ~~includes vehicles completed but awaiting installation of components, including semiconductors. As a result of the shortage, our inventory is~~at March 31, 2023 was higher than ~~in periods prior to the supply shortage.~~at December 31, 2022, reflecting higher in-transit and in-plant inventory.

In response to, or in anticipation of, supplier disruptions, we may stockpile certain components or raw materials to help prevent disruption in our production of vehicles. Such actions could have a short-term adverse impact on our cash and increase our inventory. Moreover, in order to secure critical materials for production of electric vehicles, we have entered into and plan to continue to enter into offtake agreements with raw material suppliers and make investments in certain raw material and battery suppliers, including contributing up to $6.6 billion in capital to BlueOval SK, LLC over a five-year period ending in 2026. Such investments, which are part of our plan to invest over $50 billion in electric vehicles through 2026, could have an additional adverse impact on our cash in the near-term.

The terms of the offtake agreements we have entered into, and those we may enter into in the future, vary by transaction, though they generally obligate us to purchase a certain percentage or minimum amount of output produced by the counterparty over an agreed upon period of time. The purchase price mechanism included in the offtake agreement is typically based on the market price of the material at the time of ~~delivery or an agreed upon formula or market index.~~delivery. The terms may also include conditions to our obligation to purchase the materials, such as quality or minimum output. Subject to satisfaction of those conditions, we will be obligated to purchase the materials at the cost determined by the purchase price mechanism. As of March 31, 2023, our forecasted expenditures for the maximum quantity that we are committed to purchase under these offtake agreements, subject to certain conditions, total about $4.3 billion through 2030 based on our present pricing forecast; however, our forecasted prices could fluctuate significantly from period to period, which would result in volatility in the estimate of our overall obligation. In addition, we plan to continue to enter into offtake agreements with raw material suppliers, the costs under which we expect to be significant. Based on the offtake agreements we have entered into thus far, the earliest date by which we could be obligated to purchase any output, subject to satisfaction of the applicable conditions, will be in 2024.

Financial institutions participate in a supply chain finance (“SCF”) program that enables our suppliers, at their sole discretion, to sell their Ford receivables (i.e., our payment obligations to the suppliers) to the financial institutions on a non-recourse basis in order to be paid earlier than our payment terms provide. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms, the amounts we pay, or our liquidity. We have no economic interest in a supplier’s decision to participate in the SCF program, and we ~~have no direct financial relationship with the SCF financial institutions. Moreover, we~~ do not provide any guarantees in connection with ~~the SCF program.~~it. As of ~~September 30, 2022,~~March 31, 2023, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was ~~$228~~$265 million. The amount settled through the SCF program during the first ~~nine months~~quarter of ~~2022~~2023 was ~~$971~~$452 million.

5145

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Changes in Company cash excluding Ford Credit are summarized below (in billions):


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Company Excluding Ford Credit	Company Excluding Ford Credit									Company Excluding Ford Credit
Company Adjusted EBIT excluding Ford Credit (a)	Company Adjusted EBIT excluding Ford Credit (a)	$	1.9	$	1.2	$	4.3	$	5.4	Company Adjusted EBIT excluding Ford Credit (a)	$	1.4	$	3.1

Capital spending	Capital spending	$	(1.6)	$	(1.6)	$	(4.4)	$	(4.5)	Capital spending	$	(1.3)	$	(1.8)
Depreciation and tooling amortization	Depreciation and tooling amortization	1.3		1.3		3.8		3.9		Depreciation and tooling amortization	1.3		1.3
Net spending	Net spending	$	(0.3)	$	(0.3)	$	(0.6)	$	(0.6)	Net spending	$	(0.1)	$	(0.5)

Receivables	Receivables	$	(0.1)	$	(0.1)	$	(0.7)	$	(0.6)	Receivables	$	—	$	0.4
Inventory	Inventory	(0.2)		(1.7)		(3.2)		(4.1)		Inventory	(2.7)		(2.0)
Trade Payables	Trade Payables	4.1		3.9		1.1		5.9		Trade Payables	1.5		0.3
Changes in working capital	Changes in working capital	$	3.8	$	2.2	$	(2.8)	$	1.1	Changes in working capital	$	(1.2)	$	(1.2)

Ford Credit distributions	Ford Credit distributions	$	1.5	$	0.5	$	6.5	$	2.1	Ford Credit distributions	1.0		—
Interest on debt and cash taxes	Interest on debt and cash taxes	(0.4)		(0.3)		(1.5)		(1.2)		Interest on debt and cash taxes	(0.3)		(0.6)
All other and timing differences	All other and timing differences	1.2		0.3		(3.6)		(0.2)		All other and timing differences	(1.3)		(0.1)
Company adjusted free cash flow (a)	Company adjusted free cash flow (a)	$	7.8	$	3.6	$	2.3	$	6.6	Company adjusted free cash flow (a)	$	(0.6)	$	0.7

Global Redesign (including separations)		$	(0.3)	$	(0.2)	$	(1.6)	$	—
Restructuring										Restructuring	$	(0.1)	$	—
Changes in debt	Changes in debt	(0.2)		1.0		1.8		0.1		Changes in debt	(0.3)		(0.2)
Funded pension contributions	Funded pension contributions	(0.2)		(0.1)		(0.6)		(0.5)		Funded pension contributions	(0.2)		(0.1)
Shareholder distributions	Shareholder distributions	—		(0.6)		—		(1.4)		Shareholder distributions	(0.4)		(3.2)
All other (b)	All other (b)	(0.7)		(0.3)		(1.1)		(9.3)		All other (b)	(6.2)		(0.7)
Change in cash	Change in cash	$	6.4	$	3.3	$	0.7	$	(4.5)	Change in cash	$	(7.8)	$	(3.6)

__________

(a)See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP.

(b)~~Includes~~2022 includes a ~~$0.6 billion gain and a $7.3 billion~~$5.4B mark-to-market loss on our Rivian ~~investment in the third quarter and first nine months of 2022, respectively.~~investment.

Note: Numbers may not sum due to rounding.

Our ~~third~~first quarter ~~2022~~2023 Net cash provided by/(used in) operating activities was positive ~~$3.8~~$2.8 billion, ~~a decrease~~an increase of ~~$3.2~~$3.9 billion from a year ago (see page 6458 for additional information), driven primarily by ~~lower~~higher net ~~income, higher inventory, and less favorable timing differences.~~income. Company adjusted free cash flow was ~~$3.6~~$0.7 billion, ~~$4.2~~$1.3 billion ~~lower~~higher than a year ago, driven by higher ~~inventory,~~adjusted EBIT excluding Ford Credit and favorable timing differences, offset partially by lower Ford Credit distributions ~~less favorable timing differences,~~ and ~~lower adjusted EBIT.~~higher capital spending.

Capital spending was ~~$1.6~~$1.8 billion in the ~~third~~first quarter of ~~2022, unchanged~~2023, an increase of $0.4 billion from a year ago. We ~~now~~continue to expect full year ~~2022~~2023 capital spending to be ~~about $6.5~~in the range of $8 billion to $9 billion.

~~Third~~First quarter ~~2022~~2023 working capital impact was ~~$2.2~~$1.2 billion ~~positive,~~negative, driven by higher inventory, offset partially by higher trade payables ~~partially offset by higher inventory,~~and lower receivables, each compared to ~~June 30,~~December 31, 2022. All other and timing differences were ~~positive $0.3 billion, reflecting assorted~~negative $0.1 billion. Timing differences ~~including~~include differences between accrual-based EBIT and the associated cash flows (e.g., pension and OPEB income or expense; compensation payments; marketing incentive and warranty payments to dealers).

In the ~~third~~first quarter of ~~2022,~~2023, we contributed ~~$130~~$125 million to our global funded pension plans. We continue to expect to contribute ~~about~~between $500 million and $600 million to our global funded pension plans in ~~2022.~~2023.

Shareholder distributions were ~~$603 million~~$3.2 billion in the ~~third~~first quarter of ~~2022,~~2023, all of which was attributable to our regular ~~quarterly~~and supplemental dividend. On October 26, 2022, we announced that we are reinstating a modest anti-dilutive share repurchase program to offset the dilutive effect of share-based compensation. The plan authorizes repurchases of up to 35 million shares of Ford Common Stock.

We previously announced our plan for the global redesign of our business, pursuant to which we are working to turn around automotive operations, compete like a challenger, and capitalize on our strengths by allocating more capital, more resources, and more talent to our strongest businesses and vehicle franchises. Beginning with the actions we took in 2018, we expect our global redesign to have a potential cash effect of about $6 billion through 2023. The cash effect related to our global redesign activities was $3.6 billion through September 30, 2022.

5246

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Available Credit Lines. Total Company committed credit lines, excluding Ford Credit, at ~~September 30, 2022~~March 31, 2023 were ~~$19.1~~$19.3 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $1.75 billion of our 364-day revolving credit facility, and ~~$1.9~~$2.1 billion of local credit facilities. At ~~September 30, 2022,~~March 31, 2023, the utilized portion of the corporate credit facility was ~~$25~~$17 million, representing amounts utilized for letters of ~~credit, and the utilized portion of our 364-day revolving credit facility was $350 million.~~credit. In addition, ~~$1.6~~$1.7 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of ~~September 30, 2022.~~March 31, 2023.

