F filing — read by section

Item 1. Financial Statements

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

 NOTE 1. PRESENTATION 
 
 For purposes of this report, “Ford,” the “Company,” “we,” “our,” “us,” or similar references mean Ford Motor Company, our consolidated subsidiaries, and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise. We also make reference to Ford Motor Credit Company LLC, herein referenced to as Ford Credit. Our consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X. We reclassified certain prior year amounts in our consolidated financial statements to conform to the current year presentation. 
 
 In the opinion of management, these unaudited financial statements reflect a fair statement of our results of operations and financial condition for the periods, and at the dates, presented. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K Report”). 
 
 NOTE 2. NEW ACCOUNTING STANDARDS 
 
 Adoption of New Accounting Standards 
 
 Accounting Standards Update (“ASU”) 2022-02, Financial Instruments – Credit Losses, Troubled Debt Restructurings and Vintage Disclosures. Effective January 1, 2023, we adopted the new standard, which eliminates the troubled debt recognition and measurement guidance and requires disclosure of current period gross charge-offs by year of origination (vintage disclosure). Adoption of the new standard did not have a material impact to our consolidated financial statements or financial statement disclosures. 
 
 ASU 2022-04, Liabilities – Supplier Finance Programs, Disclosure of Supplier Finance Program Obligations. Effective January 1, 2023, we adopted the new standard, which requires that entities that use supplier finance programs disclose information about the nature and potential magnitude of the programs, activity during the period, and changes from period to period. 
 
 Financial institutions participate in a supply chain finance (“SCF”) program that enables our suppliers, at their sole discretion, to sell their Ford receivables (i.e., our payment obligations to the suppliers) to the financial institutions on a non-recourse basis in order to be paid earlier than our payment terms provide. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms, the amounts we pay, or our liquidity. We have no economic interest in a supplier’s decision to participate in the SCF program, and we do not provide any guarantees in connection with it. As of March 31, 2023, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions, reported in Payables , was $ 265 million. The amount settled through the SCF program during the first quarter of 2023 was $ 452 million. 
 
 We also adopted the following ASUs during 2023, none of which had a material impact to our consolidated financial statements or financial statement disclosures: 
 
 ASU Effective Date 
 2022-01 Derivatives and Hedging – Fair Value Hedging – Portfolio Layer Hedging 
 January 1, 2023 
 2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions January 1, 2023 
 2018-12 Targeted Improvements to the Accounting for Long Duration Contracts (and related amendments) January 1, 2023 

 Accounting Standards Issued But Not Yet Adopted 
 
 ASUs issued but not yet adopted were assessed and determined to be not applicable or are not expected to have a material impact on our consolidated financial statements or financial statement disclosures. 
 
 6 

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

 NOTE 3. REVENUE 
 
 The following tables disaggregate our revenue by major source for the periods ended March 31 (in millions): 
 
 First Quarter 2022 
 Company excluding Ford Credit Ford Credit Consolidated 
 Vehicles, parts, and accessories $ 30,991 $ — $ 30,991 
 Used vehicles 429 — 429 
 Services and other revenue (a) 722 19 741 
 Revenues from sales and services 
 32,142 19 32,161 
 
 Leasing income 53 1,211 1,264 
 Financing income — 1,040 1,040 
 Insurance income — 11 11 
 Total revenues $ 32,195 $ 2,281 $ 34,476 
 
 First Quarter 2023 
 Company excluding 
Ford Credit Ford Credit Consolidated 
 Vehicles, parts, and accessories $ 37,927 $ — $ 37,927 
 Used vehicles 469 — 469 
 Services and other revenue (a) 645 17 662 
 Revenues from sales and services 
 39,041 17 39,058 
 
 Leasing income 44 1,049 1,093 
 Financing income — 1,301 1,301 
 Insurance income — 22 22 
 Total revenues $ 39,085 $ 2,389 $ 41,474 
 
 __________ 
 (a) Includes extended service contract revenue. 
 
 The amount of consideration we receive and revenue we recognize on our vehicles, parts, and accessories varies with changes in return rights and marketing incentives we offer to our customers and their customers. 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. As a result of changes in our estimate of marketing incentives, we recorded an increase of $ 211 million in the first quarter of 2022 and a decrease of $ 178 million in the first quarter of 2023 related to revenue recognized in prior periods. 
 
 We had a balance of $ 4.4 billion and $ 4.5 billion of unearned revenue associated primarily with outstanding extended service contracts reported in Other liabilities and deferred revenue at December 31, 2022 and March 31, 2023, respectively . We expect to recognize approximately $ 1.1 billion of the unearned amount in the remainder of 2023, $ 1.2 billion in 2024, and $ 2.2 billion thereafter. We recognized $ 365 million and $ 380 million of unearned amounts from prior years as revenue during the first quarter of 2022 and 2023, respectively. 
 
