What changed in this filing

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Item 9A. Controls and Procedures

2023-02-03 compared with 2022-02-04 · 402 added, 366 removed, 2395 unchanged (24% of the section changed)

2 unchanged sentences

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 December 31, 2021, 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.

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) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of December 31, 2022, 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.

Management’s Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) or 15d-15(f).

The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

53 unchanged sentences

Filed as Exhibit 3.1 to our Current Report on Form 8-K filed September 11, 2009.

Filed as Exhibit 3.1 to our Form 8-K filed on July 9, 2021.

Filed as Exhibit 3.1 to our Form 8-K filed on December 9, 2022.

Tax Benefit Preservation Plan (“TBPP”) dated September 11, 2009 between Ford Motor Company and Computershare Trust Company, N.A.

25 unchanged sentences

Benefit Equalization Plan, as amended and restated effective as of January 1, 2022.

(b) Filed as Exhibit 10.2 to our Current Report on Form 8-K filed February 7, 2018.

(b) Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Description of financial counseling services provided to certain executives.

1 unchanged sentence

Defined Benefit Supplemental Executive Retirement Plan, as amended and restated effective as of January 1, 2022.

(b) Filed as Exhibit 10.3 to our Current Report on Form 8-K filed February 7, 2018.

(b) Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Exhibit 10-F-1

Defined Contribution Supplemental Executive Retirement Plan, as amended and restated effective as of July 9, 2020.

(b) Filed as Exhibit 10 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.

Defined Contribution Supplemental Executive Retirement Plan, as amended and restated effective as of January 1, 2022.

(b) Filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Description of Director Compensation as of July 13, 2006.

12 unchanged sentences

Description of Vehicle Evaluation Program for Non-Executive Directors.

(b) Filed with this Report.

(b) Filed as Exhibit 10-I to our Annual Report on Form 10-K for the year ended December 31, 2021.

Non-Employee Directors Life Insurance and Optional Retirement Plan as amended and restated as of December 31, 2010.

10 unchanged sentences

Offer Letter to Michael Amend dated August 16, 2021.

(b) Filed with this Report.

(b) Filed as Exhibit 10-M to our Annual Report on Form 10-K for the year ended December 31, 2021.

Offer Letter to Doug Field dated August 26, 2021.

(b) Filed with this Report.

Exhibit 10- O

(b) Filed as Exhibit 10-N to our Annual Report on Form 10-K for the year ended December 31, 2021.

Agreement between Ford Motor Company and James D.

1 unchanged sentence

(b) Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.

Exhibit 10- P

Select Retirement Plan, as amended and restated effective as of January 1, 2018.

(b) Filed as Exhibit 10.4 to our Current Report on Form 8-K filed February 7, 2018.

Exhibit 10- Q

Deferred Compensation Plan, as amended and restated as of December 31, 2010.

26 unchanged sentences

(b) Filed as Exhibit 10-N-8 to our Annual Report on Form 10-K for the year ended December 31, 2010.

Exhibit 10- R -8

Incremental Bonus Description.

(b) Filed as Exhibit 10-N-9 to our Annual Report on Form 10-K for the year ended December 31, 2010.

Exhibit 10- S

2018 Long-Term Incentive Plan.

33 unchanged sentences

Exhibit 10-S-11

Form of Long-Term Incentive Plan Retention Restricted Stock Unit Agreement (b) Filed with this Report.

Form of Long-Term Incentive Plan Retention Restricted Stock Unit Agreement (b) Filed as Exhibit 10-S-11 to our Annual Report on Form 10-K for the year ended December 31, 2021.

Exhibit 10-S-12

11 unchanged sentences

Exhibit 10- T

Agreement dated January 13, 1999 between Ford Motor Company and Edsel B.

(b) Filed as Exhibit 10-X to our Annual Report on Form 10-K for the year ended December 31, 1998.

Exhibit 10- T -1

Amendment dated May 5, 2010 to the Consulting Agreement between Ford Motor Company and Edsel B.

(b) Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.

Exhibit 10- T -2

Amendment dated January 1, 2012 to the Consulting Agreement between Ford Motor Company and Edsel B.

(b) Filed as Exhibit 10-P-2 to our Annual Report on Form 10-K for the year ended December 31, 2011.

Exhibit 10- U

Second Amended and Restated Relationship Agreement dated March 19, 2020 between Ford Motor Company and Ford Motor Credit Company LLC.

Filed as Exhibit 10 to our Current Report on Form 8-K filed March 19, 2020.

Description of Company Practices regarding Club Memberships for Executives.

(b) Filed with this Report.

Exhibit 10- W

(b) Filed as Exhibit 10-V to our Annual Report on Form 10-K for the year ended December 31, 2021.

Exhibit 10- U

Amended and Restated Credit Agreement dated as of November 24, 2009.

Filed as Exhibit 99.2 to our Current Report on Form 8-K filed November 25, 2009.

Exhibit 10- W -1

Exhibit 10- U -1

Seventh Amendment dated as of March 15, 2012 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, and as further amended.

Filed as Exhibit 99.2 to our Current Report on Form 8-K filed March 15, 2012.

Exhibit 10- W -2

Exhibit 10- U -2

Ninth Amendment dated as of April 30, 2013 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, and as further amended.

Filed as Exhibit 10 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.

Exhibit 10- W -3

Exhibit 10- U -3

Tenth Amendment dated as of April 30, 2014 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, and as further amended.

Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.

Exhibit 10- W -4

Exhibit 10- U -4

Eleventh Amendment dated as of April 30, 2015 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, and as further amended, including the Third Amended and Restated Credit Agreement.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed May 1, 2015.

Exhibit 10- W -5

Exhibit 10- U -5

Twelfth Amendment dated as of April 29, 2016 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, and as further amended and restated as of April 30, 2015.

Filed as Exhibit 10 to our Current Report on Form 8-K filed April 29, 2016.

Exhibit 10- W -6

Exhibit 10- U -6

Thirteenth Amendment dated as of April 28, 2017 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, and as further amended and restated as of April 30, 2015.

Filed as Exhibit 10 to our Current Report on Form 8-K filed April 28, 2017.

Exhibit 10- W -7

Exhibit 10- U -7

Fourteenth Amendment dated as of April 26, 2018 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, and as further amended and restated as of April 30, 2015.

Filed as Exhibit 10 to our Current Report on Form 8-K filed April 26, 2018.

Designation Description Method of Filing

Exhibit 10- W -8

Exhibit 10- U -8

Fifteenth Amendment dated as of April 23, 2019 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, and as further amended and restated as of April 30, 2015.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed April 26, 2019.

Exhibit 10- W -9

Exhibit 10- U -9

Sixteenth Amendment dated as of July 27, 2020 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, and as further amended and restated as of April 30, 2015.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed July 30, 2020.

Exhibit 10- W -10

Designation Description Method of Filing

Exhibit 10- U -10

Seventeenth Amendment dated as of March 16, 2021 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, and as further amended and restated as of April 30, 2015.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed March 17, 2021.

Exhibit 10- W -11

Exhibit 10- U -11

Eighteenth Amendment dated as of September 29, 2021 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, as amended and restated as of April 30, 2015, and as further amended, including the Fourth Amended and Restated Credit Agreement.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed September 29, 2021.

Exhibit 10 - X

Exhibit 10- U -12

Nineteenth Amendment dated as of June 23, 2022 to our Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, as amended and restated as of April 30, 2015, and as further amended, including the Fourth Amended and Restated Credit Agreement.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed June 23, 2022.

Exhibit 10- V

Revolving Credit Agreement dated as of April 23, 2019.

Filed as Exhibit 10.2 to our Current Report on Form 8-K filed April 26, 2019.

Exhibit 10- X -1

Exhibit 10- V -1

First Amendment dated July 27, 2020 to the Revolving Credit Agreement dated April 23, 2019.

Filed as Exhibit 10.2 to our Current Report on Form 8-K filed July 30, 2020.

Exhibit 10- X -2

Exhibit 10- V -2

Second Amendment dated March 16, 2021 to the Revolving Credit Agreement dated April 23, 2019.

Filed as Exhibit 10.2 to our Current Report on Form 8-K filed March 17, 2021.

Exhibit 10- X -3

Exhibit 10- V -3

Third Amendment dated September 29, 2021 to the Revolving Credit Agreement dated April 23, 2019, and as further amended, including the First Amended and Restated Revolving Credit Agreement.

Filed as Exhibit 10.2 to our Current Report on Form 8-K filed September 29, 2021.

Exhibit 10- Y

Term Loan Credit Agreement dated as of April 23, 2019.

Filed as Exhibit 10.3 to our Current Report on Form 8-K filed April 26, 2019.

Exhibit 10- Z

Loan Arrangement and Reimbursement Agreement between Ford Motor Company and the U.S.

Department of Energy dated as of September 16, 2009.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed September 22, 2009.

Exhibit 10 - AA

Note Purchase Agreement dated as of September 16, 2009 among the Federal Financing Bank, Ford Motor Company, and the U.S.

Secretary of Energy.

Filed as Exhibit 10.2 to our Current Report on Form 8-K filed September 22, 2009.

Exhibit 10- V -4

Fourth Amendment dated June 23, 2022 to the Revolving Credit Agreement dated April 23, 2019, and as further amended, including the First Amended and Restated Revolving Credit Agreement.

Filed as Exhibit 10.2 to our Current Report on Form 8-K filed June 23, 2022.

Exhibit 10- W

364-Day Revolving Credit Agreement dated as of June 23, 2022.

Filed as Exhibit 10.3 to our Current Report on Form 8-K filed June 23, 2022.

Exhibit 10- W -1

First Amendment dated October 26, 2022 to the 364-Day Revolving Credit Agreement dated as of June 23, 2022.

Filed as Exhibit 10 to our Current Report on Form 8-K filed October 28, 2022.

List of Subsidiaries of Ford as of January 31, 2023.

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Filed with this Report.

E xhibit 31.1

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

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CASIANO* Director February 2, 2023

EARLEY, JR.* Director and Chair of the Compensation, Talent and Culture Committee February 3, 2022

ALEXANDRA FORD ENGLISH* Director February 2, 2023

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HELMAN IV* Director and Chair of the Sustainability, Innovation and Policy Committee February 2, 2023

HUNTSMAN, JR.

Director, Vice Chair, Policy February 3, 2022

HUNTSMAN, JR.* Director February 2, 2023

Huntsman, Jr.