~~Lenders under our~~Our corporate, supplemental, and 364-day revolving credit facilities were amended as of April 26, 2023 to extend the maturity dates of the commitments under each facility. Following the corporate credit facility ~~have~~amendment, $3.4 billion of commitments ~~maturing~~mature on ~~June 23, 2025~~April 26, 2026 and $10.1 billion of commitments ~~maturing~~mature on ~~June 23, 2027. Lenders under our~~April 26, 2028. Following the supplemental revolving credit facility ~~have~~amendment, $0.1 billion of commitments ~~maturing~~mature on September 29, 2024 and $1.9 billion of commitments ~~maturing~~mature on ~~June 23, 2025. Lenders under our~~April 26, 2026. Following the 364-day revolving credit facility ~~have $1.75~~amendment, $1.8 billion of commitments ~~maturing~~mature on ~~June 22, 2023.~~April 24, 2024.

The corporate, supplemental, and 364-day credit agreements include certain sustainability-linked targets, pursuant to which the applicable margin and facility fees may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, renewable electricity consumption, and Ford Europe CO2 tailpipe emissions.

~~On October 26, 2022, Ford amended its 364-day revolving credit facility to provide for the designation of domestic subsidiary borrowers and designated Ford Credit as a subsidiary borrower.~~

The corporate credit facility is unsecured and free of material adverse change conditions to borrowing, restrictive financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and minimum net worth requirements), and credit rating triggers that could limit our ability to obtain funding or trigger early repayment. The corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4 billion in aggregate of domestic cash, cash equivalents, and loaned and marketable securities and/or availability under the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility. The terms and conditions of the supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility. Ford Credit has been designated as a subsidiary borrower under the corporate credit facility and the 364-day revolving credit facility.

Each of the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility include a covenant that requires us to provide guarantees from certain of our subsidiaries in the event that our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P. The following subsidiaries have provided unsecured guarantees to the lenders under the credit facilities: Ford Component Sales, LLC; Ford European Holdings ~~LLC;~~Inc.; Ford Global Technologies, LLC; Ford Holdings LLC (the parent company of Ford Credit); Ford International Capital LLC; Ford Mexico Holdings LLC; Ford Motor Service Company; Ford Next LLC; Ford ~~Smart Mobility~~Trading Company, LLC; and Ford ~~Trading Company, LLC.~~Van Dyke Investment Fund, Inc.

Debt. As shown in Note 1514 of the Notes to the Financial Statements, at ~~September 30, 2022,~~March 31, 2023, Company debt excluding Ford Credit was ~~$20.3~~$19.7 billion. This balance is $0.2 billion ~~$100 million~~ lower than at December 31, ~~2021 and $900 million higher than at June 30,~~ 2022. The increase from the end of the second quarter primarily reflects our $600 million retail bond and $1.8 billion green bond issuances in August, partially offset by our redemption of $1.1 billion of higher-coupon debt and $400 million repayment under our 364-day revolving credit facility in September.

Leverage. We manage Company debt (excluding Ford Credit) levels with a leverage framework that targets investment grade credit ratings through a normal business cycle. The leverage framework includes a ratio of total Company debt (excluding Ford Credit), underfunded pension liabilities, operating leases, and other adjustments, divided by Company adjusted EBIT (excluding Ford Credit EBT), and further adjusted to exclude depreciation and tooling amortization (excluding Ford Credit).

Ford Credit’s leverage is calculated as a separate business as described in the ”Liquidity and Capital Resources - Ford Credit Segment” section of Item 2. Ford Credit is self-funding and its debt, which is used to fund its operations, is separate from our Company debt excluding Ford Credit.

5347

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Ford Credit Segment

Ford Credit remains well capitalized with a strong balance sheet and funding diversified across platforms and markets. Ford Credit saw sequential improvement in liquidity, securitized funding mix, and financial statement leverage during the quarter and ended the ~~third~~first quarter of ~~2022~~2023 with ~~$20.9~~$26 billion of ~~liquidity. During the quarter,~~liquidity, up $5 billion from year-end. Ford Credit ~~completed $2~~continues to have robust access to the capital markets, completing $12 billion of public term ~~funding.~~issuances through May 1, 2023.

Key elements of Ford Credit’s funding strategy include:

•Maintain strong liquidity and funding diversity

•Prudently access public markets

•Continue ~~growth of~~to leverage retail ~~deposits~~deposit funding in Europe

•Flexibility to increase ABS mix as needed; preserving assets and committed capacity

•Target financial statement leverage of 9:1 to 10:1

•Maintain self-liquidating balance sheet

Ford Credit’s liquidity profile continues to be diverse, robust, and focused on maintaining liquidity levels that meet its business and funding requirements. Ford Credit regularly stress tests its balance sheet and liquidity to ensure that it can continue to meet its financial obligations through economic cycles.

The following table shows funding for Ford Credit’s net receivables (in billions):


		September 30, 2021			December 31, 2021			September 30, 2022				March 31, 2022			December 31, 2022			March 31, 2023
Funding Structure	Funding Structure										Funding Structure
Term unsecured debt	Term unsecured debt	$	62.0		$	59.4		$	46.4		Term unsecured debt	$	55.1		$	48.3		$	49.3
Term asset-backed securities	Term asset-backed securities	45.1			45.4			48.9			Term asset-backed securities	47.1			56.4			55.0
Ford Interest Advantage / Retail Deposits	Ford Interest Advantage / Retail Deposits	11.9			12.9			12.7			Ford Interest Advantage / Retail Deposits	13.3			14.3			15.3
Other	Other	(0.6)			(0.2)			3.6			Other	1.7			2.6			2.2
Equity	Equity	12.4			12.4			11.4			Equity	12.1			11.9			12.2
Adjustments for cash	Adjustments for cash	(14.3)			(12.4)			(7.5)			Adjustments for cash	(11.9)			(11.2)			(10.2)
Total Net Receivables	Total Net Receivables	$	116.5		$	117.5		$	115.5		Total Net Receivables	$	117.4		$	122.3		$	123.8

Securitized Funding as Percent of Total Debt	Securitized Funding as Percent of Total Debt	37.9		%	38.5		%	45.3		%	Securitized Funding as Percent of Total Debt	40.8		%	47.4		%	46.0		%

Net receivables were ~~$115.5~~$123.8 billion at ~~September 30, 2022~~March 31, 2023 and were funded primarily with term unsecured debt and term asset-backed securities. Securitized funding as a percent of total debt was ~~45.3%~~46.0% at the end of the ~~third~~first quarter of ~~2022.~~2023.

Public Term Funding Plan. The following table shows Ford Credit’s issuances for full year ~~2020~~2021 and ~~2021,~~2022, planned issuances for full year ~~2022,~~2023, and its global public term funding issuances through ~~October 25, 2022,~~May 1, 2023, excluding short-term funding programs (in billions):


		2020 Actual		2021 Actual		2022 Forecast	Through October 25			2021 Actual		2022 Actual		2023 Forecast	Through May 1
Unsecured	Unsecured	$	14	$	5	$ 5 - 7	$	5	Unsecured	$	5	$	6	$ 10 - 13	$	6
Securitizations (a)	Securitizations (a)	13		9		9 - 10	8		Securitizations (a)	9		10		11 - 14	6
Total public	Total public	$	27	$	14	$ 14 - 17	$	13	Total public	$	14	$	16	$ 21 - 27	$	12

__________

(a)See Definitions and Information Regarding Ford Credit Causal Factors section.

For ~~2022,~~2023, Ford Credit now projects full year public term funding in the range of ~~$14~~$21 billion to ~~$17~~$27 billion. ~~Through October 25, 2022, Ford Credit has completed $13 billion of public term issuances.~~

5448

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Liquidity. The following table shows Ford Credit’s liquidity sources and utilization (in billions):


		September 30, 2021		December 31, 2021		September 30, 2022			March 31, 2022		December 31, 2022		March 31, 2023
Liquidity Sources (a)	Liquidity Sources (a)							Liquidity Sources (a)
Cash	Cash	$	14.3	$	12.4	$	7.5	Cash	$	11.9	$	11.2	$	10.2
Committed asset-backed facilities	Committed asset-backed facilities	37.7		37.1		34.2		Committed asset-backed facilities	36.1		37.4		40.5
Other unsecured credit facilities	Other unsecured credit facilities	2.7		2.7		2.1		Other unsecured credit facilities	2.8		2.3		2.5
Total liquidity sources	Total liquidity sources	$	54.7	$	52.2	$	43.8	Total liquidity sources	$	50.8	$	50.9	$	53.2

Utilization of Liquidity (a)	Utilization of Liquidity (a)							Utilization of Liquidity (a)
Securitization and restricted cash	Securitization and restricted cash	$	(6.1)	$	(3.9)	$	(2.7)	Securitization and restricted cash	$	(3.0)	$	(2.9)	$	(3.0)
Committed asset-backed facilities	Committed asset-backed facilities	(11.5)		(12.5)		(20.0)		Committed asset-backed facilities	(17.0)		(26.6)		(24.0)
Other unsecured credit facilities	Other unsecured credit facilities	(0.4)		(1.0)		(0.5)		Other unsecured credit facilities	(0.4)		(0.8)		(0.4)
Total utilization of liquidity	Total utilization of liquidity	$	(18.0)	$	(17.4)	$	(23.2)	Total utilization of liquidity	$	(20.4)	$	(30.3)	$	(27.4)

Gross liquidity	Gross liquidity	$	36.7	$	34.8	$	20.6	Gross liquidity	$	30.4	$	20.6	$	25.8
Asset-backed capacity in excess of eligible receivables and other adjustments	Asset-backed capacity in excess of eligible receivables and other adjustments	(3.7)		(2.8)		0.3		Asset-backed capacity in excess of eligible receivables and other adjustments	(2.0)		0.4		0.2
Net liquidity available for use	Net liquidity available for use	$	33.0	$	32.0	$	20.9	Net liquidity available for use	$	28.4	$	21.0	$	26.0

__________

(a)See Definitions and Information Regarding Ford Credit Causal Factors section.