 Amounts paid to dealers to obtain extended service contracts are deferred and recorded as Other assets . We had a balance of $ 315 million and $ 324 million in deferred costs as of December 31, 2022 and March 31, 2023, respectively. We recognized $ 22 million and $ 26 million of amortization during the first quarter of 2022 and 2023, respectively . 
 7 

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

 NOTE 4. OTHER INCOME/(LOSS) 
 
 The amounts included in Other income/(loss), net for the periods ended March 31 were as follows (in millions): 
 
 First Quarter 
 2022 2023 
 Net periodic pension and OPEB income/(cost), excluding service cost (Note 13) 
 $ 459 $ ( 165 ) 
 Investment-related interest income 61 348 
 Interest income/(expense) on income taxes 
 5 ( 4 ) 
 Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (a) ( 5,454 ) ( 51 ) 
 Gains/(Losses) on changes in investments in affiliates ( 125 ) 4 
 
 Royalty income 144 103 
 Other 60 ( 11 ) 
 Total $ ( 4,850 ) $ 224 

 __________ 
 (a) Includes a $ 5.4 billion loss and a $ 25 million loss on our Rivian investment in the first quarter of 2022 and 2023, respectively. 
 
 NOTE 5. INCOME TAXES 
 
 For interim tax reporting, we estimate one single effective tax rate for tax jurisdictions not subject to a valuation allowance, which is applied to the year-to-date ordinary income/(loss). Tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur. 
 
 NOTE 6. CAPITAL STOCK AND EARNINGS/(LOSS) PER SHARE 
 
 Earnings/(Loss) Per Share Attributable to Ford Motor Company Common and Class B Stock 
 
 Basic and diluted earnings/(loss) per share were calculated using the following (in millions): 
 
 First Quarter 
 2022 2023 
 Net income/(loss) attributable to Ford Motor Company $ ( 3,110 ) $ 1,757 
 
 Basic and Diluted Shares 
 Basic shares (average shares outstanding) 4,008 3,990 
 Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt (a) — 39 
 Diluted shares 4,008 4,029 

 __________ 
 (a) In the first quarter of 2022, there were 56 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect. 
 
 8 

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

 NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES 
 
 The fair values of cash, cash equivalents, and marketable securities measured at fair value on a recurring basis were as follows (in millions): 
 
 December 31, 2022 
 Fair Value 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 
 
 March 31, 2023 
 Fair Value Level Company excluding Ford Credit Ford Credit Consolidated 
 Cash and cash equivalents 
 U.S. government 1 $ 1,958 $ 1,183 $ 3,141 
 U.S. government agencies 2 2,320 1,045 3,365 
 Non-U.S. government and agencies 2 150 70 220 
 Other cash equivalents 2 — — — 
 Corporate debt 2 68 439 507 
 Total marketable securities classified as cash equivalents 
 4,496 2,737 7,233 
 Cash, time deposits, and money market funds 8,333 6,578 14,911 
 Total cash and cash equivalents $ 12,829 $ 9,315 $ 22,144 
 
 Marketable securities 
 U.S. government 1 $ 4,605 $ 173 $ 4,778 
 U.S. government agencies 2 2,300 270 2,570 
 Non-U.S. government and agencies 2 2,245 548 2,793 
 Corporate debt 2 6,212 421 6,633 
 Equities (a) 1 182 — 182 
 Other marketable securities 2 250 163 413 
 Total marketable securities $ 15,794 $ 1,575 $ 17,369 
 
 Restricted cash $ 82 $ 133 $ 215 
 
 __________ 
 (a) Includes $ 194 million and $ 147 million of Rivian common shares valued at $ 18.43 and $ 15.48 per share as of December 31, 2022 and March 31, 2023, respectively. In the first quarter of 2023, we sold 1 million of our Rivian common shares for about $ 21.6 million in total proceeds. Net unrealized gains/losses recognized during full year 2022 and the first quarter of 2023 on all equity securities held at December 31, 2022 and March 31, 2023 were a $ 968 million loss and a $ 22 million loss, respectively. 
 9 

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

 NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued) 
 
 The cash equivalents and marketable securities accounted for as available-for-sale (“AFS”) securities were as follows (in millions): 
 
 December 31, 2022 
 Fair Value of Securities with
Contractual Maturities 
 Amortized 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 
 
 March 31, 2023 
 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 $ 4,557 $ 8 $ ( 109 ) $ 4,456 $ 1,058 $ 3,387 $ 11 
 U.S. government agencies 2,338 — ( 94 ) 2,244 1,122 1,104 18 
 Non-U.S. government and agencies 2,320 2 ( 105 ) 2,217 407 1,798 12 
 Corporate debt 6,399 13 ( 157 ) 6,255 2,007 4,247 1 
 Other marketable securities 233 — ( 7 ) 226 — 170 56 
 Total 
 $ 15,847 $ 23 $ ( 472 ) $ 15,398 $ 4,594 $ 10,706 $ 98 

 Sales proceeds and gross realized gains/losses from the sale of AFS securities for the periods ended March 31 were as follows (in millions): 
 