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MOONEY* Director February 2, 2023

LYNN VOJVODICH RADAKOVICH* Director February 3, 2022

LYNN VOJVODICH RADAKOVICH* Director and Chair of the Compensation, Talent and Culture Committee February 2, 2023

Lynn Vojvodich Radakovich

Signature Title Date

THORNTON* Director February 2, 2023

Signature Title Date

VEIHMEYER* Director and Chair of the Audit Committee February 2, 2023

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Depreciation and tooling amortization (Note 12 and Note 13)

8,751 7,318 7,642

Other amortization ( 1,294 ) ( 1,358 ) ( 1,149 )

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Brazil manufacturing exit non-cash charges (excluding accelerated depreciation of $ 145 , $ 322 , and $ 17 ) (Note 21)

1,159 48 ( 82 )

(Gains)/Losses on extinguishment of debt (Note 5 and Note 19)

Provision for/(Benefit from) credit and insurance losses 929 ( 298 ) 46

Pension and other post-retirement employee benefits (“OPEB”) expense/(income) (Note 17) 2,625 1,027 ( 4,865 )

Equity investment dividends received in excess of (earnings)/losses 203 130 116

Pension and other postretirement employee benefits (“OPEB”) expense/(income) (Note 17)

1,027 ( 4,865 ) ( 378 )

Equity method investment dividends received in excess of (earnings)/losses and impairments 130 116 3,324

Foreign currency adjustments ( 420 ) 532 ( 27 )

Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments ( 139 ) ( 315 ) ( 9,159 )

Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments (Note 5)

( 315 ) ( 9,159 ) 7,518

Net (gain)/loss on changes in investments in affiliates (Note 5)

( 3,446 ) ( 368 ) 147

Stock compensation (Note 6)

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Proceeds from sale of business (Note 22)

1,340 145 449

Purchases of marketable securities and other investments ( 39,624 ) ( 27,491 ) ( 17,458 )

1 unchanged sentence

Settlements of derivatives ( 323 ) ( 272 ) 94

Capital contributions to equity method investments (Note 24)

( 4 ) ( 57 ) ( 738 )

Other 498 ( 297 ) 312

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Interest expense on Company debt excluding Ford Credit 1,649 1,803 1,259

Other income/(loss), net (Note 5 and Note 22) ( 226 ) 4,899 14,733

Equity in net income/(loss) of affiliated companies 32 42 327

Other income/(loss), net (Note 5)

4,899 14,733 ( 5,150 )

Equity in net income/(loss) of affiliated companies (Note 14)

42 327 ( 2,883 )

Income/(Loss) before income taxes ( 1,116 ) 17,780 ( 3,016 )

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Comprehensive income/(loss) attributable to noncontrolling interests

2 ( 23 ) ( 175 )

Comprehensive income/(loss) attributable to Ford Motor Company $ ( 1,845 ) $ 17,892 $ ( 2,981 )

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Trade and other receivables, less allowances of $ 48 and $ 105

11,370 15,729

Inventories (Note 11) 12,065 14,080

Assets held for sale (Note 22)

Other assets 3,416 3,780

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Other liabilities and deferred revenue (Note 16 and Note 25)

18,686 21,097

Debt payable within one year (Note 19)

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Other liabilities and deferred revenue (Note 16 and Note 25)

27,705 25,497

Long-term debt (Note 19)

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Balance at December 31, 2020 $ 41 $ 22,290 $ 18,243 $ ( 8,294 ) $ ( 1,590 ) $ 30,690 $ 121 $ 30,811

Adoption of accounting standards

— — ( 202 ) — — ( 202 ) — ( 202 )

Net income/(loss) — — 17,937 — — 17,937 ( 27 ) 17,910

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(a) Includes impacts of share-based compensation.

(b) We declared dividends per share of Common and Class B Stock of $ 0.60 , $ 0.15 , and $ 0.10 per share in 2019, 2020, and 2021, respectively.

(b) We declared dividends per share of Common and Class B Stock of $ 0.15 and $ 0.10 in 2020 and 2021, respectively, and in 2022, $ 0.10 per share in the first and second quarter and $ 0.15 per share in the third and fourth quarter.

On February 2, 2023, we declared a regular dividend of $ 0.15 per share and a supplemental dividend of $ 0.65 per share.

The accompanying notes are part of the consolidated financial statements.

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Factors we consider include the severity of the impairment, the reason for the decline in value, interest rate changes, and counterparty long-term ratings.

Trade Receivables

Trade and other receivables consist primarily of Company excluding Ford Credit receivables from contracts with customers for the sale of vehicles, parts, accessories, and services.

Trade receivables initially are recorded at the transaction amount and are typically outstanding for 30 days or less.

Each reporting period, we evaluate the collectibility of the receivables and record an allowance for doubtful accounts representing our estimate of the expected losses that result from possible default events over the expected life of a receivable.

Changes to the allowance for doubtful accounts are made by recording charges to bad debt expense reported in Selling, administrative, and other expenses.

Trade, Notes, and Other Receivables

Trade, notes, and other receivables consist primarily of receivables from contracts with customers for the sale of vehicles, parts, and accessories.

The current portion of trade and notes receivables is reported in Trade and other receivables, net .

The non-current portion of notes receivables is reported in Other assets .

Trade and notes receivables are initially recorded at transaction cost.

Trade receivables are typically outstanding for 30 days or less.

Each reporting period, we evaluate the collectibility of the trade and notes receivables and record an allowance for credit losses representing our estimate of the expected losses that result from all possible default events over the expected life of the receivables.

Additions to the allowance for credit losses are made by recording charges to bad debt expense reported in Selling, administrative, and other expenses and Cost of sales .

Trade and notes receivables are written off against the allowance for credit losses when the account is deemed to be uncollectible.

Net Intangible Assets and Goodwill

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The net carrying amount of goodwill was $ 619 million and $ 603 million at December 31, 2021 and 2022, respectively.

The goodwill increase from December 31, 2020 primarily reflects the acquisitions of Getrag Ford Transmissions GmbH in March 2021 and Electriphi, Inc.

in June 2021 (see Note 22), offset partially by the full impairment of goodwill for two investments in our Mobility segment.

In 2021, we fully impaired goodwill for two investments in our Mobility segment.

In 2022, we have not recorded any impairments for goodwill.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Events that trigger a test for recoverability include material adverse changes in projected revenues or expenses, present cash flow losses combined with a history of cash flow losses and a forecast that demonstrates significant continuing losses, significant negative industry or economic trends, a current expectation that a long-lived asset group will be disposed of significantly before the end of its useful life, a significant adverse change in the manner in which an asset group is used or in its physical condition, or when there is a change in the asset grouping.

In addition, investing in new, emerging products (e.g., EVs) or services (e.g., connectivity) may require substantial upfront investment, which may result in initial forecasted negative cash flows in the near term.

In these instances, near term negative cash flows on their own may not be indicative of a triggering event for evaluation of impairment.

In such circumstances, we also conduct a qualitative evaluation of the business growth trajectory, which includes updating our assessment of when positive cash flows are expected to be generated, confirming whether established milestones are being achieved, and assessing our ability and intent to continue to access required funding to execute the plan.

If this evaluation indicates a triggering event has occurred, a test for recoverability is performed.

When a triggering event occurs, a test for recoverability is performed, comparing projected undiscounted future cash flows to the carrying value of the asset group.

If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured relying primarily on a discounted cash flow method.

If the undiscounted forecasted cash flows are less than the carrying value of the assets, the asset group’s fair value is measured relying primarily on a discounted cash flow method.

To the extent available, we will also consider third-party valuations of our long-lived assets that were prepared for other business purposes.

1 unchanged sentence

When an impairment loss is recognized for assets to be held and used, the adjusted carrying amounts of those assets are depreciated over their remaining useful life.

For the periods presented, we have not recorded any impairments.

For the periods presented, we have not recorded any material impairments.

Held-for-Sale Asset Impairment

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When discounted cash flow models are used, projected future cash flows are discounted to a present value using market-based expectations for interest rates, foreign exchange rates, commodity prices, and the contractual terms of the derivative instruments.

The discount rate used is the relevant benchmark interest rate (e.g., LIBOR, SONIA) plus an adjustment for non-performance risk.

The discount rate used is the relevant benchmark interest rate (e.g., LIBOR, SOFR, SONIA) plus an adjustment for non-performance risk.

The adjustment reflects the full credit default swap (“CDS”) spread applied to a net exposure, by counterparty, considering the master netting agreements and any posted collateral.

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We measure finance receivables at fair value using internal valuation models (see Note 10).

These models project future cash flows of financing contracts based on scheduled contract payments (including principal and interest).

The projected cash flows are discounted to present value based on assumptions regarding expected credit losses, pre-payment speed, and applicable spreads to approximate current rates.

These models project future cash flows of financing contracts based on scheduled contract payments (including principal and interest) and assumptions regarding expected credit losses and pre-payment speed.

The projected cash flows are discounted to present value at current rates that incorporate present yield curve and credit spread assumptions.

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

21 unchanged sentences

however, when these occur, our policy is to defer the recognition of any such price change given explicitly in consideration of future business.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Government Incentives

1 unchanged sentence

governmental entities in the form of tax rebates or credits, grants, and loans.

Government incentives are recorded in our consolidated financial statements in accordance with their purpose as a reduction of expense, a reduction of the cost of the capital investment, or other income.

Government incentives are recorded in our consolidated financial statements in accordance with their purpose as a reduction of expense or other income.

The benefit is generally recorded when all conditions attached to the incentive have been met and there is reasonable assurance of receipt.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Government incentives related to capital investment are recognized in Net Property as a reduction to the net book value of the related asset.

The incentives are recognized over the life of the asset as a reduction to depreciation and amortization expense.

During 2022, we were awarded incentives by the State of Tennessee related to land, capital, and property tax abatements in connection with Ford’s capital investment in our new electric vehicle assembly plant and job commitments.

These incentives are available until December 2051.

The fair value of the land benefit in 2022 was $ 144 million and was recorded in Net Property fully offset by the value of the incentive.

A capital grant of $ 285 million is expected to be received in 2023 and will reduce the depreciation and amortization expense over the life of the related assets.

In 2022, we were also awarded incentives by the Canadian government and Province of Ontario in connection with the development of electric vehicles at our Oakville Assembly Plant.

Equipment, tooling, and labor incentives of C$ 590 million are expected to be received over the terms of the agreements beginning in 2024 through 2033 and will be recognized as a reduction of the related expenses.

Ford may also indirectly benefit from incentives and grants awarded to companies with which we are affiliated but are not included in our consolidated financial statements.

Ford’s receipt of government incentives could be subject to reduction, termination, or claw back.

Claw back provisions are monitored for ongoing compliance and are accrued for when losses are deemed probable and estimable (see Note 25).

Selected Other Costs

6 unchanged sentences

Advertising 2.8 3.1 2.2

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

Accounting Standards Update (“ASU”) 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes.

Effective January 1, 2021, we adopted the amendments in this ASU to simplify the accounting for income taxes.

The amendments clarified that an entity may elect, but is not required, to reflect an allocation of consolidated current and deferred tax expense for non-taxable legal entities that are treated as disregarded by taxing authorities in their separately issued financial statements.

With the adoption of the amendments in ASU 2019-12, Ford Credit’s separately issued financial statements no longer reflect an allocation of our consolidated U.S.

current and deferred tax expense to it and certain of its U.S.

subsidiaries that are treated as disregarded entities for U.S.

tax purposes.

Adoption of these amendments reduces complexity in accounting for income taxes and better reflects Ford Credit’s external obligations to tax authorities.

Following the adoption, in April 2021, we entered into a Second Amended and Restated Tax Sharing Agreement with Ford Credit.

The adoption of ASU 2019-12 and the Second Amended and Restated Tax Sharing Agreement had no impact on our consolidated financial position or results of operations.

The amendments were adopted on a retrospective basis and are reflected in Ford Credit’s standalone financial statements and disclosures.

ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

Effective January 1, 2021, we adopted the new standard, which simplified guidance on the issuer’s accounting for convertible debt instruments and amended certain guidance related to the computation of earnings per share for convertible instruments and contracts in an entity’s own equity.

There was no impact on the date of adoption.

During the first quarter of 2021, we issued convertible notes (see Note 19).

Accounting Standards Update (“ASU”) 2021-10, Government Assistance:

Disclosures by Business Entities about Government Assistance.

Effective January 1, 2022, we adopted the new standard, which requires entities to provide certain disclosures in annual period financial statements for those transactions with governments that are accounted for by applying a grant or contribution accounting model via analogy to other applicable accounting standards.

Adoption of the new standard did not have a material impact to our consolidated financial statement disclosures.

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

ASU Effective Date

2021-04 Issuer’s Accounting for Certain Modifications or Exchanges of Warrants January 1, 2022

2021-05 Lessors - Certain Leases with Variable Lease Payments January 1, 2022

2021-08 Business Combinations:

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers January 1, 2022

2022-06 Reference Rate Reform:

Deferral of the Sunset Date of Topic 848 December 21, 2022

Accounting Standards Issued But Not Yet Adopted

The Company considers the applicability and impact of all ASUs.

