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 June 30, 2023March 31, 2024

or

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)
Delaware38-0549190
(State of incorporation)(I.R.S. Employer Identification No.)
One American Road
Dearborn,Michigan48126
(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 classTrading symbolsName of each exchange on which registered
Common Stock, par value $.01 per shareFNew York Stock Exchange
6.200% Notes due June 1, 2059FPRBNew York Stock Exchange
6.000% Notes due December 1, 2059FPRCNew York Stock Exchange
6.500% Notes due August 15, 2062FPRDNew 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 July 24, 2023,April 19, 2024, Ford had outstanding 3,931,373,5263,921,485,081 shares of Common Stock and 70,852,076 shares of Class B Stock.

Exhibit Index begins on page 6667



FORD MOTOR COMPANY
QUARTERLY REPORT ON FORM 10-Q
For the Quarter Ended June 30, 2023March 31, 2024
 Table of ContentsPage
 Part I - Financial Information 
Item 1Financial Statements
Consolidated Income Statements
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Income Statements
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Equity
Notes to the Financial Statements
Item 2Management’s Discussion and Analysis of Financial Condition and Results of Operations
Recent Developments
Results of Operations
Ford Blue Segment
Ford Model e Segment
Ford Pro Segment
Ford Next Segment
Ford Credit Segment
Ford Credit Segment
Corporate Other
Interest on Debt
Taxes
Liquidity and Capital Resources
Credit Ratings
Outlook
Outlook
Cautionary Note on Forward-Looking Statements
Non-GAAP Financial Measures That Supplement GAAP Measures
Non-GAAP Financial Measure Reconciliations
Supplemental Information
Accounting Standards Issued But Not Yet Adopted
Item 3Quantitative and Qualitative Disclosures About Market Risk
Item 4Controls and Procedures
Part II - Other Information
Item 1Legal Proceedings
Item 5Other Information
Item 6Exhibits
Signature

i


PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements.
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
For the periods ended June 30,
 20222023
First Half
(unaudited)
Cash flows from operating activities  
Net income/(loss)$(2,481)$3,679 
Depreciation and tooling amortization3,774 3,775 
Other amortization(608)(554)
Provision for/(Benefit from) credit and insurance losses(107)212 
Pension and other postretirement employee benefits (“OPEB”) expense/(income) (Note 13)(400)612 
Equity method investment dividends received in excess of (earnings)/losses and impairments171 142 
Foreign currency adjustments60 (97)
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments (Note 4)7,974 163 
Net (gain)/loss on changes in investments in affiliates (Note 4)146 (17)
Stock compensation170 238 
Provision for/(Benefit from) deferred income taxes(1,160)3 
Decrease/(Increase) in finance receivables (wholesale and other)(4,611)(1,473)
Decrease/(Increase) in accounts receivable and other assets(1,856)(1,793)
Decrease/(Increase) in inventory(2,507)(3,354)
Increase/(Decrease) in accounts payable and accrued and other liabilities3,180 6,134 
Other118 165 
Net cash provided by/(used in) operating activities1,863 7,835 
Cash flows from investing activities
Capital spending(3,069)(3,729)
Acquisitions of finance receivables and operating leases(20,749)(26,231)
Collections of finance receivables and operating leases24,139 22,517 
Purchases of marketable securities and other investments(8,065)(4,860)
Sales and maturities of marketable securities and other investments11,257 7,584 
Settlements of derivatives156 (32)
Capital contributions to equity method investments(36)(1,047)
Other509 (359)
Net cash provided by/(used in) investing activities4,142 (6,157)
Cash flows from financing activities  
Cash payments for dividends and dividend equivalents(807)(3,794)
Purchases of common stock—  
Net changes in short-term debt595 (658)
Proceeds from issuance of long-term debt18,868 26,401 
Payments of long-term debt(24,697)(22,213)
Other(199)(197)
Net cash provided by/(used in) financing activities(6,240)(461)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(368)66 
Net increase/(decrease) in cash, cash equivalents, and restricted cash$(603)$1,283 
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(603)1,283 
Cash, cash equivalents, and restricted cash at end of period (Note 7)$20,134 $26,623 

The accompanying notes are part of the consolidated financial statements.
1

Item 1. Financial Statements (continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in millions, except per share amounts)
For the periods ended March 31,
For the periods ended March 31,
For the periods ended March 31,
For the periods ended June 30,
2022202320222023
Second QuarterFirst Half
(unaudited)
(unaudited)
(unaudited)
(unaudited)
RevenuesRevenues  
Company excluding Ford CreditCompany excluding Ford Credit$37,934 $42,427 $70,129 $81,512 
Company excluding Ford Credit
Company excluding Ford Credit
Ford CreditFord Credit2,256 2,527 4,537 4,916 
Ford Credit
Ford Credit
Total revenues (Note 3)
Total revenues (Note 3)
Total revenues (Note 3)Total revenues (Note 3)40,190 44,954 74,666 86,428 
Costs and expensesCosts and expenses  
Costs and expenses
Costs and expenses
Cost of sales
Cost of sales
Cost of salesCost of sales33,191 37,471 62,227 72,140 
Selling, administrative, and other expensesSelling, administrative, and other expenses2,759 2,750 5,499 5,256 
Selling, administrative, and other expenses
Selling, administrative, and other expenses
Ford Credit interest, operating, and other expenses
Ford Credit interest, operating, and other expenses
Ford Credit interest, operating, and other expensesFord Credit interest, operating, and other expenses1,372 2,272 2,729 4,458 
Total costs and expensesTotal costs and expenses37,322 42,493 70,455 81,854 
Total costs and expenses
Total costs and expenses
Operating income/(loss)
Operating income/(loss)
Operating income/(loss)Operating income/(loss)2,868 2,461 4,211 4,574 
Interest expense on Company debt excluding Ford CreditInterest expense on Company debt excluding Ford Credit312 304 620 612 
Interest expense on Company debt excluding Ford Credit
Interest expense on Company debt excluding Ford Credit
Other income/(loss), net (Note 4)
Other income/(loss), net (Note 4)
Other income/(loss), net (Note 4)Other income/(loss), net (Note 4)(1,823)255 (6,673)479 
Equity in net income/(loss) of affiliated companiesEquity in net income/(loss) of affiliated companies58 (124)25 6 
Equity in net income/(loss) of affiliated companies
Equity in net income/(loss) of affiliated companies
Income/(Loss) before income taxes
Income/(Loss) before income taxes
Income/(Loss) before income taxesIncome/(Loss) before income taxes791 2,288 (3,057)4,447 
Provision for/(Benefit from) income taxesProvision for/(Benefit from) income taxes153 272 (576)768 
Provision for/(Benefit from) income taxes
Provision for/(Benefit from) income taxes
Net income/(loss)
Net income/(loss)
Net income/(loss)Net income/(loss)638 2,016 (2,481)3,679 
Less: Income/(Loss) attributable to noncontrolling interestsLess: Income/(Loss) attributable to noncontrolling interests(29)99 (38)5 
Less: Income/(Loss) attributable to noncontrolling interests
Less: Income/(Loss) attributable to noncontrolling interests
Net income/(loss) attributable to Ford Motor CompanyNet income/(loss) attributable to Ford Motor Company$667 $1,917 $(2,443)$3,674 
Net income/(loss) attributable to Ford Motor Company
Net income/(loss) attributable to Ford Motor Company
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)$0.17 $0.48 $(0.61)$0.92 
Diluted income/(loss)Diluted income/(loss)0.16 0.47 (0.61)0.91 
Diluted income/(loss)
Diluted income/(loss)
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 shareWeighted-average shares used in computation of earnings/(loss) per share
Basic sharesBasic shares4,0214,0034,0143,996
Basic shares
Basic shares
Diluted sharesDiluted shares4,0524,0414,0144,035
Diluted shares
Diluted shares

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
For the periods ended June 30,
2022202320222023
Second QuarterFirst HalfFor the periods ended March 31,
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net income/(loss)Net income/(loss)$638 $2,016 $(2,481)$3,679 
Other comprehensive income/(loss), net of tax (Note 18)
Other comprehensive income/(loss), net of tax (Note 16)
Other comprehensive income/(loss), net of tax (Note 16)
Other comprehensive income/(loss), net of tax (Note 16)
Foreign currency translation
Foreign currency translation
Foreign currency translationForeign currency translation(1,018)278 (872)771 
Marketable securitiesMarketable securities(83)(44)(336)66 
Marketable securities
Marketable securities
Derivative instruments
Derivative instruments
Derivative instrumentsDerivative instruments(94)(369)50 (424)
Pension and other postretirement benefitsPension and other postretirement benefits12 3 20 6 
Pension and other postretirement benefits
Pension and other postretirement benefits
Total other comprehensive income/(loss), net of tax
Total other comprehensive income/(loss), net of tax
Total other comprehensive income/(loss), net of taxTotal other comprehensive income/(loss), net of tax(1,183)(132)(1,138)419 
Comprehensive income/(loss)Comprehensive income/(loss)(545)1,884 (3,619)4,098 
Comprehensive income/(loss)
Comprehensive income/(loss)
Less: Comprehensive income/(loss) attributable to noncontrolling interests
Less: Comprehensive income/(loss) attributable to noncontrolling interests
Less: Comprehensive income/(loss) attributable to noncontrolling interestsLess: Comprehensive income/(loss) attributable to noncontrolling interests(33)103 (42)9 
Comprehensive income/(loss) attributable to Ford Motor CompanyComprehensive income/(loss) attributable to Ford Motor Company$(512)$1,781 $(3,577)$4,089 
Comprehensive income/(loss) attributable to Ford Motor Company
Comprehensive income/(loss) attributable to Ford Motor Company

The accompanying notes are part of the consolidated financial statements.
23

Item 1. Financial Statements (continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions)
December 31,
2022
June 30,
2023
December 31,
2023
March 31,
2024
(unaudited) (unaudited)
ASSETSASSETS  ASSETS  
Cash and cash equivalents (Note 7)Cash and cash equivalents (Note 7)$25,134 $26,406 
Marketable securities (Note 7)Marketable securities (Note 7)18,936 16,415 
Ford Credit finance receivables, net of allowance for credit losses of $255 and $260 (Note 8)38,720 42,557 
Trade and other receivables, less allowances of $105 and $10115,729 14,482 
Ford Credit finance receivables, net of allowance for credit losses of $256 and $254 (Note 8)
Trade and other receivables, less allowances of $64 and $59
Inventories (Note 9)Inventories (Note 9)14,080 17,703 
Other assetsOther assets3,877 4,149 
Total current assetsTotal current assets116,476 121,712 
Ford Credit finance receivables, net of allowance for credit losses of $590 and $613 (Note 8)49,903 52,567 
Ford Credit finance receivables, net of allowance for credit losses of $626 and $626 (Note 8)
Net investment in operating leasesNet investment in operating leases22,772 21,662 
Net propertyNet property37,265 38,503 
Equity in net assets of affiliated companiesEquity in net assets of affiliated companies2,798 3,578 
Deferred income taxesDeferred income taxes15,552 15,860 
Other assetsOther assets11,118 12,109 
Total assetsTotal assets$255,884 $265,991 
LIABILITIESLIABILITIES  
LIABILITIES
LIABILITIES  
PayablesPayables$25,605 $27,749 
Other liabilities and deferred revenue (Note 12 and Note 20)21,097 23,925 
Debt payable within one year (Note 14)
Other liabilities and deferred revenue (Note 10 and Note 18)
Debt payable within one year (Note 12)
Company excluding Ford Credit
Company excluding Ford Credit
Company excluding Ford CreditCompany excluding Ford Credit730 410 
Ford CreditFord Credit49,434 48,931 
Total current liabilitiesTotal current liabilities96,866 101,015 
Other liabilities and deferred revenue (Note 12 and Note 20)25,497 25,754 
Long-term debt (Note 14)
Total current liabilities
Total current liabilities
Other liabilities and deferred revenue (Note 10 and Note 18)
Long-term debt (Note 12)
Company excluding Ford Credit
Company excluding Ford Credit
Company excluding Ford CreditCompany excluding Ford Credit19,200 19,169 
Ford CreditFord Credit69,605 74,726 
Deferred income taxesDeferred income taxes1,549 1,721 
Total liabilitiesTotal liabilities212,717 222,385 
EQUITYEQUITY  
Common Stock, par value $0.01 per share (4,084 million shares issued of 6 billion authorized)41 41 
EQUITY
EQUITY  
Common Stock, par value $0.01 per share (4,105 million shares issued of 6 billion authorized)
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 
Capital in excess of par value of stockCapital in excess of par value of stock22,832 23,029 
Retained earningsRetained earnings31,754 31,577 
Accumulated other comprehensive income/(loss) (Note 18)(9,339)(8,924)
Accumulated other comprehensive income/(loss) (Note 16)
Treasury stockTreasury stock(2,047)(2,047)
Total equity attributable to Ford Motor CompanyTotal equity attributable to Ford Motor Company43,242 43,677 
Equity attributable to noncontrolling interestsEquity attributable to noncontrolling interests(75)(71)
Total equityTotal equity43,167 43,606 
Total liabilities and equityTotal liabilities and equity$255,884 $265,991 
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,
2022
June 30,
2023
(unaudited)
December 31,
2023
December 31,
2023
March 31,
2024
(unaudited)(unaudited)
ASSETSASSETS  ASSETS  
Cash and cash equivalentsCash and cash equivalents$2,274 $2,421 
Ford Credit finance receivables, netFord Credit finance receivables, net49,142 52,504 
Net investment in operating leasesNet investment in operating leases12,545 8,929 
Other assetsOther assets264 279 
LIABILITIESLIABILITIES
Other liabilities and deferred revenueOther liabilities and deferred revenue$$ 
Other liabilities and deferred revenue
Other liabilities and deferred revenue
DebtDebt45,451 47,891 

The accompanying notes are part of the consolidated financial statements.

34

Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
For the periods ended March 31,
 20232024
First Quarter
(unaudited)
Cash flows from operating activities  
Net income/(loss)$1,663 $1,334 
Depreciation and tooling amortization1,897 1,881 
Other amortization(272)(376)
Provision for credit and insurance losses83 126 
Pension and other postretirement employee benefits (“OPEB”) expense/(income) (Note 11)303 166 
Equity method investment dividends received in excess of (earnings)/losses and impairments(7)(154)
Foreign currency adjustments(94)(12)
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments (Note 4)51 29 
Stock compensation100 126 
Provision for/(Benefit from) deferred income taxes17 (28)
Decrease/(Increase) in finance receivables (wholesale and other)(656)(1,121)
Decrease/(Increase) in accounts receivable and other assets(732)(806)
Decrease/(Increase) in inventory(1,967)(3,154)
Increase/(Decrease) in accounts payable and accrued and other liabilities2,323 3,333 
Other91 41 
Net cash provided by/(used in) operating activities2,800 1,385 
Cash flows from investing activities
Capital spending(1,780)(2,094)
Acquisitions of finance receivables and operating leases(12,543)(14,829)
Collections of finance receivables and operating leases11,170 11,238 
Purchases of marketable securities and other investments(2,545)(2,985)
Sales and maturities of marketable securities and other investments4,413 3,579 
Settlements of derivatives(41)(184)
Capital contributions to equity method investments(699)(639)
Other48 34 
Net cash provided by/(used in) investing activities(1,977)(5,880)
Cash flows from financing activities  
Cash payments for dividends and dividend equivalents(3,193)(1,326)
Purchases of common stock—  
Net changes in short-term debt(2,211)(1,201)
Proceeds from issuance of long-term debt13,912 16,488 
Payments of long-term debt(12,242)(14,225)
Other(140)(194)
Net cash provided by/(used in) financing activities(3,874)(458)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash70 (171)
Net increase/(decrease) in cash, cash equivalents, and restricted cash$(2,981)$(5,124)
Cash, cash equivalents, and restricted cash at beginning of period (Note 7)$25,340 $25,110 
Net increase/(decrease) in cash, cash equivalents, and restricted cash(2,981)(5,124)
Cash, cash equivalents, and restricted cash at end of period (Note 7)$22,359 $19,986 

The accompanying notes are part of the consolidated financial statements.
5

Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in millions, unaudited)
Equity Attributable to Ford Motor Company 
Capital StockCap. in Excess of Par Value of StockRetained EarningsAccumulated Other Comprehensive Income/(Loss) (Note 18)Treasury StockTotalEquity Attributable to Non-controlling InterestsTotal
Equity
Balance at December 31, 2021$41 $22,611 $35,769 $(8,339)$(1,563)$48,519 $103 $48,622 
Net income/(loss)— — (3,110)— — (3,110)(9)(3,119)
Other comprehensive income/(loss), net— — — 45 — 45 — 45 
Common Stock issued (a)(61)— — — (60)— (60)
Treasury stock/other — — — — (1)(1)
Dividends and dividend equivalents declared ($0.10 per share) (b)— — (408)— — (408)— (408)
Balance at March 31, 2022$42 $22,550 $32,251 $(8,294)$(1,564)$44,985 $99 $45,084 
Net income/(loss)— — 667 — — 667 (29)638 
Other comprehensive income/(loss), net— — — (1,179)— (1,179)(4)(1,183)
Common Stock issued (a)— 103 — — — 103 — 103 
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 
Equity Attributable to Ford Motor Company 
Capital StockCap. in Excess of Par Value of StockRetained EarningsAccumulated Other Comprehensive Income/(Loss) (Note 16)Treasury StockTotalEquity Attributable to Non-controlling InterestsTotal
Equity
Balance at December 31, 2022Balance at December 31, 2022$42 $22,832 $31,754 $(9,339)$(2,047)$43,242 $(75)$43,167 
Net income/(loss)Net income/(loss)— — 1,757 — — 1,757 (94)1,663 
Other comprehensive income/(loss), netOther comprehensive income/(loss), net— — — 551 — 551 — 551 
Common Stock issued (a)Common Stock issued (a)— 57 — — — 57 — 57 
Treasury stock/other Treasury stock/other — — — — — — — — 
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, 2023Balance at March 31, 2023$42 $22,889 $30,270 $(8,788)$(2,047)$42,366 $(169)$42,197 
Net income/(loss)  1,917   1,917 99 2,016 
Other comprehensive income/(loss), net   (136) (136)4 (132)
Common Stock issued (a) 140    140  140 
Treasury stock/other       (5)(5)
Dividends and dividend equivalents declared ($0.15 per share) (b)  (610)  (610) (610)
Balance at June 30, 2023$42 $23,029 $31,577 $(8,924)$(2,047)$43,677 $(71)$43,606 
Balance at December 31, 2023
Balance at December 31, 2023
Balance at December 31, 2023
Net income/(loss)
Other comprehensive income/(loss), net
Common Stock issued (a)
Treasury stock/other
Dividends and dividend equivalents declared ($0.33 per share) (b)
Balance at March 31, 2024
__________
(a)Includes impact of share-based compensation.
(b)Dividends and dividend equivalents declared for Common and Class B Stock. In the first quarter of 2023 and 2024, in addition to a regular dividend of $0.15 per share, we declared a supplemental dividend of $0.65 per share.share and $0.18 per share, respectively.

