What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-10-27 compared with 2022-07-28 · 145 added, 76 removed, 435 unchanged (34% of the section changed)

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

In the second quarter of 2022, we contributed $154 million to our global funded pension plans.

We now expect to contribute between $600 million and $700 million to our global funded pension plans in 2022.

Shareholder distributions were $407 million in the second quarter of 2022, all of which was attributable to our regular

quarterly dividend.

Changes in Company Cash.

In managing our business, we classify changes in Company cash into operating and non-operating items.

Operating items include:

Company adjusted EBIT excluding Ford Credit EBT, capital spending, depreciation and tooling amortization, changes in working capital, Ford Credit distributions, interest on debt, cash taxes, and all other and timing differences (including timing differences between accrual-based EBIT and associated cash flows).

Non-operating items include:

global redesign (including separation payments), 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, and other transactions with Ford Credit).

With respect to “Changes in working capital,” in general we carry relatively low Automotive segment trade receivables compared with our trade payables because the majority of our Automotive wholesales are financed (primarily by Ford Credit) immediately upon the sale of vehicles to dealers, which generally occurs shortly after being produced.

In contrast, our Automotive trade payables are based primarily on industry-standard production supplier payment terms of about 45 days.

As a result, our cash flow deteriorates if wholesale volumes (and the corresponding revenue) decrease while trade payables continue to become due.

Conversely, our cash flow improves if wholesale volumes (and the corresponding revenue) increase while new trade payables are generally not due for about 45 days.

For example, the suspension of production at most of our assembly plants and lower industry volumes due to COVID-19 in early 2020 resulted in an initial deterioration of our cash flow, while the subsequent resumption of manufacturing operations and return to pre-COVID-19 production levels at most of our assembly plants resulted in a subsequent improvement of our cash flow.

Even in normal economic conditions, however, these working capital balances generally are subject to seasonal changes that can impact cash flow.

For example, we typically experience cash flow timing differences associated with inventories and payables due to our annual summer and December shutdown periods when production, and therefore inventories and wholesale volumes, are usually at their lowest levels, while payables continue to come due and be paid.

The net impact of this typically results in cash outflows from changes in our working capital balances during these shutdown periods.

Our inventory includes vehicles completed but awaiting installation of components, including semiconductors.

As a result of the shortage, our inventory is higher than in periods prior to the supply shortage.

In response to, or in anticipation of, supplier disruptions, we may stockpile certain components or raw materials to help prevent disruption in our production of vehicles.

Such actions could have a short-term adverse impact on our cash and increase our inventory.

Moreover, in order to secure critical materials for production of electric vehicles, we have entered into and plan to continue to enter into offtake agreements with raw material suppliers and make investments in certain raw material and battery suppliers, including contributing up to $6.6 billion in capital to BlueOval SK, LLC over a five-year period ending in 2026.

Such investments, which are part of our plan to invest over $50 billion in electric vehicles through 2026, could have an additional adverse impact on our cash in the near-term.

The terms of the offtake agreements we have entered into, and those we may enter into in the future, vary by transaction, though they generally obligate us to purchase a certain percentage or minimum amount of output produced by the counterparty over an agreed upon period of time.

The purchase price mechanism included in the offtake agreement is typically based on the market price of the material at the time of delivery or an agreed upon formula or market index.

The terms 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.

Based on the offtake agreements we have entered into thus far, the earliest date by which we could be obligated to purchase any output, subject to satisfaction of the applicable conditions, will be in 2024.

Financial institutions participate in a supply chain finance (“SCF”) program that enables our suppliers, at their sole discretion, to sell their Ford receivables (i.e., our payment obligations to the suppliers) to the financial institutions on a non-recourse basis in order to be paid earlier than our payment terms provide.

Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms, the amounts we pay, or our liquidity.

We have no economic interest in a supplier’s decision to participate in the SCF program, and we have no direct financial relationship with the SCF financial institutions.

Moreover, we do not provide any guarantees in connection with the SCF program.