ASUs were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements.

ASU 2022-02, Financial Instruments – Credit Losses, Troubled Debt Restructurings and Vintage Disclosures.

In March 2022, the FASB issued a new accounting standard that eliminates the troubled debt recognition and measurement guidance.

The new standard requires that an entity apply the loan refinancing and restructuring guidance in ASC 310 to all loan modifications and/or receivable modifications.

It also enhances disclosure requirements for certain refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and requires disclosure of current-period gross charge-offs by year of origination in the vintage disclosure.

The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

The adoption of the new standard is not expected to have a material impact on our consolidated financial statements or financial statement disclosures.

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

FORD MOTOR COMPANY AND SUBSIDIARIES

55 unchanged sentences

We adjust our estimate of revenue at the earlier of when the value of consideration we expect to receive changes or when the consideration becomes fixed.

As a result of changes in our estimate of marketing incentives, we recorded a decrease in revenue of $ 844 million and $ 973 million during 2019 and 2020, respectively, and an increase in revenue of $ 252 million during 2021 related to revenue recognized in prior annual periods.

As a result of changes in our estimate of marketing incentives, we recorded a decrease in revenue of $ 973 million during 2020 and an increase in revenue of $ 252 million and $ 209 million during 2021 and 2022, respectively, related to revenue recognized in prior annual periods.

We have elected to recognize the cost for freight and shipping when control over vehicles, parts, or accessories have transferred to the customer as an expense in Cost of sales .

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Services and other revenue.

We use an observable price to determine the stand-alone selling price for separate or stand-ready performance obligations that are included as part of the vehicle consideration received (e.g., free extended service contracts, vehicle connectivity, over-the-air updates), or a cost-plus margin approach when one is not available.

For separate or stand-ready performance obligations that are included as part of the vehicle consideration received (e.g., free extended service contracts, vehicle connectivity, over-the-air updates), we use an observable price to determine the stand-alone selling price or, when one is not available, we use a cost-plus margin approach.

We also sell separately priced service contracts that extend mechanical and maintenance coverages beyond our base warranty agreements to vehicle owners.

We receive payment at contract inception and the contracts range from 12 to 120 months.

We receive payment at contract inception and the contracts generally range from 12 to 120 months.

We recognize revenue for vehicle service contracts that extend mechanical and maintenance coverages beyond our base warranties over the term of the agreement in proportion to the costs we expect to incur in satisfying the contract obligations.

Revenue related to other future or stand-ready performance obligations is generally recognized on a straight-line basis over the period in which services are expected to be performed.

At December 31, 2019 and 2020, a balance of $ 4.2 billion of unearned revenue associated primarily with outstanding extended service contracts was reported in Other liabilities and deferred revenue .

We had a balance of $ 4.2 billion and $ 4.3 billion of unearned revenue associated primarily with outstanding extended service contracts reported in Other liabilities and deferred revenue at December 31, 2020 and 2021, respectively.

We recognized $ 1.3 billion and $ 1.4 billion of the unearned amounts as revenue during the years ended December 31, 2021 and 2022, respectively.

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REVENUE (Continued)

We also receive net commissions for serving as the agent in facilitating the sale of a third party’s products or services to our customers, payments for vehicle-related design and testing services we perform for others, and revenue associated with various Mobility operations.

We also receive other revenue related to vehicle-related design and testing services we perform for others, various Mobility operations, and net commissions for serving as the agent in facilitating the sale of a third party’s products or services to our customers.

We have applied the practical expedient to recognize Automotive revenues for vehicle-related design and testing services over the two to three year term of these agreements in proportion to the amount we have the right to invoice.

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2020 2021 2022

Net periodic pension and OPEB income/(cost), excluding service cost (a) $ ( 1,602 ) $ 69 $ 5,997

Net periodic pension and OPEB income/(cost), excluding service cost (Note 17)

$ 69 $ 5,997 $ 1,336

Investment-related interest income 452 254 639

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( 2 ) 7 ( 23 )

Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (b) 144 325 9,159

Gains/(Losses) on changes in investments in affiliates (c) 20 3,446 368

Gains/(Losses) on extinguishment of debt (d) ( 55 ) ( 1 ) ( 1,702 )

Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (a) 325 9,159 ( 7,518 )

Gains/(Losses) on changes in investments in affiliates (Note 21 and Note 22)

3,446 368 ( 147 )

Gains/(Losses) on extinguishment of debt (Note 19)

( 1 ) ( 1,702 ) ( 121 )

Royalty income 493 619 483

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Total $ 4,899 $ 14,733 $ ( 5,150 )

(a) See Note 17 for additional information relating to our pension and OPEB remeasurements.

(b) See Note 15 for additional information relating to our investment in Rivian.

(c) See Note 22 for additional information relating to our Argo AI, LLC (“Argo AI”) and Volkswagen AG (“VW”) transaction in 2020.

(d) See Note 19 for additional information relating to our debt repurchase.

(a) Includes a $ 9.1 billion gain and $ 7.4 billion loss on our Rivian investment during the year ended December 31, 2021 and December 31, 2022, respectively.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Stock Options

For the years ended December 31, 2020 and 2021, stock options outstanding were 26.9 million and 11.9 million, respectively, and stock options exercisable were 20.3 million and 7.5 million, respectively.

During 2021, there were 11 million stock options exercised, with a weighted-average exercise price of $ 12.07 .

The exercised options prices ranged from $ 6.19 to $ 15.37 during 2021.

Activity related to stock options for 2022 was as follows:

Shares (millions) Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value (millions)

Outstanding, beginning of period 11.9 $ 11.15

Exercised (a) ( 1.8 ) 12.35

Forfeited (including expirations) — —

Outstanding, end of period 10.1 10.84

Exercisable, end of period 7.9 12.10 3.1 $ 13.4

Options expected to vest 2.2 6.40 7.6 11.7

(a) Exercised at option prices ranging from $ 6.96 to $ 15.37 during 2022.

We received approximately $ 22 million in proceeds with an equivalent of about $ 36 million in new issues used to settle the exercised options.

For options exercised during the year ended December 31, 2022, the difference between the fair value of the Common Stock issued and the respective exercise price was $ 13 million.

As of December 31, 2021, the intrinsic value for vested and unvested stock options was $ 51.6 million and $ 63.2 million, respectively.

The average remaining terms for fully vested stock options and unvested stock options were 2.3 years and 8.5 years, respectively.

Compensation cost for stock options for the year ended December 31, 2021 was $ 2 million.

Compensation cost for stock options for the year ended December 31, 2022 was $ 0 .

As of December 31, 2022, there was no unrecognized compensation cost related to non-vested stock options.

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We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be recovered or paid.

Our accounting for deferred tax consequences represents our best estimate of the likely future tax consequences of events that have been recognized on our consolidated financial statements or tax returns and their future probability.

In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets.

If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, we record a valuation allowance.

FORD MOTOR COMPANY AND SUBSIDIARIES

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INCOME TAXES (Continued)

In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets.

If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, we record a valuation allowance.

Components of Income Taxes

Components of income taxes excluding cumulative effects of changes in accounting principles, other comprehensive income, and equity in net results of affiliated companies accounted for after-tax for the years ended December 31 were as follows:

Components of income taxes excluding cumulative effects of changes in accounting principles, other comprehensive income/(loss), and equity in net results of affiliated companies accounted for after-tax for the years ended December 31 were as follows:

2020 2021 2022

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Reconciliation of effective tax rate

statutory rate 21.0 % 21.0 % 21.0 %

tax rates under U.S.

rates 46.9 ( 2.6 ) 1.3

statutory tax rate 21.0 % 21.0 % 21.0 %

tax rate differential ( 2.6 ) 1.3 ( 8.7 )

State and local income taxes 8.9 0.5 2.3

General business credits 35.1 ( 2.3 ) 13.0

Nontaxable foreign currency gains and losses ( 1.1 ) — ( 4.2 )

Dispositions and restructurings (a) ( 0.4 ) ( 18.8 ) ( 7.0 )

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Other 1.7 ( 0.3 ) 1.7

Effective rate 113.1 % ( 14.3 ) % ( 0.7 ) %

Effective tax rate ( 14.3 ) % ( 0.7 ) % 28.6 %

(a) Includes a benefit of $ 2.9 billion to recognize deferred tax assets resulting from changes in our global tax structure in 2021.

On December 22, 2017, the Tax Cuts and Jobs Act (H.R.

1) was signed into law.

This act includes, among other items, a permanent reduction to the U.S.

corporate income tax rate from 35 % to 21 % effective January 1, 2018, and requires immediate taxation of accumulated, unremitted non-U.S.

For the year ended December 31, 2019, our tax provision includes additional expense of $ 95 million related to the impact of the act and subsequently issued Treasury regulations on our global operations.

During 2020, based on all available evidence, we established U.S.

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valuation allowances.

The reversal primarily reflects a change in our intent to pursue planning actions involving cash outlays to preserve tax credits.

The reversal primarily reflected a change in our intent to pursue planning actions involving cash outlays to preserve tax credits.

During 2022, we reversed an additional $ 405 million of U.S.

valuation allowances, primarily as a result of planning actions.

At December 31, 2022, $ 14.8 billion of non-U.S.

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During 2021, we restructured a significant portion of these operations resulting in recognition of $ 2.9 billion of net deferred tax assets.

Reversal of the remaining elections would result in the recognition of $ 4.3 billion of deferred tax assets, subject to valuation allowance testing.

Reversal of the remaining elections would result in the recognition of $ 4.3 billion and $ 4.2 billion of deferred tax assets, subject to valuation allowance testing, as of December 31, 2021 and 2022, respectively.

Operating loss carryforwards for tax purposes were $ 11.4 billion at December 31, 2022, resulting in a deferred tax asset of $ 4.0 billion.

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Tax credits available to offset future tax liabilities are $ 9.4 billion.

The majority of these credits have a remaining carryforward period of five years or more.

The majority of these credits have a remaining carryforward period of six years or more.

Tax benefits of operating loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and available tax planning strategies.

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Ending balance $ 2,910 $ 2,939

The amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $ 1.9 billion and $ 2.9 billion as of December 31, 2020 and 2021, respectively.

Examinations by tax authorities have been completed through the following years:

2004 in India, 2006 in Mexico, 2008 in Germany, 2010 in Spain, 2011 in Canada, 2014 in the United States and the United Kingdom, and 2016 in China.

Net interest on income taxes was $ 29 million of expense, $ 2 million of expense, and $ 7 million of income for the years ended December 31, 2019, 2020, and 2021, respectively.

These were reported in Other income/(loss), net in our consolidated income statements.

The amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $ 2.9 billion as of December 31, 2021 and 2022.

Examinations by tax authorities have been completed through 2008 in Germany, 2014 in the United States, 2015 in Mexico, 2017 in Canada and China, 2018 in Spain and India, and 2019 in the United Kingdom.

Net interest on income taxes was $ 2 million of expense, $ 7 million of income, and $ 23 million of expense for the years ended December 31, 2020, 2021, and 2022, respectively.

These were reported in Other income/(loss), net on our consolidated income statements.

Net payables for tax related interest were $ 32 million and $ 17 million as of December 31, 2021 and 2022, respectively.

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We present both basic and diluted earnings/(loss) per share (“EPS”) amounts in our financial reporting.

Basic EPS excludes dilution and is computed by dividing Net income/(loss) attributable to Ford Motor Company by the weighted-average number of Common and Class B Stock outstanding for the period.

Basic EPS excludes dilution and is computed by dividing Net income/(loss) attributable to Ford Motor Company by the weighted-average number of shares of Common and Class B Stock outstanding for the period.