The accompanying notes are part of the consolidated financial statements.
46

Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS

Table of Contents
Footnote Page
Note 1Presentation
Note 2New Accounting Standards
Note 3Revenue
Note 4Other Income/(Loss)
Note 5Income Taxes
Note 6Capital Stock and Earnings/(Loss) Per Share
Note 7Cash, Cash Equivalents, and Marketable Securities
Note 8Ford Credit Finance Receivables and Allowance for Credit Losses
Note 9Inventories
Note 10Other Investments
Note 11Goodwill
Note 12Other Liabilities and Deferred Revenue
Note 1311Retirement Benefits
Note 1412Debt
Note 1513Derivative Financial Instruments and Hedging Activities
Note 1614Employee Separation Actions and Exit and Disposal Activities
Note 1715Acquisitions and Divestitures
Note 1816Accumulated Other Comprehensive Income/(Loss)
Note 1917Variable Interest Entities
Note 2018Commitments and Contingencies
Note 2119Segment Information
57

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 include all adjustments, consisting of only normal recurring adjustments, necessary for 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, 20222023 (“20222023 Form 10-K Report”).

NOTE 2. NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

Accounting Standards Update (“ASU”) 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 year of origination (vintage disclosure). Adoption of the new standard did not have a material impact to our consolidated financial statements 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 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 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 do not provide any guarantees in connection with it. The outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions, reported in Payables, was $253 million and $269 million at December 31, 2022 and June 30, 2023, respectively. The amount settled through the SCF program during the second quarter and first halfof 2023 was $485 million and $937 million, respectively.

We also adopted the following ASUsAccounting Standards Updates (“ASUs”) during 2023,2024, none of which had a material impact to our consolidated financial statements or financial statement disclosures:

ASUEffective Date
2022-012023-01
Derivatives and Hedging Leases: Common Control Arrangements Fair Value Hedging Portfolio Layer Hedging
January 1, 20232024
2022-032023-02Fair Value Measurement ofInvestments – Equity Securities Subject to Contractual Sale RestrictionsMethod and Joint Ventures - Accounting for Investments in Tax Credit Structures Using the Proportional Amortization MethodJanuary 1, 2023
2018-12Targeted Improvements to the Accounting for Long Duration Contracts (and related amendments)January 1, 20232024

Accounting Standards Issued But Not Yet Adopted

ASU 2023-07, Segment Reporting, Improvements to Reportable Segment Disclosures. In November 2023, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (”CODM”) for each reportable segment. In addition to significant segment expenses that are separately disclosed, the standard requires disclosure of an amount for “other segment items” by reportable segment and a description of its composition. The standard also requires all annual disclosures about a reporting segment’s profit or loss and assets to be provided on an interim basis. This new standard is effective for our 2024 annual financial statements and interim periods beginning in 2025. We are assessing the effect on our consolidated financial statement disclosures; however, adoption will not impact our consolidated balance sheets or income statements.

ASU 2023-09, Improvements to Income Tax Disclosures. In December 2023, the FASB issued a new accounting standard to enhance the transparency and decision usefulness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024, with retrospective application permitted. There will be no impact to our consolidated balance sheets or income statements; however, there will be changes to our consolidated financial statement disclosures, primarily related to the effective tax rate reconciliation and cash paid for income taxes.

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

68

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 June 30March 31 (in millions):
Second Quarter 2022
Company excluding Ford CreditFord CreditConsolidated
Vehicles, parts, and accessories$36,831 $— $36,831 
Used vehicles373 — 373 
Services and other revenue (a)677 52 729 
Revenues from sales and services37,881 52 37,933 
Leasing income53 1,166 1,219 
Financing income— 1,026 1,026 
Insurance income— 12 12 
Total revenues$37,934 $2,256 $40,190 
Second Quarter 2023
Company excluding
Ford Credit
Ford CreditConsolidated
Vehicles, parts, and accessories$41,241 $— $41,241 
Used vehicles457 — 457 
Services and other revenue (a)683 49 732 
Revenues from sales and services42,381 49 42,430 
Leasing income46 1,029 1,075 
Financing income— 1,426 1,426 
Insurance income— 23 23 
Total revenues$42,427 $2,527 $44,954 
First Half 2022
Company excluding
Ford Credit
Ford CreditConsolidated
Vehicles, parts, and accessories$67,822 $— $67,822 
Used vehicles802 — 802 
Services and other revenue (a)1,399 71 1,470 
Revenues from sales and services70,023 71 70,094 
Leasing income106 2,377 2,483 
Financing income— 2,066 2,066 
Insurance income— 23 23 
Total revenues$70,129 $4,537 $74,666 
First Half 2023
Company excluding
Ford Credit
Ford CreditConsolidated
Vehicles, parts, and accessories$79,168 $— $79,168 
Used vehicles926 — 926 
Services and other revenue (a)1,328 66 1,394 
Revenues from sales and services81,422 66 81,488 
Leasing income90 2,078 2,168 
Financing income— 2,727 2,727 
Insurance income— 45 45 
Total revenues$81,512 $4,916 $86,428 

First Quarter 2023
Company excluding Ford CreditFord CreditConsolidated
Vehicles, parts, and accessories$37,927 $— $37,927 
Used vehicles469 — 469 
Services and other revenue (a)645 17 662 
Revenues from sales and services39,041 17 39,058 
Leasing income44 1,049 1,093 
Financing income— 1,301 1,301 
Insurance income— 22 22 
Total revenues$39,085 $2,389 $41,474 
First Quarter 2024
Company excluding
Ford Credit
Ford CreditConsolidated
Vehicles, parts, and accessories$38,645 $— $38,645 
Used vehicles510 — 510 
Services and other revenue (a)688 20 708 
Revenues from sales and services39,843 20 39,863 
Leasing income47 1,017 1,064 
Financing income— 1,819 1,819 
Insurance income— 31 31 
Total revenues$39,890 $2,887 $42,777 
__________
(a)Includes extended service contract revenue.


7

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.customers, and other pricing adjustments. Estimates of marketing incentives and other pricing adjustments are based on expectedour expectations of retail and fleet sales volumes, mix of products to be sold, competitor actions, 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 variable consideration (e.g., marketing incentives,incentives), we recorded an increase of $152 million in the second quarter of 2022 and a decrease of $3 million in the second quarter of 2023 related to revenue recognized in prior periods.periods of $178 million and $707 million in the first quarter of 2023 and 2024, respectively.

We had a balance of $4.4$4.8 billion and $4.6$4.9 billion of unearned revenue associated primarily with outstanding extended service contracts reported in Other liabilities and deferred revenue at December 31, 20222023 and June 30, 2023,March 31, 2024, respectively. We expect to recognize approximately $800 million$1.2 billion of the unearned amount in the remainder of 2023,2024, $1.3 billion in 2024,2025, and $2.5$2.4 billion thereafter. We recognized $352$380 million and $374$431 million of unearned amounts from prior years as revenue during the secondfirst quarter of 20222023 and 2023, respectively, and $717 million and $754 million in the first half of 2022 and 2023,2024, respectively.

Amounts paid to dealers to obtain extended service contracts are deferred and recorded as Other assets. We had a balance of $315$317 million and $320$321 million in deferred costs as of December 31, 20222023 and June 30, 2023,March 31, 2024, respectively. We recognized $22 million and $25$26 million of amortization during both the secondfirst quarter of 20222023 and 2023, respectively, and $44 million and $51 million in the first half of 2022 and 2023, respectively.2024.
89

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 June 30March 31 were as follows (in millions):
Second QuarterFirst Half
 2022202320222023
Net periodic pension and OPEB income/(cost), excluding service cost (Note 13)$430 $(167)$889 $(332)
Investment-related interest income89 372 150 720 
Interest income/(expense) on income taxes(2)(6)
Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (a)(2,520)(112)(7,974)(163)
Gains/(Losses) on changes in investments in affiliates(21)13 (146)17 
Royalty income111 127 255 230 
Other86 24 146 13 
Total$(1,823)$255 $(6,673)$479 
__________
(a)    Includes a $2.4 billion loss and a $6 million loss on our Rivian investment in the second quarter of 2022 and 2023, respectively, and a $7.9 billion loss and a $31 million loss in the first half of 2022 and 2023, respectively.
First Quarter
 20232024
Net periodic pension and OPEB income/(cost), excluding service cost (Note 11)$(165)$(24)
Investment-related interest income348 410 
Interest income/(expense) on income taxes(4)(14)
Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments(51)(29)
Gains/(Losses) on changes in investments in affiliates
Royalty income103 124 
Other(11)24 
Total$224 $498 

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):
Second QuarterFirst Half
 2022202320222023
Net income/(loss) attributable to Ford Motor Company$667 $1,917 $(2,443)$3,674 
Basic and Diluted Shares  
Basic shares (average shares outstanding)4,021 4,003 4,014 3,996 
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt (a)31 38 — 39 
Diluted shares4,052 4,041 4,014 4,035 
__________
(a)    In the first half of 2022, there were 43 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect.
First Quarter
 20232024
Net income/(loss) attributable to Ford Motor Company$1,757 $1,332 
Basic and Diluted Shares  
Basic shares (average shares outstanding)3,990 3,979 
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt39 44 
Diluted shares4,029 4,023 

910

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, 2022
 Fair Value LevelCompany excluding Ford CreditFord CreditConsolidated
Cash and cash equivalents  
U.S. government1$3,295 $1,045 $4,340 
U.S. government agencies22,245 150 2,395 
Non-U.S. government and agencies21,048 199 1,247 
Other cash equivalents210 — 10 
Corporate debt2593 792 1,385 
Total marketable securities classified as cash equivalents7,191 2,186 9,377 
Cash, time deposits, and money market funds7,550 8,207 15,757 
Total cash and cash equivalents$14,741 $10,393 $25,134 
Marketable securities
U.S. government1$4,947 $187 $5,134 
U.S. government agencies22,641 221 2,862 
Non-U.S. government and agencies22,625 658 3,283 
Corporate debt26,755 266 7,021 
Equities (a)1223 — 223 
Other marketable securities2252 161 413 
Total marketable securities$17,443 $1,493 $18,936 
Restricted cash$79 $127 $206 
June 30, 2023
Fair Value LevelCompany excluding Ford CreditFord CreditConsolidated
Cash and cash equivalents  
U.S. government1$4,038 $1,252 $5,290 
U.S. government agencies23,055 650 3,705 
Non-U.S. government and agencies2902 441 1,343 
Corporate debt2539 756 1,295 
Total marketable securities classified as cash equivalents8,534 3,099 11,633 
Cash, time deposits, and money market funds6,411 8,362 14,773 
Total cash and cash equivalents$14,945 $11,461 $26,406 
Marketable securities
U.S. government1$4,612 $281 $4,893 
U.S. government agencies22,361 319 2,680 
Non-U.S. government and agencies22,307 577 2,884 
Corporate debt25,245 271 5,516 
Equities (a)129 — 29 
Other marketable securities2255 158 413 
Total marketable securities$14,809 $1,606 $16,415 
Restricted cash$86 $131 $217 
__________
December 31, 2023
 Fair Value LevelCompany excluding Ford CreditFord CreditConsolidated
Cash and cash equivalents  
U.S. government1$2,320 $912 $3,232 
U.S. government agencies22,075 625 2,700 
Non-U.S. government and agencies2699 276 975 
Corporate debt21,617 101 1,718 
Total marketable securities classified as cash equivalents6,711 1,914 8,625 
Cash, time deposits, and money market funds7,493 8,744 16,237 
Total cash and cash equivalents$14,204 $10,658 $24,862 
Marketable securities
U.S. government1$4,467 $207 $4,674 
U.S. government agencies21,774 49 1,823 
Non-U.S. government and agencies22,096 109 2,205 
Corporate debt25,807 268 6,075 
Equities123 — 23 
Other marketable securities2353 156 509 
Total marketable securities$14,520 $789 $15,309 
Restricted cash$111 $137 $248 
Cash, cash equivalents, and restricted cash - held for sale$— $— $— 
March 31, 2024
Fair Value LevelCompany excluding Ford CreditFord CreditConsolidated
Cash and cash equivalents  
U.S. government1$997 $86 $1,083 
U.S. government agencies22,019 — 2,019 
Non-U.S. government and agencies2699 277 976 
Corporate debt2— — — 
Total marketable securities classified as cash equivalents3,715 363 4,078 
Cash, time deposits, and money market funds7,158 8,485 15,643 
Total cash and cash equivalents$10,873 $8,848 $19,721 
Marketable securities
U.S. government1$4,085 $219 $4,304 
U.S. government agencies21,850 — 1,850 
Non-U.S. government and agencies22,342 83 2,425 
Corporate debt25,288 261 5,549 
Equities125 — 25 
Other marketable securities2438 151 589 
Total marketable securities$14,028 $714 $14,742 
Restricted cash$112 $102 $214 
Cash, cash equivalents, and restricted cash - held for sale (Note 15)$51 $— $51 
(a)Includes $194 million of Rivian common shares valued at $18.43 per share as of December 31, 2022. In the second quarter of 2023, we sold the remaining 9.5 million of our Rivian common shares for about $141 million in total proceeds. Net unrealized gains/losses recognized during full year 2022 and the first half of 2023 on all equity securities held at December 31, 2022 and June 30, 2023 were a $968 million loss and de minimis, respectively.
10

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, 2022
Fair Value of Securities with
Contractual Maturities
 Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueWithin 1 YearAfter 1 Year through
5 Years
After 5 Years
Company excluding Ford Credit  
U.S. government$4,797 $$(145)$4,653 $1,008 $3,645 $— 
U.S. government agencies2,508 — (119)2,389 1,244 1,109 36 
Non-U.S. government and agencies2,248 — (132)2,116 294 1,810 12 
Corporate debt7,511 (197)7,320 3,117 4,195 
Other marketable securities246 — (9)237 — 181 56 
Total$17,310 $$(602)$16,715 $5,663 $10,940 $112 
 
June 30, 2023
Fair Value of Securities with
Contractual Maturities
Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueWithin 1 YearAfter 1 Year through
5 Years
After 5 Years
Company excluding Ford Credit
U.S. government$4,483 $— $(133)$4,350 $1,346 $2,995 $
U.S. government agencies2,210 — (96)2,114 936 1,158 20 
Non-U.S. government and agencies2,265 — (116)2,149 409 1,728 12 
Corporate debt5,907 (157)5,753 1,445 4,295 13 
Other marketable securities233 — (8)225 — 172 53 
Total$15,098 $$(510)$14,591 $4,136 $10,348 $107 

Sales proceeds and gross realized gains/losses from the sale of AFS securities for the periods ended June 30 were as follows (in millions):
Second QuarterFirst Half
2022202320222023
Company excluding Ford Credit
Sales proceeds$1,118 $715 $5,122 $1,878 
Gross realized gains— 
Gross realized losses15 21 
11

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, 2023
Fair Value of Securities with
Contractual Maturities
 Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueWithin 1 YearAfter 1 Year through
5 Years
After 5 Years
Company excluding Ford Credit  
U.S. government$4,458 $$(66)$4,398 $2,172 $2,216 $10 
U.S. government agencies2,053 (62)1,995 490 1,487 18 
Non-U.S. government and agencies1,948 (75)1,874 587 1,275 12 
Corporate debt7,433 27 (67)7,393 2,830 4,558 
Other marketable securities322 (4)320 — 247 73 
Total$16,214 $40 $(274)$15,980 $6,079 $9,783 $118 
 
March 31, 2024
Fair Value of Securities with
Contractual Maturities
Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueWithin 1 YearAfter 1 Year through
5 Years
After 5 Years
Company excluding Ford Credit
U.S. government$4,076 $— $(64)$4,012 $1,931 $2,071 $10 
U.S. government agencies1,973 — (63)1,910 425 1,467 18 
Non-U.S. government and agencies1,982 — (71)1,911 626 1,273 12 
Corporate debt5,304 15 (59)5,260 698 4,554 
Other marketable securities408 (3)407 — 297 110 
Total$13,743 $17 $(260)$13,500 $3,680 $9,662 $158 

Sales proceeds and gross realized gains/losses from the sale of AFS securities for the periods ended March 31 were as follows (in millions):
First Quarter
20232024
Company excluding Ford Credit
Sales proceeds$1,163 $3,719 
Gross realized gains
Gross realized losses12 

12

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, 2022
Less than 1 Year1 Year or GreaterTotal
December 31, 2023December 31, 2023
Less than 1 YearLess than 1 Year1 Year or GreaterTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
Company excluding Ford CreditCompany excluding Ford Credit  
U.S. government
U.S. government
U.S. governmentU.S. government$2,860 $(52)$1,570 $(93)$4,430 $(145)
U.S. government agenciesU.S. government agencies707 (14)1,658 (105)2,365 (119)
Non-U.S. government and agenciesNon-U.S. government and agencies751 (23)1,271 (109)2,022 (132)
Corporate debtCorporate debt4,571 (79)1,737 (118)6,308 (197)
Other marketable securitiesOther marketable securities123 (4)108 (5)231 (9)
TotalTotal$9,012 $(172)$6,344 $(430)$15,356 $(602)
 
June 30, 2023
Less than 1 Year1 Year or GreaterTotal
Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
March 31, 2024
March 31, 2024
March 31, 2024
Less than 1 YearLess than 1 Year1 Year or GreaterTotal
Fair ValueFair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
Company excluding Ford CreditCompany excluding Ford Credit
U.S. government
U.S. government
U.S. governmentU.S. government$2,744 $(41)$1,606 $(92)$4,350 $(133)
U.S. government agenciesU.S. government agencies604 (6)1,449 (90)2,053 (96)
Non-U.S. government and agenciesNon-U.S. government and agencies441 (7)1,644 (109)2,085 (116)
Corporate debtCorporate debt3,289 (40)2,103 (117)5,392 (157)
Other marketable securitiesOther marketable securities77 (2)144 (6)221 (8)
TotalTotal$7,155 $(96)$6,946 $(414)$14,101 $(510)

We determine credit losses on AFS debt securities using the specific identification method. During the secondfirst quarter of 2023,2024, 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,
2022
June 30,
2023
December 31,
2023
December 31,
2023
March 31,
2024
Cash and cash equivalentsCash and cash equivalents$25,134 $26,406 
Restricted cash (a)Restricted cash (a)206 217 
Cash, cash equivalents, and restricted cash - held for sale (Note 15)
Total cash, cash equivalents, and restricted cashTotal cash, cash equivalents, and restricted cash$25,340 $26,623 
__________
(a)Included in Other assetsin the non-current assets section of our consolidated balance sheets.

1213

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,
2022
June 30,
2023
December 31,
2023
March 31,
2024
ConsumerConsumer  Consumer  
Retail installment contracts, grossRetail installment contracts, gross$66,954 $69,920 
Finance leases, grossFinance leases, gross6,765 7,256 
Retail financing, grossRetail financing, gross73,719 77,176 
Unearned interest supplementsUnearned interest supplements(2,305)(2,721)
Consumer finance receivablesConsumer finance receivables71,414 74,455 
Non-ConsumerNon-Consumer Non-Consumer 
Dealer financingDealer financing18,054 21,542 
Non-Consumer finance receivablesNon-Consumer finance receivables18,054 21,542 
Total recorded investmentTotal recorded investment$89,468 $95,997 
Recorded investment in finance receivablesRecorded investment in finance receivables$89,468 $95,997 
Recorded investment in finance receivables
Recorded investment in finance receivables
Allowance for credit lossesAllowance for credit losses(845)(873)
Total finance receivables, netTotal finance receivables, net$88,623 $95,124 
Current portion
Current portion
Current portionCurrent portion$38,720 $42,557 
Non-current portionNon-current portion49,903 52,567 
Total finance receivables, netTotal finance receivables, net$88,623 $95,124 
Net finance receivables subject to fair value (a)Net finance receivables subject to fair value (a)$82,200 $88,256 
Net finance receivables subject to fair value (a)
Net finance receivables subject to fair value (a)
Fair value (b)Fair value (b)79,521 85,923 
__________
(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 secondfirst quarter of 20222023 and 20232024 was $73$83 million and $91 million, respectively, and for the first half of 2022 and 2023 was $150 million and $174$117 million, respectively, and is included in Ford Credit revenues on our consolidated income statements.