As of September 30, 2022, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was $228 million.

The amount settled through the SCF program during the first nine months of 2022 was $971 million.

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

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

Third Quarter First Nine Months

2021 2022 2021 2022

Company Excluding Ford Credit

Company Adjusted EBIT excluding Ford Credit (a) $ 1.9 $ 1.2 $ 4.3 $ 5.4

Capital spending $ (1.6) $ (1.6) $ (4.4) $ (4.5)

Depreciation and tooling amortization 1.3 1.3 3.8 3.9

Net spending $ (0.3) $ (0.3) $ (0.6) $ (0.6)

Receivables $ (0.1) $ (0.1) $ (0.7) $ (0.6)

Inventory (0.2) (1.7) (3.2) (4.1)

Trade Payables 4.1 3.9 1.1 5.9

Changes in working capital $ 3.8 $ 2.2 $ (2.8) $ 1.1

Ford Credit distributions $ 1.5 $ 0.5 $ 6.5 $ 2.1

Interest on debt and cash taxes (0.4) (0.3) (1.5) (1.2)

All other and timing differences 1.2 0.3 (3.6) (0.2)

Company adjusted free cash flow (a) $ 7.8 $ 3.6 $ 2.3 $ 6.6

Global Redesign (including separations) $ (0.3) $ (0.2) $ (1.6) $ —

Changes in debt (0.2) 1.0 1.8 0.1

Funded pension contributions (0.2) (0.1) (0.6) (0.5)

Shareholder distributions — (0.6) — (1.4)

All other (b) (0.7) (0.3) (1.1) (9.3)

Change in cash $ 6.4 $ 3.3 $ 0.7 $ (4.5)

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

(b) Includes a $0.6 billion gain and a $7.3 billion loss on our Rivian investment in the third quarter and first nine months of 2022, respectively.

Numbers may not sum due to rounding.

Our third quarter 2022 Net cash provided by/(used in) operating activities was positive $3.8 billion, a decrease of $3.2 billion from a year ago (see page 64 for additional information), driven by lower net income, higher inventory, and less favorable timing differences.

Company adjusted free cash flow was $3.6 billion, $4.2 billion lower than a year ago, driven by higher inventory, lower Ford Credit distributions, less favorable timing differences, and lower adjusted EBIT.

Capital spending was $1.6 billion in the third quarter of 2022, unchanged from a year ago.

We now expect full year 2022 capital spending to be about $6.5 billion.

Third quarter 2022 working capital impact was $2.2 billion positive, driven by higher trade payables, partially offset by higher inventory, each compared to June 30, 2022.

All other and timing differences were positive $0.3 billion, reflecting assorted differences including differences between accrual-based EBIT and the associated cash flows (e.g., pension and OPEB income or expense;

compensation payments;

marketing incentive and warranty payments to dealers).

In the third quarter of 2022, we contributed $130 million to our global funded pension plans.

We expect to contribute about $600 million to our global funded pension plans in 2022.

Shareholder distributions were $603 million in the third quarter of 2022, all of which was attributable to our regular quarterly dividend.

On October 26, 2022, we announced that we are reinstating a modest anti-dilutive share repurchase program to offset the dilutive effect of share-based compensation.

The plan authorizes repurchases of up to 35 million shares of Ford Common Stock.

We previously announced our plan for the global redesign of our business, pursuant to which we are working to turn around automotive operations, compete like a challenger, and capitalize on our strengths by allocating more capital, more resources, and more talent to our strongest businesses and vehicle franchises.

Beginning with the actions we took in 2018, we expect our global redesign to have a potential cash effect of about $6 billion through 2023.

The cash effect related to our global redesign activities was $3.4 billion through June 30, 2022.

The cash effect related to our global redesign activities was $3.6 billion through September 30, 2022.

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, 2022 were $19.3 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $1.75 billion of our new 364-day revolving credit facility (as described below), and $2.1 billion of local credit facilities.