Ford Credit’s net liquidity available for use will fluctuate quarterly based on factors including near-term debt maturities, receivable growth and decline, and timing of funding transactions. At ~~September 30, 2022,~~March 31, 2023, Ford Credit’s net liquidity available for use was ~~$20.9~~$26 billion, ~~$11.1~~$5 billion ~~lower~~higher than year-end ~~2021. Ford Credit’s net liquidity remains robust, while~~2022, reflecting ~~a smaller balance sheet~~strong access to public funding markets and ~~lower near-term debt maturities following Ford Credit’s $3~~the addition of $3.1 billion ~~debt repurchase completed~~ in ~~the second quarter of 2022.~~committed asset-backed capacity. At ~~September 30, 2022,~~March 31, 2023, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled ~~$43.8~~$53.2 billion, ~~down $8.4~~up $2.3 billion from year-end ~~2021. Ford Credit continues to be well capitalized with a strong balance sheet.~~2022.

Material Cash Requirements. Ford Credit’s material cash requirements include: (1) the purchase of retail financing and operating lease contracts from dealers and providing wholesale financing for dealers to finance new and used vehicles; and (2) debt repayments (for additional information on debt, see the ~~“Balance Sheet Liquidity Profile” section below and the~~ “Aggregate Contractual Obligations” table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 19 of the Notes to the Financial Statements in our ~~2021~~2022 Form 10-K Report). In addition, subject to approval by Ford Credit’s Board of Directors, shareholder distributions may require the expenditure of a material amount of cash. Moreover, Ford Credit may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions, and other matters.

Ford Credit plans to utilize its liquidity (as described above) and its cash flows from business operations to fund its material cash requirements.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)~~

~~Balance Sheet Liquidity Profile.~~ Ford Credit defines its balance sheet liquidity profile as the cumulative maturities, including the impact of expected prepayments and allowance for credit losses, of its finance receivables, investment in operating leases, and cash, less the cumulative debt maturities over upcoming annual periods. Ford Credit’s balance sheet is inherently liquid because of the short-term nature of its finance receivables, investment in operating leases, and cash. Ford Credit ensures its cumulative debt maturities have a longer tenor than its cumulative asset maturities. This positive maturity profile is intended to provide Ford Credit with additional liquidity after all of its assets have been funded and is in addition to its liquidity available to protect for stress scenarios.

The following table shows Ford Credit’s cumulative maturities for assets and total debt for the periods presented and unsecured long-term debt maturities in the individual periods presented (in billions):

October - December
2022 2023 2024 2025 and Beyond
Balance Sheet Liquidity Profile
Assets (a) $ 38 $ 69 $ 93 $ 127
Total debt (b) 26 56 76 110
Memo: Unsecured long-term debt maturities 3 8 11 25

~~__________~~

~~(a)Includes gross finance receivables less the allowance for credit losses (including certain finance receivables that are reclassified in consolidation to~~ ~~Trade and other receivables, net~~), investment in operating leases net of accumulated depreciation, cash and cash equivalents, and marketable securities (excluding amounts related to insurance activities). Amounts shown include the impact of expected prepayments.

~~(b)Excludes unamortized debt (discount)/premium, unamortized issuance costs, and fair value adjustments.~~

Maturities of investment in operating leases consist primarily of the portion of rental payments attributable to depreciation over the remaining life of the lease and the expected residual value at lease termination. Maturities of finance receivables and investment in operating leases in the table above include expected prepayments for Ford Credit’s retail installment sale contracts and investment in operating leases. The table above also reflects adjustments to debt maturities to match the asset-backed debt maturities with the underlying asset maturities.

All wholesale securitization transactions and wholesale receivables are shown maturing in the next 12 months, even if the maturities extend beyond third quarter 2023. The retail securitization transactions under certain committed asset-backed facilities are assumed to amortize immediately rather than amortizing after the expiration of the commitment period. As of September 30, 2022, Ford Credit had $127 billion of assets, $59 billion of which were unencumbered.

Funding and Liquidity Risks. Ford Credit’s funding plan is subject to risks and uncertainties, many of which are beyond its control, including disruption in the capital markets, that could impact both unsecured debt and asset-backed securities issuance and the effects of regulatory changes on the financial markets. Refer to the “Liquidity - Ford Credit Segment - Funding and Liquidity Risks” section of Item 7 of Part II of our ~~2021~~2022 Form 10-K Report for more information.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Leverage. Ford Credit uses leverage, or the debt-to-equity ratio, to make various business decisions, including evaluating and establishing pricing for finance receivable and operating lease financing, and assessing its capital structure.

The table below shows the calculation of Ford Credit’s financial statement leverage (in billions):


		September 30, 2021		December 31, 2021		September 30, 2022			March 31, 2022		December 31, 2022		March 31, 2023
Leverage Calculation	Leverage Calculation							Leverage Calculation
Debt	Debt	$	119.0	$	117.7	$	108.0	Debt	$	115.5	$	119.0	$	119.6
Equity (a)	Equity (a)	12.4		12.4		11.4		Equity (a)	12.1		11.9		12.2
Financial statement leverage (to 1)	Financial statement leverage (to 1)	9.6		9.5		9.4		Financial statement leverage (to 1)	9.5		10.0		9.8

__________

(a)Total shareholder’s interest reported on Ford Credit’s balance sheets.

Ford Credit plans its leverage by considering market conditions and the risk characteristics of its business. At ~~September 30, 2022,~~March 31, 2023, Ford Credit’s financial statement leverage was ~~9.4:~~9.8:1. Ford Credit targets financial statement leverage in the range of 9:1 to 10:1.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)~~

Total Company

Pension Plans - Funded Balances. As of ~~September 30, 2022,~~March 31, 2023, our total Company pension ~~overfunded~~underfunded status reported on our consolidated balance sheets was ~~$1.2~~$0.2 billion and reflects the net funded status at December 31, ~~2021,~~2022, updated for: service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. For plans without interim remeasurement, the discount rate and rate of expected return assumptions are unchanged from year-end ~~2021.~~2022.

Return on Invested Capital (“ROIC”). We analyze total Company performance using an adjusted ROIC financial metric based on an after-tax, rolling four quarter average. The following table contains the calculation of our ROIC for the periods shown (in billions):


		Four Quarters Ending							Four Quarters Ending
		September 30, 2021			September 30, 2022				March 31, 2022			March 31, 2023
Adjusted Net Operating Profit/(Loss) After Cash Tax	Adjusted Net Operating Profit/(Loss) After Cash Tax							Adjusted Net Operating Profit/(Loss) After Cash Tax
Net income/(loss) attributable to Ford	Net income/(loss) attributable to Ford	$	2.9		$	9.0		Net income/(loss) attributable to Ford	$	11.6		$	2.9
Add: Noncontrolling interest	Add: Noncontrolling interest	—			0.1			Add: Noncontrolling interest	—			(0.3)
Less: Income tax	Less: Income tax	0.1			1.8			Less: Income tax	1.5			(0.4)
Add: Cash tax	Add: Cash tax	(0.6)			(0.6)			Add: Cash tax	(0.6)			(0.9)
Less: Interest on debt	Less: Interest on debt	(1.8)			(1.4)			Less: Interest on debt	(1.6)			(1.3)
Less: Total pension/OPEB income/(cost)	Less: Total pension/OPEB income/(cost)	(0.4)			4.3			Less: Total pension/OPEB income/(cost)	4.8			(0.1)
Add: Pension/OPEB service costs	Add: Pension/OPEB service costs	(1.1)			(1.0)			Add: Pension/OPEB service costs	(1.1)			(0.9)
Net operating profit/(loss) after cash tax	Net operating profit/(loss) after cash tax	$	3.2		$	2.7		Net operating profit/(loss) after cash tax	$	5.2		$	2.6
Less: Special items (excl. pension/OPEB) pre-tax	Less: Special items (excl. pension/OPEB) pre-tax	(3.6)			(4.9)			Less: Special items (excl. pension/OPEB) pre-tax	(0.4)			(6.6)
Adjusted net operating profit/(loss) after cash tax	Adjusted net operating profit/(loss) after cash tax	$	6.9		$	7.6		Adjusted net operating profit/(loss) after cash tax	$	5.6		$	9.2

Invested Capital	Invested Capital							Invested Capital
Equity	Equity	$	36.7		$	42.1		Equity	$	45.1		$	42.2
Debt (excl. Ford Credit)	Debt (excl. Ford Credit)	25.6			20.3			Debt (excl. Ford Credit)	20.1			19.7
Net pension and OPEB liability	Net pension and OPEB liability	10.6			4.6			Net pension and OPEB liability	5.8			4.6
Invested capital (end of period)	Invested capital (end of period)	$	73.0		$	66.9		Invested capital (end of period)	$	70.9		$	66.5
Average invested capital	Average invested capital	$	70.9		$	71.0		Average invested capital	$	72.7		$	68.2

ROIC (a)	ROIC (a)	4.6		%	3.8		%	ROIC (a)	7.2		%	3.8		%
Adjusted ROIC (Non-GAAP) (b)	Adjusted ROIC (Non-GAAP) (b)	9.7		%	10.7		%	Adjusted ROIC (Non-GAAP) (b)	7.8		%	13.5		%

__________

(a)Calculated as the sum of net operating profit/(loss) after cash tax from the last four quarters, divided by the average invested capital over the last four quarters.

(b)Calculated as the sum of adjusted net operating profit/(loss) after cash tax from the last four quarters, divided by the average invested capital over the last four quarters.

Note: Numbers may not sum due to rounding.

5750

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

CREDIT RATINGS

Our short-term and long-term debt is rated by four credit rating agencies designated as nationally recognized statistical rating organizations (“NRSROs”) by the U.S. Securities and Exchange Commission: DBRS, Fitch, Moody’s, and S&P.