At December 31, 20222023 and June 30, 2023,March 31, 2024, accrued interest was $187$294 million and $218$287 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, 20222023 and June 30, 2023,March 31, 2024, were consumer receivables of $43.9$46.0 billion and $43.6$45.0 billion, respectively, and non-consumer receivables of $18.2$21.3 billion and $18.3$22.0 billion, respectively, (including Ford Blue, Ford Model e, and Ford Pro receivables sold to Ford Credit, which we report in Trade and other 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.

13
14

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, 20222023 was as follows (in millions):
Amortized Cost Basis by Origination Year
Prior to 201820182019202020212022TotalPercent
Amortized Cost Basis by Origination Year
Prior to 2019
Prior to 2019
Prior to 201920192020202120222023TotalPercent
ConsumerConsumer
31 - 60 days past due
31 - 60 days past due
31 - 60 days past due31 - 60 days past due$41 $60 $91 $181 $150 $126 $649 0.9 %$40 $$49 $$130 $$125 $$187 $$159 $$690 0.9 0.9 %
61 - 120 days past due61 - 120 days past due12 20 39 40 29 149 0.2 
Greater than 120 days past dueGreater than 120 days past due38 0.1 
Total past dueTotal past due59 76 116 227 197 161 836 1.2 
CurrentCurrent883 2,563 6,137 13,844 18,357 28,794 70,578 98.8 
TotalTotal$942 $2,639 $6,253 $14,071 $18,554 $28,955 $71,414 100.0 %Total$947 $$2,423 $$7,552 $$11,473 $$20,502 $$35,377 $$78,274 100.0 100.0 %
Gross charge-offs
Gross charge-offs
Gross charge-offs

The credit quality analysis of consumer receivables at June 30, 2023March 31, 2024 was as follows (in millions):
Amortized Cost Basis by Origination Year
Prior to 201920192020202120222023TotalPercent
Amortized Cost Basis by Origination Year
Prior to 2020
Prior to 2020
Prior to 202020202021202220232024TotalPercent
ConsumerConsumer
31 - 60 days past due
31 - 60 days past due
31 - 60 days past due31 - 60 days past due$61 $62 $141 $127 $156 $45 $592 0.8 %$63 $$98 $$103 $$164 $$172 $$12 $$612 0.8 0.8 %
61 - 120 days past due61 - 120 days past due11 13 32 34 44 13 147 0.2 
Greater than 120 days past dueGreater than 120 days past due10 41 — 
Total past dueTotal past due82 79 181 170 209 59 780 1.0 
CurrentCurrent1,860 4,085 10,430 14,654 24,580 18,066 73,675 99.0 
TotalTotal$1,942 $4,164 $10,611 $14,824 $24,789 $18,125 $74,455 100.0 %Total$2,478 $$6,242 $$9,809 $$18,395 $$32,809 $$10,185 $$79,918 100.0 100.0 %
Gross charge-offsGross charge-offs$27 $20 $37 $40 $48 $$174 
Gross charge-offs
Gross charge-offs

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.

14
15

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, 20222023 was as follows (in millions):
Amortized Cost Basis by Origination YearWholesale Loans
Dealer Loans
Prior to 201820182019202020212022TotalTotalPercent
Amortized Cost Basis by Origination Year
Dealer Loans
Dealer Loans
Dealer Loans
Prior to 2019
Prior to 2019
Prior to 201920192020202120222023TotalTotalPercent
Group IGroup I$402 $148 $35 $67 $185 $224 $1,061 $13,888 $14,949 82.8 %Group I$383 $$30 $$58 $$156 $$61 $$331 $$1,019 $$20,419 $$21,438 86.9 86.9 %
Group IIGroup II21 — 42 72 2,751 2,823 15.6 
Group IIIGroup III— — — — — 10 10 233 243 1.4 
Group IVGroup IV— — — — 35 39 0.2 
Total (a)Total (a)$404 $169 $36 $72 $187 $279 $1,147 $16,907 $18,054 100.0 %Total (a)$399 $$31 $$59 $$159 $$64 $$385 $$1,097 $$23,586 $$24,683 100.0 100.0 %
Gross charge-offs
Gross charge-offs
Gross charge-offs
__________
(a)Total past due dealer financing receivables at December 31, 20222023 were $9$33 million.

The credit quality analysis of dealer financing receivables at June 30, 2023March 31, 2024 was as follows (in millions):
Amortized Cost Basis by Origination YearWholesale Loans
Dealer Loans
Prior to 201920192020202120222023TotalTotalPercent
Amortized Cost Basis by Origination Year
Dealer Loans
Dealer Loans
Dealer Loans
Prior to 2020
Prior to 2020
Prior to 202020202021202220232024TotalTotalPercent
Group IGroup I$520 $32 $67 $165 $83 $247 $1,114 $17,488 $18,602 86.4 %Group I$299 $$60 $$111 $$61 $$268 $$133 $$932 $$18,425 $$19,357 85.9 85.9 %
Group IIGroup II— 57 65 2,504 2,569 11.9 
Group IIIGroup III— — — 301 309 1.4 
Group IVGroup IV— — — — 58 62 0.3 
Total (a)Total (a)$522 $33 $69 $167 $87 $313 $1,191 $20,351 $21,542 100.0 %Total (a)$316 $$60 $$115 $$63 $$273 $$166 $$993 $$21,554 $$22,547 100.0 100.0 %
Gross charge-offsGross charge-offs$— $— $— $— $— $— $— $— $— 
Gross charge-offs
Gross charge-offs
__________
(a)Total past due dealer financing receivables at June 30, 2023March 31, 2024 were $4$19 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.

Loan Modifications. Consumer and non-consumer receivables that have a modified interest rate and/or a term extension (including receivables that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code) are typically considered to be loan modifications. Ford Credit does not grant 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 June 30, 2023,March 31, 2024, 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.



15
16

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.

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 June 30March 31 was as follows (in millions):
First Quarter 2023
First Quarter 2023
First Quarter 2023
Second Quarter 2022First Half 2022
ConsumerNon-ConsumerTotalConsumerNon-ConsumerTotal
Allowance for credit lossesAllowance for credit losses
Allowance for credit losses
Allowance for credit losses
Beginning balance
Beginning balance
Beginning balanceBeginning balance$826 $19 $845 $903 $22 $925 
Charge-offsCharge-offs(61)(1)(62)(123)(1)(124)
Charge-offs
Charge-offs
RecoveriesRecoveries44 45 87 89 
Provision for/(Benefit from) credit losses(48)(8)(56)(107)(13)(120)
Recoveries
Recoveries
Provision for credit losses
Provision for credit losses
Provision for credit losses
Other (a)
Other (a)
Other (a)Other (a)(7)(2)(9)(6)(1)(7)
Ending balanceEnding balance$754 $$763 $754 $$763 
Ending balance
Ending balance

First Quarter 2024
First Quarter 2024
First Quarter 2024
Second Quarter 2023First Half 2023
ConsumerNon-ConsumerTotalConsumerNon-ConsumerTotal
Allowance for credit lossesAllowance for credit losses
Allowance for credit losses
Allowance for credit losses
Beginning balance
Beginning balance
Beginning balanceBeginning balance$863 $$870 $838 $$845 
Charge-offsCharge-offs(78)— (78)(174)— (174)
Charge-offs
Charge-offs
RecoveriesRecoveries38 — 38 76 77 
Provision for/(Benefit from) credit losses40 — 40 118 (1)117 
Recoveries
Recoveries
Provision for credit losses
Provision for credit losses
Provision for credit losses
Other (a)
Other (a)
Other (a)Other (a)— — 
Ending balanceEnding balance$866 $$873 $866 $$873 
Ending balance
Ending balance
__________
(a)    Primarily represents amounts related to translation adjustments.

During the secondfirst quarter and first half of 2023,2024, the allowance for credit losses increased $3decreased $2 million, and $28 million, respectively, driven by the impact of improvement in the U.S. macroeconomic outlook assumptions, offset partially by an increase in Ford Credit finance receivables. Net charge-offs increased from a year ago, reflecting continuing normalization from extraordinarily low levels. The impact of higher inflationlower levels following the COVID-19 pandemic. While credit performance has remained strong, high inflationary pressure and higherhigh interest rates have caused economic uncertainty, which is expected to have an unfavorable impact on future consumer credit losses remains uncertain.losses. Ford Credit will continue to monitor economic trends and conditions and portfolio performance and will adjust the reserve accordingly.
1617

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,
2022
June 30,
2023
December 31,
2023
March 31,
2024
Raw materials, work-in-process, and suppliesRaw materials, work-in-process, and supplies$5,997 $6,325 
Finished productsFinished products8,083 11,378 
Total inventoriesTotal inventories$14,080 $17,703 

Our finished product inventory at June 30, 2023March 31, 2024 was higher than at December 31, 2022,2023 primarily reflecting higher in-transitnew vehicle launches and in-plant inventory.units awaiting final quality review.

NOTE 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 $384 million and $261 million at December 31, 2022 and June 30, 2023, respectively. The cumulative net unrealized gain from adjustments related to Other Investments held at June 30, 2023 was $12 million.

NOTE 11. GOODWILL

The net carrying amount of goodwill was $603 million and $608 million at December 31, 2022 and June 30, 2023, respectively, and is reported in Other assets in the non-current assets section of our consolidated balance sheets.

17

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12.10. OTHER LIABILITIES AND DEFERRED REVENUE

Other liabilities and deferred revenue were as follows (in millions):
December 31,
2022
June 30,
2023
December 31,
2023
March 31,
2024
CurrentCurrent
Dealer and dealers’ customer allowances and claims
Dealer and dealers’ customer allowances and claims
Dealer and dealers’ customer allowances and claimsDealer and dealers’ customer allowances and claims$9,219 $11,121 
Deferred revenueDeferred revenue2,404 2,679 
Employee benefit plansEmployee benefit plans2,020 1,828 
Accrued interestAccrued interest935 1,050 
Operating lease liabilitiesOperating lease liabilities404 413 
OPEB (a)OPEB (a)329 330 
Pension (a)Pension (a)196 198 
Other (b)Other (b)5,590 6,306 
Total current other liabilities and deferred revenueTotal current other liabilities and deferred revenue$21,097 $23,925 
Non-currentNon-current  Non-current  
Dealer and dealers’ customer allowances and claimsDealer and dealers’ customer allowances and claims$6,095 $6,168 
Pension (a)Pension (a)5,673 5,931 
OPEB (a)OPEB (a)4,130 4,077 
Deferred revenueDeferred revenue4,883 4,877 
Operating lease liabilitiesOperating lease liabilities1,101 1,201 
Employee benefit plansEmployee benefit plans834 783 
Other (b)Other (b)2,781 2,717 
Total non-current other liabilities and deferred revenueTotal non-current other liabilities and deferred revenue$25,497 $25,754 
__________
(a)Balances at June 30, 2023March 31, 2024 reflect pension and OPEB liabilities at December 31, 2022,2023, 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 2022.2023. Included in Other assets are pension assets of $5.7 billion and $6.0$4.3 billion at both December 31, 20222023 and June 30, 2023, respectively.March 31, 2024.
(b)Includes current derivative liabilities of $1.3$1.0 billion and $1.5$1.2 billion at December 31, 20222023 and June 30, 2023,March 31, 2024, respectively. Includes non-current derivative liabilities of $1.7$1.3 billion and $1.5$1.0 billion at December 31, 20222023 and June 30, 2023,March 31, 2024, respectively (see Note 15)13).

18

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13.11. 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 June 30March 31 were as follows (in millions):
Second Quarter
 Pension Benefits  
 U.S. PlansNon-U.S. PlansWorldwide OPEB
 202220232022202320222023
Service cost$125 $75 $107 $61 $11 $
Interest cost264 405 133 242 37 57 
Expected return on assets(643)(480)(259)(223)— — 
Amortization of prior service costs/(credits)— — 
Net remeasurement (gain)/loss— 81 16 — — 
Separation programs/other10 10 57 (1)— 
Settlements and curtailments— — — — 
Net periodic benefit cost/(income)$(246)$94 $12 $151 $47 $64 
First Half
 Pension Benefits  
 U.S. PlansNon-U.S. PlansWorldwide OPEB
 202220232022202320222023
Service cost$250 $147 $218 $122 $21 $11 
Interest cost527 813 267 479 74 115 
Expected return on assets(1,285)(966)(527)(442)— — 
Amortization of prior service costs/(credits)— 12 10 (1)
Net remeasurement (gain)/loss— 194 16 — — 
Separation programs/other11 12 17 61 (1)— 
Settlements and curtailments— 45 — — — 
Net periodic benefit cost/(income)$(496)$245 $$239 $93 $128 

First Quarter
20232024
 Pension BenefitsOPEBPension BenefitsOPEB
 U.S. PlansNon-U.S. PlansWorldwideU.S. PlansNon-U.S. PlansWorldwide
Service cost$72 $61 $$73 $63 $
Interest cost408 237 58 400 235 57 
Expected return on assets(486)(219)— (455)(255)— 
Amortization of prior service costs/(credits)— 23 
Net remeasurement (gain)/loss113 — — — (11)— 
Separation programs/other— 14 — 
Settlements and curtailments42 — — — — — 
Net periodic benefit cost/(income)$151 $88 $64 $49 $52 $65 

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 second quarter and first half of 2023, we paid lump sums for two of our pension plans, which resulted in a remeasurement of $89 million and $202 million, respectively, and settlement expenses of $4 million and $46 million, respectively.

Pension Plan Contributions

During 2023,2024, we continue to expect to contribute between $500 million and $600 millionabout $1 billion of cash to our global funded pension plans. We also expect to make about $400$420 million of benefit payments to participants in unfunded plans. In the first halfquarter of 2023,2024, we contributed $234$550 million to our global funded pension plans and made $199$105 million of benefit payments to participants in unfunded plans.
19

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 14.12. DEBT
The carrying value of Company debt excluding Ford Credit and Ford Credit debt was as follows (in millions):
December 31,
2022
June 30,
2023
December 31,
2023
December 31,
2023
March 31,
2024
Company excluding Ford CreditCompany excluding Ford Credit  Company excluding Ford Credit  
Debt payable within one yearDebt payable within one year
Short-term
Short-term
Short-termShort-term$359 $256 
Long-term payable within one yearLong-term payable within one year Long-term payable within one year 
Other debt (including finance leases)Other debt (including finance leases)372 154 
Unamortized (discount)/premiumUnamortized (discount)/premium(1)— 
Total debt payable within one yearTotal debt payable within one year730 410 
Long-term debt payable after one yearLong-term debt payable after one year Long-term debt payable after one year 
Public unsecured debt securitiesPublic unsecured debt securities14,935 14,935 
Convertible notes (a)Convertible notes (a)2,300 2,300 
U.K. Export Finance ProgramU.K. Export Finance Program1,654 1,739 
Other debt (including finance leases)Other debt (including finance leases)682 547 
Unamortized (discount)/premiumUnamortized (discount)/premium(180)(170)
Unamortized issuance costsUnamortized issuance costs(191)(182)
Total long-term debt payable after one yearTotal long-term debt payable after one year19,200 19,169 
Total Company excluding Ford CreditTotal Company excluding Ford Credit$19,930 $19,579 
Fair value of Company debt excluding Ford Credit (b)Fair value of Company debt excluding Ford Credit (b)$18,557 $19,224 
Ford CreditFord Credit  Ford Credit  
Debt payable within one yearDebt payable within one year
Short-termShort-term$19,624 $19,405 
Short-term
Short-term
Long-term payable within one yearLong-term payable within one year Long-term payable within one year 
Unsecured debtUnsecured debt7,980 9,447 
Asset-backed debtAsset-backed debt21,839 20,077 
Unamortized (discount)/premiumUnamortized (discount)/premium— — 
Unamortized issuance costsUnamortized issuance costs(13)(15)
Fair value adjustments (c)Fair value adjustments (c)17 
Total debt payable within one yearTotal debt payable within one year49,434 48,931 
Long-term debt payable after one yearLong-term debt payable after one year
Unsecured debtUnsecured debt39,620 44,377 
Unsecured debt
Unsecured debt
Asset-backed debtAsset-backed debt31,840 32,280 
Unamortized (discount)/premiumUnamortized (discount)/premium23 15 
Unamortized issuance costsUnamortized issuance costs(184)(231)
Fair value adjustments (c)Fair value adjustments (c)(1,694)(1,715)
Total long-term debt payable after one yearTotal long-term debt payable after one year69,605 74,726 
Total Ford CreditTotal Ford Credit$119,039 $123,657 
Fair value of Ford Credit debt (b)Fair value of Ford Credit debt (b)$117,214 $122,954 
__________
(a)As of June 30, 2023,March 31, 2024, each $1,000 principal amount of the notes will be convertible into 63.880167.352 shares of our Common Stock, which is equivalent to a conversion price of approximately $15.65$14.85 per share. We recognized issuance cost amortization of $2 million and $3 million during both the secondfirst quarter and first half of 2022, respectively, and $2 million and $3 million during the second quarter and first half of 2023 respectively.and 2024.
(b)At December 31, 20222023 and June 30, 2023,March 31, 2024, the fair value of debt includes $359$362 million and $256$579 million of Company excluding Ford Credit short-term debt, respectively, and $16.9$15.5 billion and $16.2$15.2 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.
(c)These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $31$(681) million and $(339)$(607) million at December 31, 20222023 and June 30, 2023,March 31, 2024, respectively. The carrying value of hedged debt was $33.3$38.7 billion and $38.0$40.3 billion at December 31, 20222023 and June 30, 2023,March 31, 2024, respectively.