At June 30, 2022, the utilized portion of the corporate credit facility was $25 million, representing amounts utilized for letters of credit, and the utilized portion of our 364-day revolving credit facility was $750 million.

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, 2022.

Our $1.5 billion delayed draw term loan facility, which was drawn in full in 2019, was repaid on June 23, 2022 as described below.

Our corporate and supplemental revolving credit facilities were amended as of June 23, 2022 to, among other things, extend the maturity dates of the commitments under each facility.

Following the corporate credit facility amendment, $3.4 billion of commitments mature on June 23, 2025 and $10.1 billion of commitments mature on June 23, 2027.

Following the supplemental revolving credit facility amendment, $0.1 billion of commitments mature on September 29, 2024 and $1.9 billion of commitments mature on June 23, 2025.

Also on June 23, 2022, we entered into a 364-day revolving credit facility, with $1.75 billion of commitments maturing on June 22, 2023.

This new 364-day revolving credit facility further strengthens our liquidity, provides working capital funding, and is intended to be utilized.

On June 23, 2022, we drew $750 million under the 364-day revolving credit facility, which, along with $750 million of Company cash, was used to prepay the full $1.5 billion outstanding under our delayed draw term loan facility.

The maturity date of the delayed draw term loan facility was December 31, 2022.

Total Company committed credit lines, excluding Ford Credit, at September 30, 2022 were $19.1 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $1.75 billion of our 364-day revolving credit facility, and $1.9 billion of local credit facilities.

At September 30, 2022, the utilized portion of the corporate credit facility was $25 million, representing amounts utilized for letters of credit, and the utilized portion of our 364-day revolving credit facility was $350 million.

In addition, $1.6 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of September 30, 2022.

Lenders under our corporate revolving credit facility have $3.4 billion of commitments maturing on June 23, 2025 and $10.1 billion of commitments maturing on June 23, 2027.

Lenders under our supplemental revolving credit facility have $0.1 billion of commitments maturing on September 29, 2024 and $1.9 billion of commitments maturing on June 23, 2025.

Lenders under our 364-day revolving credit facility have $1.75 billion of commitments maturing on June 22, 2023.

The corporate, supplemental, and 364-day credit agreements include certain sustainability-linked targets, pursuant to which the applicable margin and facility fees may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, renewable electricity consumption, and Ford Europe CO 2 tailpipe emissions.

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

The corporate credit facility is unsecured and free of material adverse change conditions to borrowing, restrictive financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and minimum net worth requirements), and credit rating triggers that could limit our ability to obtain funding or trigger early repayment.

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and Ford Trading Company, LLC.

On June 28, 2022, Ford Motor Company Limited, our operating subsidiary in the United Kingdom (“Ford Britain”), entered into a £750 million term loan credit facility with a syndicate of banks to support Ford Britain’s general export activities.

Accordingly, U.K.

Export Finance (“UKEF”) provided a £600 million guarantee of the credit facility under its Export Development Guarantee scheme, which supports high value commercial lending to U.K.

We have also guaranteed Ford Britain’s obligations under the credit facility to the lenders.

On June 30, 2022, Ford Britain drew the full £750 million available under the facility.

This five-year, non-amortizing loan matures on June 30, 2027.

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

As shown in Note 14 of the Notes to the Financial Statements, at June 30, 2022, Company debt excluding Ford Credit was $19.4 billion.

This balance is $1.0 billion lower than at December 31, 2021, due to the repayment in full of our $1.5 billion delayed draw term loan facility, repayment of the remaining $954 million under our Loan Arrangement and Reimbursement Agreement with the U.S.

Department of Energy, and scheduled maturities.

These debt repayments were partially offset by the $750 million draw on our 364-day revolving credit facility and the £750 million ($908 million as of June 30, 2022) draw on our UKEF term loan credit facility.

As shown in Note 15 of the Notes to the Financial Statements, at September 30, 2022, Company debt excluding Ford Credit was $20.3 billion, $100 million lower than at December 31, 2021 and $900 million higher than at June 30, 2022.