In several markets, locally recognized rating agencies also rate us. A credit rating reflects an assessment by the rating agency of the credit risk associated with a corporate entity or particular securities issued by that entity. Rating agencies’ ratings of us are based on information provided by us and other sources. Credit ratings are not recommendations to buy, sell, or hold securities and are subject to revision or withdrawal at any time by the assigning rating agency. Each rating agency may have different criteria for evaluating company risk and, therefore, ratings should be evaluated independently for each rating agency.

There have been no rating actions taken by these NRSROs since the filing of our ~~Quarterly Report on~~2022 Form ~~10-Q for the quarter ended June 30, 2022.~~10-K Report.

The following table summarizes certain of the credit ratings and outlook presently assigned by these four NRSROs:

NRSRO RATINGS

Ford

Ford Credit

NRSROs

Issuer
Default /
Corporate /
Issuer Rating

Long-Term Senior Unsecured

Outlook / Trend

Long-Term Senior Unsecured

Short-Term
Unsecured

Outlook / Trend

Minimum Long-Term Investment Grade Rating

DBRS

BB (high)

Positive

BB (high)

R-4

Positive

BBB (low)

Fitch

BB+

Positive

BB+

Positive

BBB-

Moody’s

N/A

Ba2

Stable

Ba2

Stable

Baa3

S&P

BB+

Positive

BB+

Positive

BBB-

5851

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

OUTLOOK

We provided ~~2022~~2023 Company guidance in our earnings release furnished on Form 8-K dated ~~October 26, 2022.~~May 2, 2023. Our actual results could differ materially from our guidance due to risks, uncertainties, and other factors, including those set forth in “Risk Factors” in Item 1A of our ~~2021~~2022 Form 10-K Report and as updated by our subsequent filings with the SEC.


						~~2022~~2023 Guidance
Total Company
Adjusted EBIT (a)						~~About $11.5~~$9 - $11 billion
Adjusted Free Cash Flow (a)						~~$9.5 - $10.0~~About $6 billion
Capital spending						~~About $6.5 billion~~
~~Pension contributions~~						~~About $0.6 billion~~
~~Global Redesign EBIT charges (b)~~						~~About $1 billion~~
~~Global Redesign cash effects (b)~~						$~~0.5~~8 - ~~$1.0~~$9 billion

Ford Credit
EBT						About ~~$2.7~~$1.3 billion

__________

(a)When we provide guidance for adjusted EBIT and adjusted free cash flow, we do not provide guidance for the most comparable GAAP measures because, as described in more detail below in “Non-GAAP Measures That Supplement GAAP Measures,” they include items that are difficult to predict with reasonable certainty.

~~(b)~~We continue to review our global businesses and may take additional restructuring actions in markets where a path to sustained profitability is not feasible when considering the capital allocation required for those markets. Such actions may result in global redesign EBIT charges and cash effects in 2022 that are incremental to those set forth in the table.

For full-year ~~2022,~~2023, we ~~now~~continue to expect adjusted EBIT of ~~about $11.5~~$9 billion ~~which would be about 15% higher than 2021. We also now expect full-year~~to $11 billion and adjusted free cash flow of ~~$9.5 billion to $10.0 billion, reflecting the strength in the Company’s automotive operations, including our restructured businesses in regions outside of North America.~~

~~Our guidance assumes~~ about a 10% year-over-year increase in wholesale shipments; significantly higher earnings in North America and aggregate profitability in the rest of the world; and strong, but lower, EBT from Ford Credit of about $2.7$6 billion.

~~Other assumptions include:~~On a segment basis, we expect:

•~~No further deterioration~~Ford Blue to deliver full-year EBIT of about $7 billion. Cost improvements and higher industry volumes will likely be offset partially by pricing headwinds, as inventory stocks continue to normalize and industry incentives rise throughout the year, along with adverse exchange.

•Ford Model e to report an EBIT loss of around $3 billion, largely reflecting disciplined investments in new products and capacity.

•Ford Pro’s EBIT to nearly double from full-year 2022 to around $6 billion. The gain is driven by improved pricing and volume, including the benefits from the launch of our all-new Super Duty.

•Ford Credit EBT to be about $1.3 billion.

Our outlook for 2023 assumes the headwinds and tailwinds below.

Headwinds:

•Global economic uncertainty

•Higher industrywide customer incentives as vehicle supply and demand rebalances

•Lower past service pension income and exchange

•Growth-related investments (e.g., customer experience, connected services, and capital expenditures)

Tailwinds:

•Improvement in the supply chain and higher industry volume with a seasonally adjusted annual rate (“SAAR”) of about 15 million in the United States and about 13 million in Europe

•~~Continued strong pent-up demand and orders for~~Launch of our ~~newest products~~all-new Super Duty

•~~Persistent strength in pricing~~

•~~High commodity~~Lower cost of goods sold, including materials and ~~broad-based inflationary costs of about $9 billion~~

•~~Strong, though lower, auction values at Ford Credit, along with higher borrowing costs~~

•~~Continuation of the strong dollar~~commodities

5952

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Cautionary Note on Forward-Looking Statements

Statements included or incorporated by reference herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:

•Ford and Ford Credit’s financial condition and results of operations have been and may continue to be adversely affected by public health issues, including epidemics or pandemics such as COVID-19;

•Ford is highly dependent on its suppliers to deliver components in accordance with Ford’s production schedule and specifications, and a shortage of or inability to acquire key components, such as semiconductors, or raw materials, such as lithium, cobalt, nickel, graphite, and manganese, can disrupt Ford’s production of vehicles;

•To facilitate access to the raw materials necessary for the production of electric vehicles, Ford has entered into, and expects to continue to enter into, multi-year commitments to raw material suppliers that subject Ford to risks associated with lower future demand for such materials as well as costs that fluctuate and are difficult to accurately forecast;

•Ford’s long-term competitiveness depends on the successful execution of Ford+;

•Ford’s vehicles could be affected by defects that result in delays in new model launches, recall campaigns, or increased warranty costs;

•Ford may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures, restructurings, or new business strategies;

•Operational systems, security systems, vehicles, and services could be affected by cyber incidents, ransomware attacks, and other ~~disruptions;~~disruptions and impact Ford and Ford Credit as well as their suppliers and dealers;

•Ford’s production, as well as Ford’s suppliers’ production, and/or the ability to deliver products to consumers could be disrupted by labor issues, natural or man-made disasters, adverse effects of climate change, financial distress, production difficulties, capacity limitations, or other factors;

•Ford’s ability to maintain a competitive cost structure could be affected by labor or other constraints;

•Ford’s ability to attract and retain talented, diverse, and highly skilled employees is critical to its success and competitiveness;

•Ford’s new and existing products and digital, software, and physical ~~services, and mobility~~ services are subject to market acceptance and face significant competition from existing and new entrants in the automotive ~~mobility,~~ and digital and software services ~~industries;~~industries and its reputation may be harmed if it is unable to achieve the initiatives it has announced;

•Ford’s ~~near-term~~ results are dependent on sales of larger, more profitable vehicles, particularly in the United States;

•With a global footprint, Ford’s results could be adversely affected by economic or geopolitical developments, including protectionist trade policies such as tariffs, or other ~~events, including tariffs;~~events;

•Industry sales volume ~~in any of Ford’s key markets~~ can be volatile and could decline if there is a financial crisis, recession, or significant geopolitical event;

•Ford may face increased price competition or a reduction in demand for its products resulting from industry excess capacity, currency fluctuations, competitive actions, or other factors;

•Inflationary pressure and fluctuations in commodity and energy prices, foreign currency exchange rates, interest rates, and market value of Ford or Ford Credit’s investments, including marketable securities, can have a significant effect on results;

•Ford and Ford Credit’s access to debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors;

•The impact of government incentives on Ford’s business could be significant, and Ford’s receipt of government incentives could be subject to reduction, termination, or clawback;

•Ford Credit could experience higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles;

•Economic and demographic experience for pension and ~~other postretirement benefit~~OPEB plans (e.g., discount rates or investment returns) could be worse than Ford has assumed;

•Pension and other postretirement liabilities could adversely affect Ford’s liquidity and financial condition;

•Ford and Ford Credit could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise;

•Ford may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel economy, autonomous ~~vehicle,~~driving technology, environmental, and other regulations;

•Ford and Ford Credit could be affected by the continued development of more stringent privacy, data use, and data protection laws and regulations as well as consumers’ heightened expectations to safeguard their personal information; and

•Ford Credit could be subject to new or increased credit regulations, consumer protection regulations, or other regulations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

We cannot be certain that any expectation, forecast, or assumption made in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise. For additional discussion, see “Item 1A. Risk Factors” in our ~~2021~~2022 Form 10-K Report, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

6054

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

NON-GAAP FINANCIAL MEASURES THAT SUPPLEMENT GAAP MEASURES

We use both generally accepted accounting principles (“GAAP”) and non-GAAP financial measures for operational and financial decision making, and to assess Company and segment business performance. The non-GAAP measures listed below are intended to be considered by users as supplemental information to their equivalent GAAP measures, to aid investors in better understanding our financial results. We believe that these non-GAAP measures provide useful perspective on underlying operating results and trends, and a means to compare our period-over-period results. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP measures may not be the same as similarly titled measures used by other companies due to possible differences in method and in items or events being adjusted.