20

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 15.13. 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 June 30March 31 were as follows (in millions):
Second QuarterFirst Half
Cash flow hedgesCash flow hedges2022202320222023
Cash flow hedges
Cash flow hedges
Reclassified from AOCI to Cost of sales
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)$(90)$64 $(180)$90 
Foreign currency exchange contracts (a)
Foreign currency exchange contracts (a)
Commodity contracts (b)
Commodity contracts (b)
Commodity contracts (b)Commodity contracts (b)84 (15)142 (24)
Fair value hedgesFair value hedges
Fair value hedges
Fair value hedges
Interest rate contracts
Interest rate contracts
Interest rate contractsInterest rate contracts
Net interest settlements and accruals on hedging instrumentsNet interest settlements and accruals on hedging instruments25 (130)101 (270)
Net interest settlements and accruals on hedging instruments
Net interest settlements and accruals on hedging instruments
Fair value changes on hedging instruments
Fair value changes on hedging instruments
Fair value changes on hedging instrumentsFair value changes on hedging instruments(336)(316)(1,322)(66)
Fair value changes on hedged debtFair value changes on hedged debt385 292 1,376 13 
Fair value changes on hedged debt
Fair value changes on hedged debt
Cross-currency interest rate swap contracts
Cross-currency interest rate swap contracts
Cross-currency interest rate swap contractsCross-currency interest rate swap contracts
Net interest settlements and accruals on hedging instrumentsNet interest settlements and accruals on hedging instruments(6)(19)(9)(33)
Net interest settlements and accruals on hedging instruments
Net interest settlements and accruals on hedging instruments
Fair value changes on hedging instruments
Fair value changes on hedging instruments
Fair value changes on hedging instrumentsFair value changes on hedging instruments(61)(24)(98)(2)
Fair value changes on hedged debtFair value changes on hedged debt65 22 106 
Fair value changes on hedged debt
Fair value changes on hedged debt
Derivatives not designated as hedging instruments
Derivatives not designated as hedging instruments
Derivatives not designated as hedging instrumentsDerivatives not designated as hedging instruments
Foreign currency exchange contracts (c)Foreign currency exchange contracts (c)127 25 81 22 
Foreign currency exchange contracts (c)
Foreign currency exchange contracts (c)
Cross-currency interest rate swap contracts
Cross-currency interest rate swap contracts
Cross-currency interest rate swap contractsCross-currency interest rate swap contracts(443)(60)(670)25 
Interest rate contractsInterest rate contracts89 109 212 97 
Interest rate contracts
Interest rate contracts
Commodity contracts
Commodity contracts
Commodity contractsCommodity contracts(140)(45)(31)(56)
TotalTotal$(301)$(97)$(292)$(201)
Total
Total
__________
(a)For the secondfirst quarter and first half of 2022, a $234 million gain and a $106 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax. For the second quarter and first half of 2023 and 2024, a $328$63 million loss and a $391$288 million loss,gain, respectively, were reported in Other comprehensive income/(loss), net of tax.
(b)For the secondfirst quarter of 2023 and first half of 2022, a $3602024, an $8 million lossgain and a $76 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax. For the second quarter and first half of 2023, a $108 million loss and a $100$32 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax.
(c)For the secondfirst quarter of 2023 and first half of 2022,2024, a $100$19 million gain and a $56$23 million gain,loss, respectively, were reported inCost of sales, and a $27$22 million gainloss and a $25$92 million gain, respectively, were reported in Other income/(loss), net. For the second quarter and first half of 2023, a $32 million gain and a $51 million gain, respectively, were reported in Cost of sales, and a $7 million loss and a $29 million loss, respectively, were reported in Other income/(loss), net.
21

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 15.13. 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, 2022June 30, 2023
NotionalFair Value of
Assets
Fair Value of
Liabilities
NotionalFair Value of
Assets
Fair Value of
Liabilities
December 31, 2023December 31, 2023March 31, 2024
NotionalNotionalFair Value of
Assets
Fair Value of
Liabilities
NotionalFair Value of
Assets
Fair Value of
Liabilities
Cash flow hedgesCash flow hedges   
Foreign currency exchange contracts
Foreign currency exchange contracts
Foreign currency exchange contractsForeign currency exchange contracts$11,536 $376 $52 $17,886 $111 $284 
Commodity contractsCommodity contracts990 16 56 1,033 — 118 
Fair value hedgesFair value hedges
Interest rate contractsInterest rate contracts16,883 — 1,653 16,454 — 1,266 
Interest rate contracts
Interest rate contracts
Cross-currency interest rate swap contractsCross-currency interest rate swap contracts885 — 161 2,078 145 
Derivatives not designated as hedging instrumentsDerivatives not designated as hedging instruments
Foreign currency exchange contracts
Foreign currency exchange contracts
Foreign currency exchange contractsForeign currency exchange contracts20,851 162 285 20,780 170 143 
Cross-currency interest rate swap contractsCross-currency interest rate swap contracts6,635 15 653 6,416 54 476 
Interest rate contractsInterest rate contracts63,210 931 483 64,142 938 908 
Commodity contractsCommodity contracts841 26 35 1,003 70 
Total derivative financial instruments, gross (a) (b)Total derivative financial instruments, gross (a) (b)$121,831 $1,526 $3,378 $129,792 $1,284 $3,410 
Current portionCurrent portion$1,101 $1,656 $925 $1,914 
Current portion
Current portion
Non-current portionNon-current portion425 1,722 359 1,496 
Total derivative financial instruments, grossTotal derivative financial instruments, gross$1,526 $3,378 $1,284 $3,410 
__________
(a)At December 31, 20222023 and June 30, 2023,March 31, 2024, we held collateral of $210$40 million and $174$33 million, respectively, and we posted collateral of $201$185 million and $278$108 million, respectively.
(b)At December 31, 20222023 and June 30, 2023,March 31, 2024, the fair value of assets and liabilities available for counterparty netting was $451$815 million and $512$681 million, respectively. respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.


22

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16.14. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES

We generally record costs associated with voluntary separations at the time of employee 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 salesand and Selling, administrative, and other expenses. expenses. Below are actions that have been initiated:

Brazil. Exited manufacturing operations in 2021 resulting in the closure of facilities in Camaçari, Taubaté, and Troller. A saleSales of the Taubaté plant wasand Camaçari plants were completed in the second quarter of 2023
India. Ceased vehicle manufacturing in Sanand in the fourth quarter of 2021 and ceased manufacturing in Chennai in the third quarter of 2022. A sale of the Sanand vehicle assembly and powertrain plants was completed in the first quarter of 2023 (see Note 17)15)
Spain. Ceased production of the Mondeo at the Valencia plant in the first quarter of 2022
China. Ceased development of certain product programs
Germany. Production of the Focus will cease at our Saarlouis Body and Assembly Plant in 2025. Our plan is to repurpose the first half of 2023facility into a technology center, retaining 1,000 positions.

In addition, we are continuing to reduce our global workforce and take other restructuring actions, including voluntary separation packages offered to our hourly workforce in the first quarter of 2024 as agreed to in our collective bargaining agreements in North America, and the separation of salaried workers, primarily in Europe, as announced in the first halfquarter of 2023.

The following table summarizes the activities for the periods ended June 30,March 31, which are recorded in Other liabilities and deferred revenue (in millions):
Second QuarterFirst Half
2022202320222023
First Quarter
First Quarter
First Quarter
2023
2023
2023
Beginning balance
Beginning balance
Beginning balanceBeginning balance$829 $1,126 $950 $588 
Changes in accruals (a)Changes in accruals (a)50 290 116 919 
Changes in accruals (a)
Changes in accruals (a)
PaymentsPayments(146)(112)(351)(195)
Foreign currency translation(42)(27)(24)(35)
Payments
Payments
Foreign currency translation and other
Foreign currency translation and other
Foreign currency translation and other
Ending balanceEnding balance$691 $1,277 $691 $1,277 
Ending balance
Ending balance
__________
(a)Excludes pension costs of $9$4 million and $55 million in the second quarter of 2022 and 2023, respectively, and $16 million and $59$14 million in the first halfquarter of 20222023 and 2023,2024, respectively.

We recorded $43 million and $2 million in the second quarter of 2022 and 2023, respectively, and $66 million and $50$48 million in the first halfquarter of 2022 and 2023 respectively, for accelerated depreciation and other non-cash items. In addition, we recognized a $6 million and $38 million pre-tax net gain on sale of assets in the second quarter and first halfof 2022, respectively, and a $19 million pre-tax net gain in both the second quarter and first half of 2023.

We recorded costs of $160$681 million and $1 billion$608 million in the first halfquarter of 20222023 and 2023,2024, respectively, related to the actions above. We estimate that we will incur about $1 billion in total charges in 2023 that range between $1.5 billion and $2 billion2024 related to such actions, primarily attributable to employee separations and supplier settlements. Wesettlements; some charges are related to plans that are subject to negotiations with a works council, union, or other social partner. In addition, we continue to review our global businesses and may take additional restructuring actions where a path to sustained profitability is not feasible when considering the capital allocation required for those businesses.



23

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16.EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES(Continued)

Ford Credit

Accumulated foreign currency translation losses included in Accumulated other comprehensive income/(loss) at June 30, 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 second quarter and first half of 2022, we reclassified losses of $36 million and $155 million, respectively, 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.

NOTE 17.15. ACQUISITIONS AND DIVESTITURES

Company Excluding Ford Credit

Argo AI, LLCFord Sales and Service Korea Company (“Argo AI”FSSK”). In October 2022, Ford and Volkswagen AG (“VW”), who held equal interests that together comprised a majority ownershipthe first quarter of Argo AI, initiated the process of exiting the joint development of highly automated driving technology (L4) through Argo AI. At December 31, 2022, the carrying value2024, we entered into an agreement to sell 100% of our equity method investmentinterest in Argo AI was $0,FSSK. Accordingly, as of March 31, 2024, we reported $72 million of held-for-sale assets, including $51 million of cash, and we had $65$49 million of held-for-sale liabilities in Other liabilitiesassets and deferred revenueOther liabilities, related to our funding commitmentrespectively. We determined the assets held for our share of Argo AI’s expenses previously incurred. Argo AI is in the process of winding down operations, and in the second quarter ofsale were not impaired.

Auto Motive Power (“AMP”). On November 1, 2023, we settledacquired AMP, a California-based energy management
startup focused on electric vehicle charging solutions. Assets acquired primarily include goodwill and technology, which are reported in Other assets. The acquisition did not have a material impact on our expected funding commitment.financial statements.

Sanand, India (“Sanand”) Plants. InOn January 10, 2023, we completed the third quartersale 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 continuecontinues 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.

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.




24

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18.16. 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 June 30March 31 were as follows (in millions):
Second QuarterFirst Half
2022202320222023
First Quarter
First Quarter
First Quarter
2023
2023
2023
Foreign currency translation
Foreign currency translation
Foreign currency translationForeign currency translation
Beginning balanceBeginning balance$(5,341)$(5,923)$(5,487)$(6,416)
Beginning balance
Beginning balance
Gains/(Losses) on foreign currency translation
Gains/(Losses) on foreign currency translation
Gains/(Losses) on foreign currency translationGains/(Losses) on foreign currency translation(996)276 (1,067)761 
Less: Tax/(Tax benefit) (a)Less: Tax/(Tax benefit) (a)65 — (31)(10)
Less: Tax/(Tax benefit) (a)
Less: Tax/(Tax benefit) (a)
Net gains/(losses) on foreign currency translation
Net gains/(losses) on foreign currency translation
Net gains/(losses) on foreign currency translationNet gains/(losses) on foreign currency translation(1,061)276 (1,036)771 
(Gains)/Losses reclassified from AOCI to net income (b)(Gains)/Losses reclassified from AOCI to net income (b)47 (2)168 (4)
Other comprehensive income/(loss), net of tax (c)(1,014)274 (868)767 
(Gains)/Losses reclassified from AOCI to net income (b)
(Gains)/Losses reclassified from AOCI to net income (b)
Other comprehensive income/(loss), net of tax
Other comprehensive income/(loss), net of tax
Other comprehensive income/(loss), net of tax
Ending balance
Ending balance
Ending balanceEnding balance$(6,355)$(5,649)$(6,355)$(5,649)
Marketable securitiesMarketable securities
Marketable securities
Marketable securities
Beginning balance
Beginning balance
Beginning balanceBeginning balance$(272)$(332)$(19)$(442)
Gains/(Losses) on available for sale securitiesGains/(Losses) on available for sale securities(118)(67)(448)68 
Gains/(Losses) on available for sale securities
Gains/(Losses) on available for sale securities
Less: Tax/(Tax benefit)
Less: Tax/(Tax benefit)
Less: Tax/(Tax benefit)Less: Tax/(Tax benefit)(29)(16)(106)17 
Net gains/(losses) on available for sale securitiesNet gains/(losses) on available for sale securities(89)(51)(342)51 
Net gains/(losses) on available for sale securities
Net gains/(losses) on available for sale securities
(Gains)/Losses reclassified from AOCI to net income
(Gains)/Losses reclassified from AOCI to net income
(Gains)/Losses reclassified from AOCI to net income(Gains)/Losses reclassified from AOCI to net income20 
Less: Tax/(Tax benefit)Less: Tax/(Tax benefit)
Net (gains)/losses reclassified from AOCI to net income15 
Less: Tax/(Tax benefit)
Less: Tax/(Tax benefit)
Net (gains)/losses reclassified from AOCI to net income (b)
Net (gains)/losses reclassified from AOCI to net income (b)
Net (gains)/losses reclassified from AOCI to net income (b)
Other comprehensive income/(loss), net of taxOther comprehensive income/(loss), net of tax(83)(44)(336)66 
Other comprehensive income/(loss), net of tax
Other comprehensive income/(loss), net of tax
Ending balance
Ending balance
Ending balanceEnding balance$(355)$(376)$(355)$(376)
Derivative instrumentsDerivative instruments
Derivative instruments
Derivative instruments
Beginning balance
Beginning balance
Beginning balanceBeginning balance$(49)$74 $(193)$129 
Gains/(Losses) on derivative instrumentsGains/(Losses) on derivative instruments(126)(436)30 (491)
Gains/(Losses) on derivative instruments
Gains/(Losses) on derivative instruments
Less: Tax/(Tax benefit)
Less: Tax/(Tax benefit)
Less: Tax/(Tax benefit)Less: Tax/(Tax benefit)(30)(113)(127)
Net gains/(losses) on derivative instrumentsNet gains/(losses) on derivative instruments(96)(323)23 (364)
Net gains/(losses) on derivative instruments
Net gains/(losses) on derivative instruments
(Gains)/Losses reclassified from AOCI to net income
(Gains)/Losses reclassified from AOCI to net income
(Gains)/Losses reclassified from AOCI to net income(Gains)/Losses reclassified from AOCI to net income(49)38 (66)
Less: Tax/(Tax benefit)Less: Tax/(Tax benefit)(3)11 (6)
Net (gains)/losses reclassified from AOCI to net income (d)(46)27 (60)
Less: Tax/(Tax benefit)
Less: Tax/(Tax benefit)
Net (gains)/losses reclassified from AOCI to net income (c)
Net (gains)/losses reclassified from AOCI to net income (c)
Net (gains)/losses reclassified from AOCI to net income (c)
Other comprehensive income/(loss), net of taxOther comprehensive income/(loss), net of tax(94)(369)50 (424)
Other comprehensive income/(loss), net of tax
Other comprehensive income/(loss), net of tax
Ending balance
Ending balance
Ending balanceEnding balance$(143)$(295)$(143)$(295)
Pension and other postretirement benefitsPension and other postretirement benefits
Pension and other postretirement benefits
Pension and other postretirement benefits
Beginning balance
Beginning balance
Beginning balanceBeginning balance$(2,632)$(2,607)$(2,640)$(2,610)
Amortization and recognition of prior service costs/(credits)Amortization and recognition of prior service costs/(credits)12 12 
Amortization and recognition of prior service costs/(credits)
Amortization and recognition of prior service costs/(credits)
Less: Tax/(Tax benefit)
Less: Tax/(Tax benefit)
Less: Tax/(Tax benefit)Less: Tax/(Tax benefit)
Net prior service costs/(credits) reclassified from AOCI to net incomeNet prior service costs/(credits) reclassified from AOCI to net income
Net prior service costs/(credits) reclassified from AOCI to net income
Net prior service costs/(credits) reclassified from AOCI to net income
Translation impact on non-U.S. plans
Translation impact on non-U.S. plans
Translation impact on non-U.S. plansTranslation impact on non-U.S. plans(1)11 (3)
Other comprehensive income/(loss), net of taxOther comprehensive income/(loss), net of tax12 20 
Other comprehensive income/(loss), net of tax
Other comprehensive income/(loss), net of tax
Ending balance
Ending balance
Ending balanceEnding balance$(2,620)$(2,604)$(2,620)$(2,604)
Total AOCI ending balance at June 30$(9,473)$(8,924)$(9,473)$(8,924)
Total AOCI ending balance at March 31
Total AOCI ending balance at March 31
Total AOCI ending balance at March 31
__________
(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.net.
(c)Excludes a $4 million loss and a $4 million gain in 2022 and 2023, respectively.
(d)Reclassified to Cost of sales. During the next twelve months, we expect to reclassify existing net losses on cash flow hedges of $139$6 million (see Note 15)13).

25

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 19.17. 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, accounts receivable, loans, and guarantees and was $1.0$3.7 billion and $2.1$4.6 billion at December 31, 20222023 and June 30, 2023,March 31, 2024, respectively. Of these amounts, guarantees of $113$125 million at both December 31, 20222023 and June 30, 2023March 31, 2024 related to certain obligations of our VIEs also are included in Note 20.18.

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 (“BOSK”), 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 SKBOSK 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 June 30, 2023,March 31, 2024, Ford has contributed to BlueOval SK $1.6BOSK $3.9 billion of its agreed capital contribution of up to $6.6 billion through 2026,2026. The total amount of capital contributions is subject to any adjustments agreed to by the parties.




26

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20.18. 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 $518$535 million and $576$515 million at December 31, 20222023 and June 30, 2023,March 31, 2024, respectively. The carrying value of recorded liabilities related to financial guarantees was $31$59 million and $47$43 million at December 31, 20222023 and June 30, 2023,March 31, 2024, 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 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.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 $273 million and $77 million at December 31, 2022 and June 30, 2023, respectively. The carrying valuevalues of recorded liabilities related to non-financial guarantees was $0were de minimis at both December 31, 20222023 and June 30, 2023.March 31, 2024.

Included in the $77 million of maximum potential payments at June 30, 2023 are guarantees for the resale value of vehicles sold in certain arrangements to daily rental companies. The maximum potential payment of $71 million as of June 30, 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.

27

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20.18. 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 and customs matters, for which we estimate the aggregate risk to be a range of up to about $1.4 billion.0.2 billion, a decrease of about $1.2 billion from December 31, 2023, primarily reflecting a customs matter settlement.

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.

28

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20.18. 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 June 30March 31 was as follows (in millions):
First Half
First QuarterFirst Quarter
20222023 20232024
Beginning balanceBeginning balance$8,451 $9,193 
Payments made during the periodPayments made during the period(2,006)(2,011)
Changes in accrual related to warranties issued during the periodChanges in accrual related to warranties issued during the period1,877 2,146 
Changes in accrual related to pre-existing warrantiesChanges in accrual related to pre-existing warranties395 882 
Foreign currency translation and otherForeign currency translation and other(120)(314)
Ending balanceEnding balance$8,597 $9,896 

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 $1$1.3 billion in the aggregate.
29

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 21.19. 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.

On January 1, 2023, we implemented a new operating model and reporting structure. As a result of this change, Accordingly, we analyze the 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. 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.

Additionally, past service pension and OPEB income and expense plus related assets, previously reported in the Automotive segment, have been realigned to Corporate Other.

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

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

Ford Blue Segment

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.


30

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 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 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 commercial, government, and rental customers. This segment 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 (including intersegment markup) associated with acquiring vehicles for sale and providing services are reflected in this segment. Ford Pro operates in North America and Europe.

Ford Next Segment

The Ford Next segment (formerly the Mobility segment) primarily includes expenses and investments for emerging business initiatives aimed at creating value for Ford in 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.


30

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 19. SEGMENT INFORMATION (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) 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, tax related 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.

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.



31

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 21.19. 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 ElementsExamplesSegment Reporting
Costs specific to a particular vehicleBill of material cost and initial warranty accrualReported in the segment externally selling the vehicle
Costs identifiable by product lineManufacturing and logistics costs, depreciation & amortization expense, direct research & development costsTypically identifiable to the product line or production location. Reported in the segment externally selling the vehicle, based on relative volume
Shared costsSelling, general & administrative expense, and indirect/cross product line research & development costsTypically 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 transactionsContract manufacturing and distribution feesReported 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 assets 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 BlueFord Model eFord 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”)




32

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 21.19. SEGMENT INFORMATION (Continued)

Key financial information for the periods ended or at June 30March 31 was as follows (in millions):
Ford BlueFord Model eFord ProFord NextFord CreditCorporate
Other
Interest
on Debt
Special ItemsEliminations/AdjustmentsTotal Ford BlueFord Model eFord ProFord NextFord CreditCorporate
Other
Interest
on Debt
Special ItemsEliminations/AdjustmentsTotal
Second Quarter 2022     
First Quarter 2023First Quarter 2023    
External revenuesExternal revenues$23,834 $1,320 $12,748 $25 $2,256 $$— $— $— $40,190 
Intersegment revenues (a)Intersegment revenues (a)9,702 50 — — — — — — (9,752)— 
Total revenuesTotal revenues$33,536 $1,370 $12,748 $25 $2,256 $$— $— $(9,752)$40,190 
Income/(Loss) before income taxes
Income/(Loss) before income taxes
Income/(Loss) before income taxesIncome/(Loss) before income taxes$2,504 $(510)$879 $(221)$939 $131 $(312)$(2,619)(b)$— $791 
Equity in net income/(loss) of affiliated companiesEquity in net income/(loss) of affiliated companies76 (3)84 (83)— — (20)— 58 
Equity in net income/(loss) of affiliated companies
Equity in net income/(loss) of affiliated companies
Total assets
Total assets
Total assetsTotal assets56,047 3,670 2,016 3,284 127,493 54,566 — — (1,321)(c)245,755 
Second Quarter 2023     
First Quarter 2024
First Quarter 2024
First Quarter 2024    
External revenuesExternal revenues$25,002 $1,834 $15,589 $— $2,527 $$— $— $— $44,954 
Intersegment revenues (a)Intersegment revenues (a)10,206 172 — — — — — — (10,378)— 
Total revenuesTotal revenues$35,208 $2,006 $15,589 $— $2,527 $$— $— $(10,378)$44,954 
Income/(loss) before income taxes
Income/(loss) before income taxes
Income/(loss) before income taxesIncome/(loss) before income taxes$2,308 $(1,080)$2,391 $(26)$390 $(197)$(304)$(1,194)(d)$— $2,288 
Equity in net income/(loss) of affiliated companiesEquity in net income/(loss) of affiliated companies104 (3)160 (6)— (387)(e)— (124)
Equity in net income/(loss) of affiliated companies
Equity in net income/(loss) of affiliated companies
Total assets
Total assets
Total assetsTotal assets58,475 9,420 2,754 253 143,155 54,063 — — (2,129)(c)265,991 
Ford BlueFord Model eFord ProFord NextFord CreditCorporate
Other
Interest
on Debt
Special ItemsEliminations/AdjustmentsTotal
First Half 2022     
External revenues$44,644 $2,292 $23,072 $109 $4,537 $12 $— $— $— $74,666 
Intersegment revenues (a)16,956 77 — — — — — — (17,033)— 
Total revenues$61,600 $2,369 $23,072 $109 $4,537 $12 $— $— $(17,033)$74,666 
Income/(Loss) before income taxes$3,832 $(890)$1,370 $(463)$1,867 $332 $(620)$(8,485)(b)$— $(3,057)
Equity in net income/(loss) of affiliated companies132 (5)169 (158)10 — (124)(f)— 25 
First Half 2023     
External revenues$50,126 $2,541 $28,838 $$4,916 $$— $— $— $86,428 
Intersegment revenues (a)19,383 181 — — — — — — (19,564)— 
Total revenues$69,509 $2,722 $28,838 $$4,916 $$— $— $(19,564)$86,428 
Income/(loss) before income taxes$4,931 $(1,802)$3,757 $(70)$693 $(344)$(612)$(2,106)(d)$— $4,447 
Equity in net income/(loss) of affiliated companies159 (6)277 (18)14 — (421)(e)— 
__________
(a)Intersegment revenues only reflect finished vehicle transactions between Ford Blue, Ford Model e, and Ford Pro where there is an intersegment markup and are recognized at the time of the intersegment transaction.
(b)Primarily reflects gains/(losses) onrestructuring actions in Europe and China and mark-to-market adjustments for our Rivian investment.global pension and OPEB plans.
(c)Primarily includes eliminations of intersegment transactions occurring in the ordinary course of business.
(d)Primarily reflects restructuring actions mark-to-market adjustmentsin Europe, the extended duration of the EV program changeover at Oakville, and buyouts for our global pension and OPEB plans, and an accrual for the Transit Connect customs matter (relating to certain Transit Connect vehicles produced between 2009 and 2013).
(e)Primarily reflects our share of charges from an equity method investment resulting from Ford’s ongoing restructuring actionshourly employees in China.
(f)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.North America.

33


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

RECENT DEVELOPMENTS

On September 14, 2023,Electric Vehicle Market

Although we continue to invest in our collective bargaining agreement with the International Union, United Automobile, Aerospaceelectric vehicle strategy, we have observed lower-than-anticipated industrywide electric vehicle adoption rates and Agricultural Implement Workers of America (“UAW”)near-term pricing pressures, which has led us, and may in the United States will expire,future lead us, to adjust our spending, production, and/or product launches to better match the pace of electric vehicle adoption. As a result, we have incurred, and may continue to incur, expenses related to payments to our electric vehicle-related suppliers (battery, raw material, or otherwise), inventory adjustments, or other matters. Further, significant unexpected changes in the EV demand environment have led, and may in the future lead, to incremental competitive pricing actions. These market dynamics may continue to occur, which could have a substantial impact on September 18, 2023, our collective bargaining agreementbusiness.

As a result, in the first quarter of 2024, we recorded about $0.4 billion of expenses and about $0.3 billion of adjustments related to revenue recognized in prior periods. In addition, slower-than-anticipated development of the electric vehicle market may impact our strategy to comply with Uniforregulatory standards, and, in Canada will expire, which will require negotiation of new agreements.some cases, we plan to utilize credits purchased from third parties to demonstrate regulatory compliance or we may need to modify our product offerings. See Item 1A. Risk Factors in our 20222023 Form 10-K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to production disruptions.lower-than-anticipated electric vehicle volumes and our planned transition to a greater mix of electric vehicles.



34

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

In the secondfirst quarter of 2023,2024, the net income attributable to Ford Motor Company was $1,917$1,332 million, and Company adjusted EBIT was $3,786$2,763 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 2119 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):
Second QuarterFirst Half
2022202320222023
First Quarter
First Quarter
First Quarter
2023
2023
2023
Restructuring (by Geography)
Restructuring (by Geography)
Restructuring (by Geography)Restructuring (by Geography)
EuropeEurope$(27)$(51)$(49)$(421)
Europe
Europe
ChinaChina(12)(446)(12)(755)
Ford Credit - Brazil(36)— (155)— 
China
China
North America Hourly Buyouts
North America Hourly Buyouts
North America Hourly Buyouts
Other
Other
OtherOther(68)(159)(104)(147)
Subtotal RestructuringSubtotal Restructuring$(143)$(656)$(320)$(1,323)
Subtotal Restructuring
Subtotal Restructuring
Other Items
Other Items
Other Items
Extended Oakville EV Program Changeover
Extended Oakville EV Program Changeover
Extended Oakville EV Program Changeover
Other (including gains/(losses) on investments)
Other (including gains/(losses) on investments)
Other (including gains/(losses) on investments)
Subtotal Other Items
Subtotal Other Items
Subtotal Other Items
Pension and OPEB Gain/(Loss)
Pension and OPEB Gain/(Loss)
Pension and OPEB Gain/(Loss)Pension and OPEB Gain/(Loss)
Pension and OPEB remeasurementPension and OPEB remeasurement$(16)$(89)$(16)$(202)
Pension and OPEB remeasurement
Pension and OPEB remeasurement
Pension settlements and curtailments
Pension settlements and curtailments
Pension settlements and curtailmentsPension settlements and curtailments— (59)— (105)
Subtotal Pension and OPEB Gain/(Loss)Subtotal Pension and OPEB Gain/(Loss)$(16)$(148)$(16)$(307)
Other Items
Gain/(loss) on Rivian investment$(2,447)$(6)$(7,896)$(31)
Transit Connect customs matter— (300)— (300)
Russia suspension of operations/asset write-off— (132)— 
Patent matters related to prior calendar years14 (121)
Other (including gains/(losses) on investments)(33)(92)— (153)
Subtotal Other Items$(2,460)$(390)$(8,149)$(476)
Subtotal Pension and OPEB Gain/(Loss)
Subtotal Pension and OPEB Gain/(Loss)
Total EBIT Special Items
Total EBIT Special Items
Total EBIT Special Items Total EBIT Special Items$(2,619)$(1,194)$(8,485)$(2,106)
Provision for/(Benefit from) tax special items (a)Provision for/(Benefit from) tax special items (a)$(537)$(177)$(1,729)$(321)
Provision for/(Benefit from) tax special items (a)
Provision for/(Benefit from) tax special items (a)
__________
(a)Includes related tax effect on special items and tax special items.

We recorded $1.2 billion$873 million of pre-tax special item charges in the secondfirst quarter of 2023,2024, driven primarily by restructuring actions in ChinaEurope, the extended duration of the EV program changeover at Oakville, and an accrualbuyouts for the Transit Connect customs matter (relating to certain Transit Connect vehicles produced between 2009 and 2013).hourly employees in North America.

In Note 2119 of the Notes to the Financial Statements, special items are reflected as a separate reconciling item, as opposed to being allocated among 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.
3435

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

The table below shows our secondfirst quarter 20232024 key metrics for the Company, compared to a year ago.
Second QuarterFirst Half
20222023H / (L)20222023H / (L)
First Quarter
First Quarter
First Quarter
2023
2023
2023
GAAP Financial Measures
GAAP Financial Measures
GAAP Financial MeasuresGAAP Financial Measures
Cash Flows from Operating Activities ($B)Cash Flows from Operating Activities ($B)$2.9 $5.0 $2.1 $1.9 $7.8 $6.0 
Cash Flows from Operating Activities ($B)
Cash Flows from Operating Activities ($B)
Revenue ($M)
Revenue ($M)
Revenue ($M)Revenue ($M)40,190 44,954 12 %74,666 86,428 16 %
Net Income/(Loss) ($M)Net Income/(Loss) ($M)667 1,917 $1,250 (2,443)3,674 $6,117 
Net Income/(Loss) ($M)
Net Income/(Loss) ($M)
Net Income/(Loss) Margin (%)Net Income/(Loss) Margin (%)1.7 %4.3 %2.6 ppts(3.3)%4.3 %7.6 ppts
Net Income/(Loss) Margin (%)
Net Income/(Loss) Margin (%)
EPS (Diluted)
EPS (Diluted)
EPS (Diluted)EPS (Diluted)$0.16 $0.47 $0.31 $(0.61)$0.91 $1.52 
Non-GAAP Financial Measures (a)
Non-GAAP Financial Measures (a)
Non-GAAP Financial Measures (a)
Non-GAAP Financial Measures (a)
Company Adj. Free Cash Flow ($B)
Company Adj. Free Cash Flow ($B)
Company Adj. Free Cash Flow ($B)Company Adj. Free Cash Flow ($B)$3.6 $2.9 $(0.7)$3.0 $3.6 $0.6 
Company Adj. EBIT ($M)Company Adj. EBIT ($M)3,722 3,786 64 6,048 7,165 1,117 
Company Adj. EBIT ($M)
Company Adj. EBIT ($M)
Company Adj. EBIT Margin (%)
Company Adj. EBIT Margin (%)
Company Adj. EBIT Margin (%)Company Adj. EBIT Margin (%)9.3 %8.4 %(0.8) ppts8.1 %8.3 %0.2 ppts
Adjusted EPS (Diluted)Adjusted EPS (Diluted)$0.68 $0.72 $0.04 $1.06 $1.34 $0.28 
Adjusted EPS (Diluted)
Adjusted EPS (Diluted)
Adjusted ROIC (Trailing Four Quarters)Adjusted ROIC (Trailing Four Quarters)11.6 %14.2 %2.7 ppts
Adjusted ROIC (Trailing Four Quarters)
Adjusted ROIC (Trailing Four Quarters)
__________
(a)See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP.

In the secondfirst quarter of 2023,2024, our diluted earnings per share of Common and Class B Stock was $0.47,$0.33, and our diluted adjusted earnings per share was $0.72.$0.49.

Net income/(loss) margin was 4.3%3.1% in the secondfirst quarter of 2023, up 2.62024, down 1.1 percentage points from a year ago. Company adjusted EBIT margin was 8.4%6.5% in the secondfirst quarter of 2023,2024, down 0.81.7 percentage points from a year ago.

The year-over-year increase of $1.3 billion in net income in the second quarter of 2023 was primarily driven by the non-recurrence of a mark-to-market loss on our Rivian investment (included in special items in the second quarter of 2022), offset partially by higher restructuring and pension expense in the second quarter of 2023 (also included in special items).

The year-over-year increase of $64 million in Company adjusted EBIT was driven by higher Ford Pro EBIT and a lower EBIT loss in Ford Next. Partial offsets include higher EBIT losses in Ford Model e, lower Ford Blue EBIT and Ford Credit EBT, and lower past service pension and OPEB income in Corporate Other.

The table below shows our secondfirst quarter and first half 20232024 net income/(loss) attributable to Ford and Company adjusted EBIT by segment.
Second QuarterFirst Half
20222023H / (L)20222023H / (L)
First Quarter
First Quarter
First Quarter
2023
2023
2023
Ford Blue
Ford Blue
Ford BlueFord Blue$2,504 $2,308 $(196)$3,832 $4,931 $1,099 
Ford Model eFord Model e(510)(1,080)(570)(890)(1,802)(912)
Ford Model e
Ford Model e
Ford Pro
Ford Pro
Ford ProFord Pro879 2,391 1,512 1,370 3,757 2,387 
Ford NextFord Next(221)(26)195 (463)(70)393 
Ford Next
Ford Next
Ford Credit
Ford Credit
Ford CreditFord Credit939 390 (549)1,867 693 (1,174)
Corporate OtherCorporate Other131 (197)(328)332 (344)(676)
Corporate Other
Corporate Other
Company Adjusted EBIT (a)
Company Adjusted EBIT (a)
Company Adjusted EBIT (a)Company Adjusted EBIT (a)3,722 3,786 64 6,048 7,165 1,117 
Interest on DebtInterest on Debt(312)(304)(8)(620)(612)(8)
Interest on Debt
Interest on Debt
Special Items
Special Items
Special ItemsSpecial Items(2,619)(1,194)(1,425)(8,485)(2,106)(6,379)
Taxes / Noncontrolling InterestsTaxes / Noncontrolling Interests(124)(371)247 614 (773)1,387 
Taxes / Noncontrolling Interests
Taxes / Noncontrolling Interests
Net Income/(Loss)Net Income/(Loss)$667 $1,917 $1,250 $(2,443)$3,674 $6,117 
Net Income/(Loss)
Net Income/(Loss)
__________
(a)See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP.

The year-over-year decrease of $425 million in net income and $616 million in Company adjusted EBIT in the first quarter of 2024 was driven by lower Ford Blue and Model e EBIT, offset partially by higher Ford Pro EBIT.
35
36

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
The tables below and on the following pages provide secondfirst quarter and first half 20232024 key metrics and the change in secondfirst quarter 20232024 EBIT compared with secondfirst quarter 20222023 by causal factor for each of our segments. For a description of these causal factors, see Definitions and Information Regarding Ford Blue, Ford Model e, Ford Pro Causal Factors.

Ford Blue Segment
Second QuarterFirst Half
First Quarter
First Quarter
First Quarter
Key Metrics
Key Metrics
Key MetricsKey Metrics20222023H / (L)20222023H / (L)
Wholesale Units (000) (a)Wholesale Units (000) (a)670 720 49 1,333 1,426 92 
Wholesale Units (000) (a)
Wholesale Units (000) (a)
Revenue ($M)
Revenue ($M)
Revenue ($M)Revenue ($M)$23,834 $25,002 $1,168 $44,644 $50,126 $5,482 
EBIT ($M)EBIT ($M)2,504 2,308 (196)3,832 4,931 1,099 
EBIT ($M)
EBIT ($M)
EBIT Margin (%)EBIT Margin (%)10.5 %9.2 %(1.3) ppts8.6 %9.8 %1.2 ppts
EBIT Margin (%)
EBIT Margin (%)
__________
(a)Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 111,00097,000 units in Q2 2022Q1 2023 and 107,000101,000 units in Q2 2023)Q1 2024).

Change in EBIT by Causal Factor (in millions)
SecondFirst Quarter 20222023 EBIT$2,5042,623 
Volume / Mix267 (1,717)
Net Pricing133293 
Cost28 (171)
Exchange(367)(158)
Other(257)35 
SecondFirst Quarter 20232024 EBIT$2,308905 

In the secondfirst quarter of 2023,2024, Ford Blue’s wholesales increased 7%decreased 11% from a year ago, driven primarily by improvementslower F-150 volume due to the new model launch in production-related supply constraints. Secondthe quarter 2023and ceasing production of the Fiesta in Europe. First quarter 2024 revenue increased 5%decreased 13%, driven by lower wholesales and unfavorable mix, offset partially by higher wholesales.currency-related pricing in South America.

Ford Blue’s secondfirst quarter 20232024 EBIT was $2.3 billion,$905 million, a decrease of $196 million$1.7 billion from a year ago, with an EBIT margin of 9.2%4.2%. The lower EBIT was driven by weaker currencieslower wholesales and unfavorable mix (primarily fewer F-150s due to the non-recurrence of an insurance claim recovery in the second quarter of 2022 (included in Other),new model launch). Higher costs reflected primarily material cost for new products and higher warranty costs, offset partially by higher wholesales, higher net pricing, and improved cost, primarily driven by improved commoditylower structural costs.

3637

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Ford Model e Segment
Second QuarterFirst Half
First Quarter
First Quarter
First Quarter
Key Metrics
Key Metrics
Key MetricsKey Metrics20222023H / (L)20222023H / (L)
Wholesale Units (000)Wholesale Units (000)24 34 10 42 47 
Wholesale Units (000)
Wholesale Units (000)
Revenue ($M)
Revenue ($M)
Revenue ($M)Revenue ($M)$1,320 $1,834 $514 $2,292 $2,541 $249 
EBIT ($M)EBIT ($M)(510)(1,080)(570)(890)(1,802)(912)
EBIT ($M)
EBIT ($M)
EBIT Margin (%)EBIT Margin (%)(38.6)%(58.9)%(20.3) ppts(38.8)%(70.9)%(32.1) ppts
EBIT Margin (%)
EBIT Margin (%)

Change in EBIT by Causal Factor (in millions)
SecondFirst Quarter 20222023 EBIT$(510)(722)
Volume / Mix66 (12)
Net Pricing(177)(548)
Cost(481)34 
Exchange16 (63)
Other(9)
SecondFirst Quarter 20232024 EBIT$(1,080)(1,320)

In the secondfirst quarter of 2023,2024, Ford Model e’s wholesales increased 44%decreased 20% from a year ago reflecting increased production capacity for Mustang Mach-E and a fullto 10,000 units. First quarter of F-150 Lightning production, which launched in late April 2022. Second quarter 20232024 revenue increased 39%decreased 84%, primarily driven by higher wholesales, offset partially bythe accrual impacts for units in dealer stock at December 31, 2023 (about $0.3 billion) as well as lower net pricing.

Ford Model e’s secondfirst quarter 20232024 EBIT loss was $1.1$1.3 billion, a $570$598 million higher loss than a year ago, with an EBIT margin of negative 58.9%.ago. The lower EBIT was primarily driven by lower net pricing and exchange. Favorable cost performance included lower battery raw materials and engineering expense, offset partially by volume-related obligations of about $90 million for batteries and certain other commodities and higher launch-related suppliermanufacturing costs as well as higher warranty, engineering, spending-related, and selling, general & administrative costs.ahead of the upcoming Explorer EV launch in Europe.

Ford Pro Segment
Second QuarterFirst Half
First Quarter
First Quarter
First Quarter
Key Metrics
Key Metrics
Key MetricsKey Metrics20222023H / (L)20222023H / (L)
Wholesale Units (000) (a)Wholesale Units (000) (a)338 365 27 623 702 80 
Wholesale Units (000) (a)
Wholesale Units (000) (a)
Revenue ($M)
Revenue ($M)
Revenue ($M)Revenue ($M)$12,748 $15,589 $2,841 $23,072 $28,838 $5,766 
EBIT ($M)EBIT ($M)879 2,391 1,512 1,370 3,757 2,387 
EBIT ($M)
EBIT ($M)
EBIT Margin (%)EBIT Margin (%)6.9 %15.3 %8.4 ppts5.9 %13.0 %7.1 ppts
EBIT Margin (%)
EBIT Margin (%)
__________
(a)Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 17,00022,000 units in Q2 2022Q1 2023 and 24,00018,000 units in Q2 2023)Q1 2024).

Change in EBIT by Causal Factor (in millions)
SecondFirst Quarter 20222023 EBIT1,366 $879 
Volume / Mix1101,795 
Net Pricing1,916680 
Cost(282)(1,054)
Exchange(65)159 
Other(167)62 
SecondFirst Quarter 20232024 EBIT$2,3913,008 

In the secondfirst quarter of 2023,2024, Ford Pro’s wholesales increased 8%21% from a year ago, driven by improvementsa full quarter of the all new Super Duty truck, which launched in production-related supply constraintsthe first quarter of 2023, and new product launches. Secondhigher sales of the Transit range of vans. First quarter 20232024 revenue increased 22%36%, driven by higher wholesales, favorable mix, and higher net pricing and wholesales.pricing.

Ford Pro’s secondfirst quarter 20232024 EBIT was $2.4$3.0 billion, an increase of $1.5$1.6 billion from a year ago, with an EBIT margin of 15.3%16.7%. The improvement in EBIT was driven by higher volume, favorable mix, and higher net pricingpricing. Higher cost was a partial offset, including material costs (primarily new product-related and wholesales,inflationary increases), higher growth-related structural costs (including engineering and lower commodity costs. Partial offsets included higher material cost for new products,manufacturing), and higher warranty costs (primarily driven by inflationary cost pressures), and the non-recurrence of an insurance claim recovery in the second quarter of 2022 (included in Other).costs.
3738

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Definitions and Information Regarding Ford Blue, Ford Model e, and Ford Pro Causal Factors

In general, we measure year-over-year change in Ford Blue, Ford Model e, and Ford Pro segment 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

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 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. 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
3839

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

The Ford Next segment (formerly Mobility) primarily includes expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments.

In this segment, our secondFord Next’s first quarter 20232024 EBIT loss was $26$9 million, a $195$35 million improvement from a year ago. Ford Next has evolved from primarily investing in the development of autonomous vehicle capabilities to focus exclusively on incubating and launching new businesses creating strategic value for Ford.
39


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/www.ford.com/finance/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 secondfirst quarter and first half 20232024 key metrics and the change in secondfirst quarter 20232024 EBT compared with secondfirst quarter 20222023 by causal factor for the Ford Credit segment. For a description of these causal factors, see Definitions and Information Regarding Ford Credit Causal Factors.
Second QuarterFirst Half
First Quarter
First Quarter
First Quarter
Key Metrics
Key Metrics
Key MetricsKey Metrics20222023H / (L)20222023H / (L)
Total Net Receivables ($B)Total Net Receivables ($B)$116 $126 %$116 $126 %
Total Net Receivables ($B)
Total Net Receivables ($B)
Loss-to-Receivables (bps) (a)
Loss-to-Receivables (bps) (a)
Loss-to-Receivables (bps) (a)Loss-to-Receivables (bps) (a)21 16 28 21 
Auction Values (b)Auction Values (b)$34,620 $31,830 (8)%$34,485 $31,445 (9)%
Auction Values (b)
Auction Values (b)
EBT ($M)EBT ($M)939 390 $(549)1,867 693 $(1,174)
EBT ($M)
EBT ($M)
ROE (%)
ROE (%)
ROE (%)ROE (%)26 %%(17) ppts24 %%(15) ppts
Other Balance Sheet MetricsOther Balance Sheet Metrics
Other Balance Sheet Metrics
Other Balance Sheet Metrics
Debt ($B)
Debt ($B)
Debt ($B)Debt ($B)$110 $124 13 %
Net Liquidity ($B)Net Liquidity ($B)25 29 16 %
Net Liquidity ($B)
Net Liquidity ($B)
Financial Statement Leverage
(to 1)
Financial Statement Leverage
(to 1)
9.1 9.9 0.8 
Financial Statement Leverage (to 1)
Financial Statement Leverage (to 1)
__________
(a)U.S. retail financing only.
(b)U.S. 36-month off-lease secondfirst quarter auction values at Q2 2023 mix and YTD amounts at 2023 YTDQ1 2024 mix.

Change in EBT by Causal Factor (in millions)
SecondFirst Quarter 20222023 EBT$939303 
Volume / Mix4734 
Financing Margin(196)125 
Credit Loss(96)(10)
Lease Residual(112)(126)
Exchange(1)
Other(191)(8)
SecondFirst Quarter 20232024 EBT$390326 

Ford Credit’s total net receivables of $126$136 billion were $10 billion10% higher than a year ago, reflecting the impact of increased consumer and non-consumer financing, and consumer financing,offset partially offset by fewer operating leases.a smaller lease portfolio. The first quarter 2024 U.S. loss-to-receivables (“LTR”) ratio remained at a low level in the second quarter of 2023, at 2147 basis points though higher thanincreased from a year ago, as losses begin to normalize from historic lows.but remained low by historical standards. U.S. auction values in the secondfirst quarter of 20232024 were lower compared to a year ago.

Ford Credit’s secondfirst quarter 20232024 EBT of $390$326 million was $549$23 million lowerhigher than a year ago, explained primarily by lowerhigher financing margin due to higher borrowing costs, the non-recurrence of prior year credit loss reserve releases and higher credit losses,favorable volume and mix, offset partially by unfavorable lease residual performance, and unfavorable market valuation adjustments to derivatives (included in Other).performance.
40

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-periodperiod-over-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 20222023 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. 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 20222023 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
41

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:

Cash (as shown in the Funding Structure and Liquidity tables) – Cash, cash equivalents, and marketable securities, and restricted cash, 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 (“ABS”) (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





42

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) 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 secondfirst quarter of 2023,2024, Corporate Other had a $197$147 million EBIT loss, compared with a $131 million profitunchanged from a year ago. The loss was driven by lower past service pension and OPEB income, which was partially offset by higher 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 $304$278 million in the secondfirst quarter of 2023, $82024, $30 million lower than a year ago.

Taxes

Our Provision for/(Benefit from) income taxes for the secondfirst quarter and first half of 20232024 was a provision of $272$278 million, and $768 million, respectively. This resultedresulting in an effective tax ratesrate of 11.9% and 17.3%, respectively.17.2%.

Our secondfirst quarter and first half of 20232024 adjusted effective tax rates,rate, which excludeexcludes special items, were 12.9% and 16.6%, respectively.was 20.0%.

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.
43

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

At June 30, 2023,March 31, 2024, total balance sheet cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $43.0$34.7 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,
2022
June 30,
2023
December 31,
2023
December 31,
2023
March 31,
2024
Balance Sheets ($B)
Balance Sheets ($B)
Company Cash
Company Cash
Company CashCompany Cash$32.3 $29.8 
LiquidityLiquidity48.0 47.3 
DebtDebt(19.9)(19.6)
Cash Net of DebtCash Net of Debt12.3 10.3 
Pension Funded Status ($B) (a)
Pension Funded Status ($B) (a)
Pension Funded Status ($B) (a)
Pension Funded Status ($B) (a)
Funded Plans
Funded Plans
Funded PlansFunded Plans$4.1 $4.0 
Unfunded PlansUnfunded Plans(4.3)(4.2)
Total Global PensionTotal Global Pension$(0.2)$(0.2)
Total Funded Status OPEBTotal Funded Status OPEB$(4.5)$(4.4)
Total Funded Status OPEB
Total Funded Status OPEB
__________
(a)Balances at June 30, 2023March 31, 2024 reflect net funded status at December 31, 2022,2023, 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 2022.2023.

Liquidity. One of ourOur key prioritiespriority is to maintain a strong balance sheet to withstand potential stress scenarios, while at the same time having resources available to invest in and grow our business. At June 30, 2023,March 31, 2024, we had Company cash of $29.8$25.1 billion and liquidity of $47.3$42.6 billion. At June 30, 2023,March 31, 2024, about 90%86% of Company cash was held by consolidated entities domiciled in the United States.

To be prepared for an economic downturn and other stress scenarios, 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 or operating environment.

Our Company cash investments 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.
44

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 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 20222023 Form 10-K Report)

Marketing incentive payments to dealers

Payments for warranty and field service actions (for additional information, see Note 2018 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 20222023 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 20222023 Form 10-K Report, the “Changes in Company Cash” section below, and Note 1311 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 20222023 Form 10-K Report)

Cash effects related to the restructuring of our business

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-basedshare-based compensation) may require the expenditure of a material amount of cash. We target shareholder distributions of 40% to 50% of adjusted free cash flow. 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.


45

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: 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, the Company excluding Ford Credit carries relatively low trade receivables compared with our trade payables because the majority of our 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 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 at June 30, 2023March 31, 2024 was higher than at December 31, 2022,2023, primarily reflecting higher in-transit inventory, primarily related to capacity constraints in transportation infrastructure,new vehicle launches and in-plant inventory.units awaiting final quality review.

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 towe may, in the future, enter into offtake agreements with raw material suppliers and make investments in certain raw material and battery suppliers, including contributing up to a maximum of $6.6 billion in capital to BlueOval SK, LLC over a five-year period ending in 2026. Our actual capital outlay could vary significantly based on the final project costs and potential financing opportunities. 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. 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 June 30, 2023,March 31, 2024, our estimated expenditures for the maximum quantity that we are committed to purchase under these offtake agreements through 2035, subject to certain conditions, total about $12consist of approximately $3.9 billion through 2035of purchase obligations and approximately $6.9 billion of contingent purchase obligations based on our present pricing forecast; however, our pricing forecast could fluctuate significantly from period to period based on market prices, which could result in significant increases or decreases in the estimate of our overall purchase commitment.estimate. The actual price paid for these materials will be recorded on our balance sheet at the time of purchase. In addition, as market conditions dictate, we may enter into additional offtake agreements with raw material suppliers the costs under which could be significant.or seek to renegotiate existing agreements. 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 the second half of 2024. See Item 1A. Risk Factors in our 2023 Form 10-K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to our offtake agreements and other long-term purchase contracts.


46

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
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 do not provide any guarantees in connection with it. As of June 30, 2023,March 31, 2024, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was $269$213 million. The amount settled through the SCF program during the first halfquarter of 20232024 was $937$383 million.

46

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):
Second QuarterFirst Half
2022202320222023
First Quarter
First Quarter
First Quarter
2023
2023
2023
Company Excluding Ford CreditCompany 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)
Company Adjusted EBIT excluding Ford Credit (a)Company Adjusted EBIT excluding Ford Credit (a)$2.8 $3.4 $4.2 $6.5 
Capital spendingCapital spending$(1.5)$(1.9)$(2.9)$(3.7)
Capital spending
Capital spending
Depreciation and tooling amortizationDepreciation and tooling amortization1.3 1.3 2.6 2.6 
Depreciation and tooling amortization
Depreciation and tooling amortization
Net spending
Net spending
Net spendingNet spending$(0.2)$(0.6)$(0.2)$(1.1)
ReceivablesReceivables$(0.6)$(0.6)$(0.6)$(0.2)
Receivables
Receivables
Inventory
Inventory
InventoryInventory0.3 (1.4)(2.5)(3.4)
Trade PayablesTrade Payables0.4 1.4 2.0 1.7 
Trade Payables
Trade Payables
Changes in working capital
Changes in working capital
Changes in working capitalChanges in working capital$0.1 $(0.7)$(1.1)$(1.9)
Ford Credit distributionsFord Credit distributions$0.6 $— $1.6 $— 
Ford Credit distributions
Ford Credit distributions
Interest on debt and cash taxes
Interest on debt and cash taxes
Interest on debt and cash taxesInterest on debt and cash taxes(0.6)(0.7)(0.9)(1.3)
All other and timing differencesAll other and timing differences0.9 1.6 (0.5)1.4 
All other and timing differences
All other and timing differences
Company adjusted free cash flow (a)
Company adjusted free cash flow (a)
Company adjusted free cash flow (a)Company adjusted free cash flow (a)$3.6 $2.9 $3.0 $3.6 
RestructuringRestructuring$0.3 $(0.1)$0.2 $(0.1)
Restructuring
Restructuring
Changes in debt
Changes in debt
Changes in debtChanges in debt(0.6)— (0.8)(0.2)
Funded pension contributionsFunded pension contributions(0.2)(0.1)(0.3)(0.2)
Funded pension contributions
Funded pension contributions
Shareholder distributionsShareholder distributions(0.4)(0.6)(0.8)(3.8)
All other (b)(2.8)(0.9)(9.0)(1.7)
Shareholder distributions
Shareholder distributions
All other
All other
All other
Change in cashChange in cash$— $1.1 $(7.8)$(2.4)
Change in cash
Change in cash
__________
(a)See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP.
(b)Includes a $2.4 billion loss and a $7.9 billion loss on our Rivian investment in the second quarter and first half of 2022, respectively.
Note: Numbers may not sum due to rounding.

Our secondfirst quarter 20232024 Net cash provided by/(used in) operating activities was positive $5.0$1.4 billion, an increase of $2.1$1.4 billion fromlower than a year ago (see page 5960 for additional information), driven primarily by. The decrease reflects higher inventory and lower net income, and higher Ford Credit operating cash flow, offset partially by an increase in inventory.higher accounts payable as reflected on our Consolidated Statement of Cash Flows. Company adjusted free cash flow was $2.9negative $0.5 billion, $0.7$1.2 billion lower than a year ago,ago. The decrease was primarily driven by higher capital spending and an increase in working capital, offset partially by higherlower Company adjusted EBIT excluding Ford Credit and favorable timing differences.higher capital spending.

Capital spending was $1.9$2.1 billion in the secondfirst quarter of 2023,2024, an increase of $0.4$0.3 billion from a year ago. We continue tonow expect full year 20232024 capital spending to be in the range of $8 billion to $9 billion.

SecondFirst quarter 20232024 working capital impact was $0.7$1.2 billion negative, driven by higher inventory, and higher receivables, offset partially by higher trade payables, each compared to MarchDecember 31, 2023. All other and timing differences were positive $1.6negative $0.2 billion. Timing differences 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)dealers, JV equity income, compensation payments, and pension and OPEB income or expense).

In the secondfirst quarter of 2023,2024, we contributed $109$550 million to our global funded pension plans. We continue to expect to contribute between $500 million and $600 millionabout $1 billion to our global funded pension plans in 2023.2024.

Shareholder distributions were $0.6$1.3 billion in the secondfirst quarter of 2023,2024, all of which was attributable to our regular and supplemental dividend.
47

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 June 30, 2023March 31, 2024 were $19.3$19.4 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $1.8 billion of our 364-day revolving credit facility, and $2.1$2.2 billion of local credit facilities. At June 30, 2023,March 31, 2024, the utilized portion of the corporate credit facility was $18 million, representing amounts utilized for letters of credit. In addition, $1.7 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of June 30, 2023.March 31, 2024.

LendersOur corporate, supplemental, and 364-day revolving credit facilities were amended as of April 22, 2024 to extend the maturity dates of the commitments under each facility and increase the size of our 364-day revolving credit facility. Following the corporate credit facility haveamendment, $25 million of commitments mature on April 26, 2026, $3.4 billion of commitments maturingmature on April 22, 2027, $0.1 billion of commitments mature on April 26, 20262028, and $10.1$10.0 billion of commitments maturingmature on April 26, 2028. Lenders under our20, 2029. Following the supplemental revolving credit facility have $0.1amendment, $2.0 billion of commitments maturing on September 29, 2024 and $1.9 billion of commitments maturingmature on April 26, 2026. Lenders under our22, 2027. Following the 364-day revolving credit facility have $1.8amendment, $2.5 billion of commitments maturingmature on April 24, 2024.21, 2025.

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, renewablecarbon-free electricity consumption, and Ford Europe CO2 tailpipe emissions.

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. If our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P, the guarantees of certain subsidiaries will be required. 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 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 Trading Company, LLC; and Ford Van Dyke Investment Fund, Inc.

Debt. As shown in Note 1412 of the Notes to the Financial Statements, at June 30, 2023,March 31, 2024, Company debt excluding Ford Credit was $19.6$20.2 billion. This balance is $0.4$0.2 billion lowerhigher than at December 31, 2022.2023.

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.
48

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 and securitized funding mix during the quarter and ended the secondfirst quarter of 20232024 with $28.8$27.0 billion of liquidity, up $7.8$1.3 billion from year-end. Ford Credit continues to have robust access to the capital markets, completing $18$13 billion of public term issuances through July 26, 2023.April 23, 2024.

Key elements of Ford Credit’s funding strategy include:

Maintain strong liquidity and funding diversity
Prudently access public markets
Continue to leverage retail 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):
June 30,
2022
December 31,
2022
June 30,
2023
March 31,
2023
March 31,
2023
December 31,
2023
March 31,
2024
Funding StructureFunding Structure
Term unsecured debtTerm unsecured debt$49.9 $48.3 $52.2 
Term unsecured debt
Term unsecured debt
Term asset-backed securitiesTerm asset-backed securities47.1 56.4 55.6 
Ford Interest Advantage / Retail Deposits12.5 14.3 15.9 
Retail Deposits / Ford Interest Advantage
OtherOther1.9 2.6 2.3 
EquityEquity12 11.9 12.5 
Adjustments for cashAdjustments for cash(7.8)(11.2)(12.4)
Total Net ReceivablesTotal Net Receivables$115.6 $122.3 $126.1 
Securitized Funding as Percent of Total DebtSecuritized Funding as Percent of Total Debt43.0 %47.4 %45.0 %
Securitized Funding as Percent of Total Debt
Securitized Funding as Percent of Total Debt46.0 %44.9 %42.5 %

Net receivables were $126.1of $135.5 billion at June 30, 2023 andMarch 31, 2024 were funded primarily with term unsecured debt and term asset-backed securities. Securitized funding as a percent of total debt was 45.0%42.5% as of June 30, 2023.March 31, 2024.

Public Term Funding Plan. The following table shows Ford Credit’s issuances for full year 20212022 and 2022,2023, planned issuances for full year 2023,2024, and its global public term funding issuances through July 26, 2023,April 23, 2024, excluding short-term funding programs (in billions):
2021
Actual
2022
Actual
2023
Forecast
Through
July 26
2022
Actual
2022
Actual
2023
Actual
2024
Forecast
Through
April 23
UnsecuredUnsecured$$$ 11 - 14$
Securitizations (a)Securitizations (a)10 12 - 14
Total publicTotal public$14 $16 $ 23 - 28$18 
__________
(a)See Definitions and Information Regarding Ford Credit Causal Factors section.

For 2023,2024, Ford Credit now projectscontinues to project full year public term funding in the range of $23$27 billion to $28$33 billion.
49

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):
June 30,
2022
December 31,
2022
June 30,
2023
March 31,
2023
March 31,
2023
December 31,
2023
March 31,
2024
Liquidity Sources (a)
Liquidity Sources (a)
Cash
Cash
CashCash$7.8 $11.2 $12.4 
Committed asset-backed facilitiesCommitted asset-backed facilities34.3 37.4 42.3 
Other unsecured credit facilitiesOther unsecured credit facilities2.5 2.3 2.6 
Total liquidity sourcesTotal liquidity sources$44.6 $50.9 $57.3 
Utilization of Liquidity (a)
Utilization of Liquidity (a)
Utilization of Liquidity (a)
Utilization of Liquidity (a)
Securitization and restricted cash
Securitization and restricted cash
Securitization and restricted cashSecuritization and restricted cash$(2.7)$(2.9)$(2.9)
Committed asset-backed facilitiesCommitted asset-backed facilities(15.3)(26.6)(23.1)
Other unsecured credit facilitiesOther unsecured credit facilities(0.5)(0.8)(1.2)
Total utilization of liquidityTotal utilization of liquidity$(18.5)$(30.3)$(27.2)
Gross liquidity$26.1 $20.6 $30.1 
Asset-backed capacity in excess of eligible receivables and other adjustments(1.1)0.4 (1.3)
Available Liquidity
Available Liquidity
Available Liquidity
Other adjustments
Net liquidity available for useNet liquidity available for use$25.0 $21.0 $28.8 
__________
(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 June 30, 2023,March 31, 2024, Ford Credit’s net liquidity available for use was $28.8$27.0 billion, $7.8$1.3 billion higher than year-end 2022,2023, reflecting strong access to public funding markets and the addition of $4.9 billion in committed asset-backed capacity.markets. At June 30, 2023,March 31, 2024, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $57.3$53.8 billion, up $6.4down $2.4 billion from year-end 2022.2023.

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 “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 20222023 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.

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 20222023 Form 10-K Report for more information.

50

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):
June 30,
2022
December 31,
2022
June 30,
2023
March 31,
2023
March 31,
2023
December 31,
2023
March 31,
2024
Leverage CalculationLeverage Calculation
Debt
Debt
DebtDebt$109.5 $119.0 $123.7 
Equity (a)Equity (a)12.0 11.9 12.5 
Financial statement leverage (to 1)Financial statement leverage (to 1)9.1 10.0 9.9 
__________
(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 June 30, 2023,March 31, 2024, Ford Credit’s financial statement leverage was 9.9:9.6:1. Ford Credit targets financial statement leverage in the range of 9:1 to 10:1.

51

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

Pension Plans - Funded Balances. As of June 30, 2023,March 31, 2024, our total Company pension underfunded status reported on our consolidated balance sheets was $0.2$1.7 billion and reflects the net funded status at December 31, 2022,2023, 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 2022.2023.

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
June 30,
2022
June 30,
2023
Four Quarters EndingFour Quarters Ending
March 31,
2023
March 31,
2023
March 31,
2024
Adjusted Net Operating Profit/(Loss) After Cash TaxAdjusted Net Operating Profit/(Loss) After Cash Tax
Net income/(loss) attributable to Ford
Net income/(loss) attributable to Ford
Net income/(loss) attributable to FordNet income/(loss) attributable to Ford$11.7 $4.1 
Add: Noncontrolling interestAdd: Noncontrolling interest— (0.2)
Less: Income taxLess: Income tax1.6 (0.5)
Add: Cash taxAdd: Cash tax(0.7)(1.0)
Less: Interest on debtLess: Interest on debt(1.5)(1.3)
Less: Total pension/OPEB income/(cost)Less: Total pension/OPEB income/(cost)4.5 (0.6)
Add: Pension/OPEB service costsAdd: Pension/OPEB service costs(1.0)(0.7)
Net operating profit/(loss) after cash taxNet operating profit/(loss) after cash tax$5.4 $4.5 
Less: Special items (excl. pension/OPEB) pre-taxLess: Special items (excl. pension/OPEB) pre-tax(3.0)(5.1)
Adjusted net operating profit/(loss) after cash taxAdjusted net operating profit/(loss) after cash tax$8.3 $9.6 
Invested CapitalInvested Capital
Invested Capital
Invested Capital
Equity
Equity
EquityEquity$44.2 $43.6 
Debt (excl. Ford Credit)Debt (excl. Ford Credit)19.4 19.6 
Net pension and OPEB liabilityNet pension and OPEB liability5.2 4.6 
Invested capital (end of period)Invested capital (end of period)$68.8 $67.8 
Average invested capitalAverage invested capital$72.0 $67.6 
ROIC (a)ROIC (a)7.4 %6.7 %
ROIC (a)
ROIC (a)3.8 %8.5 %
Adjusted ROIC (Non-GAAP) (b)Adjusted ROIC (Non-GAAP) (b)11.6 %14.2 %Adjusted ROIC (Non-GAAP) (b)13.5 %12.7 %
__________
(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.
5152

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.

The followingThere have been no rating actions were taken by these NRSROs since the filing of our Quarterly Report on2023 Form 10-Q for the quarter ended March 31, 2023:

On June 14, 2023, DBRS upgraded the credit ratings for Ford and Ford Credit to BBB (low) from BB (high) and revised the outlook to stable from positive.
On July 13, 2023, Moody’s upgraded the credit ratings for Ford and Ford Credit to Ba1 from Ba2 with a stable outlook.10-K Report.

The following table summarizes certain of the credit ratings and outlook presently assigned by these four NRSROs:
NRSRO RATINGS
FordFord CreditNRSROs
Issuer
Default /
Corporate /
Issuer Rating
Long-Term Senior UnsecuredOutlook / TrendLong-Term Senior UnsecuredShort-Term
Unsecured
Outlook / TrendMinimum Long-Term Investment Grade Rating
DBRSBBB (low)BBB (low)StableBBB (low)R-2 (low)StableBBB (low)
FitchBB+BBB-BB+BBB-PositiveStableBB+BBB-BF3PositiveStableBBB-
Moody’sN/ABa1StableBa1NPStableBaa3
S&PBB+BBB-BB+BBB-PositiveStableBB+BBB-BA-3PositiveStableBBB-

5253

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

We provided 20232024 Company guidance in our earnings release furnished on Form 8-K dated July 27, 2023.April 24, 2024. The guidance is based on our expectations as of July 27, 2023,April 24, 2024, and assumes no material change to our current assumptions for inflation, logistics issues, production, or macroeconomic conditions. 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 20222023 Form 10-K Report and as updated by our subsequent filings with the SEC.

20232024 Guidance
Total Company
Adjusted EBIT (a)$1110 - $12 billion
Adjusted Free Cash Flow (a)$6.5 - $7$7.5 billion
Capital spending$8 - $9 billion
Ford Credit
EBTAbout $1.3$1.5 billion
__________
(a)When we provide guidance for adjustedAdjusted EBIT and adjusted free cash flow,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.


For full-year 2023,2024, we now expect adjusted EBIT of $11$10 billion to $12 billion primarily reflecting stronger net pricing, and adjusted free cash flow of $6.5 billion to $7$7.5 billion.

On a segment basis, we expect:

Ford Pro EBIT approachingof $8 billion more than double full-year 2022, from significant year-over-year improvement into $9 billion driven by continued growth and favorable mix, offset partially by moderated pricing and volume.
Ford Blue EBIT of about $8$7 billion withto $7.5 billion, reflecting a balanced market equation and cost efficiencies offsetting higher volumeslabor and stronger mix more than offsetting any potential pricing headwinds.product costs
Ford Model e to report an EBIT loss of about $4.5$5 billion reflecting theto $5.5 billion, driven by continued pricing environment, disciplinedpressure and investments in new products and capacity, supplier-related launch costs, and warranty expenses.vehicles
Ford Credit EBT to beof about $1.3 billion.$1.5 billion

Our outlook for 2023 assumes the headwinds and tailwinds below.2024 assumes:

Headwinds:
Global economic uncertaintyFlat to modest U.S. industry growth at 16 million to 16.5 million
Inflationary pressures
Higher industrywide customer incentivesFull year of all-new Super Duty, which drives positive pricing and continued EV pricing pressure
Increased warranty costsmix in Ford Pro
Lower past service pension incomeindustry pricing
Exchange
Certain costs associated with union contract negotiations$2 billion of cost reductions in material, freight, and manufacturing

Tailwinds:
Improved supply chain
Higher industry volumes
All-new Super Duty
Lower commodity costs
5354

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 and other components necessary for the production of electric vehicles, Ford has entered into and expects to continue tomay, in the future, enter into multi-year commitments to raw material and other suppliers that subject Ford to risks associated with lower future demand for such materialsitems 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 recall campaigns, increased warranty costs, or delays in new model launches, recall campaigns, or increased warranty costs;and the time it takes to improve the quality of our vehicles and services could continue to have an adverse effect on our business;
Ford may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures, restructurings, or new business strategies;
Ford may not realize the anticipated benefits of restructuring actions and such actions may cause Ford to incur significant charges, disrupt our operations, or harm our reputation;
Operational information systems, security systems, vehicles, and services could be affected by cybercybersecurity incidents, ransomware attacks, and other 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, public health issues, natural or man-made disasters, adverse effects of climate change, financial distress, production difficulties, capacity limitations, or other factors;
Failure to develop and deploy secure digital services that appeal to customers could have a negative impact on Ford’s business;
Ford’s ability to maintain a competitive cost structure could be affected by labor or other constraints;
Ford’s ability to attract, develop, grow, and retain talented, diverse, and highly skilled employeesreward talent is critical to its success and competitiveness;
Ford’s new and existing products and digital, software, and physical services are subject to market acceptance and face significant competition from existing and new entrants in the automotive and digital and software services industries, and its reputation may be harmed if it is unable to achieve the initiatives it has announced;
Ford’s results are dependent on sales of larger, more profitable vehicles, particularly in the United States;
With a global footprint and supply chain, Ford’s results and operations could be adversely affected by economic or geopolitical developments, including protectionist trade policies such as tariffs, or other events;
Industry sales volume can be volatile and could decline if there is a financial crisis, recession, public health emergency, 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;factors, particularly for electric vehicles;
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 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 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, and artificial intelligence 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.
5455

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 20222023 Form 10-K Report, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
5556

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 ItemSignificance 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.
5657

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, 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.
5758

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)
Second QuarterFirst Half
2022202320222023
First Quarter
First Quarter
2023
2023
Net income/(loss) attributable to Ford (GAAP)
Net income/(loss) attributable to Ford (GAAP)
Net income/(loss) attributable to Ford (GAAP)Net income/(loss) attributable to Ford (GAAP)$667 $1,917 $(2,443)$3,674 
Income/(Loss) attributable to noncontrolling interestsIncome/(Loss) attributable to noncontrolling interests(29)99 (38)
Income/(Loss) attributable to noncontrolling interests
Income/(Loss) attributable to noncontrolling interests
Net income/(loss)
Net income/(loss)
Net income/(loss)Net income/(loss)$638 $2,016 $(2,481)$3,679 
Less: (Provision for)/Benefit from income taxesLess: (Provision for)/Benefit from income taxes(153)(272)576 (768)
Less: (Provision for)/Benefit from income taxes
Less: (Provision for)/Benefit from income taxes
Income/(Loss) before income taxes
Income/(Loss) before income taxes
Income/(Loss) before income taxesIncome/(Loss) before income taxes$791 $2,288 $(3,057)$4,447 
Less: Special items pre-taxLess: Special items pre-tax(2,619)(1,194)(8,485)(2,106)
Less: Special items pre-tax
Less: Special items pre-tax
Income/(Loss) before special items pre-tax
Income/(Loss) before special items pre-tax
Income/(Loss) before special items pre-taxIncome/(Loss) before special items pre-tax$3,410 $3,482 $5,428 $6,553 
Less: Interest on debtLess: Interest on debt(312)(304)(620)(612)
Less: Interest on debt
Less: Interest on debt
Adjusted EBIT (Non-GAAP)
Adjusted EBIT (Non-GAAP)
Adjusted EBIT (Non-GAAP)Adjusted EBIT (Non-GAAP)$3,722 $3,786 $6,048 $7,165 
Memo:Memo:
Memo:
Memo:
Revenue ($B)
Revenue ($B)
Revenue ($B)Revenue ($B)$40.2 $45.0 $74.7 $86.4 
Net income/(loss) margin (GAAP) (%)Net income/(loss) margin (GAAP) (%)1.7 %4.3 %(3.3)%4.3 %
Net income/(loss) margin (GAAP) (%)
Net income/(loss) margin (GAAP) (%)
Adjusted EBIT margin (Non-GAAP) (%)Adjusted EBIT margin (Non-GAAP) (%)9.3 %8.4 %8.1 %8.3 %
Adjusted EBIT margin (Non-GAAP) (%)
Adjusted EBIT margin (Non-GAAP) (%)

Earnings per Share Reconciliation to Adjusted Earnings per Share
Second QuarterFirst Half
2022202320222023
Diluted After-Tax Results ($M)
Diluted after-tax results (GAAP)$667 $1,917 $(2,443)$3,674 
Less: Impact of pre-tax and tax special items (a)(2,082)(1,012)(6,756)(1,722)
Adjusted net income/(loss) – diluted (Non-GAAP)$2,749 $2,929 $4,313 $5,396 
Basic and Diluted Shares (M)
Basic shares (average shares outstanding)4,021 4,003 4,014 3,996 
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt31 38 43 39 
Diluted shares4,052 4,041 4,057 4,035 
Earnings/(Loss) per share – diluted (GAAP) (b)$0.16 $0.47 $(0.61)$0.91 
Less: Net impact of adjustments(0.52)(0.25)(1.67)(0.43)
Adjusted earnings/(loss) per share – diluted (Non-GAAP)$0.68 $0.72 $1.06 $1.34 
_________
First Quarter
20232024
Diluted After-Tax Results ($M)
Diluted after-tax results (GAAP)$1,757 $1,332 
Less: Impact of pre-tax and tax special items(768)(653)
Adjusted net income/(loss) – diluted (Non-GAAP)$2,525 $1,985 
Basic and Diluted Shares (M)
Basic shares (average shares outstanding)3,990 3,979 
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt39 44 
Diluted shares4,029 4,023 
Earnings/(Loss) per share – diluted (GAAP)$0.44 $0.33 
Less: Net impact of adjustments(0.19)(0.16)
Adjusted earnings/(loss) per share – diluted (Non-GAAP)$0.63 $0.49 
(a)Includes adjustment for noncontrolling interest in 2023.
(b)The first half 2022 calculation excludes 43 million shares of net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt due to their anti-dilutive effect.

5859

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Effective Tax Rate Reconciliation to Adjusted Effective Tax Rate
Second QuarterFirst Half
2022202320222023Memo:
FY 2022
First Quarter
First Quarter
First Quarter
2023
2023
20232024Memo:
FY 2023
Pre-Tax Results ($M)
Pre-Tax Results ($M)
Income/(Loss) before income taxes (GAAP)
Income/(Loss) before income taxes (GAAP)
Income/(Loss) before income taxes (GAAP)Income/(Loss) before income taxes (GAAP)$791 $2,288 $(3,057)$4,447 $(3,016)
Less: Impact of special itemsLess: Impact of special items(2,619)(1,194)(8,485)(2,106)(12,172)
Adjusted earnings before taxes (Non-GAAP)Adjusted earnings before taxes (Non-GAAP)$3,410 $3,482 $5,428 $6,553 $9,156 
Taxes ($M)
Taxes ($M)
(Provision for)/Benefit from income taxes (GAAP)$(153)$(272)$576 $(768)$864 
Less: Impact of special items (a)537 177 1,729 321 2,573 
Taxes ($M)
Taxes ($M)
(Provision for)/Benefit from income taxes (GAAP) (a)
(Provision for)/Benefit from income taxes (GAAP) (a)
(Provision for)/Benefit from income taxes (GAAP) (a)
Less: Impact of special items (b)
Adjusted (provision for)/benefit from income taxes (Non-GAAP)Adjusted (provision for)/benefit from income taxes (Non-GAAP)$(690)$(449)$(1,153)$(1,089)$(1,709)
Tax Rate (%)
Tax Rate (%)
Tax Rate (%)
Tax Rate (%)
Effective tax rate (GAAP)
Effective tax rate (GAAP)
Effective tax rate (GAAP)Effective tax rate (GAAP)19.3 %11.9 %18.8 %17.3 %28.6 %23.0 %17.2 %(9.1)%
Adjusted effective tax rate (Non-GAAP)Adjusted effective tax rate (Non-GAAP)20.2 %12.9 %21.2 %16.6 %18.7 %Adjusted effective tax rate (Non-GAAP)20.8 %20.0 %10.0 %
_________
(a)The first half of 2022 reflects the tax consequences of unrealized losses on marketable securities. Full Year 20222023 reflects thebenefits from U.S. research tax consequences of unrealized losses on marketable securitiescredits and fourth quarter favorable changes inlegal entity restructuring within our valuation allowances.leasing operations and China.
(b)Full Year 2023 reflects benefits from China legal entity restructuring.

Net Cash Provided by/(Used in) Operating Activities Reconciliation to Company Adjusted Free Cash Flow ($M)
Second QuarterFirst Half
2022202320222023
First Quarter
First Quarter
2023
2023
Net cash provided by/(used in) operating activities (GAAP)
Net cash provided by/(used in) operating activities (GAAP)
Net cash provided by/(used in) operating activities (GAAP)Net cash provided by/(used in) operating activities (GAAP)$2,947 $5,035 $1,863 $7,835 
Less: Items not included in Company Adjusted Free Cash FlowsLess: Items not included in Company Adjusted Free Cash Flows
Less: Items not included in Company Adjusted Free Cash Flows
Less: Items not included in Company Adjusted Free Cash Flows
Ford Credit operating cash flows
Ford Credit operating cash flows
Ford Credit operating cash flowsFord Credit operating cash flows$(1,340)$581 $(1,759)$1,207 
Funded pension contributionsFunded pension contributions(154)(109)(328)(234)
Funded pension contributions
Funded pension contributions
Restructuring (including separations) (a)
Restructuring (including separations) (a)
Restructuring (including separations) (a)Restructuring (including separations) (a)(137)(118)(313)(199)
Ford Credit tax payments/(refunds) under tax sharing agreementFord Credit tax payments/(refunds) under tax sharing agreement— — — (5)
Other, net20 (73)— (213)
Ford Credit tax payments/(refunds) under tax sharing agreement
Ford Credit tax payments/(refunds) under tax sharing agreement
Other, net (b)
Other, net (b)
Other, net (b)
Add: Items included in Company Adjusted Free Cash Flows
Add: Items included in Company Adjusted Free Cash Flows
Add: Items included in Company Adjusted Free Cash FlowsAdd: Items included in Company Adjusted Free Cash Flows
Company excluding Ford Credit capital spendingCompany excluding Ford Credit capital spending$(1,503)$(1,927)$(2,852)$(3,687)
Company excluding Ford Credit capital spending
Company excluding Ford Credit capital spending
Ford Credit distributions
Ford Credit distributions
Ford Credit distributionsFord Credit distributions600 — 1,600 — 
Settlement of derivativesSettlement of derivatives(36)92 28 20 
Settlement of derivatives
Settlement of derivatives
Company adjusted free cash flow (Non-GAAP)Company adjusted free cash flow (Non-GAAP)$3,619 $2,919 $3,039 $3,612 
Company adjusted free cash flow (Non-GAAP)
Company adjusted free cash flow (Non-GAAP)
_________
(a)Restructuring excludes cash flows reported in investing activities.
(b)First quarter 2024 includes a $365 million settlement payment for the Transit Connect customs matter.
59
60

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 Ford Blue, Ford Model e, Ford Pro, and 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 June 30, 2023
First Half
Cash flows from operating activitiesCompany excluding Ford CreditFord CreditEliminationsConsolidated
Net income/(loss)$3,144 $535 $— $3,679 
Depreciation and tooling amortization2,640 1,135 — 3,775 
Other amortization(8)(546)— (554)
Provision for/(Benefit from) credit and insurance losses55 157 — 212 
Pension and OPEB expense/(income)612 — — 612 
Equity method investment dividends received in excess of (earnings)/losses and impairments146 (4)— 142 
Foreign currency adjustments(92)(5)— (97)
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments175 (12)— 163 
Net (gain)/loss on changes in investments in affiliates(17)— — (17)
Stock compensation232 — 238 
Provision for/(Benefit from) deferred income taxes(10)13 — 
Decrease/(Increase) in finance receivables (wholesale and other)— (1,473)— (1,473)
Decrease/(Increase) in intersegment receivables/payables261 (261)— — 
Decrease/(Increase) in accounts receivable and other assets(1,750)(43)— (1,793)
Decrease/(Increase) in inventory(3,354)— — (3,354)
Increase/(Decrease) in accounts payable and accrued and other liabilities6,068 66 — 6,134 
Other245 (80)— 165 
Interest supplements and residual value support to Ford Credit(1,719)1,719 — — 
Net cash provided by/(used in) operating activities$6,628 $1,207 $— $7,835 
Cash flows from investing activitiesCompany excluding Ford CreditFord CreditEliminationsConsolidated
Capital spending$(3,691)$(38)$— $(3,729)
Acquisitions of finance receivables and operating leases— (26,231)— (26,231)
Collections of finance receivables and operating leases— 22,517 — 22,517 
Purchases of marketable and other investments(3,164)(1,696)— (4,860)
Sales and maturities of marketable securities and other investments5,974 1,610 — 7,584 
Settlements of derivatives20 (52)— (32)
Capital contributions to equity method investments(1,047)— — (1,047)
Other(359)— — (359)
Investing activity (to)/from other segments— (1)— 
Net cash provided by/(used in) investing activities$(2,267)$(3,889)$(1)$(6,157)
Cash flows from financing activitiesCompany excluding Ford CreditFord CreditEliminationsConsolidated
Cash payments for dividends and dividend equivalents$(3,794)$— $— $(3,794)
Purchases of common stock— — — — 
Net changes in short-term debt(104)(554)— (658)
Proceeds from issuance of long-term debt— 26,401 — 26,401 
Payments of long-term debt(138)(22,075)— (22,213)
Other(102)(95)— (197)
Financing activity to/(from) other segments(1)— — 
Net cash provided by/(used in) financing activities$(4,139)$3,677 $$(461)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash$(11)$77 $— $66 
60

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 June 30, 2023
Second Quarter
Company excluding Ford CreditFord CreditConsolidated
For the period ended March 31, 2024For the period ended March 31, 2024
First QuarterFirst Quarter
Company excluding Ford CreditCompany excluding Ford CreditFord CreditConsolidated
RevenuesRevenues$42,427 $2,527 $44,954 
Total costs and expensesTotal costs and expenses40,221 2,272 42,493 
Operating income/(loss)Operating income/(loss)2,206 255 2,461 
Interest expense on Company debt excluding Ford CreditInterest expense on Company debt excluding Ford Credit304 — 304 
Other income/(loss), netOther income/(loss), net127 128 255 
Equity in net income/(loss) of affiliated companiesEquity in net income/(loss) of affiliated companies(131)(124)
Income/(Loss) before income taxesIncome/(Loss) before income taxes1,898 390 2,288 
Provision for/(Benefit from) income taxesProvision for/(Benefit from) income taxes177 95 272 
Net income/(loss)Net income/(loss)1,721 295 2,016 
Less: Income/(Loss) attributable to noncontrolling interestsLess: Income/(Loss) attributable to noncontrolling interests99 — 99 
Net income/(loss) attributable to Ford Motor CompanyNet income/(loss) attributable to Ford Motor Company$1,622 $295 $1,917 
For the period ended June 30, 2023
First Half
Company excluding Ford CreditFord CreditConsolidated
Revenues$81,512 $4,916 $86,428 
Total costs and expenses77,396 4,458 81,854 
Operating income/(loss)4,116 458 4,574 
Interest expense on Company debt excluding Ford Credit612 — 612 
Other income/(loss), net258 221 479 
Equity in net income/(loss) of affiliated companies(8)14 
Income/(Loss) before income taxes3,754 693 4,447 
Provision for/(Benefit from) income taxes610 158 768 
Net income/(loss)3,144 535 3,679 
Less: Income/(Loss) attributable to noncontrolling interests— 
Net income/(loss) attributable to Ford Motor Company$3,139 $535 $3,674 

61

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):
June 30, 2023
March 31, 2024March 31, 2024
AssetsAssetsCompany excluding Ford CreditFord CreditEliminationsConsolidatedAssetsCompany excluding Ford CreditFord CreditEliminationsConsolidated
Cash and cash equivalentsCash and cash equivalents$14,945 $11,461 $— $26,406 
Marketable securitiesMarketable securities14,809 1,606 — 16,415 
Ford Credit finance receivables, netFord Credit finance receivables, net— 42,557 — 42,557 
Trade and other receivables, netTrade and other receivables, net5,070 9,412 — 14,482 
InventoriesInventories17,703 — — 17,703 
Other assetsOther assets2,775 1,374 — 4,149 
Receivable from other segmentsReceivable from other segments353 1,761 (2,114)— 
Total current assetsTotal current assets55,655 68,171 (2,114)121,712 
Ford Credit finance receivables, netFord Credit finance receivables, net— 52,567 — 52,567 
Ford Credit finance receivables, net
Ford Credit finance receivables, net
Net investment in operating leasesNet investment in operating leases1,022 20,640 — 21,662 
Net propertyNet property38,250 253 — 38,503 
Equity in net assets of affiliated companiesEquity in net assets of affiliated companies3,464 114 — 3,578 
Deferred income taxesDeferred income taxes15,685 175 — 15,860 
Other assetsOther assets10,889 1,220 — 12,109 
Receivable from other segmentsReceivable from other segments— 15 (15)— 
Total assetsTotal assets$124,965 $143,155 $(2,129)$265,991 
Liabilities
Payables
Payables
Payables
Other liabilities and deferred revenue
Debt payable within one year
Payable to other segments
Payable to other segments
Payable to other segments
Total current liabilities
Other liabilities and deferred revenue
Other liabilities and deferred revenue
Other liabilities and deferred revenue
Long-term debt
Deferred income taxes
Payable to other segments
Total liabilities
LiabilitiesCompany excluding Ford CreditFord CreditEliminationsConsolidated
Payables$26,711 $1,038 $— $27,749 
Other liabilities and deferred revenue21,037 2,888 — 23,925 
Debt payable within one year410 48,931 — 49,341 
Payable to other segments2,114 — (2,114)— 
Total current liabilities50,272 52,857 (2,114)101,015 
Other liabilities and deferred revenue23,659 2,095 — 25,754 
Long-term debt19,169 74,726 — 93,895 
Deferred income taxes753 968 — 1,721 
Payable to other segments15 — (15)— 
Total liabilities$93,868 $130,646 $(2,129)$222,385 


62

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Selected Cash Flow Information. The following tables provide supplemental cash flow information (in millions):
For the period ended March 31, 2024
First Three Months
Cash flows from operating activitiesCompany excluding Ford CreditFord CreditEliminationsConsolidated
Net income/(loss)$1,100 $234 $— $1,334 
Depreciation and tooling amortization1,259 622 — 1,881 
Other amortization(381)— (376)
Provision for credit and insurance losses118 — 126 
Pension and OPEB expense/(income)166 — — 166 
Equity method investment dividends received in excess of (earnings)/losses and impairments(146)(8)— (154)
Foreign currency adjustments(1)(11)— (12)
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments25 — 29 
Stock compensation120 — 126 
Provision for/(Benefit from) deferred income taxes(62)34 — (28)
Decrease/(Increase) in finance receivables (wholesale and other)— (1,121)— (1,121)
Decrease/(Increase) in intersegment receivables/payables(202)202 — — 
Decrease/(Increase) in accounts receivable and other assets(697)(109)— (806)
Decrease/(Increase) in inventory(3,154)— — (3,154)
Increase/(Decrease) in accounts payable and accrued and other liabilities3,080 253 — 3,333 
Other73 (32)— 41 
Interest supplements and residual value support to Ford Credit(1,370)1,370 — — 
Net cash provided by/(used in) operating activities$204 $1,181 $— $1,385 
Cash flows from investing activities
Capital spending$(2,073)$(21)$— $(2,094)
Acquisitions of finance receivables and operating leases— (14,829)— (14,829)
Collections of finance receivables and operating leases— 11,238 — 11,238 
Purchases of marketable and other investments(2,934)(51)— (2,985)
Sales and maturities of marketable securities and other investments3,456 123 — 3,579 
Settlements of derivatives23 (207)— (184)
Capital contributions to equity method investments(639)— — (639)
Other34 — — 34 
Investing activity (to)/from other segments— (4)— 
Net cash provided by/(used in) investing activities$(2,133)$(3,743)$(4)$(5,880)
Cash flows from financing activities
Cash payments for dividends and dividend equivalents$(1,326)$— $— $(1,326)
Purchases of common stock— — — — 
Net changes in short-term debt215 (1,416)— (1,201)
Proceeds from issuance of long-term debt— 16,488 — 16,488 
Payments of long-term debt(46)(14,179)— (14,225)
Other(143)(51)— (194)
Financing activity to/(from) other segments(4)— — 
Net cash provided by/(used in) financing activities$(1,304)$842 $$(458)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash$(46)$(125)$— $(171)


63

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

Equity. At June 30, 2023,March 31, 2024, total equity attributable to Ford was $43.7$42.9 billion, an increase of $0.5$0.1 billion compared with December 31, 2022.2023. The detail for this change is shown below (in billions):
Increase/
(Decrease)
Net income/(loss)$3.71.3 
Shareholder distributions(3.8)(1.3)
Other comprehensive income/(loss), net0.40.1 
Common stock issued (including share-based compensation impacts)0.2 
Other— 
Total$0.50.1 

U.S. Sales by Type. The following table shows secondfirst quarter 20232024 U.S. sales volume and U.S. wholesales segregated by electric, hybrid, and internal combustion vehicles. U.S. sales volume represents primarily sales by dealers, sales to the government, and leases to Ford management, and is based, in part, on estimated vehicle registrations and includes medium and heavy trucks.
U.S. SalesU.S. Wholesales
U.S. SalesU.S. SalesU.S. Wholesales
Electric VehiclesElectric Vehicles14,843 30,055 
Hybrid VehiclesHybrid Vehicles34,589 35,135 
Internal Combustion VehiclesInternal Combustion Vehicles482,230 466,571 
Total VehiclesTotal Vehicles531,662 531,761 

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

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


6364


ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

Company Excluding Ford Credit

Foreign Currency Risk. The net fair value of foreign exchange forward contracts (including adjustments for credit risk) as of June 30, 2023,March 31, 2024, was a liability of $122$84 million, compared with an asseta liability of $236$319 million as of December 31, 2022.2023. The potential change in the fair value from a 10% change in the underlying exchange rates, in U.S. dollar terms, would have been $2.8$3 billion at June 30, 2023,March 31, 2024, compared with $1.9$3.1 billion at December 31, 2022.2023.

Commodity Price Risk. The net fair value of commodity forward contracts (including adjustments for credit risk) as of June 30, 2023,March 31, 2024, was a liability of $182$28 million, compared with a liability of $49$9 million at December 31, 2022.2023. The potential change in the fair value from a 10% change in the underlying commodity prices would have been $185$197 million at June 30, 2023,March 31, 2024, compared with $178$203 million at December 31, 2022.2023.

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 increasedecrease or decreaseincrease 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 June 30, 2023,March 31, 2024, all else constant, such an increasea decrease in interest rates would increasedecrease its pre-tax cash flow by $117$87 million over the next 12 months, compared with an increasea decrease of $127$78 million at December 31, 20222023. In reality, new assets and liabilities may not immediately capture changes in interest rates, and interest rate changes are rarely instantaneous, parallel, or move 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 June 30, 2023,March 31, 2024, 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. As previously reported,There were no changes in 2021 we began a multi-year implementation of a new global integrated enterprise resource planning (“I-ERP”) system to replace a number of our existing coreinternal control over financial systems. Implementation of I-ERP began with the launch of our Canada market in May 2021, and implementation is progressing in phased launches across our remaining markets over the next several years. In May 2023, I-ERP was launched in the rest of North America. Additionally, a new general ledger system was launched globally. Our processes, procedures, and controls continue to be refined as appropriatereporting during the phased implementation of the I-ERP system.quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.

ENVIRONMENTAL MATTERS

Any legal 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 $1,000,000 is described on page 3035 of our 20222023 Form 10-K Report and page 64 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.Report.

OTHER MATTERS

Brazilian Tax Matters (as previously reported on page 3135 of our 20222023 Form 10-K Report and page 64 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023)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.

Transit Connect Customs Penalty Notice (as previously reported on page 36 of our 2023 Form 10-K Report). U.S. Customs and Border Protection (“CBP”) ruled in 2013 that Transit Connects imported as passenger wagons and later converted into cargo vans are subject to the 25% duty applicable to cargo vehicles, rather than the 2.5% duty applicable to passenger vehicles. We filed a challenge in the U.S. Court of International Trade (“CIT”), and CIT ruled in our favor in 2017. CBP subsequently filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit, which ruled in favor of CBP. Following the U.S. Supreme Court’s denial of our petition for a writ of certiorari in 2020, we paid the increased duties for certain prior imports, plus interest, and disclosed that CBP might assert a claim for penalties. Subsequently, CBP issued a penalty notice to us dated July 22, 2021, and on November 18, 2021, CBP assessed against us a monetary penalty of $1.3 billion and additional duties of $181 million, plus interest. On March 11, 2024, Ford entered into a settlement agreement for this matter, which included a payment of $365 million to the United States.

ITEM 5. Other Information.

None.During the quarter ended March 31, 2024, no director or officer of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K.
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ITEM 6. Exhibits.
DesignationDescriptionMethod of Filing
Annual Performance Bonus Plan as amended May 10, 2023. (a)Metrics for 2024.Filed as Exhibit 4.9 to Registration Statement 333-271592. (b)
Form of Stock Option Terms and Conditions for 2023 Long-Term Incentive Plan. (a)Filed with this Report.
Form of Stock Option Agreement for 2023 Long-Term Incentive Plan. (a)Filed with this Report.
Form of Stock Option Agreement (ISO) for 2023 Long-Term Incentive Plan. (a)Filed with this Report.
Form of Stock Option Agreement (U.K. NQO) for 2023 Long-Term Incentive Plan. (a)Filed with this Report.
Form of Stock Option (U.K.) Terms and Conditions for 2023 Long-Term Incentive Plan. (a)Filed with this Report.
Form of Restricted Stock Grant Letter for 2023 Long Term-Incentive Plan. (a)Filed with this Report.
Form of Final Award Notification Letter for Performance Stock Units. (a)Unit Award Metrics for 2024.Filed with this Report.
Form of Annual Equity Grant Letter for 2023 Long Term-Incentive Plan V.1. (a)Filed with this Report.
Form of Annual Equity Grant Letter for 2023 Long Term-Incentive Plan V.2. (a)Filed with this Report.
Form of 2023 Long-Term Incentive Plan Restricted Stock Unit Agreement. (a)Filed with this Report.
Form of 2023 Long-Term Incentive Plan Restricted Stock Unit Terms and Conditions. (a)Filed with this Report.
Form of Final Award Agreement for Performance Stock Units under 2023 Long-Term Incentive Plan. (a)Filed with this Report.
Form of Final Award Terms and Conditions for Performance Stock Units under 2023 Long-Term Incentive Plan. (a)Filed with this Report.
Form of Notification Letter for Time-Based Restricted Stock Units under 2023 Long-Term Incentive Plan. (a)Filed with this Report.
Rule 15d-14(a) Certification of CEO.Filed with this Report.
Rule 15d-14(a) Certification of CFO.Filed with this Report.
Section 1350 Certification of CEO.Furnished with this Report.
Section 1350 Certification of CFO.Furnished with this Report.
Exhibit 101.INSInteractive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”).(c)(a)
Exhibit 101.SCHXBRL Taxonomy Extension Schema Document.(c)(a)
Exhibit 101.CALXBRL Taxonomy Extension Calculation Linkbase Document.(c)(a)
Exhibit 101.LABXBRL Taxonomy Extension Label Linkbase Document.(c)(a)
Exhibit 101.PREXBRL Taxonomy Extension Presentation Linkbase Document.(c)(a)
Exhibit 101.DEFXBRL Taxonomy Extension Definition Linkbase Document.(c)(a)
Exhibit 104Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).(c)(a)
__________
(a)Management contract or compensatory plan or arrangement.
(b)Incorporated by reference as an exhibit to this Report (file number reference 1-3950, unless otherwise indicated).
(c)Submitted electronically with this Report in accordance with the provisions of Regulation S-T.
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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’CallaghanMark Kosman
 Cathy O’Callaghan, ControllerMark Kosman, Chief Accounting Officer
 (principal accounting officer)
  
Date:July 27, 2023April 24, 2024

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