The increase from the end of the second quarter primarily reflects our $600 million retail bond and $1.8 billion green bond issuances in August, partially offset by our redemption of $1.1 billion of higher-coupon debt and $400 million repayment under our 364-day revolving credit facility in September.

We manage Company debt (excluding Ford Credit) levels with a leverage framework that targets investment grade credit ratings through a normal business cycle.

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Ford Credit Segment

Ford Credit ended the second quarter of 2022 with $25 billion of liquidity.

Ford Credit ended the third quarter of 2022 with $20.9 billion of liquidity.

During the quarter, Ford Credit completed $2 billion of public term funding.

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

September 30,

2021 December 31,

2021 June 30,

2021 September 30,

Funding Structure

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Securitized Funding as Percent of Total Debt 37.9 % 38.5 % 45.3 %

Net receivables were $115.6 billion at June 30, 2022 and were funded primarily with term unsecured debt and term asset-backed securities.

Securitized funding as a percent of total debt was 43.0% at the end of the second quarter of 2022.

Net receivables were $115.5 billion at September 30, 2022 and were funded primarily with term unsecured debt and term asset-backed securities.

Securitized funding as a percent of total debt was 45.3% at the end of the third quarter of 2022.

Public Term Funding Plan.

The following table shows Ford Credit’s issuances for full year 2020 and 2021, planned issuances for full year 2022, and its global public term funding issuances through July 26, 2022, excluding short-term funding programs (in billions):

The following table shows Ford Credit’s issuances for full year 2020 and 2021, planned issuances for full year 2022, and its global public term funding issuances through October 25, 2022, excluding short-term funding programs (in billions):

Forecast Through

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For 2022, Ford Credit now projects full year public term funding in the range of $14 billion to $17 billion.

Through July 26, 2022, Ford Credit has completed $10 billion of public term issuances.

Through October 25, 2022, Ford Credit has completed $13 billion of public term issuances.

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

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

September 30,

2021 December 31,

2021 June 30,

2021 September 30,

Liquidity Sources (a)

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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.

In June 2022, Ford Credit used its excess liquidity to repurchase approximately $3 billion of its public unsecured debt securities maturing in 2023, reducing interest expense and near-term maturities.

At June 30, 2022, Ford Credit’s net liquidity available for use was $25 billion, $7 billion lower than year-end 2021.

At June 30, 2022, Ford Credit’s liquidity sources including cash, committed asset-backed facilities, and unsecured credit facilities totaled $44.6 billion, down $7.6 billion from year-end 2021.

At September 30, 2022, Ford Credit’s net liquidity available for use was $20.9 billion, $11.1 billion lower than year-end 2021.

Ford Credit’s net liquidity remains robust, while reflecting a smaller balance sheet and lower near-term debt maturities following Ford Credit’s $3 billion debt repurchase completed in the second quarter of 2022.

At September 30, 2022, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $43.8 billion, down $8.4 billion from year-end 2021.

Ford Credit continues to be well capitalized with a strong balance sheet.

Material Cash Requirements.

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

July - December

October - December

2022 2023 2024 2025 and Beyond

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The table above also reflects adjustments to debt maturities to match the asset-backed debt maturities with the underlying asset maturities.

All wholesale securitization transactions and wholesale receivables are shown maturing in the next 12 months, even if the maturities extend beyond second quarter 2023.

All wholesale securitization transactions and wholesale receivables are shown maturing in the next 12 months, even if the maturities extend beyond third quarter 2023.

The retail securitization transactions under certain committed asset-backed facilities are assumed to amortize immediately rather than amortizing after the expiration of the commitment period.

As of June 30, 2022, Ford Credit had $127 billion of assets, $65 billion of which were unencumbered.

As of September 30, 2022, Ford Credit had $127 billion of assets, $59 billion of which were unencumbered.

Funding and Liquidity Risks.

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

September 30,

2021 December 31,

2021 June 30,

2021 September 30,

Leverage Calculation

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Ford Credit plans its leverage by considering market conditions and the risk characteristics of its business.