Diluted EPS reflects the maximum potential dilution that could occur from our share-based compensation (“in-the-money” stock options, unvested RSUs, and unvested RSSs) and convertible debt.

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Diluted shares 3,973 4,034 4,014

(a) In 2020, there were 29 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect.

(a) In 2020 and 2022, there were 29 million and 42 million shares, respectively, excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect .

FORD MOTOR COMPANY AND SUBSIDIARIES

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government and agencies 2 1,048 199 1,247

Other cash equivalents 2 10 — 10

Corporate debt 2 593 792 1,385

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Restricted cash $ 79 $ 127 $ 206

(a) Includes $ 10.6 billion of Rivian common shares valued at $ 103.69 per share as of December 31, 2021.

Net unrealized gains/losses incurred during the reporting periods on equity securities still held at December 31, 2020 and 2021 were a $ 24 million gain and a $ 8.3 billion gain, respectively.

At February 2, 2022, Rivian common shares were valued at $ 64.32 per share.

Ford’s Rivian shares are subject to a contractual 180 -day lockup period that commenced with Rivian’s initial public offering (“IPO”) on November 10, 2021.

(a) Includes $ 10.6 billion and $ 194 million of Rivian common shares valued at $ 103.69 and $ 18.43 per share as of December 31, 2021 and 2022, respectively.

In 2022, we sold 91 million of our Rivian common shares for about $ 3 billion in total proceeds.

Net unrealized gains/losses recognized during 2021 and 2022 on all equity securities held at December 31, 2021 and 2022 were an $ 8.3 billion gain and a $ 968 million loss, respectively.

FORD MOTOR COMPANY AND SUBSIDIARIES

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At December 31, 2021 and 2022, accrued interest was $ 125 million and $ 187 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, 2020 and 2021 were consumer receivables of $ 43.7 billion and $ 39 billion, respectively, and non-consumer receivables of $ 16.4 billion and $ 12 billion, respectively, that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements.

Included in the recorded investment in finance receivables at December 31, 2021 and 2022 were consumer receivables of $ 39 billion and $ 43.9 billion, respectively, and non-consumer receivables of $ 12 billion and $ 18.2 billion, respectively, (including Automotive 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;

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Ford Credit generally suspends credit lines and extends no further funding to dealers classified in Group IV.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Ford Credit regularly reviews the model to confirm the continued business significance and statistical predictability of the model and may make updates to improve the performance of the model.

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Ford Credit adjusts the dealer’s risk rating, if necessary.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The credit quality of dealer financing receivables is evaluated based on Ford Credit’s internal dealer risk rating analysis.

A dealer has the same risk rating for its entire dealer financing regardless of the type of financing.

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

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For consumer receivables that share similar risk characteristics such as product type, initial credit risk, term, vintage, geography, and other relevant factors, Ford Credit estimates the lifetime expected credit loss allowance based on a collective assessment using measurement models and management judgment.

The lifetime expected credit losses for the receivables is determined by applying probability of default and loss given default assumption models to monthly expected exposures, then discounting these cash flows to present value using the receivable’s original effective interest rate or the current effective interest rate for a variable rate receivable.

The lifetime expected credit losses for the receivables is determined by applying probability of default and loss given default assumption to monthly expected exposures, then discounting these cash flows to present value using the receivable’s original effective interest rate or the current effective interest rate for a variable rate receivable.

Probability of default models are developed from internal risk scoring models taking into account the expected probability of payment and time to default, adjusted for macroeconomic outlook and recent performance.

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Beginning balance $ 1,245 $ 60 $ 1,305

Adoption of ASU 2016-13 (a) 247 5 252

Charge-offs ( 272 ) ( 3 ) ( 275 )

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Provision for/(Benefit from) credit losses ( 270 ) ( 40 ) ( 310 )

Other (b) 11 2 13

Other (a) ( 2 ) ( 3 ) ( 5 )

Ending balance $ 903 $ 22 $ 925

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Provision for/(Benefit from) credit losses 56 ( 17 ) 39

Other (b) ( 2 ) ( 3 ) ( 5 )

Other (a) ( 8 ) ( 2 ) ( 10 )

Ending balance $ 838 $ 7 $ 845

(a) On January 1, 2020, we adopted ASU 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss impairment method with a method that reflects lifetime expected credit losses.

We recognized the cumulative effect as a pre-tax adjustment to retained earnings as of January 1, 2020.

(b) Primarily represents amounts related to translation adjustments.

The allowance for credit losses at December 31, 2021 considers the remaining economic uncertainty attributable to the COVID-19 pandemic, including the negative impact to consumer liquidity once economic support programs end, and the pandemic’s effect on the labor market and unemployment.

For the year ended December 31, 2021, the allowance for credit losses decreased $ 380 million, primarily reflecting improvement in the economic outlook that caused Ford Credit to lower its expectation of lifetime losses attributable to macroeconomic assumptions driven by COVID-19.

Although net charge-offs for the year ended December 31, 2021 remained low, due in part to government support programs, changes in consumer spending behavior, and high vehicle auction values, the impact of COVID-19 on future credit losses remains uncertain.

(a) Primarily represents amounts related to translation adjustments.

On January 1, 2020, we adopted ASU 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments, which had an impact on the 2020 opening balance of Retained earnings of $ 202 million.

For the year ended December 31, 2022, the allowance for credit losses decreased $ 80 million primarily due to Ford Credit’s current expectation that COVID-related losses have been largely avoided, offset partially by deterioration in the macroeconomic outlook that was reflected in the reserve balance in the fourth quarter of 2022.

Although net charge-offs for the year ended December 31, 2022 remained low due, in part, to high vehicle auction values, the impact of higher inflation and higher interest rates on future credit losses remains uncertain.

Ford Credit will continue to monitor economic trends and conditions and portfolio performance and will adjust the reserve accordingly.

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$ 12,065 $ 14,080

Finished products at December 31, 2021 in the table above include vehicles completed but awaiting installation of components affected by the semiconductor supply shortage, after which, they will proceed through an additional quality review process prior to being shipped to our dealers.

Our finished product inventory at December 31, 2022 was higher year over year due to production and release scheduling, which resulted in higher sales inventory, in-transit inventory, and units awaiting upfit.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Estimated residual values are based on assumptions for used vehicle prices at lease termination and the number of vehicles that are expected to be returned.

Adjustments to depreciation expense reflecting revised estimates of expected residual values at the end of the lease terms are recorded prospectively on a straight-line basis.

The net investment in operating leases at December 31 was as follows (in millions):

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Ford Credit Segment

Vehicles and other equipment, at cost (a) 32,486 29,982

Vehicles, at cost (a) 29,982 26,055

Accumulated depreciation ( 4,815 ) ( 4,234 )

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Maintenance and rearrangement $ 1,670 $ 1,940 $ 2,083

(a) Includes impairment of held-for-sale long-lived assets in 2019 and 2020.

(a) Includes impairment of held-for-sale long-lived assets.

See Note 22 for additional information.

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2021 2022 2022

Argo AI, LLC (see Note 22)

$ 2,368 $ 2,042 41 %

Changan Ford Automobile Corporation, Limited (a) 691 860 50

Jiangling Motors Corporation, Limited (a) (b) 592 468 32

AutoAlliance (Thailand) Co., Ltd.

BlueOval SK, LLC $ — $ 690 50 %

Ford Otomotiv Sanayi Anonim Sirketi 278 479 41

Ford Sollers Netherlands B.V.

(see Note 21)

Jiangling Motors Corporation, Limited (a) 468 471 32

Changan Ford Automobile Corporation, Limited (b) 860 409 50

AutoAlliance (Thailand) Co., Ltd.

FFS Finance South Africa (Pty) Limited 70 70 50

Ionity Holding GmbH & Co.

Getrag Ford Transmissions GmbH (a) (b) (See Note 22)

Argo AI, LLC (c) 2,042 — 44

Ford Sollers Netherlands B.V.

Other 287 266 Various

Total $ 4,545 $ 2,798

(a) In 2020, Changan Ford Automobile Corporation, Limited, Jiangling Motors Corporation, Limited, and Getrag Ford Transmissions GmbH recorded restructuring charges, our share of which was $ 15 million, $ 40 million, and $ 91 million, respectively.

(a) In 2021 and 2022, Jiangling Motors Corporation, Limited recorded restructuring charges, our share of which was $ 10 million and $ 13 million, respectively.

These charges are included in Equity in net income/(loss) of affiliated companies .

(b) In 2021, Jiangling Motors Corporation, Limited, and Getrag Ford Transmission GmbH recorded restructuring charges, our share of which was $ 10 million and $ 40 million, respectively.

(b) In 2022, Changan Ford Automobile Corporation, Limited recorded long-lived asset and other asset impairment charges as well as restructuring charges, our share of which was $ 368 million.

These charges are included in Equity in net income/(loss) of affiliated companies .

(d) In 2022, we fully impaired our $ 93 million investment in Ford Sollers Netherlands B.V., and also sold our interest to the joint venture (with an option to repurchase within five years) for a nominal value resulting in the release of the $ 25 million carrying amount of our associated foreign currency translation adjustment.

These charges are included in Equity in net income/(loss) of affiliated companies and Other income/(loss) , respectively.

We recorded $ 180 million, $ 452 million, and $ 452 million of dividends from these affiliated companies for the years ended December 31, 2020, 2021, and 2022, respectively.

An aggregate summary of the balance sheets and income statements of our equity method investees, on a stand alone basis, as reported by those investees at December 31 is below (in millions).

Our investment in each equity method investee is reported in Equity in net assets of affiliated companies , and our proportionate share of each of the entities’ income/(loss) is reported in Equity in net income/(loss) of affiliated companies .

Summarized Balance Sheet 2021 2022

Current assets $ 9,342 $ 10,361

Non-current assets 12,009 11,142

Total assets $ 21,351 $ 21,503

Current liabilities $ 9,461 $ 10,371

Non-current liabilities 4,069 4,498

Total liabilities $ 13,530 $ 14,869

Equity attributable to noncontrolling interests $ — $ —

For the years ended December 31,

Summarized Income Statement 2020 2021 2022

Total revenue $ 24,033 $ 27,760 $ 27,153

Income/(Loss) before income taxes (a) 282 1,002 ( 1,806 )

Net income/(loss) (a) 305 1,029 ( 1,769 )

(a) The 2022 results reflects Argo AI’s impairment, partially offset by the net income/(loss) of our other equity method investees.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

EQUITY IN NET ASSETS OF AFFILIATED COMPANIES (Continued)

In the ordinary course of business, we buy/sell various products and services including vehicles, parts, and components to/from our equity method investees.

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Payables 1,035 1,676

In 2017, we began investing in Argo AI, an artificial intelligence company that became a consolidated subsidiary, with a commitment to fund $ 1 billion over five years to develop autonomous vehicle technology.

In 2020, we completed a transaction with Volkswagen AG (“VW”) that resulted in Ford and VW holding equal interests in Argo AI, which together comprised a majority ownership of the entity.

As a result of this transaction, which included $ 500 million of proceeds from the sale to VW of a portion of our interest in Argo AI, we deconsolidated Argo AI, remeasured our retained investment in the entity at fair value, and, net of our carrying value in Argo AI’s net assets, recognized a $ 3.5 billion pre-tax gain in Other income/(loss), net .

Immediately following this transaction, our retained investment consisted of a $ 2.4 billion equity method investment and a $ 400 million preferred equity security investment, which were reflected on our consolidated balance sheets in Equity in net assets of affiliated companies and Other assets , respectively.

Although Argo AI made progress on developing highly automated driving technology (L4), to achieve commercially viable scale, Argo AI’s technology requires significant additional capital investment and time.