•Company Adjusted EBIT (Most Comparable GAAP Measure: Net Income/(Loss) Attributable to Ford) – Earnings before interest and taxes (EBIT) excludes interest on debt (excl. Ford Credit Debt), taxes, and pre-tax special items. This non-GAAP measure is useful to management and investors because it focuses on underlying operating results and trends, and improves comparability of our period-over-period results. Our management ordinarily excludes special items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. Our categories of pre-tax special items and the applicable significance guideline for each item (which may consist of a group of items related to a single event or action) are as follows:


Pre-Tax Special Item						Significance Guideline
∘ Pension and OPEB remeasurement gains and losses						∘ No minimum

∘ Gains and losses on investments in equity securities						∘ No minimum

∘ Personnel expenses, supplier- and dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix						∘ Generally $100 million or more

∘ Other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities						∘ $500 million or more for individual field service actions; generally $100 million or more for other items

When we provide guidance for adjusted EBIT, we do not provide guidance on a net income basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty, including gains and losses on pension and OPEB remeasurements and on investments in equity securities.

•Company Adjusted EBIT Margin (Most Comparable GAAP Measure: Company Net Income/(Loss) Margin) – Company Adjusted EBIT margin is Company adjusted EBIT divided by Company revenue. This non-GAAP measure is useful to management and investors because it allows users to evaluate our operating results aligned with industry reporting.

•Adjusted Earnings/(Loss) Per Share (Most Comparable GAAP Measure: Earnings/(Loss) Per Share) – Measure of Company’s diluted net earnings/(loss) per share adjusted for impact of pre-tax special items (described above), tax special items, and restructuring impacts in noncontrolling interests. The measure provides investors with useful information to evaluate performance of our business excluding items not indicative of earnings from ongoing operating activities. When we provide guidance for adjusted earnings/(loss) per share, we do not provide guidance on an earnings/(loss) per share basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and OPEB remeasurement gains and losses.

•Adjusted Effective Tax Rate (Most Comparable GAAP Measure: Effective Tax Rate) – Measure of Company’s tax rate excluding pre-tax special items (described above) and tax special items. The measure provides an ongoing effective rate which investors find useful for historical comparisons and for forecasting. When we provide guidance for adjusted effective tax rate, we do not provide guidance on an effective tax rate basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and OPEB remeasurement gains and losses.

6155

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

•Company Adjusted Free Cash Flow (Most Comparable GAAP Measure: Net Cash Provided By/(Used In) Operating Activities) – Measure of Company’s operating cash flow excluding Ford Credit’s operating cash flows. The measure contains elements management considers operating activities, including Company excluding Ford Credit capital spending, Ford Credit distributions to its parent, and settlement of derivatives. The measure excludes cash outflows for funded pension contributions, ~~global redesign (including separations),~~restructuring actions, and other items that are considered operating cash flows under U.S. GAAP. This measure is useful to management and investors because it is consistent with management’s assessment of the Company’s operating cash flow performance. When we provide guidance for Company adjusted free cash flow, we do not provide guidance for net cash provided by/(used in) operating activities because the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, including cash flows related to the Company's exposures to foreign currency exchange rates and certain commodity prices (separate from any related hedges), Ford Credit's operating cash flows, and cash flows related to special items, including separation payments, each of which individually or in the aggregate could have a significant impact to our net cash provided by/(used in) our operating activities.

•Adjusted ROIC – Calculated as the sum of adjusted net operating profit/(loss) after cash tax from the last four quarters, divided by the average invested capital over the last four quarters. Adjusted Return on Invested Capital (“Adjusted ROIC”) provides management and investors with useful information to evaluate the Company’s after-cash tax operating return on its invested capital for the period presented. Adjusted net operating profit/(loss) after cash tax measures operating results less special items, interest on debt (excl. Ford Credit Debt), and certain pension/OPEB costs. Average invested capital is the sum of average balance sheet equity, debt (excl. Ford Credit Debt), and net pension/OPEB liability.

6256

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Non-GAAP Financial Measure Reconciliations

The following tables show our Non-GAAP financial measure reconciliations.

Net Income/(Loss) Reconciliation to Adjusted EBIT ($M)


		Third Quarter						First Nine Months							First Quarter
		2021			2022			2021			2022				2022			2023
Net income/(loss) attributable to Ford (GAAP)	Net income/(loss) attributable to Ford (GAAP)	$	1,832		$	(827)		$	5,655		$	(3,270)		Net income/(loss) attributable to Ford (GAAP)	$	(3,110)		$	1,757
Income/(Loss) attributable to noncontrolling interests	Income/(Loss) attributable to noncontrolling interests	(10)			(103)			(18)			(141)			Income/(Loss) attributable to noncontrolling interests	(9)			(94)
Net income/(loss)	Net income/(loss)	$	1,822		$	(930)		$	5,637		$	(3,411)		Net income/(loss)	$	(3,119)		$	1,663
Less: (Provision for)/Benefit from income taxes	Less: (Provision for)/Benefit from income taxes	(63)			195			(925)			771			Less: (Provision for)/Benefit from income taxes	729			(496)
Income/(Loss) before income taxes	Income/(Loss) before income taxes	$	1,885		$	(1,125)		$	6,562		$	(4,182)		Income/(Loss) before income taxes	$	(3,848)		$	2,159
Less: Special items pre-tax	Less: Special items pre-tax	(669)			(2,607)			(31)			(11,092)			Less: Special items pre-tax	(5,866)			(912)
Income/(Loss) before special items pre-tax	Income/(Loss) before special items pre-tax	$	2,554		$	1,482		$	6,593		$	6,910		Income/(Loss) before special items pre-tax	$	2,018		$	3,071
Less: Interest on debt	Less: Interest on debt	(439)			(321)			(1,365)			(941)			Less: Interest on debt	(308)			(308)
Adjusted EBIT (Non-GAAP)	Adjusted EBIT (Non-GAAP)	$	2,993		$	1,803		$	7,958		$	7,851		Adjusted EBIT (Non-GAAP)	$	2,326		$	3,379

Memo:	Memo:													Memo:
Revenue ($B)	Revenue ($B)	$	35.7		$	39.4		$	98.7		$	114.1		Revenue ($B)	$	34.5		$	41.5
Net income/(loss) margin (GAAP) (%)	Net income/(loss) margin (GAAP) (%)	5.1		%	(2.1)		%	5.7		%	(2.9)		%	Net income/(loss) margin (GAAP) (%)	(9.0)		%	4.2		%
Adjusted EBIT margin (Non-GAAP) (%)	Adjusted EBIT margin (Non-GAAP) (%)	8.4		%	4.6		%	8.1		%	6.9		%	Adjusted EBIT margin (Non-GAAP) (%)	6.7		%	8.1		%

Earnings per Share Reconciliation to Adjusted Earnings per Share


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Diluted After-Tax Results ($M)	Diluted After-Tax Results ($M)									Diluted After-Tax Results ($M)
Diluted after-tax results (GAAP)	Diluted after-tax results (GAAP)	$	1,832	$	(827)	$	5,655	$	(3,270)	Diluted after-tax results (GAAP)	$	(3,110)	$	1,757
Less: Impact of pre-tax and tax special items	Less: Impact of pre-tax and tax special items	(209)		(2,063)		287		(8,819)		Less: Impact of pre-tax and tax special items	(4,674)		(768)
Adjusted net income/(loss) – diluted (Non-GAAP)	Adjusted net income/(loss) – diluted (Non-GAAP)	$	2,041	$	1,236	$	5,368	$	5,549	Adjusted net income/(loss) – diluted (Non-GAAP)	$	1,564	$	2,525

Basic and Diluted Shares (M)	Basic and Diluted Shares (M)									Basic and Diluted Shares (M)
Basic shares (average shares outstanding)	Basic shares (average shares outstanding)	3,995		4,021		3,989		4,017		Basic shares (average shares outstanding)	4,008		3,990
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt	Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt	41		38		38		42		Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt	56		39
Diluted shares	Diluted shares	4,036		4,059		4,027		4,059		Diluted shares	4,064		4,029

Earnings/(Loss) per share – diluted (GAAP) (a)	Earnings/(Loss) per share – diluted (GAAP) (a)	$	0.45	$	(0.21)	$	1.40	$	(0.81)	Earnings/(Loss) per share – diluted (GAAP) (a)	$	(0.78)	$	0.44
Less: Net impact of adjustments	Less: Net impact of adjustments	(0.06)		(0.51)		0.07		(2.18)		Less: Net impact of adjustments	(1.16)		(0.19)
Adjusted earnings/(loss) per share – diluted (Non-GAAP)	Adjusted earnings/(loss) per share – diluted (Non-GAAP)	$	0.51	$	0.30	$	1.33	$	1.37	Adjusted earnings/(loss) per share – diluted (Non-GAAP)	$	0.38	$	0.63

_________

(a)~~In the third~~The first quarter ~~and first nine months~~ of 2022 ~~there were 38 million and 42~~calculation excludes 56 million shares ~~respectively, excluded from the calculation~~ of ~~diluted~~

~~earnings/(loss) per share,~~net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt due to their anti-dilutive effect.

6357

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Effective Tax Rate Reconciliation to Adjusted Effective Tax Rate


		Third Quarter						First Nine Months										First Quarter
		2021			2022			2021			2022			Memo: FY 2021				2022			2023			Memo: FY 2022
Pre-Tax Results ($M)	Pre-Tax Results ($M)																Pre-Tax Results ($M)
Income/(Loss) before income taxes (GAAP)	Income/(Loss) before income taxes (GAAP)	$	1,885		$	(1,125)		$	6,562		$	(4,182)		$	17,780		Income/(Loss) before income taxes (GAAP)	$	(3,848)		$	2,159		$	(3,016)
Less: Impact of special items	Less: Impact of special items	(669)			(2,607)			(31)			(11,092)			9,583			Less: Impact of special items	(5,866)			(912)			(12,172)
Adjusted earnings before taxes (Non-GAAP)	Adjusted earnings before taxes (Non-GAAP)	$	2,554		$	1,482		$	6,593		$	6,910		$	8,197		Adjusted earnings before taxes (Non-GAAP)	$	2,018		$	3,071		$	9,156

Taxes ($M)	Taxes ($M)																Taxes ($M)
(Provision for)/Benefit from income taxes (GAAP)	(Provision for)/Benefit from income taxes (GAAP)	$	(63)		$	195		$	(925)		$	771		$	130		(Provision for)/Benefit from income taxes (GAAP)	$	729		$	(496)		$	864
Less: Impact of special items		460			544			318			2,273			1,924
Less: Impact of special items (a)																	Less: Impact of special items (a)	1,192			144			2,573
Adjusted (provision for)/benefit from income taxes (Non-GAAP)	Adjusted (provision for)/benefit from income taxes (Non-GAAP)	$	(523)		$	(349)		$	(1,243)		$	(1,502)		$	(1,794)		Adjusted (provision for)/benefit from income taxes (Non-GAAP)	$	(463)		$	(640)		$	(1,709)

Tax Rate (%)	Tax Rate (%)																Tax Rate (%)
Effective tax rate (GAAP)	Effective tax rate (GAAP)	3.3		%	17.3		%	14.1		%	18.4		%	(0.7)		%	Effective tax rate (GAAP)	18.9		%	23.0		%	28.6		%
Adjusted effective tax rate (Non-GAAP)	Adjusted effective tax rate (Non-GAAP)	20.5		%	23.5		%	18.9		%	21.7		%	21.9		%	Adjusted effective tax rate (Non-GAAP)	22.9		%	20.8		%	18.7		%

_________

(a)The first quarter of 2022 reflects the tax consequences of unrealized losses on marketable securities. Full Year 2022 reflects the tax consequences of unrealized losses on marketable securities and fourth quarter favorable changes in our valuation allowances.

Net Cash Provided by/(Used in) Operating Activities Reconciliation to Company Adjusted Free Cash Flow ($M)


		Third Quarter				First Nine Months					First Quarter
		2021		2022		2021		2022			2022		2023
Net cash provided by/(used in) operating activities (GAAP)	Net cash provided by/(used in) operating activities (GAAP)	$	7,008	$	3,812	$	12,256	$	5,675	Net cash provided by/(used in) operating activities (GAAP)	$	(1,084)	$	2,800

Less: Items not included in Company Adjusted Free Cash Flows	Less: Items not included in Company Adjusted Free Cash Flows									Less: Items not included in Company Adjusted Free Cash Flows
Ford Credit operating cash flows	Ford Credit operating cash flows	$	(341)	$	(439)	$	14,295	$	(2,198)	Ford Credit operating cash flows	$	(419)	$	626
Funded pension contributions	Funded pension contributions	(209)		(130)		(602)		(458)		Funded pension contributions	(174)		(125)
Global Redesign (including separations) (a)		(301)		(179)		(1,545)		(492)
Restructuring (including separations) (a)										Restructuring (including separations) (a)	(176)		(81)
Ford Credit tax payments/(refunds) under tax sharing agreement	Ford Credit tax payments/(refunds) under tax sharing agreement	—		22		4		22		Ford Credit tax payments/(refunds) under tax sharing agreement	—		(5)
Other, net	Other, net	(5)		(150)		(275)		(150)		Other, net	(20)		(140)

Add: Items included in Company Adjusted Free Cash Flows	Add: Items included in Company Adjusted Free Cash Flows									Add: Items included in Company Adjusted Free Cash Flows
Company excluding Ford Credit capital spending	Company excluding Ford Credit capital spending	$	(1,562)	$	(1,613)	$	(4,424)	$	(4,465)	Company excluding Ford Credit capital spending	$	(1,349)	$	(1,760)
Ford Credit distributions	Ford Credit distributions	1,500		500		6,500		2,100		Ford Credit distributions	1,000		—
Settlement of derivatives	Settlement of derivatives	(42)		26		(200)		54		Settlement of derivatives	64		(72)
Company adjusted free cash flow (Non-GAAP)	Company adjusted free cash flow (Non-GAAP)	$	7,760	$	3,601	$	2,255	$	6,640	Company adjusted free cash flow (Non-GAAP)	$	(580)	$	693

~~_______~~_________

(a)~~Global Redesign~~Restructuring excludes cash flows reported in investing activities.

6458

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

SUPPLEMENTAL INFORMATION

The tables below provide supplemental consolidating financial information, other financial information, and U.S. sales by type. Company excluding Ford Credit includes our ~~Automotive~~Ford Blue, Ford Model e, Ford Pro, and ~~Mobility~~Ford Next reportable segments, Corporate Other, Interest on Debt, and Special Items. Eliminations, where presented, primarily represent eliminations of intersegment transactions and deferred tax netting.

Selected Cash Flow Information. The following tables provide supplemental cash flow information (in millions):


		For the period ended September 30, 2022									For the period ended March 31, 2023
		First Nine Months									First Quarter
Cash flows from operating activities	Cash flows from operating activities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated		Cash flows from operating activities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated
Net income/(loss)	Net income/(loss)	$	(5,542)	$	2,131	$	—	$	(3,411)	Net income/(loss)	$	1,423	$	240	$	—	$	1,663
Depreciation and tooling amortization	Depreciation and tooling amortization	3,995		1,674		—		5,669		Depreciation and tooling amortization	1,327		570		—		1,897
Other amortization	Other amortization	74		(950)		—		(876)		Other amortization	(8)		(264)		—		(272)
(Gains)/Losses on extinguishment of debt		135		(14)		—		121
Held for sale impairment charges		32		—		—		32

Provision for/(Benefit from) credit and insurance losses	Provision for/(Benefit from) credit and insurance losses	11		(81)		—		(70)		Provision for/(Benefit from) credit and insurance losses	1		82		—		83
Pension and OPEB expense/(income)	Pension and OPEB expense/(income)	(595)		—		—		(595)		Pension and OPEB expense/(income)	303		—		—		303
Equity method investment dividends received in excess of (earnings)/losses and impairments	Equity method investment dividends received in excess of (earnings)/losses and impairments	2,983		(8)		—		2,975		Equity method investment dividends received in excess of (earnings)/losses and impairments	—		(7)		—		(7)
Foreign currency adjustments	Foreign currency adjustments	(246)		175		—		(71)		Foreign currency adjustments	(57)		(37)		—		(94)
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments	Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments	7,277		88		—		7,365		Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments	66		(15)		—		51
Net (gain)/loss on changes in investments in affiliates	Net (gain)/loss on changes in investments in affiliates	136		1		—		137		Net (gain)/loss on changes in investments in affiliates	(4)		—		—		(4)
Stock compensation	Stock compensation	269		8		—		277		Stock compensation	97		3		—		100
Provision for/(Benefit from) deferred income taxes	Provision for/(Benefit from) deferred income taxes	(1,835)		278		—		(1,557)		Provision for/(Benefit from) deferred income taxes	20		(3)		—		17
Decrease/(Increase) in finance receivables (wholesale and other)	Decrease/(Increase) in finance receivables (wholesale and other)	—		(6,601)		—		(6,601)		Decrease/(Increase) in finance receivables (wholesale and other)	—		(656)		—		(656)
Decrease/(Increase) in intersegment receivables/payables	Decrease/(Increase) in intersegment receivables/payables	(161)		161		—		—		Decrease/(Increase) in intersegment receivables/payables	(101)		101		—		—
Decrease/(Increase) in accounts receivable and other assets	Decrease/(Increase) in accounts receivable and other assets	(2,172)		(198)		—		(2,370)		Decrease/(Increase) in accounts receivable and other assets	(711)		(21)		—		(732)
Decrease/(Increase) in inventory	Decrease/(Increase) in inventory	(4,160)		—		—		(4,160)		Decrease/(Increase) in inventory	(1,967)		—		—		(1,967)
Increase/(Decrease) in accounts payable and accrued and other liabilities	Increase/(Decrease) in accounts payable and accrued and other liabilities	8,218		235		—		8,453		Increase/(Decrease) in accounts payable and accrued and other liabilities	2,382		(59)		—		2,323
Other	Other	794		(437)		—		357		Other	134		(39)		—		95
Interest supplements and residual value support to Ford Credit	Interest supplements and residual value support to Ford Credit	(1,340)		1,340		—		—		Interest supplements and residual value support to Ford Credit	(731)		731		—		—
Net cash provided by/(used in) operating activities	Net cash provided by/(used in) operating activities	$	7,873	$	(2,198)	$	—	$	5,675	Net cash provided by/(used in) operating activities	$	2,174	$	626	$	—	$	2,800


Cash flows from investing activities	Cash flows from investing activities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated		Cash flows from investing activities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated
Capital spending	Capital spending	$	(4,761)	$	(40)	$	—	$	(4,801)	Capital spending	$	(1,764)	$	(16)	$	—	$	(1,780)
Acquisitions of finance receivables and operating leases	Acquisitions of finance receivables and operating leases	—		(32,988)		—		(32,988)		Acquisitions of finance receivables and operating leases	—		(12,543)		—		(12,543)
Collections of finance receivables and operating leases	Collections of finance receivables and operating leases	—		35,676		—		35,676		Collections of finance receivables and operating leases	—		11,170		—		11,170
Proceeds from sale of business		435		—		—		435
Purchases of marketable and other investments	Purchases of marketable and other investments	(10,774)		(3,341)		—		(14,115)		Purchases of marketable and other investments	(1,572)		(973)		—		(2,545)
Sales and maturities of marketable securities and other investments	Sales and maturities of marketable securities and other investments	12,623		3,585		—		16,208		Sales and maturities of marketable securities and other investments	3,496		917		—		4,413
Settlements of derivatives	Settlements of derivatives	54		179		—		233		Settlements of derivatives	(72)		31		—		(41)
Capital contributions to equity method investments										Capital contributions to equity method investments	(699)		—		—		(699)
Other	Other	(25)		2		—		(23)		Other	48		—		—		48
Investing activity (to)/from other segments	Investing activity (to)/from other segments	2,130		(30)		(2,100)		—		Investing activity (to)/from other segments	—		—		—		—
Net cash provided by/(used in) investing activities	Net cash provided by/(used in) investing activities	$	(318)	$	3,043	$	(2,100)	$	625	Net cash provided by/(used in) investing activities	$	(563)	$	(1,414)	$	—	$	(1,977)


Cash flows from financing activities	Cash flows from financing activities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated		Cash flows from financing activities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated
Cash payments for dividends and dividend equivalents	Cash payments for dividends and dividend equivalents	$	(1,410)	$	—	$	—	$	(1,410)	Cash payments for dividends and dividend equivalents	$	(3,193)	$	—	$	—	$	(3,193)
Purchases of common stock	Purchases of common stock	—		—		—		—		Purchases of common stock	—		—		—		—
Net changes in short-term debt	Net changes in short-term debt	513		1,137		—		1,650		Net changes in short-term debt	(245)		(1,966)		—		(2,211)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	3,295		29,560		—		32,855		Proceeds from issuance of long-term debt	—		13,912		—		13,912
Payments of long-term debt	Payments of long-term debt	(3,817)		(33,578)		—		(37,395)		Payments of long-term debt	(14)		(12,228)		—		(12,242)
Other	Other	(185)		(59)		—		(244)		Other	(88)		(52)		—		(140)
Financing activity to/(from) other segments	Financing activity to/(from) other segments	—		(2,100)		2,100		—		Financing activity to/(from) other segments	—		—		—		—
Net cash provided by/(used in) financing activities	Net cash provided by/(used in) financing activities	$	(1,604)	$	(5,040)	$	2,100	$	(4,544)	Net cash provided by/(used in) financing activities	$	(3,540)	$	(334)	$	—	$	(3,874)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	$	(329)	$	(443)	$	—	$	(772)	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	$	20	$	50	$	—	$	70

6559

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Selected Income Statement Information. The following table provides supplemental income statement information (in millions):

For the period ended September 30, 2022
Third Quarter
Company excluding Ford Credit Ford Credit Consolidated
Revenues $ 37,205 $ 2,187 $ 39,392
Total costs and expenses (a) 37,211 1,677 38,888
Operating income/(loss) (6) 510 504
Interest expense on Company debt excluding Ford Credit 321 — 321
Other income/(loss), net 1,237 81 1,318
Equity in net income/(loss) of affiliated companies (2,634) 8 (2,626)
Income/(Loss) before income taxes (1,724) 599 (1,125)
Provision for/(Benefit from) income taxes (346) 151 (195)
Net income/(loss) (1,378) 448 (930)
Less: Income/(Loss) attributable to noncontrolling interests (103) — (103)
Net income/(loss) attributable to Ford Motor Company $ (1,275) $ 448 $ (827)
For the period ended September 30, 2022
First Nine Months
Company excluding Ford Credit Ford Credit Consolidated
Revenues $ 107,334 $ 6,724 $ 114,058
Total costs and expenses (a) 104,937 4,406 109,343
Operating income/(loss) 2,397 2,318 4,715
Interest expense on Company debt excluding Ford Credit 941 — 941
Other income/(loss), net (5,485) 130 (5,355)
Equity in net income/(loss) of affiliated companies (2,619) 18 (2,601)
Income/(Loss) before income taxes (6,648) 2,466 (4,182)
Provision for/(Benefit from) income taxes (1,106) 335 (771)
Net income/(loss) (5,542) 2,131 (3,411)
Less: Income/(Loss) attributable to noncontrolling interests (141) — (141)
Net income/(loss) attributable to Ford Motor Company $ (5,401) $ 2,131 $ (3,270)

~~__________~~


	For the period ended March 31, 2023
	First Quarter
	Company excluding Ford Credit		Ford Credit		Consolidated
Revenues	$	39,085	$	2,389	$	41,474
Total costs and expenses	37,175		2,186		39,361
Operating income/(loss)	1,910		203		2,113
Interest expense on Company debt excluding Ford Credit	308		—		308
Other income/(loss), net	131		93		224
Equity in net income/(loss) of affiliated companies	123		7		130
Income/(Loss) before income taxes	1,856		303		2,159
Provision for/(Benefit from) income taxes	433		63		496
Net income/(loss)	1,423		240		1,663
Less: Income/(Loss) attributable to noncontrolling interests	(94)		—		(94)
Net income/(loss) attributable to Ford Motor Company	$	1,517	$	240	$	1,757

~~(a)Ford Credit excludes a specials charge of $10 million.~~

6660

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Selected Balance Sheet Information. The following tables provide supplemental balance sheet information (in millions):


		September 30, 2022									March 31, 2023
Assets	Assets	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated		Assets	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated
Cash and cash equivalents	Cash and cash equivalents	$	15,197	$	6,351	$	—	$	21,548	Cash and cash equivalents	$	12,829	$	9,315	$	—	$	22,144
Marketable securities	Marketable securities	16,780		1,845		—		18,625		Marketable securities	15,794		1,575		—		17,369
Ford Credit finance receivables, net	Ford Credit finance receivables, net	—		33,902		—		33,902		Ford Credit finance receivables, net	—		40,350		—		40,350
Trade and other receivables, net	Trade and other receivables, net	4,154		10,610		—		14,764		Trade and other receivables, net	4,342		10,578		—		14,920
Inventories	Inventories	15,213		—		—		15,213		Inventories	16,212		—		—		16,212
Assets held for sale		100		—		—		100
Other assets	Other assets	2,638		1,298		—		3,936		Other assets	3,119		1,009		—		4,128
Receivable from other segments	Receivable from other segments	13		971		(984)		—		Receivable from other segments	685		1,423		(2,108)		—
Total current assets	Total current assets	54,095		54,977		(984)		108,088		Total current assets	52,981		64,250		(2,108)		115,123

Ford Credit finance receivables, net	Ford Credit finance receivables, net	—		47,683		—		47,683		Ford Credit finance receivables, net	—		51,084		—		51,084
Net investment in operating leases	Net investment in operating leases	1,077		22,478		—		23,555		Net investment in operating leases	951		21,057		—		22,008
Net property	Net property	35,307		222		—		35,529		Net property	37,729		241		—		37,970
Equity in net assets of affiliated companies	Equity in net assets of affiliated companies	2,432		124		—		2,556		Equity in net assets of affiliated companies	3,327		121		—		3,448
Deferred income taxes	Deferred income taxes	14,979		170		—		15,149		Deferred income taxes	15,421		151		—		15,572
Other assets	Other assets	12,940		1,419		—		14,359		Other assets	10,289		1,306		—		11,595
Receivable from other segments	Receivable from other segments	—		15		(15)		—		Receivable from other segments	—		15		(15)		—
Total assets	Total assets	$	120,830	$	127,088	$	(999)	$	246,919	Total assets	$	120,698	$	138,225	$	(2,123)	$	256,800


Liabilities	Liabilities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated		Liabilities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated
Payables	Payables	$	25,823	$	1,228	$	—	$	27,051	Payables	$	24,992	$	1,036	$	—	$	26,028
Other liabilities and deferred revenue	Other liabilities and deferred revenue	16,689		2,377		—		19,066		Other liabilities and deferred revenue	19,370		2,457		—		21,827
Debt payable within one year	Debt payable within one year	1,212		42,838		—		44,050		Debt payable within one year	522		47,528		—		48,050
Liabilities held for sale		—		—				—

Payable to other segments	Payable to other segments	984		—		(984)		—		Payable to other segments	2,049		59		(2,108)		—
Total current liabilities	Total current liabilities	44,708		46,443		(984)		90,167		Total current liabilities	46,933		51,080		(2,108)		95,905

Other liabilities and deferred revenue	Other liabilities and deferred revenue	25,463		3,128		—		28,591		Other liabilities and deferred revenue	23,914		1,994		—		25,908
Long-term debt	Long-term debt	19,073		65,206		—		84,279		Long-term debt	19,190		72,052		—		91,242
Deferred income taxes	Deferred income taxes	917		876		—		1,793		Deferred income taxes	639		909		—		1,548
Payable to other segments	Payable to other segments	15		—		(15)		—		Payable to other segments	15		—		(15)		—
Total liabilities	Total liabilities	$	90,176	$	115,653	$	(999)	$	204,830	Total liabilities	$	90,691	$	126,035	$	(2,123)	$	214,603

6761

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Selected Other Information.

Equity. At ~~September 30, 2022,~~March 31, 2023, total equity attributable to Ford was ~~$42.1~~$42.4 billion, a decrease of ~~$6.4~~$0.8 billion compared with December 31, ~~2021.~~2022. The detail for this change is shown below (in billions):


	Increase/ (Decrease)
Net income/(loss)	$	~~(3.3)~~1.8
Shareholder distributions	~~(1.4)~~(3.2)
Other comprehensive income/(loss), net	~~(1.9)~~
~~Common stock issued (including share-based compensation impacts)~~	~~0.2~~0.6
Total	$	~~(6.4)~~(0.8)

U.S. Sales by Type. The following table shows ~~third~~first quarter ~~2022~~2023 U.S. sales volume and U.S. wholesales segregated by ~~truck, SUV,~~electric, hybrid, and ~~car sales.~~internal combustion vehicles. U.S. sales volume ~~reflects transactions with (i) retail and fleet customers (as reported~~represents primarily sales by ~~dealers), (ii) governments, and (iii) Ford management. U.S. wholesales reflect~~dealers, sales to ~~dealers.~~the government, and leases to Ford management, and is based, in part, on estimated vehicle registrations and includes medium and heavy trucks.

U.S. Sales U.S. Wholesales
Trucks 238,981 257,275
SUVs 215,322 216,655
Cars 10,371 13,037
Total Vehicles 464,674 486,967


	U.S. Sales	U.S. Wholesales
Electric Vehicles	10,866	8,473
Hybrid Vehicles	27,064	30,733
Internal Combustion Vehicles	437,976	455,512
Total Vehicles	475,906	494,718

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

For a discussion of recent accounting standards, see Note 2 of the Notes to the Financial Statements.

6862

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

~~Automotive Segment~~Company Excluding Ford Credit

Foreign Currency Risk. The net fair value of foreign exchange forward contracts (including adjustments for credit risk) as of ~~September 30, 2022,~~March 31, 2023, was an asset of ~~$420~~$253 million, compared with ~~a liability~~an asset of ~~$253~~$236 million as of December 31, ~~2021.~~2022. The potential change in the fair value from a 10% change in the underlying exchange rates, in U.S. dollar terms, would have been ~~$2.0~~$2.7 billion at ~~September 30, 2022,~~March 31, 2023, compared with ~~$2.2~~$1.9 billion at December 31, ~~2021.~~2022.

Commodity Price Risk. The net fair value of commodity forward contracts (including adjustments for credit risk) as of ~~September 30, 2022,~~March 31, 2023, was a liability of ~~$252~~$32 million, compared with ~~an asset~~a liability of ~~$220~~$49 million at December 31, ~~2021.~~2022. The potential change in the fair value from a 10% change in the underlying commodity prices would have been ~~$164~~$193 million at ~~September 30, 2022,~~March 31, 2023, compared with ~~$215~~$178 million at December 31, ~~2021.~~2022.

Ford Credit Segment

Interest Rate Risk. To provide a quantitative measure of the sensitivity of its pre-tax cash flow to changes in interest rates, Ford Credit uses interest rate scenarios that assume a hypothetical, instantaneous increase or decrease of one percentage point in all interest rates across all maturities (a “parallel shift”), as well as a base case that assumes that all interest rates remain constant at existing levels. Maturing assets and liabilities are also instantaneously reinvested, capturing 100% of any hypothetical change in interest rates. The differences in pre-tax cash flow between these scenarios and the base case over a 12-month period represent an estimate of the sensitivity of Ford Credit’s pre-tax cash flow. Under this model, Ford Credit estimates that at ~~September 30, 2022,~~March 31, 2023, all else constant, such an increase in interest rates would increase its pre-tax cash flow by ~~$18~~$73 million over the next 12 months, compared with ~~a decrease~~an increase of ~~$76~~$127 million at December 31, ~~2021~~2022. In reality, new assets and liabilities may not immediately capture changes in interest rates, and interest rate changes are rarely instantaneous, parallel, or ~~parallel and rates could~~ move ~~more or less than~~exactly the one percentage point assumed in Ford Credit’s analysis. As a result, the actual impact to pre-tax cash flow could be higher or lower than the results detailed above.

ITEM 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. James D. Farley, Jr., our Chief Executive Officer (“CEO”), and John T. Lawler, our Chief Financial Officer (“CFO”), have performed an evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of ~~September 30, 2022,~~March 31, 2023, and each has concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by SEC rules and forms, and that such information is accumulated and communicated to the CEO and CFO to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting. ~~There were no changes in internal control over financial~~On January 1, 2023, Ford implemented a new operating model and reporting ~~during~~structure. As a result of this change, we analyze the ~~quarter ended September 30, 2022 that~~results of our business through the following segments: Ford Blue, Ford Model e, and Ford Pro (combined, replacing the previous Automotive segment), Ford Next (previously the Mobility segment), and Ford Credit. Our processes, procedures, and controls have ~~materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.~~been refined as appropriate, consistent with the new segment reporting structure.

6963

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.

~~PRODUCT LIABILITY MATTERS~~

~~Hill v. Ford.~~ Plaintiffs in this product liability action pending in Georgia state court allege that the roof of a 2002 Ford F-250 involved in a rollover accident was defectively designed. During the first trial in 2018, the judge declared a mistrial, ruled that Ford’s attorneys had violated pre-trial rulings while presenting evidence, and sanctioned Ford by prohibiting Ford from introducing any evidence at the second trial to show that the roof design of the F-250 was not defective. During the second trial in August 2022, a jury found that Pep Boys (the party that sold the tires on the vehicle involved in the rollover accident) was responsible for 30% of the damages, and Ford, as a direct result of the sanctions order prohibiting Ford from presenting its defense, was responsible for 70% of the damages, resulting in $16.8 million in damages being apportioned to Ford. The jury subsequently awarded punitive damages against Ford in the amount of $1.7 billion. We have filed post-trial motions, and we are seeking a new trial. We believe the law supports our position that Ford is entitled to a new trial with the right to present evidence in its defense.

ENVIRONMENTAL MATTERS

~~We have no~~Any legal ~~proceedings~~proceeding arising under any federal, state, or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment, in which (i) a governmental authority is a party, and (ii) we believe there is the possibility of monetary sanctions (exclusive of interest and costs) in excess of ~~$1 million.~~$1,000,000 is described herein.

As previously reported on page 30 of our 2022 Form 10-K Report, on June 16, 2022, the New Jersey Department of Environmental Protection (“NJDEP”) filed a complaint in the Superior Court of New Jersey (Bergen County) seeking natural resource damages and other claims related to the Ringwood Mines/Landfill Site located in Ringwood, New Jersey. On February 21, 2023, the court denied our motion to dismiss. We continue to defend against the NJDEP’s allegations.

OTHER MATTERS

Brazilian Tax Matters (as previously reported on page 3031 of our ~~2021~~2022 Form 10-K ~~Report, page 65 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and page 68 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022)~~Report). One Brazilian state (São Paulo) and the Brazilian federal tax authority currently have outstanding substantial tax assessments against Ford Motor Company Brasil Ltda. (“Ford Brazil”) related to state and federal tax incentives Ford Brazil received for its operations in the Brazilian state of Bahia. The São Paulo assessment is part of a broader conflict among various states in Brazil. The federal legislature enacted laws designed to encourage the states to end that conflict, and in 2017 the states reached an agreement on a framework for resolution. Ford Brazil continues to pursue a resolution under the framework and expects the amount of any remaining assessments by the states to be resolved under that framework. The federal assessments are outside the scope of the legislation.

All of the outstanding assessments have been appealed to the relevant administrative court of each jurisdiction. To proceed with an appeal within the judicial court system, an appellant may be required to post collateral. To date, we have not been required to post any collateral. If we are required to post collateral, which could be in excess of $1 billion, we expect it to be in the form of fixed assets, surety bonds, and/or letters of credit, but we may be required to post cash collateral. Although the ultimate resolution of these matters may take many years, we consider our overall risk of loss to be remote.

~~European Commission and U.K. Competition and Markets Authority Matter.~~ On March 15, 2022, the European Commission (the “Commission”) and the U.K. Competition and Markets Authority (the “CMA”) conducted unannounced inspections at the premises of, and sent formal requests for information to, several companies and associations active in the automotive sector, including Ford. The inspections and requests for information concern possible collusion in relation to the collection, treatment, and recovery of end-of-life cars and vans (“ELVs”). We understand that the scope of the investigations includes determining whether manufacturers and importers of passenger cars and vans agreed to an approach to (i) the compensation of ELV collection, treatment, and recovery companies, and (ii) the use of data relating to the recyclability or recoverability of ELVs in marketing materials, and whether such conduct violates relevant competition laws. If a violation is found, a broad range of remedies is potentially available to the Commission and/or CMA, including imposing a fine and/or the prohibition or restriction of certain business practices. Given that this investigation is in its early stages, it is difficult to predict the outcome or what remedies, if any, may be imposed. We are cooperating with the Commission and the CMA as they complete their investigations.

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ITEM 6. Exhibits.

Designation

Description

Method of Filing

Exhibit 10.1

Annual Performance Bonus Plan Metrics for 2023.

Filed with this Report.

Exhibit 10.2

Performance Stock Unit Award Metrics for 2023.

Filed with this Report.

Exhibit 31.1

Rule 15d-14(a) Certification of CEO.

Filed with this Report.

Exhibit 31.2

Rule 15d-14(a) Certification of CFO.

Filed with this Report.

Exhibit 32.1

Section 1350 Certification of CEO.

Furnished with this Report.

Exhibit 32.2

Section 1350 Certification of CFO.

Furnished with this Report.

Exhibit 101.INS

Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”).

(a)

Exhibit 101.SCH

XBRL Taxonomy Extension Schema Document.

(a)

Exhibit 101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

(a)

Exhibit 101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

(a)

Exhibit 101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

(a)

Exhibit 101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

(a)

Exhibit 104

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

(a)

__________

(a)Submitted electronically with this Report in accordance with the provisions of Regulation S-T.

7165

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FORD MOTOR COMPANY


By:			/s/ Cathy O’Callaghan
			Cathy O’Callaghan, Controller
			(principal accounting officer)

Date:			~~October 26, 2022~~May 2, 2023

7266


	October - December 2022		2023		2024		2025 and Beyond
Balance Sheet Liquidity Profile
Assets (a)	$	38	$	69	$	93	$	127
Total debt (b)	26		56		76		110
Memo: Unsecured long-term debt maturities	3		8		11		25


	U.S. Sales	U.S. Wholesales
Trucks	238,981	257,275
SUVs	215,322	216,655
Cars	10,371	13,037
Total Vehicles	464,674	486,967