At June 30, 2022, Ford Credit’s financial statement leverage was 9.1:1, at the lower end of Ford Credit’s 9:1 to 10:1 target range.

At September 30, 2022, Ford Credit’s financial statement leverage was 9.4:1.

Ford Credit targets financial statement leverage in the range of 9:1 to 10:1.

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

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Pension Plans - Funded Balances.

As of June 30, 2022, our total Company pension overfunded status reported on our consolidated balance sheets was $0.7 billion and reflects the net funded status at December 31, 2021, updated for:

As of September 30, 2022, our total Company pension overfunded status reported on our consolidated balance sheets was $1.2 billion and reflects the net funded status at December 31, 2021, updated for:

service and interest cost;

expected return on assets;

curtailments, settlements, and associated interim remeasurement (where applicable);

separation expense;

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and cash contributions.

The discount rate and rate of expected return assumptions are unchanged from year-end 2021.

For plans without interim remeasurement, the discount rate and rate of expected return assumptions are unchanged from year-end 2021.

Return on Invested Capital (“ROIC”).

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Four Quarters Ending

2021 June 30,

September 30,

2021 September 30,

Adjusted Net Operating Profit/(Loss) After Cash Tax

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Each rating agency may have different criteria for evaluating company risk and, therefore, ratings should be evaluated independently for each rating agency.

The following rating actions were taken by these NRSROs since the filing of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022:

• On May 2, 2022, Fitch affirmed the credit ratings for Ford and Ford Credit at BB+ and revised the outlook to positive, from stable.

• On May 17, 2022, DBRS affirmed the credit ratings for Ford and Ford Credit at BB (high) and revised the outlook to positive, from stable.

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

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

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

We provided 2022 Company guidance in our earnings release furnished on Form 8-K dated July 27, 2022.

We provided 2022 Company guidance in our earnings release furnished on Form 8-K dated October 26, 2022.

Our actual results could differ materially from our guidance due to risks, uncertainties, and other factors, including those set forth in “Risk Factors” in Item 1A of our 2021 Form 10-K Report and as updated by our subsequent filings with the SEC.

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Total Company

Adjusted EBIT (a) $11.5 - $12.5 billion

Adjusted EBIT (a) About $11.5 billion

Adjusted Free Cash Flow (a) $9.5 - $10.0 billion

Capital spending About $6.5 billion

Pension contributions $0.6 - $0.7 billion

Pension contributions About $0.6 billion

Global Redesign EBIT charges (b) About $1 billion

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Such actions may result in global redesign EBIT charges and cash effects in 2022 that are incremental to those set forth in the table.

For full-year 2022, we continue to expect adjusted EBIT of $11.5 billion to $12.5 billion, which would represent 15% to 25% growth from last year, and adjusted free cash flow of $5.5 billion to $6.5 billion, with a significant portion coming from Automotive operations.

Our guidance continues to assume 10% to 15% growth in vehicle wholesales from 2021 and assumes that semiconductor availability continues to improve.

Our adjusted EBIT range assumes significantly higher profits in North America, collective profitability from other regional markets, strong but lower Ford Credit EBT of about $3 billion, and modest improvement in Mobility and Corporate Other EBIT.

For full-year 2022, we now expect adjusted EBIT of about $11.5 billion, which would be about 15% higher than 2021.

We also now expect full-year adjusted free cash flow of $9.5 billion to $10.0 billion, reflecting the strength in the Company’s automotive operations, including our restructured businesses in regions outside of North America.

Our guidance assumes about a 10% year-over-year increase in wholesale shipments;

significantly higher earnings in North America and aggregate profitability in the rest of the world;

and strong, but lower, EBT from Ford Credit of about $2.7 billion.

