FORD MOTOR CO 10-Q

ITEM 1. Legal Proceedings. PRODUCT LIABILITY MATTERS Hill v. Ford. Plaintiffs in this product liability action pending in Georgia state court allege that the roof of a 2002 Ford F-250 involved in a rollover accident was defectively designed. During the first trial in 2018, the judge declared a mistrial, ruled that Ford’s attorneys had violated pre-trial rulings while presenting evidence, and sanctioned Ford by prohibiting Ford from introducing any evidence at the second trial to show that the roof design of the F-250 was not defective. During the second trial in August 2022, a jury found that Pep Boys (the party that sold the tires on the vehicle involved in the rollover accident) was responsible for 30% of the damages, and Ford, as a direct result of the sanctions order prohibiting Ford from presenting its defense, was responsible for 70% of the damages, resulting in $16.8 million in damages being apportioned to Ford. The jury subsequently awarded punitive damages against Ford in the amount of $1.7 billion. We have filed post-trial motions, and we are seeking a new trial. We believe the law supports our position that Ford is entitled to a new trial with the right to present evidence in its defense. ENVIRONMENTAL MATTERS We have no legal proceedings arising under any federal, state, or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment, in which (i) a governmental authority is a party, and (ii) we believe there is the possibility of monetary sanctions (exclusive of interest and costs) in excess of $1 million. OTHER MATTERS Brazilian Tax Matters (as previously reported on page 30 of our 2021 Form 10-K Report, page 65 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and page 68 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022). One Brazilian state (São Paulo) and the Brazilian federal tax authority currently have outstanding substantial tax assessments against Ford Motor Company Brasil Ltda. (“Ford Brazil”) related to state and federal tax incentives Ford Brazil received for its operations in the Brazilian state of Bahia. The São Paulo assessment is part of a broader conflict among various states in Brazil. The federal legislature enacted laws designed to encourage the states to end that conflict, and in 2017 the states reached an agreement on a framework for resolution. Ford Brazil continues to pursue a resolution under the framework and expects the amount of any remaining assessments by the states to be resolved under that framework. The federal assessments are outside the scope of the legislation. All of the outstanding assessments have been appealed to the relevant administrative court of each jurisdiction. To proceed with an appeal within the judicial court system, an appellant may be required to post collateral. To date, we have not been required to post any collateral. If we are required to post collateral, which could be in excess of $1 billion, we expect it to be in the form of fixed assets, surety bonds, and/or letters of credit, but we may be required to post cash collateral. Although the ultimate resolution of these matters may take many years, we consider our overall risk of loss to be remote. European Commission and U.K. Competition and Markets Authority Matter. On March 15, 2022, the European Commission (the “Commission”) and the U.K. Competition and Markets Authority (the “CMA”) conducted unannounced inspections at the premises of, and sent formal requests for information to, several companies and associations active in the automotive sector, including Ford. The inspections and requests for information concern possible collusion in relation to the collection, treatment, and recovery of end-of-life cars and vans (“ELVs”). We understand that the scope of the investigations includes determining whether manufacturers and importers of passenger cars and vans agreed to an approach to (i) the compensation of ELV collection, treatment, and recovery companies, and (ii) the use of data relating to the recyclability or recoverability of ELVs in marketing materials, and whether such conduct violates relevant competition laws. If a violation is found, a broad range of remedies is potentially available to the Commission and/or CMA, including imposing a fine and/or the prohibition or restriction of certain business practices. Given that this investigation is in its early stages, it is difficult to predict the outcome or what remedies, if any, may be imposed. We are cooperating with the Commission and the CMA as they complete their investigations. 70 ITEM 6. Exhibits. Designation Description Method of Filing Exhibit 31.1 Rule 15d-14(a) Certification of CEO. Filed with this Report. Exhibit 31.2 Rule 15d-14(a) Certification of CFO. Filed with this Report. Exhibit 32.1 Section 1350 Certification of CEO. Furnished with this Report. Exhibit 32.2 Section 1350 Certification of CFO. Furnished with this Report. Exhibit 101.INS Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”). (a) Exhibit 101.SCH XBRL Taxonomy Extension Schema Document. (a) Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. (a) Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase Document. (a) Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. (a) Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. (a) Exhibit 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). (a) __________ (a) Submitted electronically with this Report in accordance with the provisions of Regulation S-T. 71 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FORD MOTOR COMPANY By: /s/ Cathy O’Callaghan Cathy O’Callaghan, Controller (principal accounting officer) Date: October 26, 2022 72