In the near term, we see more potential for partial or conditional automated driving technology (L2/L3) to be transformative for customers and our business.

Therefore, in the third quarter of 2022, we made the strategic decision to shift our capital spending from L4 technology being developed by Argo AI to advanced L2/L3 systems, which we believe will ultimately be essential to achieve profitable commercialization of L4 autonomy at scale in the future.

Additionally, because of the significant additional capital and time required to achieve commercialization of L4, as well as other macroeconomic factors, Argo AI has been unable to attract new investors.

After performing external outreach in the third quarter of 2022 to assess market interest in acquiring either Argo AI or its technology components and conducting internal reviews to evaluate opportunities to leverage Argo AI’s technology, Ford determined that Argo AI no longer has value as a going concern.

As a result, we reassessed the carrying value of our investment in Argo AI starting from September 30, 2022, and in October 2022, Ford and VW initiated the process of exiting the joint development of L4 technology through Argo AI.

On October 26, 2022, we announced that Argo AI plans to wind down operations, which is in progress.

Our valuation assumed an orderly conclusion of operations at Argo AI, in which the cash required to satisfy the remaining obligations would consume all of Argo AI’s remaining capital.

In addition, we assessed whether Argo AI’s technology components have value in isolation, and we concluded that the cost to integrate into currently anticipated technology ecosystems would be prohibitive.

Accordingly, we recorded a $ 2.7 billion pre-tax impairment in the second half of 2022.

The non-cash charge was reported in Equity in net income/(loss) of affiliated companies .

The carrying value of our investment in Argo AI is $ 0 as of December 31, 2022;

in addition, we have $ 65 million in Other liabilities and deferred revenue related to our funding commitment in 2023 for our share of Argo AI’s expenses incurred in 2022.

The carrying value immediately prior to the impairment was higher than our net cash investment of approximately $ 500 million (i.e., our $ 1 billion investment less proceeds we received from VW) due to the non-cash gain recognized when we deconsolidated Argo AI in 2020 as described above.

FORD MOTOR COMPANY AND SUBSIDIARIES

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These investments were $ 0.9 billion and $ 0.4 billion at December 31, 2021 and 2022, respectively.

The decrease from December 31, 2020 primarily reflects the reclassification of our investment in Rivian from Other assets to Marketable securities following the Rivian IPO in November 2021.

At the time of the IPO, Ford’s investment in Rivian’s preferred shares (including the observable event earlier in 2021 of $ 902 million) and investment in Rivian’s unsecured senior convertible notes converted to common shares, and we recorded an $ 8.2 billion unrealized gain during fourth quarter 2021, reported in Other income/(loss), net on our consolidated income statements.

The cumulative net unrealized gain from adjustments related to Other Investments held on December 31, 2021 is $ 101 million.

See Note 14 for additional information about the decrease from December 31, 2021.

The cumulative net unrealized gain from adjustments related to Other Investments held at December 31, 2022 is $ 136 million.

OTHER LIABILITIES AND DEFERRED REVENUE

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Pension 202 196

Other 4,960 4,583

Other (a) 4,583 5,590

Total current other liabilities and deferred revenue $ 18,686 $ 21,097

Dealer and dealers’ customer allowances and claims $ 4,909 $ 6,095

Pension 8,658 5,673

OPEB 5,708 4,130

Dealer and dealers’ customer allowances and claims 3,072 4,909

Deferred revenue 4,683 4,883

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Employee benefit plans 1,007 834

Other 1,709 1,692

Other (a) 1,692 2,781

Total non-current other liabilities and deferred revenue $ 27,705 $ 25,497

(a) Includes current derivative liabilities of $ 97 million and $ 1.3 billion at December 31, 2021 and 2022, respectively.

Includes non-current derivative liabilities of $ 535 million and $ 1.7 billion at December 31, 2021 and 2022, respectively (see Note 20).

FORD MOTOR COMPANY AND SUBSIDIARIES

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This includes the expense for Company-matching contributions to our primary employee savings plan in the United States of $ 146 million, $ 152 million, and $ 152 million for the years ended December 31, 2020, 2021, and 2022, respectively.

The 2019 expense also reflects a one-time contribution of $ 33 million to certain eligible employees as part of the UAW collective bargaining agreement.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Net periodic benefit cost/(income) $ ( 563 ) $ ( 1,437 ) $ 1,191 $ 836 $ ( 3,216 ) $ ( 439 ) $ 754 $ ( 212 ) $ ( 1,130 )

In 2019, we recognized additional expense of $ 361 million related to separation programs, settlements, and curtailments, which included a $ 57 million settlement loss, offset partially by a $ 12 million curtailment gain, related to the transfer of our Netherlands pension obligation and related plan assets to an insurance company, and $ 415 million of separation expenses, partially offset by $ 104 million of settlement and curtailment gains, related to ongoing redesign programs.

In 2020, we recognized additional expense of $ 367 million related to separation programs, settlements, and curtailments, which included $ 61 million of settlement losses related to a non-U.S.

In 2020, we recognized an expense of $ 367 million related to separation programs, settlements, and curtailments, which included a $ 61 million settlement loss related to a non-U.S.

pension plan and $ 268 million related to ongoing redesign programs.

In 2021, we recognized expense of $ 244 million related to separation programs, settlements, and curtailments, which included $ 70 million of settlement losses related to a U.S.

pension plan and additional separation expense of $ 156 million in non-U.S.

In 2021, we recognized an expense of $ 244 million related to separation programs, settlements, and curtailments, which included $ 70 million of settlement losses related to a U.S.

pension plan and separation expenses of $ 156 million for non-U.S.

pension plans related to ongoing redesign programs.

In 2022, we recognized an expense of $ 544 million related to separation programs, settlements, and curtailments, which included $ 438 million of settlement losses related to a U.S.

pension plan and separation and curtailment expenses of $ 57 million for non-U.S.

pension plans related to ongoing redesign programs.

Until our Global Redesign programs are completed, we anticipate further adjustments to our plans in subsequent periods.

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Curtailments — — ( 4 ) ( 2 ) — —

Settlements ( 25 ) ( 1,297 ) ( 189 ) — — —

Settlements (a) ( 1,297 ) ( 1,172 ) — ( 674 ) — —

Plan participant contributions 20 18 13 12 21 1

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Benefits paid ( 2,522 ) ( 2,466 ) ( 1,565 ) ( 1,302 ) — —

Settlements ( 25 ) ( 1,297 ) ( 189 ) — — —

Settlements (a) ( 1,297 ) ( 1,172 ) — ( 674 ) — —

Foreign exchange translation — — ( 855 ) ( 2,973 ) — —

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Projected Benefit Obligation at December 31 $ 44,888 $ 32,867 $ 34,432 $ 21,605

(a) In the fourth quarter of 2022, we transferred a non-U.S.

pension obligation and related plan assets to an insurance company.

There were no gains or losses recognized upon settlement.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Expected Long-Term Rate of Return on Assets.

The long-term return assumption at year-end 2021 is 5.75 % for the U.S.

The long-term return assumption at year-end 2022, which will be used to determine the 2023 expected return on assets, is 6.25 % for the U.S.

plans, 3.75 % for the U.K.

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plans, amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales).

For non-U.S plans, primarily Ford-Werke, plan assets (insurance contracts valued at $ 5 billion at year-end 2020) and amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales).

For non-U.S plans, $ 4.7 billion of insurance contracts, primarily Ford-Werke, and amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales).

FORD MOTOR COMPANY AND SUBSIDIARIES

57 unchanged sentences

Plans (a) 6,020 ( 1,732 ) 26 ( 722 ) 217 3,809

plans, insurance contracts, primarily Ford-Werke plan, valued at $ 5 billion and $ 4.7 billion at year-end 2020 and 2021, respectively.

(a) Includes insurance contracts, primarily the Ford-Werke plan, valued at $ 4.7 billion and $ 2.5 billion at year-end 2021 and 2022, respectively.

In the fourth quarter of 2022, we transferred a non-U.S.

pension obligation and related plan assets to an insurance company.

There were no gains or losses recognized upon settlement.

LEASE COMMITMENTS

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Otherwise, the leases are classified as operating leases and reported in Other assets in the non-current assets section of our consolidated balance sheets.

We have also entered into manufacturing contracts commencing in a future period where Ford’s portion of the output is expected to be significant.

As a result, there may be embedded leases, and related liabilities, that will be reported as part of our financial statements, typically upon commencement of production.

For the majority of our leases, we do not separate the non-lease components (e.g., maintenance and operating services) from the lease components to which they relate.

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Total lease liabilities $ 1,505 $ 574

(a) Excludes approximately $ 252 million in future lease payments for various operating leases commencing in a future period.

(a) Excludes approximately $ 300 million in future lease payments for various leases commencing in a future period.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Convertible notes 2,300 2,300

Delayed draw term loan 1,500 —

DOE ATVM Incentive Program 1,064 —

Export Finance Program 843 1,654

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Public unsecured debt securities $ — $ — $ 176 $ 3,972 $ — $ 13,087 $ ( 258 ) $ 16,977

DOE ATVM Incentive Program 953 — — — — — 2 955

Delayed draw term loan 1,500 — — — — — — 1,500

Short-term and other debt 731 95 820 65 939 417 ( 114 ) 2,953

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Title of Security 2021 2022

9.215 % Debentures due September 15, 2021

8 7/8% Debentures due January 15, 2022 $ 86 $ —

9.000 % Notes due April 22, 2025

7 1/8% Debentures due November 15, 2025 176 176

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9.95 % Debentures due February 15, 2032

6.10 % Notes due August 19, 2032

4.75 % Notes due January 15, 2043

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6.00 % Notes due December 1, 2059

6.50 % Notes due August 15, 2062

7.70 % Debentures due May 15, 2097

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Pursuant to our November 2021 cash tender offer and December 2021 redemption, we repurchased or redeemed $ 7.6 billion principal amount of our public unsecured debt securities for an aggregate cost of $ 9.3 billion (including transaction costs and accrued and unpaid interest payments for such tendered securities).

As a result of these transactions, we recorded a pre-tax loss of $ 1.7 billion (net of unamortized discounts, premiums, and fees) in Other income/(loss), net in the fourth quarter of 2021.

Environmental, Social, Governance (ESG) Bond

In November 2021, we issued $ 2.5 billion aggregate principal amount of green bonds with an interest rate of 3.250 % under our new sustainable financing framework.

We are allocating the net proceeds from this issuance to the design, development, and manufacturing of our battery electric vehicles.

As a result of these transactions, we recorded a pre-tax loss of $ 1.7 billion (net of unamortized discounts, premiums, and fees) in Other income/(loss), net in 2021.

In September 2022, we redeemed approximately $ 1.1 billion principal amount of our public unsecured debt securities for an aggregate cost of approximately $ 1.2 billion (including redemption costs and accrued and unpaid interest payments for such redeemed securities).

As a result of this transaction, we recorded a pre-tax loss of $ 135 million (net of unamortized discounts, premiums, and fees) in Other income/(loss), net in 2022.

Environmental, Social, Governance (“ESG”) Bonds

In November 2021 and August 2022, we issued $ 2.5 billion and approximately $ 1.8 billion aggregate principal amount of green bonds, respectively, under our sustainable financing framework.

The interest rates of these green bonds are 3.250 % and 6.1 %, respectively.

We are allocating the net proceeds from this issuance to the design, development, and manufacturing of our electric vehicle portfolio.

Convertible Debt

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Upon conversion, we will pay cash up to the aggregate principal amount of the notes to be converted and cash, shares of our Common Stock, or a combination of cash and shares of our Common Stock, at our election for the remainder of our obligation in excess, if any, of the aggregate principal amount of the notes being converted.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

DEBT AND COMMITMENTS (Continued)

We may not redeem the notes prior to March 20, 2024.

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In addition, if specific corporate events occur prior to the maturity date or if we issue a notice of redemption, we will increase the conversion rate by pre-defined amounts for holders who elect to convert their notes in connection with such a corporate event.

The conditions allowing holders of the notes to convert were not met in 2021.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

DEBT AND COMMITMENTS (Continued)

The conditions allowing holders of the notes to convert were not met in 2021 or 2022.

The notes were issued at par and fees associated with the issuance of these notes are amortized to Interest expense on Company debt excluding Ford Credit over the contractual term of the notes.

Amortization of issuance costs was $ 5 million in 2021.

Amortization of issuance costs was $ 5 million and $ 7 million in 2021 and 2022, respectively.

The effective interest rate of the notes is 0.3 %.

The total estimated fair value of the notes as of December 31, 2021 was approximately $ 3.2 billion.

The total estimated fair value of the notes as of December 31, 2021 and December 31, 2022 was approximately $ 3.2 billion and $ 2.2 billion, respectively.

The fair value was determined using commonly employed valuation methodologies applying observable market inputs and is classified within Level 2 of the fair value hierarchy.

The notes did not have an impact on our full year 2021 diluted EPS.

The notes did not have an impact on our full year 2021 or 2022 diluted EPS.

DOE ATVM Incentive Program

In September 2009, we entered into a Loan Arrangement and Reimbursement Agreement with the DOE, under which we borrowed through multiple draws $ 5.9 billion to finance certain costs for fuel-efficient, advanced-technology vehicles.

At December 31, 2021, an aggregate $ 953 million was outstanding.

In June 2020, the ATVM loan was modified, reducing quarterly principal payments from $ 148 million to $ 37 million.

The deferred portion of the principal payments will be due upon original maturity in June 2022.

As a result of our dividend payment in December 2021, the remaining quarterly principal payments revert from $ 37 million back to $ 148 million in accordance with the terms of the Loan Arrangement and Reimbursement Agreement.

The ATVM loan bears interest at a blended rate based on the U.S.

Treasury yield curve at the time each draw was made (with the weighted-average interest rate on all such draws being about 2.3 % per annum) on the principal amount, and an additional 1.45 % per annum on the deferred portion of the principal amount.

We made our final repayment to the DOE in June 2022.

Export Finance Program

In 2020, Ford Motor Company Limited (“Ford of Britain”), our operating subsidiary in the United Kingdom, entered into, and drew in full, a £ 625 million term loan credit facility with a syndicate of banks to support Ford of Britain’s general export activities.

In 2020 and 2022, Ford Motor Company Limited (“Ford of Britain”), our operating subsidiary in the United Kingdom, entered into, and drew in full, £ 625 million and £ 750 million term loan credit facilities, respectively, with a syndicate of banks to support Ford of Britain’s general export activities.

Accordingly, U.K.

Export Finance (“UKEF”) provided a £ 500 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 of Britain’s obligations under the credit facility to the lenders.

As of December 31, 2021, the full £ 625 million remained outstanding.

This five-year , non-amortizing loan matures on June 30, 2025.

Company Excluding Ford Credit Facilities

Total Company committed credit lines, excluding Ford Credit, at December 31, 2021 were $ 18.3 billion, consisting of $ 13.5 billion of our corporate credit facility, $ 2.0 billion of our supplemental revolving credit facility, $ 1.5 billion of our delayed draw term loan facility, and $ 1.3 billion of local credit facilities.

At December 31, 2021, the utilized portion of the corporate credit facility was $ 25 million, representing amounts utilized for letters of credit, and no portion of the supplemental revolving credit facility was utilized.

The $ 1.5 billion delayed draw term loan facility was drawn in full in 2019 and remains outstanding.

In addition, $ 847 million of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of December 31, 2021.

Lenders under our corporate credit facility have $ 3.4 billion of commitments maturing on September 29, 2024 and $ 10.1 billion of commitments maturing on September 29, 2026.

Lenders under our supplemental revolving credit facility have $ 2.0 billion of commitments maturing on September 29, 2024.

Export Finance (“UKEF”) provided £ 500 million and £ 600 million guarantees of the credit facilities, respectively, under its Export Development Guarantee scheme, which supports high value commercial lending to U.K.

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

As of December 31, 2022, the full £ 1,375 million under the two credit facilities remained outstanding.

These five-year , non-amortizing loans mature on June 30, 2025 and June 30, 2027.

FORD MOTOR COMPANY AND SUBSIDIARIES

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DEBT AND COMMITMENTS (Continued)

In September 2021, we amended the corporate and supplemental credit agreements to remove the restrictions on our ability to repurchase shares or pay dividends.

In addition, the 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.

Further, interest on any U.S.

dollar borrowings under both the corporate and supplemental revolving credit facilities will be calculated using daily simple SOFR.

Prior to the amendments, such interest was calculated using LIBOR.

Company Excluding Ford Credit Facilities

Total Company committed credit lines, excluding Ford Credit, at December 31, 2022 were $ 19.3 billion, consisting of $ 13.5 billion of our corporate credit facility, $ 2 billion of our supplemental revolving credit facility, $ 1.75 billion of our 364-day revolving credit facility, and $ 2.1 billion of local credit facilities.

At December 31, 2022, the utilized portion of the corporate credit facility was $ 19 million, representing amounts utilized for letters of credit, and the full $ 1.75 billion of our 364-day revolving credit facility was utilized by Ford Credit, in its capacity as a subsidiary borrower under that facility.

In addition, $ 1.7 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of December 31, 2022.

As of January 25, 2023, Ford Credit had repaid the full $ 1.75 billion outstanding under the 364-day revolving credit facility.

Lenders under our corporate 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.

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 facility.

The terms and conditions of the delayed draw term loan (other than sustainability-linked provisions and the transition from LIBOR to SOFR) and the supplemental revolving credit facility are consistent with our corporate credit facility.

Each of the corporate credit facility, supplemental revolving credit facility, delayed draw term loan, and our Loan Arrangement and Reimbursement Agreement with the DOE 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 and to the DOE:

The terms and conditions of the supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility.

Ford Credit has been designated as a subsidiary borrower under the corporate credit facility and the 364-day revolving credit facility.

Each of the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility include a covenant that requires us to provide guarantees from certain of our subsidiaries in the event that our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P.

The following subsidiaries have provided unsecured guarantees to the lenders under the credit facilities:

Ford Component Sales, LLC;

Ford European Holdings LLC;

Ford European Holdings Inc.;

Ford Global Technologies, LLC;

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Ford Motor Service Company;

Ford Next LLC (formerly known as Ford Autonomous Vehicles LLC);

Ford Smart Mobility LLC;

Ford Next LLC;

and Ford Trading Company, LLC.

Ford Credit Segment

Debt Extinguishment

Pursuant to Ford Credit’s June 2022 cash tender offer, Ford Credit repurchased approximately $ 3 billion principal amount of its public unsecured debt securities for an aggregate cost of approximately $ 3 billion (including transaction costs and accrued and unpaid interest payments for such tendered securities).

As a result of these transactions, Ford Credit recorded a pre-tax gain of $ 17 million (net of unamortized discounts, premiums, fees, and fair value adjustments) in Other income/(loss), net in 2022.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

DEBT AND COMMITMENTS (Continued)

Asset-Backed Debt

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In order to continue to fund the wholesale receivables, we also may contribute additional cash or wholesale receivables if the collateral falls below required levels.

The balance of cash related to these contributions was $ 25 million and $ 1,150 million at December 31, 2020 and December 31, 2021, respectively, and ranged from $ 0 to $ 524 million during 2020 and from $ 25 million to $ 3,700 million during 2021.

Cash contributions were higher than a year ago primarily related to lower wholesale receivables as a result of lower dealer inventories due to the semiconductor shortage.

The balance of cash related to these contributions was $ 1,150 million and $ 0 at December 31, 2021 and December 31, 2022, respectively, and ranged from $ 25 million to $ 3,700 million during 2021 and from $ 0 to $ 2,850 million during 2022.

SPEs that are exposed to interest rate or currency risk may reduce their risks by entering into derivative transactions.

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Interest expense on securitization debt was $ 1.2 billion, $ 0.9 billion, and $ 1.3 billion in 2020, 2021, and 2022, respectively.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

DEBT AND COMMITMENTS (Continued)

The assets and liabilities related to our asset-backed debt arrangements included in our consolidated financial statements at December 31 were as follows (in billions):

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Ford Credit’s committed capacity is primarily comprised of committed asset-backed security facilities from bank-sponsored commercial paper conduits and other financial institutions and unsecured credit facilities with financial institutions.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

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Our cash flow hedges mature within three years .

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Fair Value Hedges.

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Cash flows associated with non-designated or de-designated derivatives are reported in Net cash provided by/(used in) investing activities on our consolidated statements of cash flows.

Normal Purchases and Normal Sales Classification.

We have elected to apply the normal purchases and normal sales classification for physical supply contracts that are entered into for the purpose of procuring commodities to be used in production over a reasonable period in the normal course of our business.

FORD MOTOR COMPANY AND SUBSIDIARIES

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Normal Purchases and Normal Sales Classification.

Income Effect of Derivative Financial Instruments

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Total $ 347 $ 85 $ ( 576 )

(a) For 2019, 2020, and 2021, an $ 839 million loss, a $ 198 million gain, and a $ 453 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax .

(b) For 2019, 2020, and 2021, a $ 36 million loss, a $ 9 million gain, and a $ 284 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax .

(c) For 2019, 2020, and 2021, a $ 32 million gain, a $ 228 million loss, and a $ 230 million gain, respectively, were reported in Cost of sales and a $ 52 million gain, an $ 82 million loss, and a $ 145 million gain were reported in Other income/(loss), net, respectively.

(a) For 2020, 2021, and 2022, a $ 198 million gain, a $ 453 million loss, and a $ 448 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax .

(b) For 2020, 2021, and 2022, a $ 9 million gain, a $ 284 million gain, and a $ 102 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax .

(c) For 2020, 2021, and 2022, a $ 228 million loss, a $ 230 million gain, and a $ 53 million loss, respectively, were reported in Cost of sales and a $ 82 million loss, an $ 145 million gain, and a $ 50 million gain were reported in Other income/(loss), net, respectively.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Company Excluding Ford Credit

Global Redesign and Other Actions

Employee separation actions and exit and disposal activities include employee separation costs, facility and other asset-related charges (e.g., impairment, accelerated depreciation), dealer and supplier payments, other statutory and contractual obligations, and other expenses, which are recorded in Cost of sales and Selling, administrative, and other expenses .

Below are actions we have initiated, primarily related to the global redesign of our business:

In February 2019, Ford Motor Company Brasil Ltda.

(“Ford Brazil”), our subsidiary in Brazil, committed to a plan to exit the commercial heavy truck business in South America.

As a result, Ford Brazil ceased production at the São Bernardo do Campo plant in Brazil during 2019.

Ford Brazil completed a sale of the plant machinery and equipment in the third quarter of 2020 and the land and buildings in the fourth quarter of 2020.

In December 2020, Ford Brazil committed to a plan to exit manufacturing operations in Brazil, which resulted in the closure of facilities in Camaçari, Taubaté, and Troller in 2021.

These actions will not result in Ford Brazil being substantially liquidated, as it will continue imported vehicle sales and customer support operations, and maintain the product development center in Bahia, the proving grounds in Tatuí, São Paulo, and the regional headquarters in São Paulo.

In March 2019, Ford Sollers Netherlands B.V.

(“Ford Sollers”), a joint venture between Ford and Sollers PJSC (“Sollers”) in which Ford had control, announced its plan to restructure its business in Russia to focus exclusively on commercial vehicles and to exit the passenger car segment.

As a result of these actions, Ford acquired 100 % ownership of Ford Sollers and ceased production at the Naberezhnye Chelny and St.

Petersburg vehicle assembly plants and the Elabuga engine plant during the second quarter of 2019.

Subsequent to completion of the restructuring actions, in July 2019, Ford sold a 51 % controlling interest in the restructured entity to Sollers, which resulted in deconsolidation of the Ford Sollers subsidiary.

Our continued involvement in Ford Sollers is accounted for as an equity method investment.

In the fourth quarter of 2020, we also completed a sale of certain manufacturing assets.

United Kingdom.

In June 2019, Ford of Britain announced its plan to exit the Ford Bridgend plant in South Wales in 2020.

Ford of Britain ceased production at the Bridgend plant and the facility was closed in September 2020.

In the third quarter of 2019, Ford committed to a plan to sell specific net assets in our India Automotive operations as part of a plan to establish a joint venture with Mahindra & Mahindra Limited (“Mahindra”).

In December 2020, Ford and Mahindra mutually determined that we would not complete the joint venture (see Note 22).

Subsequently, in September 2021, Ford India Private Limited (“Ford India”), our subsidiary in India, announced its plans to exit the engine and vehicle manufacturing operations at its facilities in Chennai and its vehicle manufacturing operation at its facility in Sanand.

Ford India ceased vehicle manufacturing in Sanand in fourth quarter 2021 and plans to cease engine and vehicle manufacturing in Chennai by second quarter 2022.

These actions will not result in Ford India being substantially liquidated, as it will continue with its powertrain operations at its engine plant in Sanand to support certain products, including those manufactured by our affiliate in Thailand, and it will continue its imported vehicle sales and customer support operations.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES (Continued)

Other Global Redesign Actions.

In 2018, we announced our plan to end production at the Ford Aquitaine Industries plant in Bordeaux, France.

We ceased production and closed the facility in July 2019.

In March 2019, we announced our plan to phase-out the production of the C-Max at the Saarlouis Body and Assembly Plant in Germany.

We ceased production of the C-Max in June 2019.

In March 2021, we announced our plan to phase-out the production of the Mondeo at the Valencia Plant in Spain.

In addition, we are continuing to reduce our global workforce and take other restructuring actions.

• Ford Motor Company Brasil Ltda exited manufacturing operations in Brazil, which resulted in the sale of the São Bernardo do Campo plant facilities and machinery and equipment during 2020 as well as closure of facilities in Camaçari, Taubaté, and Troller in 2021

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

• Ford India Private Limited (“Ford India”) ceased vehicle manufacturing in Sanand in fourth quarter 2021 and ceased manufacturing in Chennai in third quarter 2022.

In the third quarter of 2022, Ford India entered into an agreement to sell the Sanand vehicle assembly and powertrain plants.

• Ford Espana S.L.

ceased production of the Mondeo at the Valencia plant in Spain in March 2022

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

The following table summarizes the activities for the years ended December 31, which are recorded in Other liabilities and deferred revenue (in millions):

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(a) Excludes pension costs of $ 156 million and $ 57 million in 2021 and 2022, respectively .

We recorded $ 1.4 billion of non-cash charges in 2019 for the impairment of our India Automotive operations, accelerated depreciation, and other items.

In 2020, we recorded $ 1.4 billion of non-cash charges related to the write-off of certain tax and other assets in South America, accelerated depreciation, and other items.

In addition, we recognized a pre-tax net gain on sale of assets in Brazil and Russia of $ 39 million, with cash proceeds of $ 128 million.

In addition, we recognized a pre-tax net gain on sale of assets of $ 39 million.

In 2021, we recorded $ 739 million for accelerated depreciation and other non-cash items.

We estimate that we will incur about $ 2 billion in total charges in 2022 related to the actions above, primarily attributable to employee separations and dealer and supplier settlements.

We continue to review our global businesses and may take additional restructuring actions in markets where a path to sustained profitability is not feasible when considering the capital allocation required for those markets.

In 2022, we recorded $ 32 million for accelerated depreciation, impairment of our India held-for-sale assets, and other non-cash items, partially offset by tax credits and other benefits.

In addition, we recognized a $ 38 million pre-tax net gain on sale of assets in 2022.

We recorded $ 2 billion and $ 608 million in 2021 and 2022, respectively, related to the actions above.

Total charges in 2023 related to such actions, primarily attributable to employee separations and dealer and supplier settlements, are not expected to be significant.

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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES (Continued)

United Automobile, Aerospace, and Agricultural Implement Workers of America (“UAW”) Voluntary Separation Packages

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All separations occurred during 2020.

In June 2021, Ford Credit announced the plan of its subsidiaries in Brazil and Argentina to cease originating receivables by the end of 2021 and begin the process of selling or otherwise winding down their operations in those markets.

We recorded approximately $ 11 million related to employee separation costs in Ford Credit interest, operating, and other expenses , the majority of which was paid in 2021.

Accumulated foreign currency translation losses included in Accumulated other comprehensive income/(loss) at December 31, 2021 of $ 379 million are associated with Ford Credit’s investments in Brazil and Argentina that it no longer plans to operate.

We expect to reclassify these losses to income upon sale, transfer, or substantially complete liquidation of Ford Credit’s investments, which may occur over multiple reporting periods.

In the fourth quarter of 2021, we recognized a $ 14 million gain on the liquidation of an entity in Brazil.

The timing for the completion of the remaining actions is uncertain, as they may be subject to regulatory approval.

We expect the majority of losses to be recognized in 2022.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

In addition, we also offered voluntary separation packages in 2022 to certain of our UAW hourly workforce who were eligible for normal or early retirement and recorded associated costs of $ 19 million in Cost of sales .

Accumulated foreign currency translation losses included in Accumulated other comprehensive income/(loss) at December 31, 2022 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 2022, we reclassified losses of $ 155 million to Other income/(loss), net upon the liquidation of three investments in Brazil.

Although the timing for the completion of the remaining actions is uncertain, we expect the majority of losses to be recognized in 2024 or later.

ACQUISITIONS AND DIVESTITURES

Company Excluding Ford Credit

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 sale there were about $ 100 million of assets, such as embedded leases, and related liabilities that continue to be reported as part of our financial statements.

Sanand, India (“Sanand”) Plants.

In the third quarter of 2022, we entered into an agreement to sell our Sanand vehicle assembly and powertrain plants to Tata Passenger Electric Mobility Limited (“Tata”), a subsidiary of Tata Motors Limited.

The sale transaction includes the land, buildings, and other fixed assets (excluding the powertrain machinery and equipment) for the plants.

Accordingly, we have reported $ 88 million of fixed assets for this operation as held for sale for the period ended December 31, 2022.

We recognized, in Cost of sales , pre-tax impairment charges of $ 32 million in the third quarter of 2022 to adjust the carrying value of the held-for-sale assets to fair value less costs to sell.

We determined fair value using the market approach, estimated based on the negotiated value of the assets.

After the sale to Tata, Ford will continue to operate the powertrain facility by leasing back the associated land and building.

On January 10, 2023, we completed the sale of the plants to Tata, which will result in derecognition of the fixed assets and recognition of 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.

Skinny Labs Inc., dba Spin (“Spin”).

On April 1, 2022, we completed the sale of Spin, our wholly-owned micro-mobility provider, to TIER Mobility SE, a German-based micro-mobility provider, which resulted in the deconsolidation of our Spin subsidiary in the second quarter of 2022.

In exchange for our shares of Spin, we received preferred equity in TIER Mobility SE, which is reflected in our consolidated balance sheets in Other assets as of the second quarter of 2022.

The fair value of the preferred equity approximated the carrying value of Spin at the time of the transaction.

Electriphi, Inc.

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On June 18, 2021, we acquired Electriphi, a California-based provider of charging management and fleet monitoring software for electric vehicles.

Assets acquired primarily include goodwill, reported in Other assets (see Note 2), and software, reported in Net property .

Assets acquired primarily include goodwill, reported in Other assets , and software, reported in Net property .

The acquisition did not have a material impact on our

financial statements.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

ACQUISITIONS AND DIVESTITURES (Continued)

Ford Lio Ho Motor Co., Ltd.

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On March 1, 2021, we acquired Magna’s shares in the restructured GFT.

The purchase price, which is subject to post-closing revisions, presently is estimated at $ 273 million.

We expect that the purchase price revisions will be finalized by the first quarter of 2022.

The purchase price, which was subject to post-closing revisions, was $ 275 million.

The restructured GFT includes the Halewood, UK and Cologne, Germany transmission plants, but excludes the Bordeaux, France transmission plant and China interests acquired by Magna.

We concluded with Magna that these businesses would be better served under separate ownership.

The Sanand, India transmission plant will continue under joint Ford/Magna ownership.

As a result of the transaction, we consolidated the restructured GFT, remeasured our prior investment in GFT at its $ 273 million fair value, and recognized a pre-tax gain of $ 178 million in O ther income/(loss), net during 2021.

The Sanand, India transmission plant continues under joint Ford/Magna ownership.

As a result of the transaction, we consolidated the restructured GFT, remeasured our prior investment in GFT at its $ 275 million fair value, and recognized in O ther income/(loss), net a pre-tax gain of $ 178 million during 2021 and post-closing revisions resulting in a pre-tax gain of $ 2 million during the first quarter of 2022.

We estimated the fair value of GFT in negotiations with Magna based on the income approach.

The significant assumptions used in the valuation included GFT’s cash flows that reflect the approved business plan, discounted at a rate typically used for a company like GFT.

See Note 2 for information about goodwill recognized as part of this transaction.

Argo AI, LLC (“Argo AI”).

On June 1, 2020, we completed a transaction with Volkswagen AG (“VW”) that reduced our ownership interest in the autonomous vehicle technology company Argo AI and resulted in Ford and VW holding equal interests that comprised a majority ownership of Argo AI.

The transaction involved us selling a portion of our Argo AI equity to VW for $ 500 million and VW making additional investments in Argo AI, including contributing its Autonomous Intelligent Driving company.

As a result of the transaction, we deconsolidated Argo AI, remeasured our retained investment in Argo AI at fair value, and recognized a $ 3.5 billion gain in Other income/(loss) , of which $ 2.9 billion related to our retained investment in Argo AI.

Our retained investment in Argo AI consists of an equity method investment and a preferred equity security investment, reflected on our consolidated balance sheets in Equity in net assets of affiliated companies and Other assets , respectively.

In 2019 and 2020, we recognized, in Cost of sales , pre-tax impairment charges of $ 804 million and $ 23 million, respectively, to adjust the carrying value of certain India Automotive operations held-for-sale assets to fair value less cost to sell in preparation to form a joint venture with Mahindra.

In 2020, it was determined the joint venture with Mahindra would not be completed, and the assets and liabilities were reclassified as held and used.

Because the carrying value of the net assets approximated fair value at December 31, 2020, the pre-tax impairment charges recorded in 2019 and 2020 were not adjusted as a result of the reclassification to held and used.

On June 1, 2020, we completed a transaction with VW that resulted in Ford and VW holding equal interests in Argo AI, which together comprised a majority ownership of the entity.

See Note 14 for more information about our retained investment in Argo AI following this transaction.

Ford Credit Segment

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Net prior service (costs)/credits arising during the period

( 13 ) ( 15 ) —

Amortization and recognition of prior service costs/(credits) (e) 63 27 21

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

(c) Excludes a loss of $ 1 million, a gain of $ 4 million, and a loss of $ 4 million related to noncontrolling interests in 2020, 2021, and 2022, respectively.

(d) Reclassified to Cost of sales .

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rather, they represent claims against the specific assets of the consolidated VIEs.

We have the power to direct the significant activities of an entity when our management has the ability to make key operating decisions, such as decisions regarding capital investment or manufacturing production schedules.

We have the power to direct the significant activities of an entity when our management has the ability to make key operating decisions, such as decisions regarding budgets, capital investment, manufacturing, or product development.

For securitization entities, we have the power to direct significant activities when we have the ability to exercise discretion in the servicing of financial assets, issue additional debt, exercise a unilateral call option, add assets to revolving structures, or control investment decisions.

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Certain of our affiliates are VIEs in which we are not the primary beneficiary.

Our maximum exposure to any potential losses associated with these affiliates is limited to our affiliate investments and loans and was $ 3 billion and $ 2.8 billion at December 31, 2020 and 2021, respectively.

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 $ 2.8 billion and $ 1.0 billion at December 31, 2021 and 2022, respectively, of which $ 113 million of guarantees related to certain obligations of our VIEs in 2022 are also included in Note 25.

The decrease in maximum exposure from December 31, 2021 is primarily explained by Argo AI (see Note 14), partially offset by the investment in BlueOval SK (as described below).

On July 13, 2022, Ford, SK On Co., Ltd., and SK Battery America, Inc.

(a wholly owned subsidiary of SK On) completed the creation of BlueOval SK, LLC, a 50/ 50 joint venture that will build and operate electric vehicle battery plants in Tennessee and Kentucky to supply batteries to Ford and Ford affiliates.

BlueOval SK is a variable interest entity of which we are not the primary beneficiary, and we use the equity method of accounting for our investment.

As of December 31, 2022, Ford has contributed to BlueOval SK $ 691 million of its agreed capital contribution of up to $ 6.6 billion through 2026, subject to any adjustments agreed to by the parties.

VIEs of Which We are the Primary Beneficiary

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The maximum potential payments for non-financial guarantees were $ 453 million and $ 273 million at December 31, 2021 and 2022, respectively.

The carrying value of recorded liabilities related to non-financial guarantees was $ 48 million and $ 38 million at December 31, 2020 and 2021, respectively.

We guarantee the resale value of vehicles sold in certain arrangements to daily rental companies.

The carrying value of recorded liabilities related to non-financial guarantees was $ 38 million and $ 0 at December 31, 2021 and 2022, respectively.

Included in the $ 273 million of maximum potential payments at December 31, 2022 are guarantees for the resale value of vehicles sold in certain arrangements to daily rental companies.

The maximum potential payment of $ 267 million as of December 31, 2022 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 have recorded $ 38 million as our best estimate of the amount we will have to pay under the guarantee.

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.

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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 $ 1.7 billion, an increase of about $ 1.3 billion from December 31, 2020, primarily reflecting an assessment received in 2021 in a customs matter.

Our estimate of reasonably possible loss in excess of our accruals for all material matters currently reflects indirect tax, customs, and regulatory matters, for which we estimate the aggregate risk to be a range of up to about $ 2 billion.

As noted, the litigation process is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance.

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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 billion in the aggregate.

Our estimate of reasonably possible costs in excess of our accruals for material field service actions and customer satisfaction actions is a range of up to about $ 700 million in the aggregate.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Automotive, Mobility, and Ford Credit.

Beginning in 2021, consistent with how our CODM assesses performance of the segments and makes decisions about resource allocations, we changed the measurement of our segments as follows:

(i) costs and benefits related to enterprise connectivity activities included in the Mobility segment are reported in the Automotive segment;

(ii) certain corporate governance expenses that benefit the global enterprise reported in the Automotive segment are reported as part of Corporate Other;

and (iii) cash and other centrally managed corporate assets reported in the Automotive segment are realigned to Corporate Other.

In addition, we realigned tax-related assets within our segments to reflect our adoption of ASU 2019-12 as of January 1, 2021 (see Note 3).

Effective with fourth quarter 2021 reporting, special items now include gains and losses on investments in equity securities.

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

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

Items not included within our segments are reported and reviewed as part of Corporate Other, Interest on Debt, and Special Items.

On January 1, 2023, we implemented a new operating model and reporting structure.

With this change, we will analyze the results of our business through the following reportable segments:

Ford Blue, Ford Model e, and Ford Pro (combined, replacing the Automotive segment);

Ford Next (previously Mobility);

and Ford Credit.

As a result of the change, beginning with our Quarterly Report on Form 10-Q for the quarter ending March 31, 2023, we will report our results in these five reportable segments.

Company adjusted earnings before interest and taxes (“EBIT”) will include the financial results of these five reportable segments and Corporate Other, and net income will comprise the financial results of the five reportable segments and Corporate Other, as well as Interest on Debt, Special Items, and Taxes.

Below is a description of our reportable segments and other activities as of December 31, 2022.

Automotive Segment

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The Mobility segment primarily includes development costs for Ford’s autonomous vehicles and related businesses, Ford’s equity ownership in Argo AI (a developer of autonomous driving systems), and other mobility businesses and investments.

For additional information about our investment in Argo AI, see Note 14.

Ford Credit Segment

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Automotive Mobility Ford Credit Corporate Other Interest on Debt Special

Items Adjustments Total

Items Eliminations/Adjustments Total

Revenues $ 115,894 $ 47 $ 11,203 $ — $ — $ — $ — $ 127,144

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Depreciation and tooling amortization 5,209 8 3,269 52 — 236 — 8,774

5,494 8 3,666 47 — 1,278 — 10,493

Interest expense — — 3,402 — 1,649 — — 5,051

— — 4,389 — 1,020 — — 5,409

Investment-related interest income 158 — 94 200 — — — 452

167 — 306 336 — — — 809

Equity in net income/(loss) of affiliated companies 296 ( 133 ) 20 1 — ( 142 ) — 42

83 — 31 2 — ( 84 ) (b) — 32

Cash outflow for capital spending 5,483 44 40 175 — — — 5,742

7,362 23 52 195 — — — 7,632

Total assets 63,586 419 160,964 36,190 — — ( 2,622 ) (c) 258,537

Total assets 62,741 3,459 157,637 45,410 — — ( 1,986 ) (b) 267,261

Revenues $ 126,150 $ 118 $ 10,073 $ — $ — $ — $ — $ 136,341

Income/(Loss) before income taxes 1,706 ( 1,052 ) 2,608 ( 726 ) ( 1,649 ) ( 2,003 )

(d) — ( 1,116 )

Income/(Loss) before income taxes 7,397 ( 1,030 ) 4,717 ( 1,084 ) ( 1,803 ) 9,583 (c) — 17,780

Depreciation and tooling amortization 5,024 8 1,666 53 — 567 — 7,318

5,209 8 3,269 52 — 236 — 8,774

Interest expense — — 2,790 — 1,803 — — 4,593

— — 3,402 — 1,649 — — 5,051

Investment-related interest income 112 — 38 104 — — — 254

158 — 94 200 — — — 452

Equity in net income/(loss) of affiliated companies 567 ( 258 ) 31 2 — ( 15 ) — 327

296 ( 133 ) 20 1 — ( 142 ) (b) — 42

Cash outflow for capital spending 5,979 46 44 158 — — — 6,227

5,483 44 40 175 — — — 5,742

Total assets 62,741 3,459 157,637 45,410 — — ( 1,986 ) (c) 267,261

Total assets 68,969 3,325 134,428 51,730 — — ( 1,417 ) (b) 257,035

Revenues $ 148,980 $ 99 $ 8,978 $ — $ — $ — $ — $ 158,057

Income/(Loss) before income taxes 7,397 ( 1,030 ) 4,717 ( 1,084 ) ( 1,803 ) 9,583 (e) — 17,780

Income/(Loss) before income taxes 9,692 ( 926 ) 2,657 ( 1,008 ) ( 1,259 ) ( 12,172 ) (d) — ( 3,016 )

Depreciation and tooling amortization 5,159 5 2,281 72 — 157 — 7,674

5,024 8 1,666 53 — 567 — 7,318

Interest expense — — 3,334 — 1,259 — — 4,593

— — 2,790 — 1,803 — — 4,593

Investment-related interest income 75 — 178 386 — — — 639

112 — 38 104 — — — 254

Equity in net income/(loss) of affiliated companies

567 ( 258 ) 31 2 — ( 15 ) — 327

Equity in net income/(loss) of affiliated companies 667 ( 315 ) 27 1 — ( 3,263 ) (e) — ( 2,883 )

Cash outflow for capital spending 6,284 23 58 204 — 297 — 6,866

5,979 46 44 158 — — — 6,227

Total assets 68,969 3,325 134,428 51,730 — — ( 1,417 ) (c) 257,035

(a) Primarily reflects Global Redesign actions in Europe and mark-to-market adjustments for our global pension and OPEB plans.

Prior period amounts have been reclassified in accordance with special item reporting.

(b) Prior period amounts have been reclassified in accordance with special item reporting.

Prior period amounts have been revised to reflect adoption of ASU 2019-12.

(d) Primarily reflects Global Redesign actions in South America and Europe, mark-to-market adjustments for our global pension and OPEB plans, and the field service action for Takata airbag inflators, partially offset by the gain on our investment in Argo AI as a result of the transaction with Argo AI and VW in the second quarter of 2020.

Prior period amounts have been reclassified in accordance with special item reporting.

(e) Primarily reflects gains/(losses) on investments in equity securities (including a $ 9.1 billion gain on our Rivian equity investment) and mark-to-market adjustments for our global pension and OPEB plans, partially offset by Global Redesign actions and the loss on extinguishment of debt.

Total assets 69,933 392 137,954 49,132 — — ( 1,527 ) (b) 255,884

(a) Primarily reflects Global Redesign actions, mark-to-market adjustments for our global pension and OPEB plans, and the field service action for Takata airbag inflators, partially offset by the gain on our investment in Argo AI as a result of the transaction with Argo AI and VW in the second quarter of 2020.

(b) Primarily includes eliminations of intersegment transactions occurring in the ordinary course of business.

(c) Primarily reflects gains/(losses) on our Rivian investment and mark-to-market adjustments for our global pension and OPEB plans, partially offset by Global Redesign actions and the loss on extinguishment of debt.

(d) Primarily reflects gains/(losses) on our Rivian investment and the impairment of our Argo AI equity method investment.

(e) Primarily reflects the impairment of our Argo AI equity method investment.

FORD MOTOR COMPANY AND SUBSIDIARIES

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Canada 8,711 5,111 11,153 5,773 12,590 5,739

Germany 7,930 3,225 6,526 3,197 6,237 2,708

United Kingdom 6,110 1,401 7,607 1,383 8,220 1,264

Germany 6,526 3,197 6,237 2,708 6,471 2,483

Mexico 1,030 3,669 1,440 3,903 1,813 4,255

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Allowances deducted from assets

Credit losses $ 530 $ 840 $ 38 (a) $ 1,332

Credit losses $ 1,332 $ ( 306 ) $ 100 $ 926

Doubtful receivables 57 3 13 (b) 47

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Allowances deducted from assets

Credit losses $ 1,332 $ ( 306 ) $ 100 (a) $ 926

Credit losses $ 926 $ 50 $ 119 $ 857

Doubtful receivables 47 57 11 (b) 93

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(d) Includes $( 78 ) million, $( 77 ) million, and $ 127 million in 2019, 2020, and 2021, respectively, of valuation allowances for deferred tax assets through Accumulated other comprehensive income/(loss), including translation adjustments and $( 52 ) million, $ 1.2 billion, and $( 797 ) million in 2019, 2020, and 2021, respectively, of valuation allowances for deferred tax assets through the income statement.

The reversal in 2021 primarily reflects a change in our intent to pursue planning actions involving cash outlays to preserve tax credits.

(d) Change in valuation allowance on deferred tax assets including translation adjustments.

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-K

Item 9A. Controls and Procedures