 First Quarter 
 2022 2023 
 Company excluding Ford Credit 
 Sales proceeds $ 4,004 $ 1,163 
 Gross realized gains 6 1 
 Gross realized losses 6 12 

 10 

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

 NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued) 
 
 The present fair values and gross unrealized losses for cash equivalents and marketable securities accounted for as AFS securities that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in millions): 
 
 December 31, 2022 
 Less than 1 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 ) 
 
 March 31, 2023 
 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 $ 1,825 $ ( 22 ) $ 1,684 $ ( 87 ) $ 3,509 $ ( 109 ) 
 U.S. government agencies 465 ( 3 ) 1,658 ( 91 ) 2,123 ( 94 ) 
 Non-U.S. government and agencies 276 ( 4 ) 1,685 ( 101 ) 1,961 ( 105 ) 
 Corporate debt 3,152 ( 50 ) 2,012 ( 107 ) 5,164 ( 157 ) 
 Other marketable securities 107 ( 3 ) 101 ( 4 ) 208 ( 7 ) 
 Total 
 $ 5,825 $ ( 82 ) $ 7,140 $ ( 390 ) $ 12,965 $ ( 472 ) 

 We determine credit losses on AFS debt securities using the specific identification method. During the first quarter of 2023, we did not recognize any credit loss. The unrealized losses on securities are due to changes in interest rates and market liquidity. 
 
 Cash, Cash Equivalents, and Restricted Cash 
 
 Cash, cash equivalents, and restricted cash, as reported in the consolidated statements of cash flows, were as follows (in millions): 
 
 December 31,
2022 March 31,
2023 
 Cash and cash equivalents $ 25,134 $ 22,144 
 Restricted cash (a) 206 215 
 
 Total cash, cash equivalents, and restricted cash $ 25,340 $ 22,359 

 __________ 
 (a) Included in Other assets in the non-current assets section of our consolidated balance sheets. 
 
 11 

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

 NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES 
 
 Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios. The receivables are generally secured by the vehicles, inventory, or other property being financed. 
 
 Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses. 
 
 For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date. 
 
 Ford Credit finance receivables, net were as follows (in millions): 
 
 December 31,
2022 March 31,
2023 
 Consumer 
 Retail installment contracts, gross $ 66,954 $ 68,259 
 Finance leases, gross 6,765 6,990 
 Retail financing, gross 73,719 75,249 
 Unearned interest supplements ( 2,305 ) ( 2,435 ) 
 Consumer finance receivables 71,414 72,814 
 Non-Consumer 
 Dealer financing 18,054 19,490 
 Non-Consumer finance receivables 18,054 19,490 
 Total recorded investment $ 89,468 $ 92,304 
 
 Recorded investment in finance receivables $ 89,468 $ 92,304 
 Allowance for credit losses ( 845 ) ( 870 ) 
 Total finance receivables, net $ 88,623 $ 91,434 
 
 Current portion $ 38,720 $ 40,350 
 Non-current portion 49,903 51,084 
 Total finance receivables, net $ 88,623 $ 91,434 
 
 Net finance receivables subject to fair value (a) $ 82,200 $ 84,812 
 Fair value (b) 79,521 82,966 

 __________ 
 (a) Net finance receivables subject to fair value exclude finance leases. 
 (b) The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy. 
 
 Ford Credit’s finance leases are comprised of sales-type and direct financing leases. Financing revenue from finance leases for the first quarter of 2022 and 2023 was $ 77 million and $ 83 million, respectively, and is included in Ford Credit revenues on our consolidated income statements. 
 
 At December 31, 2022 and March 31, 2023, accrued interest was $ 187 million and $ 198 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, 2022 and March 31, 2023, were consumer receivables of $ 43.9 billion and $ 43.9 billion, respectively, and non-consumer receivables of $ 18.2 billion and $ 17.6 billion, respectively, (including Ford Blue, Ford Model e, and Ford Pro receivables sold to Ford Credit, which we report in Trade and other receivables ) that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions. 
 12 

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

 NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) 
 
 Credit Quality 
 
 Consumer Portfolio. Credit quality ratings for consumer receivables are based on Ford Credit’s aging analysis. Consumer receivables credit quality ratings are as follows: 
 
 • Pass – current to 60 days past due; 
 • Special Mention – 61 to 120 days past due and in intensified collection status; and 
 • Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral less costs to sell. 
 
 The credit quality analysis of consumer receivables at December 31, 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 % 

 The credit quality analysis of consumer receivables at March 31, 2023 was as follows (in millions): 
 
 Amortized Cost Basis by Origination Year 
 Prior to 2019 2019 2020 2021 2022 2023 Total Percent 
 Consumer 
 31 - 60 days past due $ 75 $ 72 $ 149 $ 135 $ 150 $ 10 $ 591 0.8 % 
 61 - 120 days past due 11 13 28 30 36 1 119 0.2 
 Greater than 120 days past due 12 4 8 10 6 — 40 — 
 Total past due 98 89 185 175 192 11 750 1.0 
 Current 2,574 5,065 12,184 16,542 26,921 8,778 72,064 99.0 
 Total $ 2,672 $ 5,154 $ 12,369 $ 16,717 $ 27,113 $ 8,789 $ 72,814 100.0 % 
 
 Gross charge-offs $ 17 $ 12 $ 23 $ 22 $ 22 $ — $ 96 

 Non-Consumer Portfolio. The credit quality of dealer financing receivables is evaluated based on Ford Credit’s internal dealer risk rating analysis. Ford Credit uses a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance data to identify key factors about a dealer that are considered most significant in predicting a dealer’s ability to meet its financial obligations. Ford Credit also considers numerous other financial and qualitative factors of the dealer’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Ford Credit and other creditors. 
 
 Dealers are assigned to one of four groups according to risk ratings as follows: 
 
 • Group I – strong to superior financial metrics; 
 • Group II – fair to favorable financial metrics; 
 • Group III – marginal to weak financial metrics; and 
 • Group IV – poor financial metrics, including dealers classified as uncollectible. 
 13 

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

 NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) 
 
 The credit quality analysis of dealer financing receivables at December 31, 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. 
 
 The credit quality analysis of dealer financing receivables at March 31, 2023 was as follows (in millions): 
 
 Amortized Cost Basis by Origination Year Wholesale Loans 
 Dealer Loans 
 Prior to 2019 2019 2020 2021 2022 2023 Total Total Percent 
 Group I $ 516 $ 33 $ 67 $ 179 $ 83 $ 189 $ 1,067 $ 15,951 $ 17,018 87.3 % 
 Group II 3 — 2 2 1 51 59 2,115 2,174 11.1 
 Group III — — — — — 10 10 255 265 1.4 
 Group IV — 1 — — — 3 4 29 33 0.2 
 Total (a) $ 519 $ 34 $ 69 $ 181 $ 84 $ 253 $ 1,140 $ 18,350 $ 19,490 100.0 % 
 
 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 

 __________ 
 (a) Total past due dealer financing receivables at March 31, 2023 were $ 7 million. 
 
 Non-Accrual of Revenue. The accrual of financing revenue is discontinued at the time a receivable is determined to be uncollectible or when it is 90 days past due. Accounts may be restored to accrual status only when a customer settles all past-due deficiency balances and future payments are reasonably assured. For receivables in non-accrual status, subsequent financing revenue is recognized only to the extent a payment is received. Payments are generally applied first to outstanding interest and then to the unpaid principal balance. 
 
 Loan Modifications. Consumer and non-consumer receivables that have a modified interest rate and/or a term extension (including receivables that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code) are typically considered to be loan modifications. Ford Credit does not grant modifications to the principal balance of the receivables. If a receivable is modified in a reorganization proceeding, all payment requirements of the reorganization plan need to be met before remaining balances are forgiven. 
 
 The use of interest rate modifications and term extensions helps Ford Credit mitigate financial loss. Term extensions may assist in cases where Ford Credit believes the customer will recover from short-term financial difficulty and resume regularly scheduled payments. The effect of most loan modifications made to borrowers experiencing financial difficulty is included in the historical trends used to measure the allowance for credit losses. A loan modification that improves the delinquency status of a borrower reduces the probability of default, which results in a lower allowance for credit losses. At March 31, 2023, an insignificant portion of Ford Credit's total finance receivables portfolio had been granted a loan modification, and these modifications are generally treated as a continuation of the existing loan. 
 
 14 

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

 NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) 
 
 Allowance for Credit Losses 
 
 The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in finance receivables as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly. 
 
 Adjustments to the allowance for credit losses are made by recording charges to Ford Credit interest, operating, and other expenses on our consolidated income statements. The uncollectible portion of a finance receivable is charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the customer or borrower, the value of the collateral, recourse to guarantors, and other factors . 
 
 Charge-offs on finance receivables include uncollected amounts related to principal, interest, late fees, and other allowable charges. Recoveries on finance receivables previously charged off as uncollectible are credited to the allowance for credit losses. In the event Ford Credit repossesses the collateral, the receivable is charged off and the collateral is recorded at its estimated fair value less costs to sell and reported in Other assets on our consolidated balance sheets. 
 
 An analysis of the allowance for credit losses related to finance receivables for the periods ended March 31 was as follows (in millions): 
 
 First Quarter 2022 
 Consumer Non-Consumer Total 
 Allowance for credit losses 
 Beginning balance $ 903 $ 22 $ 925 
 Charge-offs ( 62 ) — ( 62 ) 
 Recoveries 43 1 44 
 Provision for/(Benefit from) credit losses ( 59 ) ( 5 ) ( 64 ) 
 Other (a) 1 1 2 
 Ending balance $ 826 $ 19 $ 845 

 First Quarter 2023 
 Consumer Non-Consumer Total 
 Allowance for credit losses 
 Beginning balance $ 838 $ 7 $ 845 
 Charge-offs ( 96 ) — ( 96 ) 
 Recoveries 38 1 39 
 Provision for/(Benefit from) credit losses 78 ( 1 ) 77 
 Other (a) 5 — 5 
 Ending balance $ 863 $ 7 $ 870 

 __________ 
 (a) Primarily represents amounts related to translation adjustments. 
 
 During the first quarter of 2023, the allowance for credit losses increased $ 25 million, driven by an increase in Ford Credit finance receivables. Net charge-offs increased from a year ago reflecting normalization from extraordinarily low levels. 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. 
 15 

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

 NOTE 9. INVENTORIES 
 
 Inventories were as follows (in millions): 
 
 December 31,
2022 March 31,
2023 
 Raw materials, work-in-process, and supplies $ 5,997 $ 6,464 
 Finished products 8,083 9,748 
 Total inventories $ 14,080 $ 16,212 

 Our finished product inventory at March 31, 2023 was higher than at December 31, 2022, reflecting higher in-transit and in-plant inventory. 
 
 NOTE 10. OTHER INVESTMENTS 
 
 We have investments in entities not accounted for under the equity method for which fair values are not readily available. We record these investments at cost (less impairment, if any), adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We report the carrying value of these investments in Other assets in the non-current assets section of our consolidated balance sheets. These investments were $ 384 million and $ 350 million at December 31, 2022 and March 31, 2023, respectively. The cumulative net unrealized gain from adjustments related to Other Investments held at March 31, 2023 was $ 101 million. 
 
 NOTE 11. GOODWILL 
 
 The net carrying amount of goodwill was $ 603 million and $ 609 million at December 31, 2022 and March 31, 2023, respectively, and is reported in Other assets in the non-current assets section of our consolidated balance sheets. 
 
 16 

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

 NOTE 12. OTHER LIABILITIES AND DEFERRED REVENUE 
 
 Other liabilities and deferred revenue were as follows (in millions): 
 
 December 31,
2022 March 31,
2023 
 Current 
 Dealer and dealers’ customer allowances and claims $ 9,219 $ 9,881 
 Deferred revenue 2,404 2,582 
 Employee benefit plans 2,020 1,505 
 Accrued interest 935 938 
 Operating lease liabilities 404 415 
 OPEB (a) 329 328 
 Pension (a) 196 198 
 Other (b) 5,590 5,980 
 Total current other liabilities and deferred revenue $ 21,097 $ 21,827 
 Non-current 
 Dealer and dealers’ customer allowances and claims $ 6,095 $ 6,538 
 Pension (a) 5,673 5,835 
 OPEB (a) 4,130 4,069 
 Deferred revenue 4,883 4,835 
 Operating lease liabilities 1,101 1,201 
 Employee benefit plans 834 829 
 Other (b) 2,781 2,601 
 Total non-current other liabilities and deferred revenue $ 25,497 $ 25,908 

 __________ 
 (a) Balances at March 31, 2023 reflect pension and OPEB liabilities at December 31, 2022, updated for: service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. The discount rate and rate of expected return assumptions are unchanged from year-end 2022. Included in Other assets are pension assets of $ 5.7 billion and $ 5.8 billion at December 31, 2022 and March 31, 2023, respectively. 
 (b) Includes current derivative liabilities of $ 1.3 billion at both December 31, 2022 and March 31, 2023. Includes non-current derivative liabilities of $ 1.7 billion and $ 1.2 billion at December 31, 2022 and March 31, 2023, respectively (see Note 15). 
 
 17 

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

 NOTE 13. RETIREMENT BENEFITS 
 
 Defined Benefit Plans - Expense 
 
 The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the periods ended March 31 were as follows (in millions): 
 
 First Quarter 
 Pension Benefits 
 U.S. Plans Non-U.S. Plans Worldwide OPEB 
 2022 2023 2022 2023 2022 2023 
 Service cost $ 125 $ 72 $ 111 $ 61 $ 10 $ 5 
 Interest cost 263 408 134 237 37 58 
 Expected return on assets ( 642 ) ( 486 ) ( 268 ) ( 219 ) — — 
 Amortization of prior service costs/(credits) 
 — — 7 5 ( 1 ) 1 
 Net remeasurement (gain)/loss — 113 — — — — 
 Separation programs/other 4 2 7 4 — — 
 Settlements and curtailments 
 — 42 — — — — 
 Net periodic benefit cost/(income) 
 $ ( 250 ) $ 151 $ ( 9 ) $ 88 $ 46 $ 64 
 
 The service cost component is included in Cost of sales and Selling, administrative, and other expenses . Other components of net periodic benefit cost/(income) are included in Other income/(loss), net on our consolidated income statements. 
 
 In the first quarter of 2023, we paid lump sums for one of our U.S. pension plans, which resulted in a remeasurement and settlement expenses of $ 113 million and $ 42 million, respectively. 
 
 Pension Plan Contributions 
 
 During 2023, we continue to 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. In the first quarter of 2023, we contributed $ 125 million to our global funded pension plans and made $ 99 million of benefit payments to participants in unfunded plans. 
 18 

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

 NOTE 14. DEBT 
 The carrying value of Company debt excluding Ford Credit and Ford Credit debt was as follows (in millions): 
 
 December 31,
2022 March 31,
2023 
 Company excluding Ford Credit 
 Debt payable within one year 
 Short-term $ 359 $ 186 
 Long-term payable within one year 
 Other debt 372 336 
 Unamortized (discount)/premium ( 1 ) — 
 Total debt payable within one year 730 522 
 Long-term debt payable after one year 
 Public unsecured debt securities 14,935 14,935 
 Convertible notes (a) 2,300 2,300 
 U.K. Export Finance Program 1,654 1,702 
 Other debt 682 616 
 Unamortized (discount)/premium ( 180 ) ( 176 ) 
 Unamortized issuance costs ( 191 ) ( 187 ) 
 Total long-term debt payable after one year 19,200 19,190 
 Total Company excluding Ford Credit $ 19,930 $ 19,712 
 Fair value of Company debt excluding Ford Credit (b) $ 18,557 $ 19,046 
 Ford Credit 
 Debt payable within one year 
 Short-term $ 19,624 $ 17,890 
 Long-term payable within one year 
 Unsecured debt 7,980 10,128 
 Asset-backed debt 21,839 19,502 
 Unamortized (discount)/premium — — 
 Unamortized issuance costs 
 ( 13 ) ( 16 ) 
 Fair value adjustments (c) 4 24 
 Total debt payable within one year 49,434 47,528 
 Long-term debt payable after one year 
 Unsecured debt 39,620 41,237 
 Asset-backed debt 31,840 32,449 
 Unamortized (discount)/premium 23 17 
 Unamortized issuance costs 
 ( 184 ) ( 209 ) 
 Fair value adjustments (c) ( 1,694 ) ( 1,442 ) 
 Total long-term debt payable after one year 69,605 72,052 
 Total Ford Credit $ 119,039 $ 119,580 
 Fair value of Ford Credit debt (b) $ 117,214 $ 118,688 

 __________ 
 (a) As of March 31, 2023, each $ 1,000 principal amount of the notes will be convertible into 63.0921 shares of our Common Stock, which is equivalent to a conversion price of approximately $ 15.85 per share. We recognized issuance cost amortization of $ 2 million during both the first quarter of 2022 and 2023. 
 (b) At December 31, 2022 and March 31, 2023, the fair value of debt includes $ 359 million and $ 186 million of Company excluding Ford Credit short-term debt, respectively, and $ 16.9 billion and $ 14.8 billion of Ford Credit short-term debt, respectively, carried at cost, which approximates fair value. All other debt is categorized within Level 2 of the fair value hierarchy. 
 (c) These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $ 31 million and $( 31 ) million at December 31, 2022 and March 31, 2023, respectively. The carrying value of hedged debt was $ 33.3 billion and $ 36.5 billion at December 31, 2022 and March 31, 2023, respectively. 
 
 19 

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

 NOTE 15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES 
 
 In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into highly effective derivative contracts. We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting. 
 
 Income Effect of Derivative Financial Instruments 
 
 The gains/(losses), by hedge designation, reported in income for the periods ended March 31 were as follows (in millions): 
 
 First Quarter 
 Cash flow hedges 
 2022 2023 
 Reclassified from AOCI to Cost of sales 
 Foreign currency exchange contracts (a) 
 $ ( 90 ) $ 26 
 Commodity contracts (b) 
 58 ( 9 ) 
 Fair value hedges 
 Interest rate contracts 
 Net interest settlements and accruals on hedging instruments 
 76 ( 140 ) 
 Fair value changes on hedging instruments ( 986 ) 250 
 Fair value changes on hedged debt 991 ( 279 ) 
 Cross-currency interest rate swap contracts 
 Net interest settlements and accruals on hedging instruments 
 ( 3 ) ( 14 ) 
 Fair value changes on hedging instruments ( 37 ) 22 
 Fair value changes on hedged debt 41 ( 19 ) 
 Derivatives not designated as hedging instruments 
 
 Foreign currency exchange contracts (c) ( 46 ) ( 3 ) 
 Cross-currency interest rate swap contracts 
 ( 227 ) 85 
 Interest rate contracts 123 ( 12 ) 
 Commodity contracts 109 ( 11 ) 
 Total $ 9 $ ( 104 ) 

 __________ 
 (a) For the first quarter of 2022 and 2023, a $ 128 million loss and a $ 63 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax . 
 (b) For the first quarter of 2022 and 2023, a $ 284 million gain and an $ 8 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax . 
 (c) For the first quarter of 2022 and 2023, a $ 44 million loss and a $ 19 million gain, respectively, were reported in Cost of sales , and a $ 2 million loss and a $ 22 million loss, respectively, were reported in Other income/(loss), net . 
 20 

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

 NOTE 15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) 
 
 Balance Sheet Effect of Derivative Financial Instruments 
 
 Derivative assets and liabilities are reported on our consolidated balance sheets at fair value and are presented on a gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts exchanged by the parties and are not a direct measure of our financial exposure. We also enter into master agreements with counterparties that may allow for netting of exposures in the event of default or breach of the counterparty agreement. Collateral represents cash received or paid under reciprocal arrangements that we have entered into with our derivative counterparties, which we do not use to offset our derivative assets and liabilities. 
 
 The fair value of our derivative instruments and the associated notional amounts were as follows (in millions): 
 
 December 31, 2022 March 31, 2023 
 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 
 $ 11,536 $ 376 $ 52 $ 16,998 $ 316 $ 102 
 Commodity contracts 990 16 56 1,012 15 40 
 Fair value hedges 
 Interest rate contracts 16,883 — 1,653 19,042 15 1,302 
 Cross-currency interest rate swap contracts 
 885 — 161 1,421 4 135 
 Derivatives not designated as hedging instruments 
 
 Foreign currency exchange contracts 20,851 162 285 19,718 136 164 
 Cross-currency interest rate swap contracts 
 6,635 15 653 6,115 38 528 
 Interest rate contracts 63,210 931 483 57,312 753 397 
 Commodity contracts 841 26 35 949 32 39 
 Total derivative financial instruments, gross (a) (b) 
 $ 121,831 $ 1,526 $ 3,378 $ 122,567 $ 1,309 $ 2,707 
 
 Current portion 
 $ 1,101 $ 1,656 $ 813 $ 1,462 
 Non-current portion 
 425 1,722 496 1,245 
 Total derivative financial instruments, gross 
 $ 1,526 $ 3,378 $ 1,309 $ 2,707 

 __________ 
 (a) At December 31, 2022 and March 31, 2023, we held collateral of $ 210 million and $ 180 million, respectively, and we posted collateral of $ 201 million and $ 203 million, respectively. 
 (b) At December 31, 2022 and March 31, 2023, the fair value of assets and liabilities available for counterparty netting was $ 451 million and $ 438 million, respectively . All derivatives are categorized within Level 2 of the fair value hierarchy. 
 
 21 

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

 NOTE 16. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES 
 
 We generally record costs associated with voluntary separations at the time of employee acceptance. We record costs associated with involuntary separation programs when management has approved the plan for separation, the affected employees are identified, and it is unlikely that actions required to complete the separation plan will change significantly. Costs associated with benefits that are contingent on the employee continuing to provide service are accrued over the required service period. 
 
 Company Excluding Ford Credit 
 
 Employee separation actions and exit and disposal activities include employee separation costs, facility and other asset-related charges (e.g., impairment, accelerated depreciation), dealer and supplier payments, other statutory and contractual obligations, and other expenses, which are recorded in Cost of sales and Selling, administrative, and other expenses. Below are actions that have been initiated: 
 
 • Brazil. Exited manufacturing operations in 2021 resulting in the closure of facilities in Camaçari, Taubaté, and Troller 
 • India. Ceased vehicle manufacturing in Sanand in the fourth quarter of 2021 and ceased manufacturing in Chennai in the third quarter of 2022. A sale of the Sanand vehicle assembly and powertrain plants was completed in the first quarter of 2023 (see Note 17) 
 • Spain. Ceased production of the Mondeo at the Valencia plant in the first quarter of 2022 
 • China. Ceased development of certain product programs in the first quarter of 2023 
 
 In addition, we are continuing to reduce our global workforce and take other restructuring actions, including the separation of salaried workers, primarily in Europe, as announced in the first quarter of 2023. 
 
 The following table summarizes the activities for the periods ended March 31, which are recorded in Other liabilities and deferred revenue (in millions): 
 
 First Quarter 
 2022 2023 
 Beginning balance $ 950 $ 588 
 Changes in accruals (a) 66 629 
 Payments ( 205 ) ( 83 ) 
 Foreign currency translation 18 ( 8 ) 
 Ending balance $ 829 $ 1,126 

 __________ 
 (a) Excludes pension costs of $ 7 million and $ 4 million in the first quarter of 2022 and 2023, respectively. 
 
 We recorded $ 23 million and $ 48 million in the first quarter of 2022 and 2023, respectively, for accelerated depreciation and other non-cash items. In addition, we recognized a $ 32 million pre-tax net gain on sale of assets in the first quarter of 2022. 
 
 We recorded costs of $ 64 million and $ 681 million in the first quarter of 2022 and 2023, respectively, related to the actions above. We estimate that we will incur total charges in 2023 that range between $ 1.5 billion and $ 2 billion related to such actions, primarily attributable to employee separations and supplier settlements. We continue to review our global businesses and may take additional restructuring actions where a path to sustained profitability is not feasible when considering the capital allocation required for those businesses. 
 