Other assumptions include:

• Strong order banks and pent-up demand for our new and iconic products

• Continued strength in pricing, which includes the benefit of pricing actions taken during the year

• Commodity headwinds of about $4 billion, which we expect to offset with improvements in net pricing and mix

• Continuation of other broad-based inflationary pressures, now expected to total about $3 billion for the year, up $1 billion from our estimate last quarter, while we are actively looking at opportunities to offset increases

• Lower Ford Credit EBT reflecting primarily lower credit loss reserve releases, fewer returned off-lease vehicles, and more normalized credit losses.

We also expect auction values to remain strong but to decline in the second half of the year as the supply of new vehicles improves

• No further deterioration in the supply chain

• Continued strong pent-up demand and orders for our newest products

• Persistent strength in pricing

• High commodity and broad-based inflationary costs of about $9 billion

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

• Continuation of the strong dollar

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

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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 after cash tax from the last four quarters, divided by the average invested capital over the last four quarters.

• 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 after cash tax measures operating results less special items, interest on debt (excl.

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.

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

Second Quarter First Half

Third Quarter First Nine Months

2021 2022 2021 2022

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Earnings per Share Reconciliation to Adjusted Earnings per Share

Second Quarter First Half

Third Quarter First Nine Months

2021 2022 2021 2022

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Adjusted earnings/(loss) per share – diluted (Non-GAAP) $ 0.51 $ 0.30 $ 1.33 $ 1.37

(a) The first half of 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.

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

earnings/(loss) per share, due to their anti-dilutive effect.

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

Effective Tax Rate Reconciliation to Adjusted Effective Tax Rate

Second Quarter First Half

Third Quarter First Nine Months

2021 2022 2021 2022 Memo:

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

Second Quarter First Half

Third Quarter First Nine Months

2021 2022 2021 2022

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The following tables provide supplemental cash flow information (in millions):

For the period ended June 30, 2022

For the period ended September 30, 2022

First Nine Months

Cash flows from operating activities Company excluding Ford Credit Ford Credit Eliminations Consolidated

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Other amortization 74 (950) — (876)

(Gains)/Losses on extinguishment of debt 135 (14) — 121

Held for sale impairment charges 32 — — 32

Provision for/(Benefit from) credit and insurance losses 11 (81) — (70)

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Collections of finance receivables and operating leases — 35,676 — 35,676

Proceeds from sale of business 435 — — 435

Purchases of marketable and other investments (10,774) (3,341) — (14,115)

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The following table provides supplemental income statement information (in millions):

For the period ended June 30, 2022

Second Quarter

For the period ended September 30, 2022

Third Quarter

Company excluding Ford Credit Ford Credit Consolidated

Revenues $ 37,205 $ 2,187 $ 39,392

Total costs and expenses 35,950 1,372 37,322

Total costs and expenses (a) 37,211 1,677 38,888

Operating income/(loss) (6) 510 504

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Net income/(loss) attributable to Ford Motor Company $ (1,275) $ 448 $ (827)

For the period ended June 30, 2022

For the period ended September 30, 2022

First Nine Months

Company excluding Ford Credit Ford Credit Consolidated

Revenues $ 107,334 $ 6,724 $ 114,058

Total costs and expenses 67,726 2,729 70,455

Total costs and expenses (a) 104,937 4,406 109,343

Operating income/(loss) 2,397 2,318 4,715

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Net income/(loss) attributable to Ford Motor Company $ (5,401) $ 2,131 $ (3,270)

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

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

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The following tables provide supplemental balance sheet information (in millions):

June 30, 2022

September 30, 2022

Assets Company excluding Ford Credit Ford Credit Eliminations Consolidated

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Selected Other Information.

At June 30, 2022, total equity attributable to Ford was $44.2 billion, a decrease of $4.3 billion compared with December 31, 2021.

At September 30, 2022, total equity attributable to Ford was $42.1 billion, a decrease of $6.4 billion compared with December 31, 2021.

The detail for this change is shown below (in billions):

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Other comprehensive income/(loss), net (1.9)

Common stock issued (including share-based compensation impacts) 0.2

Total $ (6.4)

Sales by Type.

The following table shows second quarter 2022 U.S.

The following table shows third quarter 2022 U.S.

sales volume and U.S.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis