FORD MOTOR CO 10-K

ITEM 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures. James D. Farley, Jr., our Chief Executive Officer (“CEO”), and John T. Lawler, our Chief Financial Officer (“CFO”), have performed an evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) 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) 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022. The assessment was based on criteria established in the framework Internal Control - Integrated Framework (2013) , issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2022. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP (PCAOB ID 238 ), an independent registered public accounting firm, as stated in its report included herein. Changes in Internal Control Over Financial Reporting. There were no changes in internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. Other Information. None. ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 97 PART III. ITEM 10. Directors, Executive Officers of Ford, and Corporate Governance. The information required by Item 10 regarding our directors is incorporated by reference from the information under the captions “Proposal 1. Election of Directors,” “Corporate Governance – Beneficial Stock Ownership,” and “Corporate Governance – Delinquent Section 16(a) Reports” in our Proxy Statement. The information required by Item 10 regarding our executive officers appears as Item 4A under Part I of this Report. The information required by Item 10 regarding an audit committee financial expert is incorporated by reference from the information under the caption “Corporate Governance – Audit Committee Financial Expert and Auditor Rotation” in our Proxy Statement. The information required by Item 10 regarding the members of our Audit Committee of the Board of Directors is incorporated by reference from the information under the captions “Proxy Summary,” “Corporate Governance – Board Committee Functions,” “Corporate Governance – Audit Committee Financial Expert and Auditor Rotation,” and “Proposal 1. Election of Directors” in our Proxy Statement. The information required by Item 10 regarding the Audit Committee’s review and discussion of the audited financial statements is incorporated by reference from information under the caption “Audit Committee Report” in our Proxy Statement. The information required by Item 10 regarding our codes of ethics is incorporated by reference from the information under the caption “Corporate Governance – Codes of Ethics” in our Proxy Statement. In addition, we have included in Item 1 instructions for how to access our codes of ethics on our website and our Internet address. Amendments to, and waivers granted under, our Code of Ethics for Senior Financial Personnel, if any, will be posted to our website as well. ITEM 11. Executive Compensation. The information required by Item 11 is incorporated by reference from the information under the following captions in our Proxy Statement: “Director Compensation in 2022,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Compensation Committee Interlocks and Insider Participation,” “Compensation of Named Executives,” “Summary Compensation Table,” “Grants of Plan-Based Awards in 2022,” “Outstanding Equity Awards at 2022 Fiscal Year-End,” “Option Exercises and Stock Vested in 2022,” “Pension Benefits in 2022,” “Nonqualified Deferred Compensation in 2022,” “Potential Payments Upon Termination or Change-in-Control,” and “Pay Ratio.” ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by Item 12 is incorporated by reference from the information under the captions “Equity Compensation Plan Information” and “Corporate Governance – Beneficial Stock Ownership” in our Proxy Statement. ITEM 13. Certain Relationships and Related Transactions, and Director Independence. The information required by Item 13 is incorporated by reference from the information under the captions “Corporate Governance – Certain Relationships and Related Party Transactions” and “Corporate Governance – Independence of Directors and Relevant Facts and Circumstances” in our Proxy Statement. ITEM 14. Principal Accounting Fees and Services. The information required by Item 14 is incorporated by reference from the information under the caption “Proposal 2. Ratification of Independent Registered Public Accounting Firm” in our Proxy Statement. 98 PART IV. ITEM 15. Exhibits and Financial Statement Schedules. (a) 1. Financial Statements – Ford Motor Company and Subsidiaries The following are contained in this 2022 Form 10-K Report: • Report of Independent Registered Public Accounting Firm. • Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2021, and 2022. • Consolidated Income Statements for the years ended December 31, 2020, 2021, and 2022. • Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2021, and 2022. • Consolidated Balance Sheets at December 31, 2021 and 2022. • Consolidated Statements of Equity for the years ended December 31, 2020, 2021, and 2022. • Notes to the Financial Statements. The Report of Independent Registered Public Accounting Firm, the Consolidated Financial Statements, and the Notes to the Financial Statements listed above are filed as part of this Report and are set forth beginning on page 106 immediately following the signature pages of this Report. (a) 2. Financial Statement Schedules Designation Description Schedule II Valuation and Qualifying Accounts for the years ended 2019, 2020, and 2021 Schedule II is filed as part of this Report and is set forth on page 179 immediately following the Notes to the Financial Statements referred to above. The other schedules are omitted because they are not applicable, the information required to be contained in them is disclosed elsewhere on our Consolidated Financial Statements, or the amounts involved are not sufficient to require submission. (a) 3. Exhibits Designation Description Method of Filing Exhibit 3-A Restated Certificate of Incorporation, dated August 2, 2000. Filed as Exhibit 3-A to our Annual Report on Form 10-K for the year ended December 31, 2000. (a) Exhibit 3-A-1 Certificate of Designations of Series A Junior Participating Preferred Stock filed on September 11, 2009. Filed as Exhibit 3.1 to our Current Report on Form 8-K filed September 11, 2009. (a) Exhibit 3-B By-laws. Filed as Exhibit 3.1 to our Form 8-K filed on December 9, 2022. (a) Exhibit 4-A Tax Benefit Preservation Plan (“TBPP”) dated September 11, 2009 between Ford Motor Company and Computershare Trust Company, N.A. Filed as Exhibit 4.1 to our Current Report on Form 8-K filed September 11, 2009. (a) Exhibit 4-A-1 Amendment No. 1 to TBPP dated September 11, 2012. Filed as Exhibit 4 to our Current Report on Form 8-K filed September 12, 2012. (a) Exhibit 4-A-2 Amendment No. 2 to TBPP dated September 9, 2015. Filed as Exhibit 4 to our Current Report on Form 8-K filed September 11, 2015. (a) Exhibit 4-A-3 Amendment No. 3 to TBPP dated September 13, 2018. Filed as Exhibit 4 to our Current Report on Form 8-K filed September 14, 2018. (a) Exhibit 4-A-4 Amendment No. 4 to TBPP dated September 9, 2021. Filed as Exhibit 4 to our Current Report on Form 8-K filed September 10, 2021. (a) Exhibit 4-B Description of Securities. Filed with this Report. Exhibit 10-A Executive Separation Allowance Plan, as amended and restated effective as of January 1, 2018. (b) Filed as Exhibit 10.1 to our Current Report on Form 8-K filed February 7, 2018. (a) Exhibit 10-B Deferred Compensation Plan for Non-Employee Directors, as amended and restated as of January 1, 2012. (b) Filed as Exhibit 10-B to our Annual Report on Form 10-K for the year ended December 31, 2011. (a) Exhibit 10-C 2014 Stock Plan for Non-Employee Directors (b) Filed as Exhibit 10-C to our Annual Report on Form 10-K for the year ended December 31, 2013. (a) 99 Designation Description Method of Filing Exhibit 10-D Benefit Equalization Plan, as amended and restated effective as of January 1, 2022. (b) Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. (a) Exhibit 10-E Description of financial counseling services provided to certain executives. (b) Filed as Exhibit 10-E to our Annual Report on Form 10-K for the year ended December 31, 2019. (a) Exhibit 10-F Defined Benefit Supplemental Executive Retirement Plan, as amended and restated effective as of January 1, 2022. (b) Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. (a) Exhibit 10-F-1 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. (a) Exhibit 10-G Description of Director Compensation as of July 13, 2006. (b) Filed as Exhibit 10-G-3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006. (a) Exhibit 10-G-1 Amendment to Description of Director Compensation as of February 8, 2012. (b) Filed as Exhibit 10-F-3 to our Annual Report on Form 10-K for the year ended December 31, 2011. (a) Exhibit 10-G-2 Amendment to Description of Director Compensation as of July 1, 2013. (b) Filed as Exhibit 10-G-2 to our Annual Report on Form 10-K for the year ended December 31, 2013. (a) Exhibit 10-G-3 Amendment to Description of Director Compensation as of January 1, 2017. (b) Filed as Exhibit 10-G-3 to our Annual Report on Form 10-K for the year ended December 31, 2016. (a) Exhibit 10-H 2008 Long-Term Incentive Plan. (b) Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008. (a) Exhibit 10-I Description of Vehicle Evaluation Program for Non-Executive Directors. (b) Filed as Exhibit 10-I to our Annual Report on Form 10-K for the year ended December 31, 2021. (a) Exhibit 10-J Non-Employee Directors Life Insurance and Optional Retirement Plan as amended and restated as of December 31, 2010. (b) Filed as Exhibit 10-I to our Annual Report on Form 10-K for the year ended December 31, 2010. (a) Exhibit 10-K Description of Non-Employee Directors Accidental Death, Dismemberment and Permanent Total Disablement Indemnity. (b) Filed as Exhibit 10-S to our Annual Report on Form 10-K for the year ended December 31, 1992. (a) Exhibit 10-K-1 Description of Amendment to Basic Life Insurance and Accidental Death & Dismemberment Insurance. (b) Filed as Exhibit 10-K-1 to our Annual Report on Form 10-K for the year ended December 31, 2013. (a) Exhibit 10-L Agreement between Ford Motor Company and Jon M. Huntsman, Jr. dated April 12, 2021. (b) Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. (a) Exhibit 10-M Offer Letter to Michael Amend dated August 16, 2021. (b) Filed as Exhibit 10-M to our Annual Report on Form 10-K for the year ended December 31, 2021. (a) Exhibit 10-N Offer Letter to Doug Field dated August 26, 2021. (b) Filed as Exhibit 10-N to our Annual Report on Form 10-K for the year ended December 31, 2021. (a) Exhibit 10-O Agreement between Ford Motor Company and James D. Farley, Jr. dated August 3, 2020. (b) Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. (a) 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. (a) Exhibit 10-Q Deferred Compensation Plan, as amended and restated as of December 31, 2010. (b) Filed as Exhibit 10-M to our Annual Report on Form 10-K for the year ended December 31, 2010. (a) Exhibit 10-Q-1 Suspension of Open Enrollment in Deferred Compensation Plan. (b) Filed as Exhibit 10-M-1 to our Annual Report on Form 10-K for the year ended December 31, 2009. (a) Exhibit 10-R Annual Incentive Compensation Plan, as amended and restated effective as of January 1, 2023. (b) Filed with this Report. Exhibit 10-R- 1 Annual Incentive Compensation Plan Metrics for 2021. (b) Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. (a) Exhibit 1 0-R- 2 Annual Incentive Compensation Plan Metrics for 2022. (b) Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. (a) Exhibit 10-R- 3 Performance-Based Restricted Stock Unit Metrics for 2019. (b) Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019. (a) Exhibit 10-R- 4 Performance-Based Restricted Stock Unit Metrics for 2020. (b) Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. (a) Exhibit 10-R- 5 Performance-Based Restricted Stock Unit Metrics for 2021. (b) Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. (a) Exhibit 10-R- 6 Performance-Based Restricted Stock Unit Metrics for 2022. (b) Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. (a) Exhibit 10-R- 7 Executive Compensation Recoupment Policy. (b) Filed as Exhibit 10-N-8 to our Annual Report on Form 10-K for the year ended December 31, 2010. (a) Exhibit 10-S 2018 Long-Term Incentive Plan. (b) Filed as Exhibit 4.1 to Registration Statement No. 333-226348. (a) Exhibit 10-S-1 Form of Stock Option Terms and Conditions for Long-Term Incentive Plan. (b) Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. (a) Exhibit 10-S-2 Form of Stock Option Agreement for Long-Term Incentive Plan. (b) Filed as Exhibit 10-P-3 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-3 Form of Stock Option Agreement (ISO) for Long-Term Incentive Plan. (b) Filed as Exhibit 10-P-4 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-4 Form of Stock Option Agreement (U.K. NQO) for Long-Term Incentive Plan. (b) Filed as Exhibit 10-P-5 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) 100 Designation Description Method of Filing Exhibit 10-S-5 Form of Stock Option (U.K.) Terms and Conditions for Long-Term Incentive Plan. (b) Filed as Exhibit 10-R-5 to our Annual Report on Form 10-K for the year ended December 31, 2020. (a) Exhibit 10-S-6 Form of Restricted Stock Grant Letter. (b) Filed as Exhibit 10-P-7 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-7 Form of Final Award Notification Letter for Performance-Based Restricted Stock Units. (b) Filed as Exhibit 10-P-8 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-8 Form of Annual Equity Grant Letter V.1. (b) Filed as Exhibit 10-P-9 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-9 Form of Annual Equity Grant Letter V.2. (b) Filed as Exhibit 10-P-10 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-10 Form of Long-Term Incentive Plan Restricted Stock Unit Agreement. (b) Filed as Exhibit 10-P-11 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-11 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. (a) Exhibit 10-S-12 Long-Term Incentive Plan Restricted Stock Unit Terms and Conditions. (b) Filed as Exhibit 10-P-12 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-13 Form of Final Award Agreement for Performance-Based Restricted Stock Units under Long-Term Incentive Plan. (b) Filed as Exhibit 10-P-13 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-14 Form of Final Award Terms and Conditions for Performance-Based Restricted Stock Units under Long-Term Incentive Plan. (b) Filed as Exhibit 10-P-14 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10-S-15 Form of Notification Letter for Time-Based Restricted Stock Units. (b) Filed as Exhibit 10-P-15 to our Annual Report on Form 10-K for the year ended December 31, 2017. (a) Exhibit 10- T Description of Company Practices regarding Club Memberships for Executives. (b) Filed as Exhibit 10-V to our Annual Report on Form 10-K for the year ended December 31, 2021. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 101 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) 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. (a) Exhibit 21 List of Subsidiaries of Ford as of January 31, 2023. Filed with this Report. Exhibit 23 Consent of Independent Registered Public Accounting Firm. Filed with this Report. Exhibit 24 Powers of Attorney. Filed with this Report. Exhibit 31.1 Rule 15d-14(a) Certification of CEO. Filed with this Report. Exhibit 31.2 Rule 15d-14(a) Certification of CFO. Filed with this Report. Exhibit 32.1 Section 1350 Certification of CEO. Furnished with this Report. Exhibit 32.2 Section 1350 Certification of CFO. Furnished with this Report. Exhibit 101.INS Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”). (c) Exhibit 101.SCH XBRL Taxonomy Extension Schema Document. (c) Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. (c) Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase Document. (c) Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. (c) Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. (c) Exhibit 104 Cover Page Interactive Data File (formatted in Inline XBRL contained in Exhibit 101). (c) __________ (a) Incorporated by reference as an exhibit to this Report (file number reference 1-3950, unless otherwise indicated). (b) Management contract or compensatory plan or arrangement. (c) Submitted electronically with this Report in accordance with the provisions of Regulation S-T. Instruments defining the rights of holders of certain issues of long-term debt of Ford and of certain consolidated subsidiaries and of any unconsolidated subsidiary, for which financial statements are required to be filed with this Report, have not been filed as exhibits to this Report because the authorized principal amount of any one of such issues does not exceed 10% of the total assets of Ford and our subsidiaries on a consolidated basis. Ford agrees to furnish a copy of each of such instrument to the Securities and Exchange Commission upon request. 102 ITEM 16. Form 10-K Summary. None. 103 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Ford has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. FORD MOTOR COMPANY By: /s/ Cathy O’Callaghan Cathy O’Callaghan, Controller (principal accounting officer) Date: February 2, 2023 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of Ford and in the capacities on the date indicated: Signature Title Date /s/ WILLIAM CLAY FORD, JR. Director, Chair of the Board, Executive Chair, Chair of the Office of the Chair and Chief Executive, and Chair of the Finance Committee February 2, 2023 William Clay Ford, Jr. /s/ JAMES D. FARLEY, JR. Director, President and Chief Executive Officer February 2, 2023 James D. Farley, Jr. (principal executive officer) KIMBERLY A. CASIANO* Director February 2, 2023 Kimberly A. Casiano ALEXANDRA FORD ENGLISH* Director February 2, 2023 Alexandra Ford English HENRY FORD III* Director February 2, 2023 Henry Ford III WILLIAM W. HELMAN IV* Director and Chair of the Sustainability, Innovation and Policy Committee February 2, 2023 William W. Helman IV JON M. HUNTSMAN, JR.* Director February 2, 2023 Jon M. Huntsman, Jr. WILLIAM E. KENNARD* Director and Chair of the Nominating and Governance Committee February 2, 2023 William E. Kennard JOHN C. MAY II* Director February 2, 2023 John C. May II BETH E. MOONEY* Director February 2, 2023 Beth E. Mooney LYNN VOJVODICH RADAKOVICH* Director and Chair of the Compensation, Talent and Culture Committee February 2, 2023 Lynn Vojvodich Radakovich JOHN L. THORNTON* Director February 2, 2023 John L. Thornton 104 Signature Title Date JOHN B. VEIHMEYER* Director and Chair of the Audit Committee February 2, 2023 John B. Veihmeyer JOHN S. WEINBERG* Director February 2, 2023 John S. Weinberg /s/ JOHN T. LAWLER Chief Financial Officer February 2, 2023 John T. Lawler (principal financial officer) /s/ CATHY O’CALLAGHAN Controller February 2, 2023 Cathy O’Callaghan (principal accounting officer) *By: /s/ JONATHAN E. OSGOOD February 2, 2023 Jonathan E. Osgood Attorney-in-Fact 105 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Ford Motor Company Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Ford Motor Company and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Change in Accounting Principle As discussed in Note 10 to the consolidated financial statements, the Company changed the manner in which it accounts for credit losses in 2020. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 106 Definition and Limitations of Internal Control over Financial Reporting A 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Ford Credit Consumer Finance Receivables Allowance for Credit Losses As described in Note 10 to the consolidated financial statements, the Company had consumer finance receivables of $71,414 million, for which a consumer allowance for credit losses of $838 million was recorded as of December 31, 2022. The consumer allowance for credit losses represents management’s estimate of the lifetime expected credit losses inherent in the consumer finance receivables as of the balance sheet date. For consumer receivables that share similar risk characteristics, management estimates the lifetime expected credit losses 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 assumptions 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. If management does not believe the models reflect lifetime expected credit losses for the portfolio, an adjustment is made to reflect management judgment regarding qualitative factors including economic uncertainty, observable changes in portfolio performance, and other relevant factors. The principal considerations for our determination that performing procedures relating to the Ford Credit consumer finance receivables allowance for credit losses is a critical audit matter are (i) the significant judgment by management in determining the consumer finance receivables allowance for credit losses; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the probability of default and loss given default assumptions and management’s judgment regarding qualitative factors; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s determination of the consumer finance receivables allowance for credit losses. These procedures also included, among others (i) testing management’s process for determining the consumer finance receivables allowance for credit losses; (ii) evaluating the appropriateness of the models used to determine the allowance; (iii) evaluating the reasonableness of the probability of default and loss given default assumptions; (iv) testing the data used in the models; and (v) evaluating the reasonableness of management’s judgment regarding qualitative factors related to economic uncertainty, observable changes in portfolio performance, and other relevant factors. Professionals with specialized skill and knowledge were used to assist in performing the procedures described in (i) through (v). 107 Warranty and Field Service Actions Accrual (United States) As described in Note 25 to the consolidated financial statements, the Company had an accrual for estimated future warranty and field service action costs, net of estimated supplier recoveries (“warranty accrual”), of $9,193 million as of December 31, 2022, of which the United States comprises a significant portion. Management accrues the estimated cost of both base warranty coverages and field service actions at the time of sale. Management establishes their estimate of base warranty obligations using a patterned estimation model, using historical information regarding the nature, frequency, and average cost of claims for each vehicle line by model year. Management establishes their estimates of field service action obligations using a patterned estimation model, using historical information regarding the nature, frequency, severity, and average cost of claims for each model year. Management reevaluates the adequacy of their accruals on a regular basis. The principal considerations for our determination that performing procedures relating to the warranty accrual for the United States is a critical audit matter are (i) the significant judgment by management in the estimation of the accrual and development of the patterned estimation model; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the estimation model and significant assumptions related to the frequency and average cost of claims; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls related to the estimate of the warranty accrual for the United States. These procedures also included, among others, evaluating the reasonableness of significant assumptions used by management to develop the warranty accrual for the United States, related to the frequency and average cost of claims, in part by considering the historical experience of the Company. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the model as well as the reasonableness of significant assumptions related to the frequency and average cost of claims. /s/ PricewaterhouseCoopers LLP Detroit, Michigan February 2, 2023 We have served as the Company’s auditor since 1946. 108 FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) For the years ended December 31, 2020 2021 2022 Cash flows from operating activities Net income/(loss) $ ( 1,276 ) $ 17,910 $ ( 2,152 ) Depreciation and tooling amortization (Note 12 and Note 13) 8,751 7,318 7,642 Other amortization ( 1,294 ) ( 1,358 ) ( 1,149 ) Held-for-sale impairment charges (Note 22) 23 — 32 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) 1 1,702 121 Provision for/(Benefit from) credit and insurance losses 929 ( 298 ) 46 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 (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) 199 305 336 Provision for deferred income taxes ( 269 ) ( 563 ) ( 1,910 ) Decrease/(Increase) in finance receivables (wholesale and other) 12,104 7,656 ( 10,560 ) Decrease/(Increase) in accounts receivable and other assets ( 63 ) ( 1,141 ) ( 1,183 ) Decrease/(Increase) in inventory 148 ( 1,778 ) ( 2,576 ) Increase/(Decrease) in accounts payable and accrued and other liabilities 6,809 ( 36 ) 7,268 Other 72 ( 234 ) 436 Net cash provided by/(used in) operating activities 24,269 15,787 6,853 Cash flows from investing activities Capital spending ( 5,742 ) ( 6,227 ) ( 6,866 ) Acquisitions of finance receivables and operating leases ( 55,901 ) ( 48,379 ) ( 45,533 ) Collections of finance receivables and operating leases 48,746 52,094 46,276 Proceeds from sale of business (Note 22) 1,340 145 449 Purchases of marketable securities and other investments ( 39,624 ) ( 27,491 ) ( 17,458 ) Sales and maturities of marketable securities and other investments 32,395 33,229 19,117 Settlements of derivatives ( 323 ) ( 272 ) 94 Capital contributions to equity method investments (Note 24) ( 4 ) ( 57 ) ( 738 ) Other 498 ( 297 ) 312 Net cash provided by/(used in) investing activities ( 18,615 ) 2,745 ( 4,347 ) Cash flows from financing activities Cash payments for dividends and dividend equivalents ( 596 ) ( 403 ) ( 2,009 ) Purchases of common stock — — ( 484 ) Net changes in short-term debt ( 2,291 ) 3,273 5,460 Proceeds from issuance of long-term debt 65,900 27,901 45,470 Payments of long-term debt ( 60,514 ) ( 54,164 ) ( 45,655 ) Other ( 184 ) ( 105 ) ( 271 ) Net cash provided by/(used in) financing activities 2,315 ( 23,498 ) 2,511 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 225 ( 232 ) ( 414 ) Net increase/(decrease) in cash, cash equivalents, and restricted cash $ 8,194 $ ( 5,198 ) $ 4,603 Cash, cash equivalents, and restricted cash at beginning of period (Note 9) $ 17,741 $ 25,935 $ 20,737 Net increase/(decrease) in cash, cash equivalents, and restricted cash 8,194 ( 5,198 ) 4,603 Cash, cash equivalents, and restricted cash at end of period (Note 9) $ 25,935 $ 20,737 $ 25,340 The accompanying notes are part of the consolidated financial statements. 109 FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (in millions, except per share amounts) For the years ended December 31, 2020 2021 2022 Revenues Automotive $ 115,894 $ 126,150 $ 148,980 Ford Credit 11,203 10,073 8,978 Mobility 47 118 99 Total revenues (Note 4) 127,144 136,341 158,057 Costs and expenses Cost of sales 112,752 114,651 134,397 Selling, administrative, and other expenses 10,193 11,915 10,888 Ford Credit interest, operating, and other expenses 8,607 5,252 6,496 Total costs and expenses 131,552 131,818 151,781 Operating income/(loss) ( 4,408 ) 4,523 6,276 Interest expense on Company debt excluding Ford Credit 1,649 1,803 1,259 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 ) Provision for/(Benefit from) income taxes (Note 7) 160 ( 130 ) ( 864 ) Net income/(loss) ( 1,276 ) 17,910 ( 2,152 ) Less: Income/(Loss) attributable to noncontrolling interests 3 ( 27 ) ( 171 ) Net income/(loss) attributable to Ford Motor Company $ ( 1,279 ) $ 17,937 $ ( 1,981 ) EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 8) Basic income/(loss) $ ( 0.32 ) $ 4.49 $ ( 0.49 ) Diluted income/(loss) ( 0.32 ) 4.45 ( 0.49 ) Weighted-average shares used in computation of earnings/(loss) per share Basic shares 3,973 3,991 4,014 Diluted shares 3,973 4,034 4,014 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) For the years ended December 31, 2020 2021 2022 Net income/(loss) $ ( 1,276 ) $ 17,910 $ ( 2,152 ) Other comprehensive income/(loss), net of tax (Note 23) Foreign currency translation ( 901 ) 43 ( 933 ) Marketable securities 85 ( 175 ) ( 423 ) Derivative instruments 222 73 322 Pension and other postretirement benefits 27 18 30 Total other comprehensive income/(loss), net of tax ( 567 ) ( 41 ) ( 1,004 ) Comprehensive income/(loss) ( 1,843 ) 17,869 ( 3,156 ) Less: Comprehensive income/(loss) attributable to noncontrolling interests 2 ( 23 ) ( 175 ) Comprehensive income/(loss) attributable to Ford Motor Company $ ( 1,845 ) $ 17,892 $ ( 2,981 ) The accompanying notes are part of the consolidated financial statements. 110 FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in millions) December 31, 2021 December 31, 2022 ASSETS Cash and cash equivalents (Note 9) $ 20,540 $ 25,134 Marketable securities (Note 9) 29,053 18,936 Ford Credit finance receivables, net of allowance for credit losses of $ 282 and $ 255 (Note 10) 32,543 38,720 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) 9 97 Other assets 3,416 3,780 Total current assets 108,996 116,476 Ford Credit finance receivables, net of allowance for credit losses of $ 643 and $ 590 (Note 10) 51,256 49,903 Net investment in operating leases (Note 12) 26,361 22,772 Net property (Note 13) 37,139 37,265 Equity in net assets of affiliated companies (Note 14) 4,545 2,798 Deferred income taxes (Note 7) 13,796 15,552 Other assets 14,942 11,118 Total assets $ 257,035 $ 255,884 LIABILITIES Payables $ 22,349 $ 25,605 Other liabilities and deferred revenue (Note 16 and Note 25) 18,686 21,097 Debt payable within one year (Note 19) Company excluding Ford Credit 3,175 730 Ford Credit 46,517 49,434 Total current liabilities 90,727 96,866 Other liabilities and deferred revenue (Note 16 and Note 25) 27,705 25,497 Long-term debt (Note 19) Company excluding Ford Credit 17,200 19,200 Ford Credit 71,200 69,605 Deferred income taxes (Note 7) 1,581 1,549 Total liabilities 208,413 212,717 EQUITY Common Stock, par value $ 0.01 per share ( 4,068 million shares issued of 6 billion authorized) 40 41 Class B Stock, par value $ 0.01 per share ( 71 million shares issued of 530 million authorized) 1 1 Capital in excess of par value of stock 22,611 22,832 Retained earnings 35,769 31,754 Accumulated other comprehensive income/(loss) (Note 23) ( 8,339 ) ( 9,339 ) Treasury stock ( 1,563 ) ( 2,047 ) Total equity attributable to Ford Motor Company 48,519 43,242 Equity attributable to noncontrolling interests 103 ( 75 ) Total equity 48,622 43,167 Total liabilities and equity $ 257,035 $ 255,884 The following table includes assets to be used to settle liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheets above. See Note 24 for additional information on our VIEs. December 31, 2021 December 31, 2022 ASSETS Cash and cash equivalents $ 3,407 $ 2,274 Ford Credit finance receivables, net 43,001 49,142 Net investment in operating leases 7,540 12,545 Other assets 39 264 LIABILITIES Other liabilities and deferred revenue $ 6 $ 2 Debt 38,274 45,451 The accompanying notes are part of the consolidated financial statements. 111 FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (in millions) Equity Attributable to Ford Motor Company Capital Stock Cap. in Excess of Par Value of Stock Retained Earnings/(Accumulated Deficit) Accumulated Other Comprehensive Income/(Loss) (Note 23) Treasury Stock Total Equity Attributable to Non-controlling Interests Total Equity Balance at December 31, 2019 $ 41 $ 22,165 $ 20,320 $ ( 7,728 ) $ ( 1,613 ) $ 33,185 $ 45 $ 33,230 Adoption of accounting standards — — ( 202 ) — — ( 202 ) — ( 202 ) Net income/(loss) — — ( 1,279 ) — — ( 1,279 ) 3 ( 1,276 ) Other comprehensive income/(loss), net of tax — — — ( 566 ) — ( 566 ) ( 1 ) ( 567 ) Common stock issued (a) — 125 — — — 125 — 125 Treasury stock/other — — — — 23 23 86 109 Dividend and dividend equivalents declared (b) — — ( 596 ) — — ( 596 ) ( 12 ) ( 608 ) Balance at December 31, 2020 $ 41 $ 22,290 $ 18,243 $ ( 8,294 ) $ ( 1,590 ) $ 30,690 $ 121 $ 30,811 Balance at December 31, 2020 $ 41 $ 22,290 $ 18,243 $ ( 8,294 ) $ ( 1,590 ) $ 30,690 $ 121 $ 30,811 Net income/(loss) — — 17,937 — — 17,937 ( 27 ) 17,910 Other comprehensive income/(loss), net of tax — — — ( 45 ) — ( 45 ) 4 ( 41 ) Common stock issued (a) — 321 — — — 321 — 321 Treasury stock/other — — — — 27 27 5 32 Dividend and dividend equivalents declared (b) — — ( 411 ) — — ( 411 ) — ( 411 ) Balance at December 31, 2021 $ 41 $ 22,611 $ 35,769 $ ( 8,339 ) $ ( 1,563 ) $ 48,519 $ 103 $ 48,622 Balance at December 31, 2021 $ 41 $ 22,611 $ 35,769 $ ( 8,339 ) $ ( 1,563 ) $ 48,519 $ 103 $ 48,622 Net income/(loss) — — ( 1,981 ) — — ( 1,981 ) ( 171 ) ( 2,152 ) Other comprehensive income/(loss), net of tax — — — ( 1,000 ) — ( 1,000 ) ( 4 ) ( 1,004 ) Common stock issued (a) 1 221 — — — 222 — 222 Treasury stock/other — — — — ( 484 ) ( 484 ) 7 ( 477 ) Dividend and dividend equivalents declared (b) — — ( 2,034 ) — — ( 2,034 ) ( 10 ) ( 2,044 ) Balance at December 31, 2022 $ 42 $ 22,832 $ 31,754 $ ( 9,339 ) $ ( 2,047 ) $ 43,242 $ ( 75 ) $ 43,167 __________ (a) Includes impacts of share-based compensation. (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. 112 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS Table of Contents Footnote Page Note 1 Presentation 114 Note 2 Summary of Significant Accounting Policies 115 Note 3 New Accounting Standards 121 Note 4 Revenue 122 Note 5 Other Income/(Loss) 124 Note 6 Share-Based Compensation 125 Note 7 Income Taxes 126 Note 8 Capital Stock and Earnings/(Loss) Per Share 130 Note 9 Cash, Cash Equivalents, and Marketable Securities 131 Note 10 Ford Credit Finance Receivables and Allowance for Credit Losses 134 Note 11 Inventories 141 Note 12 Net Investment in Operating Leases 142 Note 13 Net Property 143 Note 14 Equity in Net Assets of Affiliated Companies 144 Note 15 Other Investments 146 Note 16 Other Liabilities and Deferred Revenue 146 Note 17 Retirement Benefits 147 Note 18 Lease Commitments 154 Note 19 Debt and Commitments 156 Note 20 Derivative Financial Instruments and Hedging Activities 164 Note 21 Employee Separation Actions and Exit and Disposal Activities 167 Note 22 Acquisitions and Divestitures 168 Note 23 Accumulated Other Comprehensive Income/(Loss) 170 Note 24 Variable Interest Entities 171 Note 25 Commitments and Contingencies 172 Note 26 Segment Information 175 113 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 1. PRESENTATION For purposes of this report, “Ford,” the “Company,” “we,” “our,” “us,” or similar references mean Ford Motor Company, our consolidated subsidiaries, and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise. We also make reference to Ford Motor Credit Company LLC, herein referenced to as Ford Credit. Our consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We reclassified certain prior year amounts in our consolidated financial statements to conform to the current year presentation. Certain Transactions Between Automotive, Mobility, and Ford Credit Intersegment transactions occur in the ordinary course of business. Additional detail regarding certain transactions and the effect on each segment at December 31 was as follows (in billions): 2021 2022 Automotive Mobility Ford Credit Automotive Mobility Ford Credit Trade and other receivables (a) $ 7.4 $ 10.6 Unearned interest supplements and residual support (b) ( 4.6 ) ( 3.4 ) Finance receivables and other (c) 1.2 1.3 Intersegment receivables/(payables) $ ( 1.4 ) $ — 1.4 $ ( 1.5 ) $ — 1.5 __________ (a) Automotive receivables (generated primarily from vehicle and parts sales to third parties) sold to Ford Credit. (b) Automotive pays amounts to Ford Credit at the point of retail financing or lease origination, which represent interest supplements and residual support. (c) Primarily receivables with entities that are consolidated subsidiaries of Ford, including a sale-leaseback agreement between Automotive and Ford Credit relating primarily to vehicles that we lease to our employees. 114 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES For each accounting topic that is addressed in its own note, the description of the accounting policy may be found in the related note. Other significant accounting policies are described below. Use of Estimates The preparation of financial statements requires us to make estimates and assumptions that affect our results. Estimates are used to account for certain items such as marketing accruals, warranty costs, employee benefit programs, allowance for credit losses, and other items requiring judgment. Estimates are based on assumptions that we believe are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. Foreign Currency When an entity has monetary assets and liabilities denominated in a currency that is different from its functional currency, we remeasure those assets and liabilities from the transactional currency to the entity’s functional currency. The effect of this remeasurement process and the results of our related foreign currency hedging activities are reported in Cost of sales and Other income/(loss), net and were $( 46 ) million, $( 74 ) million, and $ 180 million, for the years ended 2020, 2021, and 2022, respectively. Generally, our foreign subsidiaries use the local currency as their functional currency. We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies to U.S. dollars using end-of-period exchange rates. Changes in the carrying value of these assets and liabilities attributable to fluctuations in exchange rates are recognized in Foreign currency translation , a component of Other comprehensive income/(Ioss), net of tax. Upon sale or upon complete or substantially complete liquidation of an investment in a foreign subsidiary, the amount of accumulated foreign currency translation related to the entity is reclassified to income and recognized as part of the gain or loss on the investment. Cash Equivalents Cash and cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal. A debt security is classified as a cash equivalent if it meets these criteria and if it has a remaining time to maturity of three months or less from the date of purchase. Amounts on deposit and available upon demand, or negotiated to provide for daily liquidity without penalty, are classified as Cash and cash equivalents . Time deposits, certificates of deposit, and money market accounts that meet the above criteria are reported at par value on our consolidated balance sheets. Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in Other assets in the non-current assets section of our consolidated balance sheets. Our Company excluding Ford Credit restricted cash balances primarily include various escrow agreements related to legal, insurance, customs, and environmental matters and cash held under the terms of certain contractual agreements. Our Ford Credit segment restricted cash balances primarily include cash held to meet certain local governmental and regulatory reserve requirements and cash held under the terms of certain contractual agreements. Restricted cash does not include required minimum balances or cash securing debt issued through securitization transactions. 115 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Marketable Securities Investments in debt securities with a maturity date greater than three months at the date of purchase and other debt securities for which there is more than an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal are classified and accounted for as either trading or available-for-sale marketable securities. Equity securities with a readily determinable fair value are classified and accounted for as trading marketable securities. Realized gains and losses, interest income, and dividend income on all of our marketable securities and unrealized gains and losses on securities not classified as available for sale are recorded in Other income/(loss), net . Unrealized gains and losses on available-for-sale securities are recognized in Unrealized gains and losses on securities , a component of Other comprehensive income/(loss), net of tax . Realized gains and losses and reclassifications of accumulated other comprehensive income into net income are measured using the specific identification method. On a quarterly basis, we review our available-for-sale debt securities for credit losses. We compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, we determine if a credit loss allowance is necessary. If a credit loss allowance is necessary, we will record an allowance, limited by the amount that fair value is less than the amortized cost basis, and recognize the corresponding charge in Other income/(loss), net . 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, 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 Indefinite-lived intangible assets and goodwill are not amortized but are tested for impairment annually or more frequently if events or circumstances indicate the assets may be impaired. Goodwill impairment testing is also performed following an allocation of goodwill to a business to be disposed or a change in reporting units. We test for impairment by assessing qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit allocated the goodwill is less than its carrying amount. If the qualitative assessment indicates a possible impairment, the carrying value of the asset or reporting unit is compared with its fair value. Fair value is measured relying primarily on the income approach by applying a discounted cash flow method, the market approach using market values or multiples, and/or third-party valuations. We capitalize and amortize our finite-lived intangible assets over their estimated useful lives. The carrying amount of intangible assets and goodwill is reported in Other assets in the non-current assets section of our consolidated balance sheets. Intangible assets are comprised primarily of advertising agreements, land rights, and technology licenses. The net carrying amount of our intangible assets was $ 111 million and $ 86 million at December 31, 2021 and 2022, respectively. For the periods presented, we have not recorded any material impairments for indefinite-lived intangibles. The net carrying amount of goodwill was $ 619 million and $ 603 million at December 31, 2021 and 2022, respectively. In 2021, we fully impaired goodwill for two investments in our Mobility segment. In 2022, we have not recorded any impairments for goodwill. 116 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Held-and-Used Long-Lived Asset Impairment We test long-lived asset groups when changes in circumstances indicate the carrying value may not be recoverable. 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 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. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. 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 material impairments. Held-for-Sale Asset Impairment We perform an impairment test on a disposal group to be discontinued, held for sale (“HFS”), or otherwise disposed when we have committed to an action and the action is expected to be completed within one year. We estimate fair value to approximate the expected proceeds to be received, less cost to sell, and compare it to the carrying value of the disposal group. An impairment charge is recognized when the carrying value exceeds the estimated fair value (see Note 22). We also assess fair value if circumstances arise that were considered unlikely and, as a result, we decide not to sell a disposal group previously classified as HFS upon reclassification as held and used. When there is a change to a plan of sale, and the assets are reclassified from HFS to held and used, the long-lived assets would be reported at the lower of (i) the carrying amount before HFS designation, adjusted for depreciation that would have been recognized if the assets had not been classified as HFS, or (ii) the fair value at the date the assets no longer satisfy the criteria for classification as HFS. Fair Value Measurements We measure fair value of our financial instruments, including those held within our pension plans, using various valuation methods and prioritize the use of observable inputs. The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our fair value hierarchy: • Level 1 - inputs include quoted prices for identical instruments and are the most observable • Level 2 - inputs include quoted prices for similar instruments and observable inputs such as interest rates, currency exchange rates, and yield curves • Level 3 - inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the instruments Fixed income securities, equities, commingled funds, derivative financial instruments, and alternative assets are remeasured and presented within our consolidated financial statements at fair value on a recurring basis. Finance receivables and debt are measured at fair value for the purpose of disclosure. Other assets and liabilities are measured at fair value on a nonrecurring basis. Transfers into and transfers out of the hierarchy levels are recognized as if they had taken place at the end of the reporting period. 117 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Valuation Method Fixed Income Securities . Fixed income securities primarily include government securities, government agency securities, corporate bonds, and asset-backed securities. We generally measure fair value using prices obtained from pricing services or quotes from dealers that make markets in such securities. Pricing methods and inputs to valuation models used by the pricing services depend on the security type (i.e., asset class). Where possible, fair values are generated using market inputs, including quoted prices (the closing price in an exchange market), bid prices (the price at which a buyer stands ready to purchase), and other market information. For fixed income securities that are not actively traded, the pricing services use alternative methods to determine fair value for the securities, including quotes for similar fixed income securities, matrix pricing, discounted cash flow using benchmark curves, or other factors. In certain cases, when market data are not available, we may use broker quotes or pricing services that use proprietary pricing models to determine fair value. The proprietary models incorporate unobservable inputs primarily consisting of prepayment curves, discount rates, default assumptions, recovery rates, yield assumptions, and credit spread assumptions. An annual review is performed on the security prices received from our pricing services, which includes discussion and analysis of the inputs used by the pricing services to value our securities. We also compare the price of certain securities sold close to the quarter end to the price of the same security at the balance sheet date to ensure the reported fair value is reasonable. Equities. Equity securities are primarily exchange-traded and are valued based on the closing bid, official close, or last trade pricing on an active exchange. If closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price. Securities that are thinly traded or delisted are valued using unobservable pricing data. Commingled Funds. Fixed income and public equity securities may each be combined into commingled fund investments. Most commingled funds are valued to reflect our interest in the fund based on the reported year-end net asset value (“NAV”). Derivative Financial Instruments. Exchange-traded derivatives for which market quotations are readily available are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. Over-the-counter derivatives are not exchange traded and are valued using independent pricing services or industry-standard valuation models such as a discounted cash flow. 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, 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. We use our counterparty’s CDS spread when we are in a net asset position and our own CDS spread when we are in a net liability position. In cases when market data are not available, we use broker quotes and models (e.g., Black-Scholes) to determine fair value. This includes situations where there is a lack of liquidity for a particular currency or commodity, or when the instrument is longer dated. When broker quotes or models are used to determine fair value, the derivative is categorized within Level 3 of the hierarchy. All other derivatives are categorized within Level 2. Alternative Assets. Hedge funds generally hold liquid and readily-priced securities, such as public equities, exchange-traded derivatives, and corporate bonds. Private equity and real estate investments are less liquid. External investment managers typically report valuations reflecting initial cost or updated appraisals, which are adjusted for cash flows, and realized and unrealized gains/losses. All alternative assets are valued at the NAV provided by the investment sponsor or third party administrator, as they do not have readily-available market quotations. Valuations may be lagged up to six months. The NAV will be adjusted for cash flows (additional investments or contributions, and distributions) through year end. We may make further adjustments for any known substantive valuation changes not reflected in the NAV. 118 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) We may hold annuity contracts within some of our non-U.S. pension plans (see Note 17). Generally, the contract valuation method is applied for markets where we have purchased non-participating annuity contracts from an insurer as a plan asset. The Ford-Werke GmbH (“Ford-Werke”) defined benefit plan is primarily funded through a participating group insurance contract. For the Ford-Werke plan, we measure the fair value of the insurance asset by projecting expected future cash flows from the contract and discounting them to present value based on current market rates as well as an assessment for non-performance risk of the insurance company. The assumptions used to project expected future cash flows are based on actuarial estimates and are unobservable. We include all annuity contracts within Level 3 of the hierarchy. Finance Receivables. 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) 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. On a nonrecurring basis, we also measure at fair value retail contracts greater than 120 days past due or deemed to be uncollectible, and individual dealer loans probable of foreclosure. We use the fair value of collateral, adjusted for estimated costs to sell, to determine the fair value of these receivables. The collateral for a retail financing or wholesale receivable is the vehicle financed, and for dealer loans is real estate or other property. The fair value of collateral for retail receivables is calculated as the outstanding receivable balances multiplied by the average recovery value percentage. The fair value of collateral for wholesale receivables is based on the wholesale market value or liquidation value for new and used vehicles. The fair value of collateral for dealer loans is determined by reviewing various appraisals, which include total adjusted appraised value of land and improvements, alternate use appraised value, broker’s opinion of value, and purchase offers. Debt. We measure debt at fair value using quoted prices for our own debt with approximately the same remaining maturities (see Note 19). Where quoted prices are not available, we estimate fair value using discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of the debt instruments. For certain short-term debt with an original maturity date of one year or less, we assume that book value is a reasonable approximation of the debt’s fair value. The fair value of debt is categorized within Level 2 of the hierarchy. Finance and Lease Incentives We routinely sponsor special retail financing and lease incentives to dealers’ customers who choose to finance or lease our vehicles from Ford Credit. The cost for these incentives is included in our estimate of variable consideration when the vehicle is sold to the dealer. Ford Credit records a reduction to the finance receivable or reduces the cost of the vehicle operating lease when it records the underlying finance contract, and we transfer to Ford Credit the amount of the incentive on behalf of the dealer’s customer. See Note 1 for additional information regarding transactions between Automotive and Ford Credit. The Ford Credit segment recognized interest revenue of $ 2.4 billion, $ 2.4 billion, and $ 2.1 billion in 2020, 2021, and 2022, respectively, and lower depreciation of $ 2.3 billion, $ 1.9 billion, and $ 1.2 billion in 2020, 2021, and 2022, respectively, associated with these incentives. Supplier Price Adjustments We frequently negotiate price adjustments with our suppliers throughout a production cycle, even after receiving production material. These price adjustments relate to changes in design specification or other commercial terms such as economics, productivity, and competitive pricing. We recognize price adjustments when we reach final agreement with our suppliers. In general, we avoid direct price changes in consideration of future business; however, when these occur, our policy is to defer the recognition of any such price change given explicitly in consideration of future business. 119 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Government Incentives We receive incentives from U.S. and non-U.S. 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 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. 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 Engineering, research, and development expenses are reported in Cost of sales and primarily consist of salaries, materials, and associated costs. Engineering, research, and development costs are expensed as incurred when performed internally or when performed by a supplier if we guarantee reimbursement. Advertising costs are reported in Selling, administrative, and other expenses and are expensed as incurred. Engineering, research, development, and advertising expenses for the years ended December 31 were as follows (in billions): 2020 2021 2022 Engineering, research, and development $ 7.1 $ 7.6 $ 7.8 Advertising 2.8 3.1 2.2 120 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 3. NEW ACCOUNTING STANDARDS Adoption of New Accounting Standards 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 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. 121 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 4. REVENUE The following tables disaggregate our revenue by major source for the years ended December 31 (in millions): 2020 Company Excluding Ford Credit Ford Credit Consolidated Vehicles, parts, and accessories $ 110,180 $ — $ 110,180 Used vehicles 2,935 — 2,935 Services and other revenue (a) 2,514 161 2,675 Revenues from sales and services 115,629 161 115,790 Leasing income 312 5,653 5,965 Financing income — 5,261 5,261 Insurance income — 128 128 Total revenues $ 115,941 $ 11,203 $ 127,144 2021 Company Excluding Ford Credit Ford Credit Consolidated Vehicles, parts, and accessories $ 120,973 $ — $ 120,973 Used vehicles 2,358 — 2,358 Services and other revenue (a) 2,651 161 2,812 Revenues from sales and services 125,982 161 126,143 Leasing income 286 5,291 5,577 Financing income — 4,560 4,560 Insurance income — 61 61 Total revenues $ 126,268 $ 10,073 $ 136,341 2022 Company Excluding Ford Credit Ford Credit Consolidated Vehicles, parts, and accessories $ 144,471 $ — $ 144,471 Used vehicles 1,719 — 1,719 Services and other revenue (a) 2,688 100 2,788 Revenues from sales and services 148,878 100 148,978 Leasing income 201 4,569 4,770 Financing income — 4,254 4,254 Insurance income — 55 55 Total revenues $ 149,079 $ 8,978 $ 158,057 __________ (a) Includes extended service contract revenue. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs when we transfer control of our vehicles, parts, or accessories, or provide services. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. For the majority of sales, this occurs when products are shipped from our manufacturing facilities. However, we defer a portion of the consideration received when there is a separate future or stand-ready performance obligation, such as extended service contracts or ongoing vehicle connectivity. Sales, value-added, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The expected costs associated with our base warranties and field service actions are recognized as expense when the products are sold (see Note 25). We do not have any material significant payment terms as payment is received at or shortly after the point of sale. 122 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 4. REVENUE (Continued) Company Excluding Ford Credit Vehicles, Parts, and Accessories. For the majority of vehicles, parts, and accessories, we transfer control and recognize a sale when we ship the product from our manufacturing facility to our customer (dealers and distributors). We receive cash equal to the invoice price for most vehicle sales at the time of wholesale. When the vehicle sale is financed by our wholly-owned subsidiary Ford Credit, the dealer is obligated to pay Ford Credit when it sells the vehicle to the retail customer (see Note 10). Payment terms on part sales to dealers, distributors, and retailers range from 30 to 120 days. The amount of consideration we receive and revenue we recognize varies with changes in return rights and marketing incentives we offer to our customers and their customers. When we give our dealers the right to return eligible parts and accessories, we estimate the expected returns based on an analysis of historical experience. Estimates of marketing incentives are based on expected retail and fleet sales volumes, mix of products to be sold, and incentive programs to be offered. Customer acceptance of products and programs, as well as other market conditions, will impact these estimates. 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 $ 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 . We sell vehicles to daily rental companies and may guarantee that we will pay them the difference between an agreed amount and the value they are able to realize upon resale. At the time of transfer of vehicles to the daily rental companies, we record the probable amount we will pay under the guarantee to Other liabilities and deferred revenue (see Note 25) . Used Vehicles. We sell used vehicles both at auction and through our consolidated dealerships. Proceeds from the sale of these vehicles are recognized in Company excluding Ford Credit revenues upon transfer of control of the vehicle to the customer, and the related vehicle carrying value is recognized in Cost of sales . Services and other revenue. 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 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. 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. At December 31, 2022, the unearned amount was $ 4.4 billion. We expect to recognize approximately $ 1.3 billion of the unearned amount in 2023, $ 1.1 billion in 2024, and $ 2 billion thereafter. We record a premium deficiency reserve to the extent we estimate the future costs associated with extended service contracts exceed the unrecognized revenue. Amounts paid to dealers to obtain these contracts are deferred and recorded as Other assets . These costs are amortized to expense consistent with how the related revenue is recognized. We had a balance of $ 309 million and $ 315 million in deferred costs as of December 31, 2021 and 2022, respectively. We recognized $ 79 million, $ 81 million, and $ 88 million of amortization during the years ended December 31, 2020, 2021, and 2022, respectively. 123 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 4. REVENUE (Continued) 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. Leasing Income. We sell vehicles to daily rental companies with an obligation to repurchase the vehicles for a guaranteed amount, exercisable at the option of the customer. The transactions are accounted for as operating leases. Upon the transfer of vehicles to the daily rental companies, we record proceeds received in Other liabilities and deferred revenue. The difference between the proceeds received and the guaranteed repurchase amount is recorded in Company excluding Ford Credit revenues over the term of the lease using a straight-line method. The cost of the vehicle is recorded in Net investment in operating leases on our consolidated balance sheets and the difference between the cost of the vehicle and the estimated auction value is depreciated in Cost of sales over the term of the lease. Ford Credit Segment Leasing Income. Ford Credit offers leasing plans to retail consumers through Ford and Lincoln brand dealers that originate the leases. Ford Credit records an operating lease upon purchase of a vehicle subject to a lease from the dealer. The retail consumer makes lease payments representing the difference between Ford Credit’s purchase price of the vehicle and the contractual residual value of the vehicle plus lease fees, which we recognize on a straight-line basis over the term of the lease agreement. Depreciation and the gain or loss upon disposition of the vehicle is recorded in Ford Credit interest, operating, and other expenses . Financing Income. Ford Credit originates and purchases finance installment contracts. Financing income represents interest earned on the finance receivables (including sales-type and direct financing leases). Interest is recognized using the interest method and includes the amortization of certain direct origination costs. Insurance Income. Income from insurance contracts is recognized evenly over the term of the agreement. Insurance commission revenue is recognized on a net basis at the time of sale of the third party’s product or service to our customer. NOTE 5. OTHER INCOME/(LOSS) The amounts included in Other income/(loss), net for the years ended December 31 were as follows (in millions): 2020 2021 2022 Net periodic pension and OPEB income/(cost), excluding service cost (Note 17) $ 69 $ 5,997 $ 1,336 Investment-related interest income 452 254 639 Interest income/(expense) on income taxes ( 2 ) 7 ( 23 ) 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 Other 117 31 201 Total $ 4,899 $ 14,733 $ ( 5,150 ) __________ (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. 124 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 6. SHARE-BASED COMPENSATION Under our Long-Term Incentive Plans, we may issue restricted stock units (“RSUs”), restricted stock shares (“RSSs”), and stock options. RSUs and RSSs consist of time-based and performance-based awards. The number of shares that may be granted in any year is limited to 2 % of our issued and outstanding Common Stock as of December 31 of the prior calendar year. The limit may be increased up to 3 % in any year, with a corresponding reduction in shares available for grants in future years. Granted RSUs generally cliff vest or ratably vest over a three-year service period. Performance-based RSUs have two components: one based on internal financial performance metrics and the other based on total shareholder return relative to an industrial and automotive peer group. At the time of vest, RSU awards are net settled (i.e., shares are withheld to cover the employee tax obligation). Stock options ratably vest over a three-year service period and expire ten years from the grant date. The fair value of both the time-based and the internal performance metrics portion of the performance-based RSUs and RSSs is determined using the closing price of our Common Stock at grant date. For awards that include a market condition, we measure the fair value using a Monte Carlo simulation. The weighted average per unit grant date fair value for the years ended December 31, 2020, 2021, and 2022 was $ 7.11 , $ 13.02 , and $ 15.63 , respectively. Time-based RSUs generally have a graded vesting feature whereby one-third of each grant vests after the first anniversary of the grant date, one-third after the second anniversary, and one-third after the third anniversary. The graded vesting method recognizes expense over the service period for each separately-vesting tranche, which results in accelerated recognition of expense. The fair value of time-based RSUs, RSSs, and stock options is expensed over the shorter of each separate vesting period, using the graded vesting method, or the time period an employee becomes eligible to retain the award at retirement. The fair value of performance-based RSUs and RSSs is expensed when it is probable and estimable as measured against the performance metrics over the shorter of the performance or required service periods. We measure the fair value of our stock options on the date of grant using either the Black-Scholes option-pricing model (for options without a market condition) or a Monte Carlo simulation (for options with a market condition). We have elected to recognize forfeitures as an adjustment to compensation expense for all RSUs, RSSs, and stock options in the same period as the forfeitures occur. Expense is recorded in Selling, administrative, and other expenses . Restricted Stock Units and Restricted Stock Shares The fair value of vested RSUs and RSSs as well as the compensation cost for the years ended December 31 were as follows (in millions): 2020 2021 2022 Fair value of vested shares $ 264 $ 217 $ 252 Compensation cost (a) 156 229 223 __________ (a) Net of tax benefit of $ 31 million, $ 74 million, and $ 113 million in 2020, 2021, and 2022, respectively. As of December 31, 2022, there was approximately $ 265 million in unrecognized compensation cost related to non-vested RSUs. This expense will be recognized over a weighted average period of 1.9 years. The performance-based RSUs granted in March 2020, 2021, and 2022 include a relative Total Shareholder Return (“TSR”) metric. Inputs and assumptions used to calculate the fair value at grant date through a Monte Carlo simulation were as follows: 2020 2021 2022 Fair value per stock award $ 7.21 $ 13.45 $ 18.10 Grant date stock price 7.08 11.93 16.85 Assumptions: Ford’s stock price expected volatility (a) 25.4 % 39.9 % 44.8 % Expected average volatility of peer companies (a) 26.4 39.6 39.6 Risk-free interest rate 0.68 0.32 1.62 __________ (a) Expected volatility based on three years of daily closing share price changes ending on the grant date. 125 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 6. SHARE-BASED COMPENSATION (Continued) During 2022, activity for RSUs and RSSs was as follows (in millions, except for weighted-average fair value): Shares Weighted- Average Fair Value Outstanding, beginning of year 62.5 $ 10.31 Granted (a) 35.9 15.63 Vested (a) ( 25.6 ) 9.84 Forfeited ( 8.9 ) 12.94 Outstanding, end of year (b) 63.9 12.90 __________ (a) Includes shares awarded to non-employee directors. (b) Excludes 1,047,856 non-employee director shares that were vested but unissued at December 31, 2022. Stock Options 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 Granted — — 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. 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. During 2022, no new stock options were granted. NOTE 7. INCOME TAXES We recognize income tax-related penalties in Provision for/(Benefit from) income taxes on our consolidated income statements. We recognize income tax-related interest income and interest expense in Other income/(loss), net on our consolidated income statements. We account for U.S. tax on global intangible low-taxed income in the period incurred. Valuation of Deferred Tax Assets and Liabilities Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards on a taxing jurisdiction basis. 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. 126 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 7. INCOME TAXES (Continued) 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. Components of Income Taxes 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 Income/(Loss) before income taxes (in millions) U.S. $ ( 231 ) $ 10,043 $ ( 6,548 ) Non-U.S. ( 885 ) 7,737 3,532 Total $ ( 1,116 ) $ 17,780 $ ( 3,016 ) Provision for/(Benefit from) income taxes (in millions) Current Federal $ ( 23 ) $ 102 $ 68 Non-U.S. 554 598 781 State and local ( 45 ) 26 123 Total current 486 726 972 Deferred Federal ( 523 ) 2,290 ( 2,292 ) Non-U.S. 168 ( 3,254 ) 688 State and local 29 108 ( 232 ) Total deferred ( 326 ) ( 856 ) ( 1,836 ) Total $ 160 $ ( 130 ) $ ( 864 ) Reconciliation of effective tax rate U.S. statutory tax rate 21.0 % 21.0 % 21.0 % Non-U.S. 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 ) U.S. tax on non-U.S. earnings 28.1 2.4 2.8 Prior year settlements and claims 8.3 ( 0.3 ) 1.5 Tax incentives ( 6.0 ) ( 0.6 ) 2.0 Enacted change in tax laws 1.5 1.1 ( 2.0 ) Valuation allowances ( 108.8 ) ( 4.7 ) 6.2 Other 1.7 ( 0.3 ) 1.7 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. During 2020, based on all available evidence, we established U.S. valuation allowances of $ 1.3 billion, primarily against tax credits as it was deemed more likely than not that these deferred tax assets would not be realized. In assessing the realizability of deferred tax assets, we consider the trade-offs between cash preservation and cash outlays to preserve tax credits. In 2021, we reversed $ 918 million of the previously established U.S. valuation allowances. 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. earnings are considered indefinitely reinvested in operations outside the United States, for which deferred taxes have not been provided. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested basis differences is not practicable. 127 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 7. INCOME TAXES (Continued) Components of Deferred Tax Assets and Liabilities The components of deferred tax assets and liabilities at December 31 were as follows (in millions): 2021 2022 Deferred tax assets Employee benefit plans $ 2,320 $ 1,960 Net operating loss carryforwards 4,163 3,978 Tax credit carryforwards 10,437 9,354 Research expenditures 1,117 3,240 Dealer and dealers’ customer allowances and claims 1,944 2,192 Other foreign deferred tax assets 2,005 1,854 All other 2,353 2,201 Total gross deferred tax assets 24,339 24,779 Less: Valuation allowances ( 1,067 ) ( 822 ) Total net deferred tax assets 23,272 23,957 Deferred tax liabilities Leasing transactions 2,103 2,992 Depreciation and amortization (excluding leasing transactions) 2,881 3,116 Finance receivables 756 792 Carrying value of investments 2,149 487 Other foreign deferred tax liabilities 893 1,196 All other 2,275 1,371 Total deferred tax liabilities 11,057 9,954 Net deferred tax assets/(liabilities) $ 12,215 $ 14,003 Deferred tax assets for net operating losses and other temporary differences related to certain non-U.S. operations have not been recorded as a result of elections to tax these operations simultaneously in U.S. tax returns. 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 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. There is no expiration date for $ 3.1 billion of these losses. A substantial portion of the remaining losses will expire beyond 2025. Tax credits available to offset future tax liabilities are $ 9.4 billion. 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. In our evaluation, we anticipate making tax elections that change the order of tax credit carryforward utilization on U.S. tax returns. 128 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 7. INCOME TAXES (Continued) Other A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 were as follows (in millions): 2021 2022 Beginning balance $ 1,913 $ 2,910 Increase – tax positions in prior periods 1,054 338 Increase – tax positions in current period 25 17 Decrease – tax positions in prior periods ( 54 ) ( 236 ) Settlements 1 ( 2 ) Lapse of statute of limitations ( 7 ) ( 1 ) Foreign currency translation adjustment ( 22 ) ( 87 ) Ending balance $ 2,910 $ 2,939 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. Cash paid for income taxes was $ 421 million, $ 568 million, and $ 801 million in 2020, 2021, and 2022, respectively. 129 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 8. CAPITAL STOCK AND EARNINGS/(LOSS) PER SHARE All general voting power is vested in the holders of Common Stock and Class B Stock. Holders of our Common Stock have 60 % of the general voting power, and holders of our Class B Stock are entitled to such number of votes per share as will give them the remaining 40 %. Shares of Common Stock and Class B Stock share equally in dividends when and as paid, with stock dividends payable in shares of stock of the class held. If liquidated, each share of Common Stock is entitled to the first $ 0.50 available for distribution to holders of Common Stock and Class B Stock, each share of Class B Stock is entitled to the next $ 1.00 so available, each share of Common Stock is entitled to the next $ 0.50 so available, and each share of Common and Class B Stock is entitled to an equal amount thereafter. 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 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. Potentially dilutive shares are excluded from the calculation if they have an anti-dilutive effect in the period. Earnings/(Loss) Per Share Attributable to Ford Motor Company Common and Class B Stock Basic and diluted income/(loss) per share were calculated using the following (in millions): 2020 2021 2022 Net income/(loss) attributable to Ford Motor Company $ ( 1,279 ) $ 17,937 $ ( 1,981 ) Basic and Diluted Shares Basic shares (average shares outstanding) 3,973 3,991 4,014 Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt (a) — 43 — Diluted shares 3,973 4,034 4,014 __________ (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 . 130 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 9. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES The fair values of cash, cash equivalents, and marketable securities measured at fair value on a recurring basis were as follows (in millions): December 31, 2021 Fair Value Level Company excluding Ford Credit Ford Credit Consolidated Cash and cash equivalents U.S. government 1 $ 2,877 $ 711 $ 3,588 U.S. government agencies 2 355 240 595 Non-U.S. government and agencies 2 55 152 207 Corporate debt 2 105 940 1,045 Total marketable securities classified as cash equivalents 3,392 2,043 5,435 Cash, time deposits, and money market funds 6,185 8,920 15,105 Total cash and cash equivalents $ 9,577 $ 10,963 $ 20,540 Marketable securities U.S. government 1 $ 4,018 $ 864 $ 4,882 U.S. government agencies 2 2,270 75 2,345 Non-U.S. government and agencies 2 3,373 697 4,070 Corporate debt 2 6,299 304 6,603 Equities (a) 1 10,673 — 10,673 Other marketable securities 2 247 233 480 Total marketable securities $ 26,880 $ 2,173 $ 29,053 Restricted cash $ 69 $ 128 $ 197 December 31, 2022 Fair Value Level Company excluding Ford Credit Ford Credit Consolidated Cash and cash equivalents U.S. government 1 $ 3,295 $ 1,045 $ 4,340 U.S. government agencies 2 2,245 150 2,395 Non-U.S. government and agencies 2 1,048 199 1,247 Other cash equivalents 2 10 — 10 Corporate debt 2 593 792 1,385 Total marketable securities classified as cash equivalents 7,191 2,186 9,377 Cash, time deposits, and money market funds 7,550 8,207 15,757 Total cash and cash equivalents $ 14,741 $ 10,393 $ 25,134 Marketable securities U.S. government 1 $ 4,947 $ 187 $ 5,134 U.S. government agencies 2 2,641 221 2,862 Non-U.S. government and agencies 2 2,625 658 3,283 Corporate debt 2 6,755 266 7,021 Equities (a) 1 223 — 223 Other marketable securities 2 252 161 413 Total marketable securities $ 17,443 $ 1,493 $ 18,936 Restricted cash $ 79 $ 127 $ 206 __________ (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. 131 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 9. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued) The cash equivalents and marketable securities accounted for as available-for-sale (“AFS”) securities were as follows (in millions): December 31, 2021 Fair Value of Securities with Contractual Maturities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Within 1 Year After 1 Year through 5 Years After 5 Years Company excluding Ford Credit U.S. government $ 3,821 $ 12 $ ( 14 ) $ 3,819 $ 1,360 $ 2,435 $ 24 U.S. government agencies 2,249 2 ( 21 ) 2,230 316 1,802 112 Non-U.S. government and agencies 2,599 6 ( 21 ) 2,584 854 1,708 22 Corporate debt 6,373 21 ( 23 ) 6,371 2,645 3,726 — Other marketable securities 228 1 ( 1 ) 228 — 150 78 Total $ 15,270 $ 42 $ ( 80 ) $ 15,232 $ 5,175 $ 9,821 $ 236 December 31, 2022 Fair Value of Securities with Contractual Maturities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Within 1 Year After 1 Year through 5 Years After 5 Years Company excluding Ford Credit U.S. government $ 4,797 $ 1 $ ( 145 ) $ 4,653 $ 1,008 $ 3,645 $ — U.S. government agencies 2,508 — ( 119 ) 2,389 1,244 1,109 36 Non-U.S. government and agencies 2,248 — ( 132 ) 2,116 294 1,810 12 Corporate debt 7,511 6 ( 197 ) 7,320 3,117 4,195 8 Other marketable securities 246 — ( 9 ) 237 — 181 56 Total $ 17,310 $ 7 $ ( 602 ) $ 16,715 $ 5,663 $ 10,940 $ 112 Sales proceeds and gross realized gains/losses from the sale of AFS securities for the years ended December 31 were as follows (in millions): 2020 2021 2022 Company excluding Ford Credit Sales proceeds $ 8,574 $ 5,943 $ 6,207 Gross realized gains 56 26 7 Gross realized losses 11 3 26 132 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 9. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued) The present fair values and gross unrealized losses for cash equivalents and marketable securities accounted for as AFS securities that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in millions): December 31, 2021 Less than 1 Year 1 Year or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Company excluding Ford Credit U.S. government $ 2,598 $ ( 14 ) $ — $ — $ 2,598 $ ( 14 ) U.S. government agencies 1,809 ( 19 ) 73 ( 2 ) 1,882 ( 21 ) Non-U.S. government and agencies 1,614 ( 20 ) 38 ( 1 ) 1,652 ( 21 ) Corporate debt 3,637 ( 21 ) 71 ( 2 ) 3,708 ( 23 ) Other marketable securities 178 ( 1 ) 15 — 193 ( 1 ) Total $ 9,836 $ ( 75 ) $ 197 $ ( 5 ) $ 10,033 $ ( 80 ) December 31, 2022 Less than 1 Year 1 Year or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Company excluding Ford Credit U.S. government $ 2,860 $ ( 52 ) $ 1,570 $ ( 93 ) $ 4,430 $ ( 145 ) U.S. government agencies 707 ( 14 ) 1,658 ( 105 ) 2,365 ( 119 ) Non-U.S. government and agencies 751 ( 23 ) 1,271 ( 109 ) 2,022 ( 132 ) Corporate debt 4,571 ( 79 ) 1,737 ( 118 ) 6,308 ( 197 ) Other marketable securities 123 ( 4 ) 108 ( 5 ) 231 ( 9 ) Total $ 9,012 $ ( 172 ) $ 6,344 $ ( 430 ) $ 15,356 $ ( 602 ) We determine credit losses on AFS debt securities using the specific identification method. During the years ended December 31, 2020, 2021, and 2022, we did no t recognize any credit loss. The unrealized losses on securities are due to changes in interest rates and market liquidity. Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents, and restricted cash as reported in the consolidated statements of cash flows were as follows (in millions): December 31, 2021 December 31, 2022 Cash and cash equivalents $ 20,540 $ 25,134 Restricted cash (a) 197 206 Total cash, cash equivalents, and restricted cash $ 20,737 $ 25,340 __________ (a) Included in Other assets in the non-current assets section of our consolidated balance sheets. 133 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios. The receivables are generally secured by the vehicles, inventory, or other property being financed. Consumer Portfolio. Receivables in this portfolio include products offered to individuals and businesses that finance the acquisition of Ford and Lincoln vehicles from dealers for personal or commercial use. Retail financing includes retail installment contracts for new and used vehicles and finance leases with retail customers, government entities, daily rental companies, and fleet customers. Non-Consumer Portfolio. Receivables in this portfolio include products offered to automotive dealers. Dealer financing includes wholesale loans to dealers to finance the purchase of vehicle inventory, also known as floorplan financing, as well as loans to dealers to finance working capital and improvements to dealership facilities, finance the purchase of dealership real estate, and finance other dealer programs. Wholesale financing is approximately 94 % of dealer financing. Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses. For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date. Finance Receivables Classification Finance receivables are accounted for as held for investment (“HFI”) if Ford Credit has the intent and ability to hold the receivables for the foreseeable future or until maturity or payoff. The determination of intent and ability to hold for the foreseeable future is highly judgmental and requires Ford Credit to make good faith estimates based on all information available at the time of origination or purchase. If Ford Credit does not have the intent and ability to hold the receivables, then the receivables are classified as HFS. Each quarter, Ford Credit makes a determination of whether it is probable that finance receivables originated or purchased during the quarter will be held for the foreseeable future based on historical receivables sale experience, internal forecasts and budgets, as well as other relevant, reliable information available through the date of evaluation. For purposes of this determination, probable means at least 70 % likely and, consistent with the budgeting and forecasting period, the foreseeable future means twelve months. Ford Credit classifies receivables as HFI or HFS on a receivable-by-receivable basis. Specific receivables included in off-balance sheet sale transactions are generally not identified until the month in which the sale occurs. Held-for-Investment. Finance receivables classified as HFI are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses. Cash flows from finance receivables, excluding wholesale and other receivables, that were originally classified as HFI are recorded as an investing activity since GAAP requires the statement of cash flows presentation to be based on the original classification of the receivables. Cash flows from wholesale and other receivables are recorded as an operating activity. Held-for-Sale. Finance receivables classified as HFS are carried at the lower of cost or fair value. Cash flows resulting from the origination or purchase and sale of HFS receivables are recorded as an operating activity in Decrease/(Increase) in finance receivables (wholesale and other) . Once a decision has been made to sell receivables that were originally classified as HFI, the receivables are reclassified as HFS and carried at the lower of cost or fair value. The valuation adjustment, if applicable, is recorded in Other income/(loss), net to recognize the receivables at the lower of cost or fair value. 134 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) Ford Credit finance receivables, net at December 31 were as follows (in millions): 2021 2022 Consumer Retail installment contracts, gross $ 69,148 $ 66,954 Finance leases, gross 7,318 6,765 Retail financing, gross 76,466 73,719 Unearned interest supplements ( 3,020 ) ( 2,305 ) Consumer finance receivables 73,446 71,414 Non-Consumer Dealer financing 11,278 18,054 Non-Consumer finance receivables 11,278 18,054 Total recorded investment $ 84,724 $ 89,468 Recorded investment in finance receivables $ 84,724 $ 89,468 Allowance for credit losses ( 925 ) ( 845 ) Total finance receivables, net $ 83,799 $ 88,623 Current portion $ 32,543 $ 38,720 Non-current portion 51,256 49,903 Total finance receivables, net $ 83,799 $ 88,623 Net finance receivables subject to fair value (a) $ 76,796 $ 82,200 Fair value (b) 77,648 79,521 __________ (a) Net finance receivables subject to fair value exclude finance leases. (b) The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy. Ford Credit’s finance leases are comprised of sales-type and direct financing leases. These financings include primarily lease plans for terms of 24 to 60 months. Financing revenue from finance leases for the years ended December 31, 2020, 2021, and 2022, was $ 357 million, $ 345 million, and $ 303 million, respectively, and is included in Ford Credit revenues on our consolidated income statements. The amounts contractually due on Ford Credit’s finance leases at December 31 were as follows (in millions): 2022 2023 $ 1,448 2024 1,317 2025 1,136 2026 563 2027 66 Thereafter 1 Total future cash payments 4,531 Less: Present value discount 234 Finance lease receivables $ 4,297 135 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) The reconciliation from finance lease receivables to finance leases, gross and finance leases, net at December 31 is as follows (in millions): 2021 2022 Finance lease receivables $ 4,631 $ 4,297 Unguaranteed residual assets 2,605 2,389 Initial direct costs 82 79 Finance leases, gross 7,318 6,765 Unearned interest supplements from Ford and affiliated companies ( 274 ) ( 307 ) Allowance for credit losses ( 41 ) ( 35 ) Finance leases, net $ 7,003 $ 6,423 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, 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; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions (see Note 24). Credit Quality Consumer Portfolio When originating consumer receivables, Ford Credit uses a proprietary scoring system that measures credit quality using information in the credit application, proposed contract terms, credit bureau data, and other information. After a proprietary risk score is generated, Ford Credit decides whether to originate a contract using a decision process based on a judgmental evaluation of the applicant, the credit application, the proposed contract terms, credit bureau information (e.g., FICO score), proprietary risk score, and other information. The evaluation emphasizes the applicant’s ability to pay and creditworthiness focusing on payment, affordability, applicant credit history, and stability as key considerations. After origination, Ford Credit reviews the credit quality of retail financing based on customer payment activity. As each customer develops a payment history, an internally developed behavioral scoring model is used to assist in determining the best collection strategies, which allows Ford Credit to focus collection activity on higher-risk accounts. These models are used to refine Ford Credit’s risk-based staffing model to ensure collection resources are aligned with portfolio risk. Based on data from this scoring model, contracts are categorized by collection risk. Ford Credit’s collection models evaluate several factors, including origination characteristics, updated credit bureau data, and payment patterns. Credit quality ratings for consumer receivables are based on aging. Consumer receivables credit quality ratings are as follows: • Pass – current to 60 days past due; • Special Mention – 61 to 120 days past due and in intensified collection status; and • Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral less costs to sell. 136 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) The credit quality analysis of consumer receivables at December 31, 2021 was as follows (in millions): Amortized Cost Basis by Origination Year Prior to 2017 2017 2018 2019 2020 2021 Total Percent Consumer 31 - 60 days past due $ 39 $ 52 $ 98 $ 120 $ 186 $ 91 $ 586 0.8 % 61 - 120 days past due 7 10 20 29 40 21 127 0.2 Greater than 120 days past due 10 6 6 9 11 1 43 — Total past due 56 68 124 158 237 113 756 1.0 Current 812 2,607 6,559 12,689 22,701 27,322 72,690 99.0 Total $ 868 $ 2,675 $ 6,683 $ 12,847 $ 22,938 $ 27,435 $ 73,446 100.0 % The credit quality analysis of consumer receivables at December 31, 2022 was as follows (in millions): Amortized Cost Basis by Origination Year Prior to 2018 2018 2019 2020 2021 2022 Total Percent Consumer 31 - 60 days past due $ 41 $ 60 $ 91 $ 181 $ 150 $ 126 $ 649 0.9 % 61 - 120 days past due 9 12 20 39 40 29 149 0.2 Greater than 120 days past due 9 4 5 7 7 6 38 0.1 Total past due 59 76 116 227 197 161 836 1.2 Current 883 2,563 6,137 13,844 18,357 28,794 70,578 98.8 Total $ 942 $ 2,639 $ 6,253 $ 14,071 $ 18,554 $ 28,955 $ 71,414 100.0 % Non-Consumer Portfolio Ford Credit extends credit to dealers primarily in the form of lines of credit to purchase new Ford and Lincoln vehicles as well as used vehicles. Payment is required when the dealer has sold the vehicle. Each non-consumer lending request is evaluated by considering the borrower’s financial condition and the underlying collateral securing the loan. Ford Credit uses a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance data to identify key factors about a dealer that are considered most significant in predicting a dealer’s ability to meet its financial obligations. Ford Credit also considers numerous other financial and qualitative factors of the dealer’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Ford Credit and other creditors. Dealers are assigned to one of four groups according to risk ratings as follows: • Group I – strong to superior financial metrics; • Group II – fair to favorable financial metrics; • Group III – marginal to weak financial metrics; and • Group IV – poor financial metrics, including dealers classified as uncollectible. Ford Credit generally suspends credit lines and extends no further funding to dealers classified in Group IV. 137 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. 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. In addition, Ford Credit regularly audits dealer inventory and dealer sales records to verify that the dealer is in possession of the financed vehicles and is promptly paying each receivable following the sale of the financed vehicle. The frequency of on-site vehicle inventory audits depends primarily on the dealer’s risk rating. Under Ford Credit’s policies, on-site vehicle inventory audits of low-risk dealers are conducted only as circumstances warrant. On-site vehicle inventory audits of higher-risk dealers are conducted with increased frequency based primarily on the dealer’s risk rating, but also considering the results of electronic monitoring of the dealer’s performance, including daily payment verifications and monthly analyses of the dealer’s financial statements, payoffs, aged inventory, over credit line, and delinquency reports. Ford Credit typically performs a credit review of each dealer annually and more frequently reviews certain dealers based on the dealer’s risk rating and total exposure. Ford Credit adjusts the dealer’s risk rating, if necessary. 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): Amortized Cost Basis by Origination Year Wholesale Loans Dealer Loans Prior to 2017 2017 2018 2019 2020 2021 Total Total Percent Group I $ 391 $ 68 $ 151 $ 45 $ 109 $ 345 $ 1,109 $ 6,751 $ 7,860 69.7 % Group II 11 7 26 2 4 54 104 2,689 2,793 24.8 Group III 8 — 1 — 1 20 30 529 559 4.9 Group IV — — 4 — — 6 10 56 66 0.6 Total (a) $ 410 $ 75 $ 182 $ 47 $ 114 $ 425 $ 1,253 $ 10,025 $ 11,278 100.0 % __________ (a) Total past due dealer financing receivables at December 31, 2021 were $ 62 million. The credit quality analysis of dealer financing receivables at December 31, 2022 was as follows (in millions): Amortized Cost Basis by Origination Year Wholesale Loans Dealer Loans Prior to 2018 2018 2019 2020 2021 2022 Total Total Percent Group I $ 402 $ 148 $ 35 $ 67 $ 185 $ 224 $ 1,061 $ 13,888 $ 14,949 82.8 % Group II 2 21 — 5 2 42 72 2,751 2,823 15.6 Group III — — — — — 10 10 233 243 1.4 Group IV — — 1 — — 3 4 35 39 0.2 Total (a) $ 404 $ 169 $ 36 $ 72 $ 187 $ 279 $ 1,147 $ 16,907 $ 18,054 100.0 % __________ (a) Total past due dealer financing receivables at December 31, 2022 were $ 9 million. Non-Accrual of Revenue. The accrual of financing revenue is discontinued at the time a receivable is determined to be uncollectible or when it is 90 days past due. Accounts may be restored to accrual status only when a customer settles all past-due deficiency balances and future payments are reasonably assured. For receivables in non-accrual status, subsequent financing revenue is recognized only to the extent a payment is received. Payments are generally applied first to outstanding interest and fees and then to the unpaid principal balance. Troubled Debt Restructuring (“TDR”). A restructuring of debt constitutes a TDR if a concession is granted to a debtor for economic or legal reasons related to the debtor’s financial difficulties that Ford Credit otherwise would not consider. Consumer and non-consumer receivables that have a modified interest rate below market rate or that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code, except non-consumer receivables that are current with minimal risk of loss, are considered to be TDRs. Ford Credit does not grant concessions on the principal balance of the receivables. If a receivable is modified in a reorganization proceeding, all payment requirements of the reorganization plan need to be met before remaining balances are forgiven. 138 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) Allowance for Credit Losses The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in finance receivables as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly. Adjustments to the allowance for credit losses are made by recording charges to Ford Credit interest, operating, and other expenses on our consolidated income statements. The uncollectible portion of a finance receivable is charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the customer or borrower, the value of the collateral, recourse to guarantors, and other factors. Charge-offs on finance receivables include uncollected amounts related to principal, interest, late fees, and other allowable charges. Recoveries on finance receivables previously charged off as uncollectible are credited to the allowance for credit losses. In the event Ford Credit repossesses the collateral, the receivable is charged off and the collateral is recorded at its estimated fair value less costs to sell and reported in Other assets on our consolidated balance sheets. Consumer Portfolio 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 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. The models consider factors such as risk evaluation at the time of origination, historical trends in credit losses (which include the impact of TDRs), and the composition and recent performance of the present portfolio (including vehicle brand, term, risk evaluation, and new/used vehicles). The loss given default is the percentage of the expected balance due at default that is not recoverable, taking into account the expected collateral value and trends in recoveries (including key metrics such as delinquencies, repossessions, and bankruptcies). Monthly exposures are equal to the receivables’ expected outstanding principal and interest balance. The allowance for credit losses incorporates forward-looking macroeconomic conditions for baseline, upturn, and downturn scenarios. Three separate credit loss allowances are calculated from these scenarios. They are then probability-weighted to determine the quantitative estimate of the credit loss allowance recognized in the financial statements. Ford Credit uses forecasts from a third party that revert to a long-term historical average after a reasonable and supportable forecasting period, which is specific to the particular macroeconomic variable and which varies by market. Ford Credit updates the forward-looking macroeconomic forecasts quarterly. If management does not believe the models reflect lifetime expected credit losses for the portfolio, an adjustment is made to reflect management judgment regarding qualitative factors, including economic uncertainty, observable changes in portfolio performance, and other relevant factors. On an ongoing basis, Ford Credit reviews its models, including macroeconomic factors, the selection of macroeconomic scenarios, and their weighting, to ensure they reflect the risk of the portfolio. 139 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) Non-Consumer Portfolio Dealer financing is evaluated on an individual dealer basis by segmenting dealers by risk characteristics (such as the amount of the loans, the nature of the collateral, the financial status of the dealer, and any TDR modifications) to determine if an individual dealer requires a specific allowance for credit loss. If required, the allowance is based on the present value of the expected future cash flows of the dealer’s receivables discounted at the loans’ original effective interest rate or the fair value of the collateral adjusted for estimated costs to sell. For the remaining dealer financing, Ford Credit estimates an allowance for credit losses on a collective basis. Wholesale Loans. Ford Credit estimates the allowance for credit losses for wholesale loans based on historical loss-to-receivable (“LTR”) ratios, expected future cash flows, and the fair value of collateral. For wholesale loans with similar risk characteristics, the allowance for credit losses is estimated on a collective basis using the LTR model and management judgment. The LTR model is based on the most recent years of history. An LTR ratio is calculated by dividing credit losses (i.e., charge-offs net of recoveries) by average net finance receivables, excluding unearned interest supplements and allowance for credit losses. The average LTR ratio is multiplied by the end-of-period balances, representing the lifetime expected credit loss reserve. Dealer Loans. Ford Credit uses a weighted-average remaining maturity method to estimate the lifetime expected credit loss reserve for dealer loans. The loss model is based on the industry-wide commercial real estate credit losses, adjusted to factor in the historical credit losses for the dealer loans portfolio. The expected credit loss is calculated under different macroeconomic scenarios that are weighted to provide the total lifetime expected credit loss. After establishing the collective and specific allowance for credit losses, if management believes the allowance does not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant forward-looking economic factors, an adjustment is made based on management judgment. 140 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) An analysis of the allowance for credit losses related to finance receivables for the years ended December 31 was as follows (in millions): 2021 Consumer Non-Consumer Total Allowance for credit losses Beginning balance $ 1,245 $ 60 $ 1,305 Charge-offs ( 272 ) ( 3 ) ( 275 ) Recoveries 202 8 210 Provision for/(Benefit from) credit losses ( 270 ) ( 40 ) ( 310 ) Other (a) ( 2 ) ( 3 ) ( 5 ) Ending balance $ 903 $ 22 $ 925 2022 Consumer Non-Consumer Total Allowance for credit losses Beginning balance $ 903 $ 22 $ 925 Charge-offs ( 278 ) ( 1 ) ( 279 ) Recoveries 165 5 170 Provision for/(Benefit from) credit losses 56 ( 17 ) 39 Other (a) ( 8 ) ( 2 ) ( 10 ) Ending balance $ 838 $ 7 $ 845 __________ (a) Primarily represents amounts related to translation adjustments. Note: 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. NOTE 11. INVENTORIES All inventories are stated at the lower of cost or net realizable value. Cost of our inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) basis. Inventories at December 31 were as follows (in millions): 2021 2022 Raw materials, work-in-process, and supplies $ 5,785 $ 5,997 Finished products 6,280 8,083 Total inventories $ 12,065 $ 14,080 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. 141 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 12. NET INVESTMENT IN OPERATING LEASES Net investment in operating leases consists primarily of lease contracts for vehicles with individuals, daily rental companies, government entities, and fleet customers. Assets subject to operating leases are depreciated using the straight-line method over the term of the lease to reduce the asset to its estimated residual value. 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): 2021 2022 Company excluding Ford Credit Vehicles, net of depreciation $ 1,194 $ 951 Ford Credit Segment Vehicles, at cost (a) 29,982 26,055 Accumulated depreciation ( 4,815 ) ( 4,234 ) Total Ford Credit Segment 25,167 21,821 Total $ 26,361 $ 22,772 __________ (a) Includes Ford Credit’s operating lease assets of $ 7.5 billion and $ 12.5 billion at December 31, 2021 and 2022, respectively, that have been included in securitization transactions. These net investments in operating leases are available only for payment of the debt or other obligations issued or arising in the securitization transactions; they are not available to pay other obligations or the claims of other creditors. Ford Credit Segment Included in Ford Credit interest, operating, and other expense is operating lease depreciation expense, which includes gains and losses on disposal of assets along with fees assessed to a customer at lease termination such as excess wear and use and excess mileage that are considered variable lease payments. Operating lease depreciation expense for the years ended December 31 was as follows (in millions): 2020 2021 2022 Operating lease depreciation expense $ 3,235 $ 1,626 $ 2,240 The amounts contractually due on operating leases at December 31, 2022 were as follows (in millions): 2023 2024 2025 2026 Thereafter Total Operating lease payments $ 3,324 $ 1,944 $ 803 $ 164 $ 11 $ 6,246 142 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 13. NET PROPERTY Net property is reported at cost, net of accumulated depreciation, which includes impairments. We capitalize new assets when we expect to use the asset for more than one year. Routine maintenance and repair costs are expensed when incurred. Property and equipment are depreciated primarily using the straight-line method over the estimated useful life of the asset. Useful lives range from 3 years to 40 years. The estimated useful lives generally are 14.5 years for machinery and equipment, 8 years for software, 30 years for land improvements, and 40 years for buildings. Tooling generally is amortized over the expected life of a product program using a straight-line method. Net property at December 31 was as follows (in millions): 2021 2022 Land $ 450 $ 371 Buildings and land improvements 12,438 11,946 Machinery, equipment, and other 39,636 38,964 Software 4,598 5,042 Construction in progress 2,152 3,203 Total land, plant and equipment, and other 59,274 59,526 Accumulated depreciation ( 32,342 ) ( 31,781 ) Net land, plant and equipment, and other 26,932 27,745 Tooling, net of amortization 10,207 9,520 Total $ 37,139 $ 37,265 Property-related expenses, excluding net investment in operating leases, for the years ended December 31 were as follows (in millions): 2020 2021 2022 Depreciation and other amortization $ 2,792 $ 2,986 $ 2,878 Tooling amortization 2,747 2,706 2,556 Total (a) $ 5,539 $ 5,692 $ 5,434 Maintenance and rearrangement $ 1,670 $ 1,940 $ 2,083 __________ (a) Includes impairment of held-for-sale long-lived assets. See Note 22 for additional information. 143 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 14. EQUITY IN NET ASSETS OF AFFILIATED COMPANIES We use the equity method of accounting for our investments in entities over which we do not have control, but over whose operating and financial policies we are able to exercise significant influence. Our carrying value and ownership percentages of our equity method investments at December 31 were as follows (in millions, except percentages): Investment Balance Ownership Percentage 2021 2022 2022 BlueOval SK, LLC $ — $ 690 50 % Ford Otomotiv Sanayi Anonim Sirketi 278 479 41 Jiangling Motors Corporation, Limited (a) 468 471 32 Changan Ford Automobile Corporation, Limited (b) 860 409 50 AutoAlliance (Thailand) Co., Ltd. 391 346 50 FFS Finance South Africa (Pty) Limited 70 70 50 Ionity Holding GmbH & Co. KG 41 67 15 Argo AI, LLC (c) 2,042 — 44 Ford Sollers Netherlands B.V. (d) 108 — — Other 287 266 Various Total $ 4,545 $ 2,798 __________ (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 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 . (c) See below for information on our investment in Argo AI, LLC. (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. 144 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 14. 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. In addition, we receive royalty income. Transactions with equity method investees reported for the years ended or at December 31 were as follows (in millions): For the years ended December 31, Income Statement 2020 2021 2022 Sales $ 4,126 $ 4,777 $ 4,369 Purchases 8,439 9,245 9,670 Royalty income 381 458 483 Balance Sheet 2021 2022 Receivables $ 724 $ 1,007 Payables 1,035 1,676 Argo AI 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. 145 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 15. OTHER INVESTMENTS We have investments in entities not accounted for under the equity method for which fair values are not readily available. We record these investments at cost (less impairment, if any), adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We report the carrying value of these investments in Other assets in the non-current assets section of our consolidated balance sheets. These investments were $ 0.9 billion and $ 0.4 billion at December 31, 2021 and 2022, respectively. 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. NOTE 16. OTHER LIABILITIES AND DEFERRED REVENUE Other liabilities and deferred revenue at December 31 were as follows (in millions): 2021 2022 Current Dealer and dealers’ customer allowances and claims $ 8,300 $ 9,219 Deferred revenue 2,349 2,404 Employee benefit plans 1,687 2,020 Accrued interest 888 935 Operating lease liabilities 345 404 OPEB 332 329 Pension 202 196 Other (a) 4,583 5,590 Total current other liabilities and deferred revenue $ 18,686 $ 21,097 Non-current Dealer and dealers’ customer allowances and claims $ 4,909 $ 6,095 Pension 8,658 5,673 OPEB 5,708 4,130 Deferred revenue 4,683 4,883 Operating lease liabilities 1,048 1,101 Employee benefit plans 1,007 834 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). 146 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. RETIREMENT BENEFITS Defined benefit pension and OPEB plan obligations are remeasured at least annually as of December 31 based on the present value of projected future benefit payments for all participants for services rendered to date. The measurement of projected future benefits is dependent on the provisions of each specific plan, demographics of the group covered by the plan, and other key measurement assumptions. For plans that provide benefits dependent on salary assumptions, we include a projection of salary growth in our measurements. No assumption is made regarding any potential future changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts). Net periodic benefit costs, including service cost, interest cost, and expected return on assets, are determined using assumptions regarding the benefit obligation and the fair value of plan assets (where applicable) as of the beginning of each year. We have elected to use a fair value of plan assets to calculate the expected return on assets in net periodic benefit cost. The funded status of the benefit plans, which represents the difference between the benefit obligation and fair value of plan assets, is calculated on a plan-by-plan basis. The benefit obligation and related funded status are determined using assumptions as of the end of each year. Actuarial gains and losses resulting from plan remeasurement are recognized in net periodic benefit cost in the period of the remeasurement. The impact of a retroactive plan amendment is recorded in Accumulated other comprehensive income/(loss) , and is amortized as a component of net periodic cost, generally over the remaining service period of the active employees. The service cost component is included in Cost of sales and Selling, administrative and other expenses . Other components of net periodic benefit cost/(income) are included in Other income/(loss), net on our consolidated income statements. A curtailment results from an event that significantly reduces the expected years of future service or eliminates the accrual of defined benefits for the future services of a significant number of employees. A curtailment gain is recorded when the employees who are entitled to a benefit terminate their employment, or when a plan suspension or amendment that results in a curtailment gain is adopted. A curtailment loss is recorded when it becomes probable a curtailment loss will occur. We recognize settlement expense when the costs associated with all settlements during the year exceed the interest component of net periodic cost for the affected plan. Expense from curtailments and settlements is recorded in Other income/(loss), net . Defined Benefit Pension Plans. We have defined benefit pension plans covering hourly and salaried employees in the United States, Canada, United Kingdom, Germany, and other locations. The largest portion of our worldwide obligation is associated with our U.S. plans. Virtually all of our worldwide defined benefit plans are closed to new participants. In general, our defined benefit pension plans are funded (i.e., have restricted assets from which benefits are paid). Our unfunded defined benefit pension plans are treated on a “pay as you go” basis with benefit payments from general Company cash. These unfunded plans primarily include certain plans in Germany and the U.S. defined benefit plans for senior management. OPEB . We have defined benefit OPEB plans, primarily certain health care and life insurance benefits, covering hourly and salaried employees in the United States, Canada, and other locations. The largest portion of our worldwide obligation is associated with our U.S. plans. Our OPEB plans are unfunded and the benefits are paid from general Company cash. Defined Contribution and Savings Plans . We also have defined contribution and savings plans for hourly and salaried employees in the United States and other locations. Company contributions to these plans, if any, are made from general Company cash and are expensed as incurred. The expense for our worldwide defined contribution and savings plans was $ 398 million, $ 432 million, and $ 478 million for the years ended December 31, 2020, 2021, and 2022, respectively. 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. 147 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. RETIREMENT BENEFITS (Continued) Defined Benefit Plans – Expense and Status The assumptions used to determine benefit obligation and net periodic benefit cost/(income) were as follows: Pension Benefits U.S. Plans Non-U.S. Plans Worldwide OPEB 2021 2022 2021 2022 2021 2022 Weighted Average Assumptions at December 31 Discount rate 2.91 % 5.51 % 1.75 % 4.42 % 2.97 % 5.48 % Average rate of increase in compensation 3.50 3.70 3.19 3.42 3.46 3.65 Weighted Average Assumptions Used to Determine Net Benefit Cost for the Year Ended December 31 Discount rate - Service cost 3.02 % 3.12 % 1.44 % 1.78 % 3.14 % 3.27 % Effective interest rate on benefit obligation 2.00 2.40 1.06 1.54 1.96 2.49 Expected long-term rate of return on assets 6.00 5.75 3.42 3.29 — — Average rate of increase in compensation 3.50 3.50 3.34 3.19 3.44 3.46 The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the years ended December 31 was as follows (in millions): Pension Benefits U.S. Plans Non-U.S. Plans Worldwide OPEB 2020 2021 2022 2020 2021 2022 2020 2021 2022 Service cost $ 520 $ 526 $ 500 $ 529 $ 557 $ 416 $ 47 $ 49 $ 42 Interest cost 1,291 928 1,054 514 420 504 169 127 146 Expected return on assets ( 2,795 ) ( 2,728 ) ( 2,569 ) ( 1,067 ) ( 1,130 ) ( 1,006 ) — — — Amortization of prior service costs/(credits) 4 2 2 32 24 22 ( 16 ) ( 12 ) ( 3 ) Net remeasurement (gain)/loss 377 ( 254 ) 1,720 499 ( 3,241 ) ( 436 ) 556 ( 376 ) ( 1,314 ) Separation programs/other 35 19 46 226 156 63 — — — Settlements and curtailments 5 70 438 103 ( 2 ) ( 2 ) ( 2 ) — ( 1 ) Net periodic benefit cost/(income) $ ( 563 ) $ ( 1,437 ) $ 1,191 $ 836 $ ( 3,216 ) $ ( 439 ) $ 754 $ ( 212 ) $ ( 1,130 ) 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 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. 148 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. RETIREMENT BENEFITS (Continued) The year-end status of these plans was as follows (in millions): Pension Benefits U.S. Plans Non-U.S. Plans Worldwide OPEB 2021 2022 2021 2022 2021 2022 Change in Benefit Obligation Benefit obligation at January 1 $ 49,020 $ 44,888 $ 39,835 $ 34,432 $ 6,575 $ 6,040 Service cost 526 500 557 416 49 42 Interest cost 928 1,054 420 504 127 146 Amendments — — 4 — — — Separation programs/other ( 25 ) 4 185 56 — — Curtailments — — ( 4 ) ( 2 ) — — Settlements (a) ( 1,297 ) ( 1,172 ) — ( 674 ) — — Plan participant contributions 20 18 13 12 21 1 Benefits paid ( 2,522 ) ( 2,466 ) ( 1,565 ) ( 1,302 ) ( 356 ) ( 363 ) Foreign exchange translation — — ( 1,432 ) ( 2,877 ) — ( 92 ) Actuarial (gain)/loss ( 1,762 ) ( 9,959 ) ( 3,581 ) ( 8,960 ) ( 376 ) ( 1,315 ) Benefit obligation at December 31 44,888 32,867 34,432 21,605 6,040 4,459 Change in Plan Assets Fair value of plan assets at January 1 48,355 45,909 33,820 33,085 — — Actual return on plan assets 1,150 ( 9,548 ) 788 ( 7,516 ) — — Company contributions 247 223 912 722 — — Plan participant contributions 20 18 13 12 — — Benefits paid ( 2,522 ) ( 2,466 ) ( 1,565 ) ( 1,302 ) — — Settlements (a) ( 1,297 ) ( 1,172 ) — ( 674 ) — — Foreign exchange translation — — ( 855 ) ( 2,973 ) — — Other ( 44 ) ( 42 ) ( 28 ) ( 10 ) — — Fair value of plan assets at December 31 45,909 32,922 33,085 21,344 — — Funded status at December 31 $ 1,021 $ 55 $ ( 1,347 ) $ ( 261 ) $ ( 6,040 ) $ ( 4,459 ) Amounts Recognized on the Balance Sheets Prepaid assets $ 3,130 $ 2,064 $ 5,404 $ 3,599 $ — $ — Other liabilities ( 2,109 ) ( 2,009 ) ( 6,751 ) ( 3,860 ) ( 6,040 ) ( 4,459 ) Total $ 1,021 $ 55 $ ( 1,347 ) $ ( 261 ) $ ( 6,040 ) $ ( 4,459 ) Amounts Recognized in Accumulated Other Comprehensive Loss (pre-tax) Unamortized prior service costs/(credits) $ 2 $ — $ 170 $ 130 $ 22 $ 25 Pension Plans in which Accumulated Benefit Obligation Exceeds Plan Assets at December 31 Accumulated benefit obligation $ 2,192 $ 15,055 $ 12,586 $ 8,346 Fair value of plan assets 140 13,576 6,835 5,068 Accumulated Benefit Obligation at December 31 $ 43,879 $ 32,336 $ 31,850 $ 20,304 Pension Plans in which Projected Benefit Obligation Exceeds Plan Assets at December 31 Projected benefit obligation $ 2,249 $ 15,585 $ 13,651 $ 8,932 Fair value of plan assets 140 13,576 6,900 5,068 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. 149 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. RETIREMENT BENEFITS (Continued) The actuarial (gain)/loss for our pension benefit obligations in 2021 and 2022 was primarily related to changes in discount rates. Pension Plan Contributions Our policy for funded pension plans is to contribute annually, at a minimum, amounts required by applicable laws and regulations. We may make contributions beyond those legally required. In 2022, we contributed $ 567 million to our global funded pension plans and made $ 379 million of benefit payments to participants in unfunded plans. During 2023, we expect to contribute between $ 500 million and $ 600 million of cash to our global funded pension plans. We also expect to make about $ 400 million of benefit payments to participants in unfunded plans. Based on current assumptions and regulations, we do not expect to have a legal requirement to fund our major U.S. pension plans in 2023. Expected Future Benefit Payments The expected future benefit payments at December 31, 2022 were as follows (in millions): Benefit Payments Pension U.S. Plans Non-U.S. Plans Worldwide OPEB 2023 $ 3,805 $ 1,300 $ 335 2024 2,595 1,225 335 2025 2,605 1,245 335 2026 2,570 1,255 330 2027 2,530 1,275 330 2028-2032 12,445 6,485 1,595 Pension Plan Asset Information Investment Objectives and Strategies . Our investment objectives for the U.S. plans are to minimize the volatility of the value of our U.S. pension assets relative to U.S. pension obligations and to ensure assets are sufficient to pay plan benefits. Our largest non-U.S. plans (e.g., United Kingdom and Canada) have similar investment objectives to the U.S. plans. Investment strategies and policies for the U.S. plans and the largest non-U.S. plans reflect a balance of risk-reducing and return-seeking considerations. The objective of minimizing the volatility of assets relative to obligations is addressed primarily through asset-liability matching, asset diversification, and hedging. The fixed income asset allocation matches the bond-like and long-dated nature of the pension obligations. Assets are broadly diversified within asset classes to achieve risk-adjusted returns that, in total, lower asset volatility relative to the obligations. Strategies to address the goal of ensuring sufficient assets to pay benefits include target allocations to a broad array of asset classes, and strategies within asset classes that provide adequate returns, diversification, and liquidity. 150 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. RETIREMENT BENEFITS (Continued) Derivatives are permitted for fixed income investment and public equity managers to use as efficient substitutes for traditional securities and to manage exposure to interest rate and foreign exchange risks. Interest rate and foreign currency derivative instruments are used for the purpose of hedging changes in the fair value of assets that result from interest rate changes and currency fluctuations. Interest rate derivatives are also used to adjust portfolio duration. Derivatives may not be used to leverage or to alter the economic exposure to an asset class outside the scope of the mandate an investment manager has been given. Alternative investment managers are permitted to employ leverage (including through the use of derivatives or other tools) that may alter economic exposure. Alternative investments execute diverse strategies that provide exposure to a broad range of hedge fund strategies, equity investments in private companies, and investments in private property funds. Significant Concentrations of Risk. Significant concentrations of risk in our plan assets relate to interest rates, growth assets, and operating risks. In order to minimize asset volatility relative to the obligations, the majority of plan assets are allocated to fixed income investments which are exposed to interest rate risk. Rate increases generally will result in a decline in the value of fixed income assets, while reducing the present value of the obligations. Conversely, rate decreases generally will increase the value of fixed income assets, offsetting the related increase in the obligations. In order to ensure assets are sufficient to pay benefits, a portion of plan assets is allocated to growth assets (primarily hedge funds, real estate, private equity, and public equity) that are expected over time to earn higher returns with more volatility than fixed income investments, which more closely match pension obligations. Within growth assets, risk is mitigated by constructing a portfolio that is broadly diversified by asset class, investment strategy, manager, style, and process. Operating risks include the risks of inadequate diversification and weak controls. To mitigate these risks, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing manager oversight (e.g., style adherence, team strength, firm health, and internal risk controls), plan and asset class investment guidelines and instructions that are communicated to managers, and periodic compliance reviews to ensure adherence. At year-end 2022, Ford securities comprised less than 1 % of our plan assets. Expected Long-Term Rate of Return on Assets. 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. plans, and 5.03 % for the Canadian plans, and averages 4.13 % for all non-U.S. plans. A generally consistent approach is used worldwide to develop this assumption. This approach considers primarily inputs from a range of advisors for long-term capital market returns, inflation, bond yields, and other variables, adjusted for specific aspects of our investment strategy by plan. Historical returns also are considered where appropriate. The assumption is based on consideration of all inputs, with a focus on long-term trends to avoid short-term market influences. 151 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. RETIREMENT BENEFITS (Continued) The fair value of our defined benefit pension plan assets (including dividends and interest receivables of $ 310 million and $ 96 million for U.S. and non-U.S. plans, respectively) by asset category at December 31 was as follows (in millions): 2021 U.S. Plans Non-U.S. Plans Level 1 Level 2 Level 3 Assets measured at NAV (a) Total Level 1 Level 2 Level 3 Assets measured at NAV (a) Total Asset Category Equity U.S. companies $ 1,396 $ 20 $ — $ — $ 1,416 $ 1,862 $ 48 $ — $ — $ 1,910 International companies 740 8 8 — 756 1,254 59 — — 1,313 Total equity 2,136 28 8 — 2,172 3,116 107 — — 3,223 Fixed Income U.S. government and agencies 9,660 1,687 — — 11,347 47 13 — — 60 Non-U.S. government — 1,230 12 — 1,242 — 20,338 123 — 20,461 Corporate bonds — 25,842 — — 25,842 — 2,901 70 — 2,971 Mortgage/other asset-backed — 464 — — 464 — 338 15 — 353 Commingled funds — 164 — — 164 — 185 — — 185 Derivative financial instruments, net 1 ( 19 ) — — ( 18 ) ( 1 ) 23 28 — 50 Total fixed income 9,661 29,368 12 — 39,041 46 23,798 236 — 24,080 Alternatives Hedge funds — — — 3,390 3,390 — — — 1,221 1,221 Private equity 1 — — 1,976 1,977 — — — 756 756 Real estate — — — 1,323 1,323 — — — 386 386 Total alternatives 1 — — 6,689 6,690 — — — 2,363 2,363 Cash, cash equivalents, and repurchase agreements (b) ( 1,220 ) — — — ( 1,220 ) ( 1,899 ) — — — ( 1,899 ) Other (c) ( 774 ) — — — ( 774 ) ( 466 ) — 5,784 — 5,318 Total assets at fair value $ 9,804 $ 29,396 $ 20 $ 6,689 $ 45,909 $ 797 $ 23,905 $ 6,020 $ 2,363 $ 33,085 __________ (a) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (b) Primarily short-term investment funds to provide liquidity to plan investment managers, cash held to pay benefits, and repurchase agreements valued at $ 2.9 billion in U.S. plans and $ 2.6 billion in non-U.S. plans. (c) For U.S. plans, 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). 152 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. RETIREMENT BENEFITS (Continued) The fair value of our defined benefit pension plan assets (including dividends and interest receivables of $ 268 million and $ 74 million for U.S. and non-U.S. plans, respectively) by asset category at December 31 was as follows (in millions): 2022 U.S. Plans Non-U.S. Plans Level 1 Level 2 Level 3 Assets measured at NAV (a) Total Level 1 Level 2 Level 3 Assets measured at NAV (a) Total Asset Category Equity U.S. companies $ 412 $ 2 $ — $ — $ 414 $ 1,426 $ 33 $ — $ — $ 1,459 International companies 269 6 8 — 283 989 13 — — 1,002 Total equity 681 8 8 — 697 2,415 46 — — 2,461 Fixed Income U.S. government and agencies 7,380 1,509 — — 8,889 36 35 — — 71 Non-U.S. government — 640 — — 640 — 12,256 231 — 12,487 Corporate bonds — 17,774 1 — 17,775 — 2,059 124 — 2,183 Mortgage/other asset-backed — 422 — — 422 — 265 10 — 275 Commingled funds — 104 — — 104 — 170 — — 170 Derivative financial instruments, net ( 2 ) 19 — — 17 2 ( 74 ) 77 — 5 Total fixed income 7,378 20,468 1 — 27,847 38 14,711 442 — 15,191 Alternatives Hedge funds — — — 3,342 3,342 — — — 1,009 1,009 Private equity — — — 1,411 1,411 — — — 584 584 Real estate — — — 1,553 1,553 — — — 405 405 Total alternatives — — — 6,306 6,306 — — — 1,998 1,998 Cash, cash equivalents, and repurchase agreements (b) ( 1,135 ) — — — ( 1,135 ) ( 1,363 ) — — — ( 1,363 ) Other (c) ( 793 ) — — — ( 793 ) ( 310 ) — 3,367 — 3,057 Total assets at fair value $ 6,131 $ 20,476 $ 9 $ 6,306 $ 32,922 $ 780 $ 14,757 $ 3,809 $ 1,998 $ 21,344 __________ (a) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (b) Primarily short-term investment funds to provide liquidity to plan investment managers, cash held to pay benefits, and repurchase agreements valued at $ 2.6 billion in U.S. plans and $ 2.1 billion in non-U.S. plans. (c) For U.S. plans, amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). For non-U.S plans, $ 2.5 billion of insurance contracts, primarily Ford-Werke, and amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). 153 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. RETIREMENT BENEFITS (Continued) The following table summarizes the changes in Level 3 defined benefit pension plan assets measured at fair value on a recurring basis for the years ended December 31 (in millions): 2021 Return on plan assets Fair Value at January 1 Attributable to Assets Held at December 31 Attributable to Assets Sold Net Purchases/ (Settlements) Transfers Into/ (Out of) Level 3 Fair Value at December 31 U.S. Plans $ 16 $ ( 2 ) $ — $ 5 $ 1 $ 20 Non-U.S. Plans (a) 6,006 ( 943 ) 153 687 117 6,020 2022 Return on plan assets Fair Value at January 1 Attributable to Assets Held at December 31 Attributable to Assets Sold Net Purchases/ (Settlements) Transfers Into/ (Out of) Level 3 Fair Value at December 31 U.S. Plans $ 20 $ — $ ( 4 ) $ ( 8 ) $ 1 $ 9 Non-U.S. Plans (a) 6,020 ( 1,732 ) 26 ( 722 ) 217 3,809 __________ (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. NOTE 18. LEASE COMMITMENTS We lease land, dealership facilities, offices, distribution centers, warehouses, and equipment under agreements with contractual periods ranging from less than one year to 40 years. Many of our leases contain one or more options to extend. In certain dealership lease agreements, we are the tenant and we sublease the site to a dealer. In the event the sublease is terminated, we have the option to terminate the head lease. We include options that we are reasonably certain to exercise in our evaluation of the lease term after considering all relevant economic and financial factors. Leases that are economically similar to the purchase of an asset are classified as finance leases. The leased (“right-of-use”) assets in finance lease arrangements are reported in Net property on our consolidated balance sheets. 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. Instead, non-lease components are included in the measurement of the lease liabilities. However, we do separate lease and non-lease components for contracts containing a significant service component (e.g., energy performance contracts). We calculate the initial lease liability as the present value of fixed payments not yet paid and variable payments that are based on a market rate or an index (e.g., CPI), measured at commencement. The majority of our leases are discounted using our incremental borrowing rate because the rate implicit in the lease is not readily determinable. All other variable payments are expensed as incurred. 154 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 18. LEASE COMMITMENTS (Continued) Lease right-of-use assets and liabilities at December 31 were as follows (in millions): 2021 2022 Operating leases Other assets, non-current $ 1,337 $ 1,447 Other liabilities and deferred revenue, current $ 345 $ 404 Other liabilities and deferred revenue, non-current 1,048 1,101 Total operating lease liabilities $ 1,393 $ 1,505 Finance leases Property and equipment, gross $ 715 $ 791 Accumulated depreciation ( 68 ) ( 109 ) Property and equipment, net $ 647 $ 682 Company excluding Ford Credit debt payable within one year $ 76 $ 86 Company excluding Ford Credit long-term debt 489 488 Total finance lease liabilities $ 565 $ 574 The amounts contractually due on our lease liabilities as of December 31, 2022 were as follows (in millions): Operating Leases (a) Finance Leases 2023 $ 452 $ 107 2024 350 91 2025 253 68 2026 176 62 2027 134 37 Thereafter 309 348 Total 1,674 713 Less: Present value discount 169 139 Total lease liabilities $ 1,505 $ 574 __________ (a) Excludes approximately $ 300 million in future lease payments for various leases commencing in a future period. 155 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 18. LEASE COMMITMENTS (Continued) Supplemental cash flow information related to leases for the years ended December 31 was as follows (in millions): 2020 2021 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 434 $ 424 $ 459 Operating cash flows from finance leases 15 14 22 Financing cash flows from finance leases 105 52 83 Right-of-use assets obtained in exchange for lease liabilities Operating leases $ 304 $ 441 $ 528 Finance leases 306 192 95 The components of lease expense for the years ended December 31 were as follows (in millions): 2020 2021 2022 Operating lease expense $ 463 $ 444 $ 463 Variable lease expense 57 49 62 Sublease income ( 14 ) ( 16 ) ( 15 ) Finance lease expense Amortization of right-of-use assets 27 34 60 Interest on lease liabilities 15 14 22 Total lease expense $ 548 $ 525 $ 592 The weighted-average remaining lease term and weighted-average discount rate at December 31 were as follows: 2020 2021 2022 Weighted-average remaining lease term (in years) Operating leases 6.3 6.0 5.5 Finance leases 14.8 12.1 12.2 Weighted-average discount rate Operating leases 3.8 % 3.3 % 3.7 % Finance leases 3.5 3.3 3.9 NOTE 19. DEBT AND COMMITMENTS Our debt consists of short-term and long-term secured and unsecured debt securities, and secured and unsecured borrowings from banks and other lenders. Debt issuances are placed directly by us or through securities dealers or underwriters and are held by institutional and retail investors. In addition, Ford Credit sponsors securitization programs that provide short-term and long-term asset-backed financing through institutional investors in the U.S. and international capital markets. Debt is reported on our consolidated balance sheets at par value adjusted for unamortized discount or premium, unamortized issuance costs, and adjustments related to designated fair value hedging (see Note 20). Discounts, premiums, and costs directly related to the issuance of debt are capitalized and amortized over the life of the debt or to the put date and are recorded in interest expense using the effective interest method. Gains and losses on the extinguishment of debt are recorded in Other income/(loss), net . 156 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. DEBT AND COMMITMENTS (Continued) The carrying value of Company debt excluding Ford Credit and Ford Credit debt at December 31 was as follows (in millions): Interest Rates Average Contractual Average Effective (a) Company excluding Ford Credit 2021 2022 2021 2022 2021 2022 Debt payable within one year Short-term $ 286 $ 359 0.4 % 2.8 % 0.4 % 2.8 % Long-term payable within one year Public unsecured debt securities 86 — U.S. Department of Energy Advanced Technology Vehicles Manufacturing (“DOE ATVM”) Incentive Program 953 — Delayed draw term loan 1,500 — Other debt 348 372 Unamortized (discount)/premium 2 ( 1 ) Total debt payable within one year 3,175 730 Long-term debt payable after one year Public unsecured debt securities 13,643 14,935 Convertible notes 2,300 2,300 U.K. Export Finance Program 843 1,654 Other debt 768 682 Unamortized (discount)/premium ( 188 ) ( 180 ) Unamortized issuance costs ( 166 ) ( 191 ) Total long-term debt payable after one year 17,200 19,200 4.4 % (b) 4.9 % (b) 4.6 % (b) 5.1 % (b) Total Company excluding Ford Credit $ 20,375 $ 19,930 Fair value of Company debt excluding Ford Credit (c) $ 24,044 $ 18,557 Ford Credit Debt payable within one year Short-term $ 14,810 $ 19,624 1.2 % 3.8 % 1.3 % 3.8 % Long-term payable within one year Unsecured debt 13,660 7,980 Asset-backed debt 18,049 21,839 Unamortized (discount)/premium 1 — Unamortized issuance costs ( 13 ) ( 13 ) Fair value adjustments (d) 10 4 Total debt payable within one year 46,517 49,434 Long-term debt payable after one year Unsecured debt 44,337 39,620 Asset-backed debt 26,654 31,840 Unamortized (discount)/premium 28 23 Unamortized issuance costs ( 199 ) ( 184 ) Fair value adjustments (d) 380 ( 1,694 ) Total long-term debt payable after one year 71,200 69,605 2.6 % (b) 3.6 % (b) 2.6 % (b) 3.6 % (b) Total Ford Credit $ 117,717 $ 119,039 Fair value of Ford Credit debt (c) $ 120,204 $ 117,214 __________ (a) Average effective rates reflect the average contractual interest rate plus amortization of discounts, premiums, and issuance costs. (b) Includes interest on long-term debt payable within one year and after one year. (c) At December 31, 2021 and 2022, the fair value of debt includes $ 209 million and $ 359 million of Company excluding Ford Credit short-term debt and $ 14.1 billion and $ 16.9 billion of Ford Credit short-term debt, respectively, carried at cost, which approximates fair value. All other debt is categorized within Level 2 of the fair value hierarchy. (d) These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $ 257 million and $ 31 million at December 31, 2021 and 2022, respectively. The carrying value of hedged debt was $ 37.5 billion and $ 33.3 billion at December 31, 2021 and 2022, respectively. 157 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. DEBT AND COMMITMENTS (Continued) Cash paid for interest was $ 1.4 billion, $ 1.9 billion, and $ 1.2 billion in 2020, 2021, and 2022, respectively, on Company excluding Ford Credit debt. Cash paid for interest was $ 3.4 billion, $ 2.8 billion, and $ 3.2 billion in 2020, 2021, and 2022, respectively, on Ford Credit debt. Maturities Debt maturities at December 31, 2022 were as follows (in millions): 2023 2024 2025 2026 2027 Thereafter Adjustments Total Debt Maturities Company excluding Ford Credit Public unsecured debt securities $ — $ — $ 176 $ 3,972 $ — $ 13,087 $ ( 258 ) $ 16,977 Short-term and other debt 731 95 820 65 939 417 ( 114 ) 2,953 Total $ 731 $ 95 $ 996 $ 4,037 $ 939 $ 13,504 $ ( 372 ) $ 19,930 Ford Credit Unsecured debt $ 24,798 $ 11,533 $ 10,888 $ 5,184 $ 6,187 $ 5,828 $ ( 1,816 ) $ 62,602 Asset-backed debt 24,645 15,625 10,896 3,509 1,110 700 ( 48 ) 56,437 Total $ 49,443 $ 27,158 $ 21,784 $ 8,693 $ 7,297 $ 6,528 $ ( 1,864 ) $ 119,039 158 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. DEBT AND COMMITMENTS (Continued) Company excluding Ford Credit Segment Public Unsecured Debt Securities Our public unsecured debt securities outstanding at December 31 were as follows (in millions): Aggregate Principal Amount Outstanding Title of Security 2021 2022 8 7/8% Debentures due January 15, 2022 $ 86 $ — 9.000 % Notes due April 22, 2025 1,058 — 7 1/8% Debentures due November 15, 2025 176 176 0.00 % Notes due March 15, 2026 2,300 2,300 7 1/2% Debentures due August 1, 2026 172 172 4.346 % Notes due December 8, 2026 1,500 1,500 6 5/8% Debentures due February 15, 2028 104 104 6 5/8% Debentures due October 1, 2028 (a) 446 446 6 3/8% Debentures due February 1, 2029 (a) 202 202 9.30 % Notes due March 1, 2030 294 294 9.625 % Notes due April 22, 2030 432 432 7.45 % GLOBLS due July 16, 2031 (a) 1,070 1,070 8.900 % Debentures due January 15, 2032 108 108 3.25 % Notes due February 12, 2032 2,500 2,500 9.95 % Debentures due February 15, 2032 4 4 6.10 % Notes due August 19, 2032 — 1,750 4.75 % Notes due January 15, 2043 2,000 2,000 7.75 % Debentures due June 15, 2043 73 73 7.40 % Debentures due November 1, 2046 398 398 5.291 % Notes due December 8, 2046 1,300 1,300 9.980 % Debentures due February 15, 2047 114 114 6.20 % Notes due June 1, 2059 750 750 6.00 % Notes due December 1, 2059 800 800 6.50 % Notes due August 15, 2062 — 600 7.70 % Debentures due May 15, 2097 142 142 Total public unsecured debt securities $ 16,029 $ 17,235 __________ (a) Listed on the Luxembourg Exchange and on the Singapore Exchange. 159 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. DEBT AND COMMITMENTS (Continued) Debt Extinguishment 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 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 In March 2021, we issued $ 2.3 billion aggregate principal amount of unsecured 0 % Convertible Senior Notes due 2026, including $ 300 million aggregate principal amount of such notes pursuant to the exercise in full of the overallotment option granted to the initial purchasers. The notes will not bear regular interest and the principal amount of the notes will not accrete. The total net proceeds from the offering, after deducting debt issuance costs, were approximately $ 2.267 billion. Each $ 1,000 principal amount of the notes will be convertible into 59.3505 shares of our Common Stock, which is equivalent to a conversion price of approximately $ 16.85 per share, subject to adjustment upon the occurrence of specified events. The notes are convertible, at the option of the noteholders, on or after December 15, 2025. Prior to December 15, 2025, the notes are convertible only under the following circumstances: • During any fiscal quarter commencing after the fiscal quarter ending on September 30, 2021 (and only during such fiscal quarter), if the last reported sale price of our Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price of the notes on each applicable trading day; • During the five business day period after any five consecutive trading day period in which the trading price per $ 1,000 principal amount of the notes for each day of that five consecutive trading day period was less than 98 % of the product of the last reported sale price of our Common Stock and the conversion rate of the notes on such trading day; • If we call any or all of the notes for redemption; or • Upon the occurrence of specific corporate events such as a change in control or certain beneficial distributions to common stockholders (as set forth in the indenture governing the notes). 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. 160 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. DEBT AND COMMITMENTS (Continued) We may not redeem the notes prior to March 20, 2024. On or after March 20, 2024, we may redeem all or any portion of the notes for cash equal to 100 % of the principal amount of the notes being redeemed if the last reported sale price of our Common Stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period. If we undergo a fundamental change (e.g., change of control), subject to certain conditions, holders of the notes may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100 % of the principal amount of the notes. 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 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 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 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 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. We made our final repayment to the DOE in June 2022. U.K. Export Finance Program 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 £ 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. exporters. 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. 161 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. DEBT AND COMMITMENTS (Continued) 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 corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility. The terms and conditions of the supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility. Ford Credit has been designated as a subsidiary borrower under the corporate credit facility and the 364-day revolving credit facility. Each of the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility include a covenant that requires us to provide guarantees from certain of our subsidiaries in the event that our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P. The following subsidiaries have provided unsecured guarantees to the lenders under the credit facilities: Ford Component Sales, LLC; Ford European Holdings Inc.; Ford Global Technologies, LLC; Ford Holdings LLC (the parent company of Ford Credit); Ford International Capital LLC; Ford Mexico Holdings LLC; Ford Motor Service Company; Ford Next LLC; 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. 162 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. DEBT AND COMMITMENTS (Continued) Asset-Backed Debt At December 31, 2022, the carrying value of our asset-backed debt was $ 56.4 billion. This secured debt is issued by Ford Credit and includes asset-backed securities used to fund operations and maintain liquidity. Assets securing the related debt issued as part of all our securitization transactions are included in our consolidated results and are based upon the legal transfer of the underlying assets in order to reflect legal ownership and the beneficial ownership of the debt holder. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt and do not have such recourse to us, except for the customary representation and warranty provisions or when we are counterparty to certain derivative transactions of the special purpose entities (“SPEs”). In addition, the cash flows generated by the assets are restricted only to pay such liabilities; Ford Credit retains the right to residual cash flows. See Note 24 for additional information. Although not contractually required, we regularly support our wholesale securitization programs by repurchasing receivables of a dealer from a SPE when the dealer’s performance is at risk, which transfers the corresponding risk of loss from the SPE to us. 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 $ 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. In certain instances, we have entered into derivative transactions with the counterparty to protect the counterparty from risks absorbed through derivative transactions with the SPEs. Derivative income/(expense) related to the derivative transactions that support Ford Credit’s securitization programs were $( 234 ) million, $ 41 million, and $ 466 million for the years ended December 31, 2020, 2021, and 2022, respectively. See Note 20 for additional information regarding the accounting for derivatives. Interest expense on securitization debt was $ 1.2 billion, $ 0.9 billion, and $ 1.3 billion in 2020, 2021, and 2022, respectively. 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): 2021 2022 Assets Cash and cash equivalents $ 3.8 $ 2.8 Finance receivables, net 50.6 61.6 Net investment in operating leases 7.5 12.5 Liabilities Debt (a) $ 45.4 $ 56.4 __________ (a) Debt is net of unamortized discount and issuance costs. Committed Credit Facilities At December 31, 2022, Ford Credit’s committed capacity totaled $ 39.7 billion, compared with $ 39.8 billion at December 31, 2021. 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. 163 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into highly effective derivative contracts: • Foreign currency exchange contracts, including forwards, that are used to manage foreign exchange exposure; • Commodity contracts, including forwards, that are used to manage commodity price risk; • Interest rate contracts, including swaps, that are used to manage the effects of interest rate fluctuations; and • Cross-currency interest rate swap contracts that are used to manage foreign currency and interest rate exposures on foreign-denominated debt. Our derivatives are over-the-counter customized derivative transactions and are not exchange-traded. We review our hedging program, derivative positions, and overall risk management strategy on a regular basis. Derivative Financial Instruments and Hedge Accounting. Derivative assets are reported in Other assets and derivative liabilities are reported in Payables and Other liabilities and deferred revenue. We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting. Cash Flow Hedges. We have designated certain forward contracts as cash flow hedges of forecasted transactions with exposure to foreign currency exchange and commodity price risks. Changes in the fair value of cash flow hedges are deferred in Accumulated other comprehensive income/(loss) and are recognized in Cost of sales when the hedged item affects earnings. Our policy is to de-designate foreign currency exchange cash flow hedges prior to the time forecasted transactions are recognized as assets or liabilities on our consolidated balance sheets and report subsequent changes in fair value through Cost of sales . If it becomes probable that the originally forecasted transaction will not occur, the related amount included in Accumulated other comprehensive income/(loss) is reclassified and recognized in earnings. The cash flows associated with hedges designated until maturity are reported in Net cash provided by/(used in) operating activities on our consolidated statement of cash flows. Our cash flow hedges mature within three years . Fair Value Hedges. Our Ford Credit segment uses derivatives to reduce the risk of changes in the fair value of debt. We have designated certain receive-fixed, pay-float interest rate and cross-currency interest rate swaps as fair value hedges of fixed-rate debt. The risk being hedged is the risk of changes in the fair value of the hedged debt attributable to changes in the benchmark interest rate and foreign exchange. We report the change in fair value of the hedged debt related to the change in benchmark interest rate in Ford Credit debt and Ford Credit interest, operating, and other expenses . We report the change in fair value of the hedged debt and hedging instrument related to foreign currency in Other income/(loss), net . Net interest settlements and accruals and fair value changes on hedging instruments due to the benchmark interest rate change are reported in Ford Credit interest, operating, and other expenses . The cash flows associated with fair value hedges are reported in Net cash provided by/(used in) operating activities on our consolidated statements of cash flows. When a fair value hedge is de-designated, or when the derivative is terminated before maturity, the fair value adjustment to the hedged debt continues to be reported as part of the carrying value of the debt and is recognized in Ford Credit interest, operating, and other expenses over its remaining life. Derivatives Not Designated as Hedging Instruments. For total Company excluding Ford Credit, we report changes in the fair value of derivatives not designated as hedging instruments through Cost of sales . 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. Our Ford Credit segment reports the gains/(losses) on derivatives not designated as hedging instruments in Other income/(loss), net . 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. 164 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) 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. Income Effect of Derivative Financial Instruments The gains/(losses), by hedge designation, reported in income for the years ended December 31 were as follows (in millions): 2020 2021 2022 Cash flow hedges Reclassified from AOCI to Cost of sales Foreign currency exchange contracts (a) $ ( 11 ) $ ( 412 ) $ ( 213 ) Commodity contracts (b) ( 55 ) 132 133 Fair value hedges Interest rate contracts Net interest settlements and accruals on hedging instruments 290 393 ( 45 ) Fair value changes on hedging instruments 986 ( 1,001 ) ( 1,875 ) Fair value changes on hedged debt ( 985 ) 957 1,893 Cross-currency interest rate swap contracts Net interest settlements and accruals on hedging instruments ( 2 ) ( 8 ) ( 27 ) Fair value changes on hedging instruments 38 ( 93 ) ( 111 ) Fair value changes on hedged debt ( 37 ) 82 113 Derivatives not designated as hedging instruments Foreign currency exchange contracts (c) ( 310 ) 375 ( 3 ) Cross-currency interest rate swap contracts 486 ( 507 ) ( 780 ) Interest rate contracts ( 100 ) ( 3 ) 390 Commodity contracts 47 170 ( 51 ) Total $ 347 $ 85 $ ( 576 ) __________ (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. 165 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) Balance Sheet Effect of Derivative Financial Instruments Derivative assets and liabilities are reported on our consolidated balance sheets at fair value and are presented on a gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts exchanged by the parties and are not a direct measure of our financial exposure. We also enter into master agreements with counterparties that may allow for netting of exposures in the event of default or breach of the counterparty agreement. Collateral represents cash received or paid under reciprocal arrangements that we have entered into with our derivative counterparties, which we do not use to offset our derivative assets and liabilities. The fair value of our derivative instruments and the associated notional amounts at December 31 were as follows (in millions): 2021 2022 Notional Fair Value of Assets Fair Value of Liabilities Notional Fair Value of Assets Fair Value of Liabilities Cash flow hedges Foreign currency exchange contracts $ 11,534 $ 74 $ 346 $ 11,536 $ 376 $ 52 Commodity contracts 931 182 5 990 16 56 Fair value hedges Interest rate contracts 23,893 544 274 16,883 — 1,653 Cross-currency interest rate swap contracts 885 — 49 885 — 161 Derivatives not designated as hedging instruments Foreign currency exchange contracts 28,463 281 198 20,851 162 285 Cross-currency interest rate swap contracts 6,533 117 61 6,635 15 653 Interest rate contracts 50,060 338 126 63,210 931 483 Commodity contracts 997 54 11 841 26 35 Total derivative financial instruments, gross (a) (b) $ 123,296 $ 1,590 $ 1,070 $ 121,831 $ 1,526 $ 3,378 Current portion $ 924 $ 535 $ 1,101 $ 1,656 Non-current portion 666 535 425 1,722 Total derivative financial instruments, gross $ 1,590 $ 1,070 $ 1,526 $ 3,378 __________ (a) At December 31, 2021 and 2022, we held collateral of $ 26 million and $ 210 million, respectively, and we posted collateral of $ 71 million and $ 201 million, respectively. (b) At December 31, 2021 and 2022, the fair value of assets and liabilities available for counterparty netting was $ 719 million and $ 451 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy. 166 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 21. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES We record costs associated with voluntary separations at the time of employee acceptance, unless the acceptance requires explicit approval by the Company. We record costs associated with involuntary separation programs when management has approved the plan for separation, the affected employees are identified, and it is unlikely that actions required to complete the separation plan will change significantly. Costs associated with benefits that are contingent on the employee continuing to provide service are accrued over the required service period. Company Excluding Ford Credit Employee separation actions and exit and disposal activities include employee separation costs, facility and other asset-related charges (e.g., impairment, accelerated depreciation), dealer and supplier payments, other statutory and contractual obligations, and other expenses, which are recorded in Cost of sales and Selling, administrative, and other expenses . Below are actions we have initiated, primarily related to the global redesign of our business: • 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. See Note 22 • 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): 2021 2022 Beginning balance $ 1,732 $ 950 Changes in accruals (a) 1,150 557 Payments ( 1,883 ) ( 883 ) Foreign currency translation ( 49 ) ( 36 ) Ending balance $ 950 $ 588 __________ (a) Excludes pension costs of $ 156 million and $ 57 million in 2021 and 2022, respectively . 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 of $ 39 million. In 2021, we recorded $ 739 million for accelerated depreciation and other non-cash items. 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. 167 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 21. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES (Continued) United Automobile, Aerospace, and Agricultural Implement Workers of America (“UAW”) Voluntary Separation Packages As agreed in the collective bargaining agreement ratified in November 2019, during the first quarter of 2020, we offered voluntary separation packages to our UAW hourly workforce who were eligible for normal or early retirement and recorded associated costs of $ 201 million in Cost of sales . All separations occurred during 2020. 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 . Ford Credit 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. NOTE 22. 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. (“Electriphi”). On June 18, 2021, we acquired Electriphi, a California-based provider of charging management and fleet monitoring software for electric vehicles. Assets acquired primarily include goodwill, reported in Other assets , and software, reported in Net property . The acquisition did not have a material impact on our financial statements. 168 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 22. ACQUISITIONS AND DIVESTITURES (Continued) Ford Lio Ho Motor Co., Ltd. (“FLH”). On April 1, 2021, we completed the sale of our controlling financial interest in FLH and its wholly owned subsidiary FLH Marketing & Service Limited, which resulted in deconsolidation of our Ford Taiwan subsidiary in the second quarter of 2021. FLH will continue to import, manufacture, and sell Ford-branded vehicles through at least 2025. We recognized a pre-tax gain of $ 161 million, which was reported in Other income/(loss) , net in the second quarter of 2021. Getrag Ford Transmissions GmbH (“GFT”). Prior to March 2021, Ford and Magna International Inc. (“Magna”) equally owned and operated the GFT joint venture for the purpose of developing, manufacturing, and selling transmissions. We accounted for our investment in GFT as an equity method investment. During the first quarter of 2021 and prior to our acquisition, GFT recorded restructuring charges, of which our share was $ 40 million. These charges are included in Equity in net income/(loss) of affiliated companies . On March 1, 2021, we acquired Magna’s shares in the restructured GFT. The purchase price, which was subject to post-closing revisions, was $ 275 million. The restructured GFT includes the Halewood, UK and Cologne, Germany transmission plants, but excludes the Bordeaux, France transmission plant and China interests acquired by Magna. We concluded with Magna that these businesses would be better served under separate ownership. The Sanand, India transmission plant continues under joint Ford/Magna ownership. As a result of the transaction, we consolidated the restructured GFT, remeasured our prior investment in GFT at its $ 275 million fair value, and recognized in 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. Argo AI, LLC (“Argo AI”). 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 In the first quarter of 2020, Ford Credit completed the sale of its wholly-owned subsidiary Forso Nordic AB, recognizing a pre-tax loss of $ 4 million, reported in Other income/(loss), net , and cash proceeds of $ 1.3 billion. 169 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 23. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) The changes in the balances for each component of accumulated other comprehensive income/(loss) attributable to Ford Motor Company for the years ended December 31 were as follows (in millions): 2020 2021 2022 Foreign currency translation Beginning balance $ ( 4,626 ) $ ( 5,526 ) $ ( 5,487 ) Gains/(Losses) on foreign currency translation ( 1,107 ) 200 ( 1,199 ) Less: Tax/(Tax benefit) (a) ( 206 ) 143 ( 2 ) Net gains/(losses) on foreign currency translation ( 901 ) 57 ( 1,197 ) (Gains)/Losses reclassified from AOCI to net income (b) 1 ( 18 ) 268 Other comprehensive income/(loss), net of tax (c) ( 900 ) 39 ( 929 ) Ending balance $ ( 5,526 ) $ ( 5,487 ) $ ( 6,416 ) Marketable securities Beginning balance $ 71 $ 156 $ ( 19 ) Gains/(Losses) on available for sale securities 155 ( 209 ) ( 576 ) Less: Tax/(Tax benefit) 37 ( 52 ) ( 139 ) Net gains/(losses) on available for sale securities 118 ( 157 ) ( 437 ) (Gains)/Losses reclassified from AOCI to net income ( 45 ) ( 23 ) 19 Less: Tax/(Tax benefit) ( 12 ) ( 5 ) 5 Net (gains)/losses reclassified from AOCI to net income ( 33 ) ( 18 ) 14 Other comprehensive income/(loss), net of tax 85 ( 175 ) ( 423 ) Ending balance $ 156 $ ( 19 ) $ ( 442 ) Derivative instruments Beginning balance $ ( 488 ) $ ( 266 ) $ ( 193 ) Gains/(Losses) on derivative instruments 207 ( 169 ) 346 Less: Tax/(Tax benefit) 39 ( 20 ) 83 Net gains/(losses) on derivative instruments 168 ( 149 ) 263 (Gains)/Losses reclassified from AOCI to net income 66 280 80 Less: Tax/(Tax benefit) 12 58 21 Net (gains)/losses reclassified from AOCI to net income (d) 54 222 59 Other comprehensive income/(loss), net of tax 222 73 322 Ending balance $ ( 266 ) $ ( 193 ) $ 129 Pension and other postretirement benefits Beginning balance $ ( 2,685 ) $ ( 2,658 ) $ ( 2,640 ) Prior service (costs)/credits arising during the period ( 21 ) — — Less: Tax/(Tax benefit) ( 6 ) — — Net prior service (costs)/credits arising during the period ( 15 ) — — Amortization and recognition of prior service costs/(credits) (e) 63 27 21 Less: Tax/(Tax benefit) 10 6 4 Net prior service costs/(credits) reclassified from AOCI to net income 53 21 17 Translation impact on non-U.S. plans ( 11 ) ( 3 ) 13 Other comprehensive income/(loss), net of tax 27 18 30 Ending balance $ ( 2,658 ) $ ( 2,640 ) $ ( 2,610 ) Total AOCI ending balance at December 31 $ ( 8,294 ) $ ( 8,339 ) $ ( 9,339 ) __________ (a) We do not recognize deferred taxes for a majority of the foreign currency translation gains and losses because we do not anticipate reversal in the foreseeable future. However, we have made elections to tax certain non-U.S. operations simultaneously in U.S. tax returns, and have recorded deferred taxes for temporary differences that will reverse, independent of repatriation plans, in U.S. tax returns. Taxes or tax benefits resulting from foreign currency translation of the temporary differences are recorded in Other comprehensive income/(loss), net of tax . (b) Reclassified to Other income/(loss), net. (c) Excludes a 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 . During the next twelve months we expect to reclassify existing net losses on cash flow hedges of $ 160 million. See Note 20 for additional information. (e) Amortization and recognition of prior service costs/(credits) is included in the computation of net periodic pension cost/(income). See Note 17 for additional information . 170 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 24. VARIABLE INTEREST ENTITIES A VIE is an entity that either (i) has insufficient equity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. We consolidate VIEs of which we are the primary beneficiary. We consider ourselves the primary beneficiary of a VIE when we have both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. Assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against our general assets. Liabilities recognized as a result of consolidating these VIEs do not represent additional claims on our general assets; 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 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. VIEs of Which We are Not the Primary Beneficiary Certain of our affiliates are VIEs in which we are not the primary beneficiary. Our maximum exposure to any potential losses associated with these unconsolidated affiliates is limited to our equity investments, accounts receivable, loans, and guarantees and was $ 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 Securitization Entities. Through Ford Credit, we securitize, transfer, and service financial assets associated with consumer finance receivables, operating leases, and wholesale loans. Our securitization transactions typically involve the legal transfer of financial assets to bankruptcy remote SPEs. We generally retain a portion of the economic interests in the asset-backed securitization transactions, which could be retained in the form of a portion of the senior interests, the subordinated interests, cash reserve accounts, residual interests, and servicing rights. The transfers of assets in our securitization transactions do not qualify for accounting sale treatment. In most cases, the bankruptcy remote SPEs meet the definition of VIEs for which we are the primary beneficiary and, therefore, are consolidated. We account for all securitization transactions as if they were secured financing and therefore the assets, liabilities, and related activity of these transactions are consolidated in our financial statements. See Note 19 for additional information on the accounting for asset-backed debt and the assets securing this debt. 171 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 25. COMMITMENTS AND CONTINGENCIES Commitments and contingencies primarily consist of guarantees and indemnifications, litigation and claims, and warranty and field service actions. Guarantees and Indemnifications Financial Guarantees. Financial guarantees and indemnifications are recorded at fair value at their inception. Subsequent to initial recognition, the guarantee liability is adjusted at each reporting period to reflect the current estimate of expected payments resulting from possible default events over the remaining life of the guarantee. The maximum potential payments for financial guarantees were $ 357 million and $ 518 million at December 31, 2021 and 2022, respectively. The carrying value of recorded liabilities related to financial guarantees was $ 36 million and $ 31 million at December 31, 2021 and 2022, respectively. Our financial guarantees consist of debt and lease obligations of certain joint ventures, as well as certain financial obligations of outside third parties, including suppliers, to support our business and economic growth. Expiration dates vary through 2037, and guarantees will terminate on payment and/or cancellation of the underlying obligation. A payment by us would be triggered by failure of the joint venture or other third party to fulfill its obligation covered by the guarantee. In some circumstances, we are entitled to recover from a third party amounts paid by us under the guarantee. Non-Financial Guarantees. Non-financial guarantees and indemnifications are recorded at fair value at their inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we will be required to perform under a guarantee or indemnity, the amount of probable payment is recorded. The maximum potential payments for non-financial guarantees were $ 453 million and $ 273 million at December 31, 2021 and 2022, respectively. 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 do not expect we will have to pay under the guarantee. In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction, such as the sale of a business. These indemnifications might include and are not limited to claims relating to any of the following: environmental, tax, and shareholder matters; intellectual property rights; power generation contracts; governmental regulations and employment-related matters; dealer, supplier, and other commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities generally would be triggered by a breach of contract claim brought by a counterparty, including a joint venture or alliance partner, or a third-party claim. While some of these indemnifications are limited in nature, many of them do not limit potential payment. Therefore, we are unable to estimate a maximum amount of future payments that could result from claims made under these unlimited indemnities. 172 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 25. COMMITMENTS AND CONTINGENCIES (Continued) Litigation and Claims Various legal actions, proceedings, and claims (generally, “matters”) are pending or may be instituted or asserted against us. These include, but are not limited to, matters arising out of alleged defects in our products; product warranties; governmental regulations relating to safety, emissions, and fuel economy or other matters; government incentives; tax matters, including trade and customs; alleged illegal acts resulting in fines or penalties; financial services; employment-related matters; dealer, supplier, and other contractual relationships; intellectual property rights; environmental matters; shareholder or investor matters; and financial reporting matters. Certain of the pending legal actions are, or purport to be, class actions. Some of the matters involve or may involve claims for compensatory, punitive, or antitrust or other treble damages in very large amounts, or demands for field service actions, environmental remediation programs, sanctions, loss of government incentives, assessments, or other relief, which, if granted, would require very large expenditures. The extent of our financial exposure to these matters is difficult to estimate. Many matters do not specify a dollar amount for damages, and many others specify only a jurisdictional minimum. To the extent an amount is asserted, our historical experience suggests that in most instances the amount asserted is not a reliable indicator of the ultimate outcome. We accrue for matters when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood that we will prevail, and the severity of any potential loss. We reevaluate and update our accruals as matters progress over time. For the majority of matters, which generally arise out of alleged defects in our products, we establish an accrual based on our extensive historical experience with similar matters. We do not believe there is a reasonably possible outcome materially in excess of our accrual for these matters. For the remaining matters, where our historical experience with similar matters is of more limited value (i.e., “non-pattern matters”), we evaluate the matters primarily based on the individual facts and circumstances. For non-pattern matters, we evaluate whether there is a reasonable possibility of a material loss in excess of any accrual that can be estimated. Our estimate of reasonably possible loss in excess of our accruals for all material matters currently reflects indirect tax, customs, and regulatory matters, for which we estimate the aggregate risk to be a range of up to about $ 2 billion. As noted, the litigation process is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. Our assessments are based on our knowledge and experience, but the ultimate outcome of any matter could require payment substantially in excess of the amount that we have accrued and/or disclosed. 173 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 25. COMMITMENTS AND CONTINGENCIES (Continued) Warranty and Field Service Actions We accrue the estimated cost of both base warranty coverages and field service actions at the time of sale. We establish our estimate of base warranty obligations using a patterned estimation model, using historical information regarding the nature, frequency, and average cost of claims for each vehicle line by model year. We establish our estimates of field service action obligations using a patterned estimation model, using historical information regarding the nature, frequency, severity, and average cost of claims for each model year. In addition, from time to time, we issue extended warranties at our expense, the estimated cost of which is accrued at the time of issuance. Warranty and field service action obligations are reported in Other liabilities and deferred revenue . We reevaluate the adequacy of our accruals on a regular basis. We recognize the benefit from a recovery of the costs associated with our warranty and field service actions when specifics of the recovery have been agreed with our supplier and the amount of recovery is virtually certain. Recoveries are reported in Trade and other receivables, net and Other assets. The estimate of our future warranty and field service action costs, net of estimated supplier recoveries, for the years ended December 31 was as follows (in millions): 2021 2022 Beginning balance $ 8,172 $ 8,451 Payments made during the period ( 3,952 ) ( 4,166 ) Changes in accrual related to warranties issued during the period 4,102 4,028 Changes in accrual related to pre-existing warranties 221 1,134 Foreign currency translation and other ( 92 ) ( 254 ) Ending balance $ 8,451 $ 9,193 Changes to our estimated costs are reported as changes in accrual related to pre-existing warranties in the table above. Our estimate of reasonably possible costs in excess of our accruals for material field service actions and customer satisfaction actions is a range of up to about $ 700 million in the aggregate. 174 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 26. SEGMENT INFORMATION We report segment information consistent with the way our chief operating decision maker (“CODM”) evaluates the operating results and performance of the Company. Accordingly, we analyze the results of our business through the following segments: Automotive, Mobility, and Ford Credit. 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 The Automotive segment primarily includes the sale of Ford and Lincoln vehicles, service parts, and accessories worldwide, together with the associated costs to develop, manufacture, distribute, and service the vehicles, parts, and accessories. This segment includes revenues and costs related to our electrification vehicle programs and enterprise connectivity. The segment includes the following regional business units: North America, South America, Europe, China (including Taiwan), and the International Markets Group. Mobility Segment 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 The Ford Credit segment is comprised of the Ford Credit business on a consolidated basis, which is primarily vehicle-related financing and leasing activities. Corporate Other Corporate Other primarily includes corporate governance expenses, interest income (excluding interest earned on our extended service contract portfolio that is included in our Automotive segment) and gains and losses from our cash, cash equivalents, and marketable securities (excluding gains and losses on investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, that are not allocated to operating segments. These include expenses related to setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. Corporate Other assets include: cash, cash equivalents, and marketable securities; tax related assets; other investments; and other assets managed centrally. Interest on Debt Interest on Debt is presented as a separate reconciling item and consists of interest expense on Company debt excluding Ford Credit. The underlying liability is reported in the Automotive segment and in Corporate Other. 175 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 26. SEGMENT INFORMATION (Continued) Special Items Special Items are presented as a separate reconciling item. They consist of (i) pension and OPEB remeasurement gains and losses, (ii) gains and losses on investments in equity securities, (iii) significant personnel expenses, dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix, and (iv) other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities. Our management ordinarily excludes these items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. We also report these special items separately to help investors track amounts related to these activities and to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results. 176 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 26. SEGMENT INFORMATION (Continued) Key financial information for the years ended or at December 31 was as follows (in millions): Automotive Mobility Ford Credit Corporate Other Interest on Debt Special Items Eliminations/Adjustments Total 2020 Revenues $ 115,894 $ 47 $ 11,203 $ — $ — $ — $ — $ 127,144 Income/(Loss) before income taxes 1,706 ( 1,052 ) 2,608 ( 726 ) ( 1,649 ) ( 2,003 ) (a) — ( 1,116 ) Depreciation and tooling amortization 5,209 8 3,269 52 — 236 — 8,774 Interest expense — — 3,402 — 1,649 — — 5,051 Investment-related interest income 158 — 94 200 — — — 452 Equity in net income/(loss) of affiliated companies 296 ( 133 ) 20 1 — ( 142 ) — 42 Cash outflow for capital spending 5,483 44 40 175 — — — 5,742 Total assets 62,741 3,459 157,637 45,410 — — ( 1,986 ) (b) 267,261 2021 Revenues $ 126,150 $ 118 $ 10,073 $ — $ — $ — $ — $ 136,341 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 Interest expense — — 2,790 — 1,803 — — 4,593 Investment-related interest income 112 — 38 104 — — — 254 Equity in net income/(loss) of affiliated companies 567 ( 258 ) 31 2 — ( 15 ) — 327 Cash outflow for capital spending 5,979 46 44 158 — — — 6,227 Total assets 68,969 3,325 134,428 51,730 — — ( 1,417 ) (b) 257,035 2022 Revenues $ 148,980 $ 99 $ 8,978 $ — $ — $ — $ — $ 158,057 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 Interest expense — — 3,334 — 1,259 — — 4,593 Investment-related interest income 75 — 178 386 — — — 639 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 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. 177 FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 26. SEGMENT INFORMATION (Continued) Geographic Information We report revenue on a “where-sold” basis, which reflects the revenue within the country in which the ultimate sale or financing is made to our external customer. Total Company revenues and long-lived assets, split geographically by our country of domicile (the United States) and other countries where our major subsidiaries are domiciled, for the years ended December 31 were as follows (in millions): 2020 2021 2022 Revenues Long-Lived Assets (a) Revenues Long-Lived Assets (a) Revenues Long-Lived Assets (a) United States $ 82,535 $ 45,360 $ 87,012 $ 44,271 $ 105,481 $ 41,925 Canada 8,711 5,111 11,153 5,773 12,590 5,739 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 All Other 22,232 6,296 22,892 5,462 23,482 4,371 Total Company $ 127,144 $ 65,034 $ 136,341 $ 63,500 $ 158,057 $ 60,037 __________ (a) Includes Net property and Net investment in operating leases from our consolidated balance sheets. 178 FORD MOTOR COMPANY AND SUBSIDIARIES Schedule II — Valuation and Qualifying Accounts (in millions) Description Balance at Beginning of Period Charged to Costs and Expenses Deductions Balance at End of Period For the Year Ended December 31, 2020 Allowances deducted from assets Credit losses $ 530 $ 840 $ 38 (a) $ 1,332 Doubtful receivables 49 28 20 (b) 57 Inventories (primarily service part obsolescence) 462 226 (c) — 688 Deferred tax assets 843 1,301 (d) 163 1,981 Total allowances deducted from assets $ 1,884 $ 2,395 $ 221 $ 4,058 For the Year Ended December 31, 2021 Allowances deducted from assets Credit losses $ 1,332 $ ( 306 ) $ 100 $ 926 Doubtful receivables 57 3 13 (b) 47 Inventories (primarily service part obsolescence) 688 36 (c) — 724 Deferred tax assets 1,981 ( 670 ) (d) 244 1,067 Total allowances deducted from assets $ 4,058 $ ( 937 ) $ 357 $ 2,764 For the Year Ended December 31, 2022 Allowances deducted from assets Credit losses $ 926 $ 50 $ 119 $ 857 Doubtful receivables 47 57 11 (b) 93 Inventories (primarily service part obsolescence) 724 ( 6 ) (c) — 718 Deferred tax assets 1,067 ( 242 ) (d) 3 822 Total allowances deducted from assets $ 2,764 $ ( 141 ) $ 133 $ 2,490 _________ (a) Finance receivables deemed to be uncollectible and other changes, principally amounts related to finance receivables sold and translation adjustments. For the year ended 2020, includes $( 252 ) million related to the adoption of ASU 2016-13 for cumulative pre-tax adjustments recorded to retained earnings as of January 1, 2020. (b) Accounts receivable deemed to be uncollectible as well as translation adjustments. (c) Net change in inventory allowances, including translation adjustments. (d) Change in valuation allowance on deferred tax assets including translation adjustments. 179