 Ford Credit 
 
 Accumulated foreign currency translation losses included in Accumulated other comprehensive income/(loss) at March 31, 2023 of $ 223 million are associated with Ford Credit’s investments in Brazil and Argentina that have ceased operations. We expect to reclassify these losses to income upon substantially complete liquidation of Ford Credit’s investments, which may occur over multiple reporting periods. In the first quarter of 2022, we reclassified losses of $ 119 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. 
 22 

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

 NOTE 17. ACQUISITIONS AND DIVESTITURES 
 
 Company Excluding Ford Credit 
 
 Argo AI, LLC (“Argo AI”). In October 2022, Ford and Volkswagen AG (“VW”), who held equal interests that together comprised a majority ownership of Argo AI, initiated the process of exiting the joint development of highly automated driving technology (L4) through Argo AI. Argo AI is in the process of winding down operations. The carrying value of our equity method investment in Argo AI was $ 0 at both December 31, 2022 and March 31, 2023; in addition, we had $ 65 million and $ 4 million at December 31, 2022 and March 31, 2023, respectively, in Other liabilities and deferred revenue related to our funding commitment for our share of Argo AI’s expenses previously incurred. 
 
 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 included the land, buildings, and other fixed assets (excluding the powertrain machinery and equipment) for the plants. We recognized, in Cost of sales , pre-tax impairment charges of $ 32 million in the third quarter of 2022 to adjust the carrying value of the assets to fair value less costs to sell. We determined fair value using the market approach, based on the negotiated value of the assets. Accordingly, we reported $ 88 million of fixed assets for this operation as held for sale for the period ended December 31, 2022, which we report in Other assets in the current assets section of our consolidated balance sheets. 
 
 On January 10, 2023, we completed the sale of the plants to Tata. Ford will continue to operate the powertrain facility by leasing back the associated land and building. As a result of the sale transaction, we derecognized the fixed assets and recognized the powertrain facility operating lease right-of-use asset and related lease liability in the first quarter of 2023. The fair value of the cash consideration received approximated the carrying value of the fixed assets at the time of sale. 
 
 Ford Romania S.R.L. (“Ford Romania”). On July 1, 2022, we completed the sale of Ford Romania, our wholly-owned Romanian manufacturing subsidiary, to Ford Otosan, a joint venture in which Ford has a 41 % ownership share. The transaction resulted in deconsolidation of our Ford Romania subsidiary in the third quarter of 2022. The fair value of consideration received, consisting of cash and a note receivable, approximated the carrying value of Ford Romania at the time of sale. The Ford Romania plant in Craiova, Romania will continue to manufacture Ford-branded vehicles for Ford and Ford Otosan. Ford’s portion of the output is expected to be significant; as a result, at the time of the sale there were about $ 100 million of assets, such as embedded leases, and related liabilities that continue to be reported as part of our financial statements. 
 
 Skinny Labs Inc., dba Spin (“Spin”). On April 1, 2022, we completed the sale of Spin, our wholly-owned micro-mobility provider, to TIER Mobility SE, a German-based micro-mobility provider, which resulted in the deconsolidation of our Spin subsidiary in the second quarter of 2022. In exchange for our shares of Spin, we received preferred equity in TIER Mobility SE, 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. 
 
 23 

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

 NOTE 18. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) 
 
 The changes in the balances for each component of accumulated other comprehensive income/(loss) attributable to Ford Motor Company for the periods ended March 31 were as follows (in millions): 
 
 First Quarter 
 2022 2023 
 Foreign currency translation 
 Beginning balance $ ( 5,487 ) $ ( 6,416 ) 
 Gains/(Losses) on foreign currency translation ( 71 ) 485 
 Less: Tax/(Tax benefit) (a) ( 96 ) ( 10 ) 
 Net gains/(losses) on foreign currency translation 25 495 
 (Gains)/Losses reclassified from AOCI to net income (b) 121 ( 2 ) 
 Other comprehensive income/(loss), net of tax 146 493 
 Ending balance $ ( 5,341 ) $ ( 5,923 ) 
 
 Marketable securities 
 Beginning balance $ ( 19 ) $ ( 442 ) 
 Gains/(Losses) on available for sale securities ( 330 ) 135 
 Less: Tax/(Tax benefit) ( 77 ) 33 
 Net gains/(losses) on available for sale securities ( 253 ) 102 
 (Gains)/Losses reclassified from AOCI to net income — 11 
 Less: Tax/(Tax benefit) — 3 
 Net (gains)/losses reclassified from AOCI to net income 
 — 8 
 Other comprehensive income/(loss), net of tax ( 253 ) 110 
 Ending balance $ ( 272 ) $ ( 332 ) 
 
 Derivative instruments 
 Beginning balance $ ( 193 ) $ 129 
 Gains/(Losses) on derivative instruments 156 ( 55 ) 
 Less: Tax/(Tax benefit) 37 ( 14 ) 
 Net gains/(losses) on derivative instruments 119 ( 41 ) 
 (Gains)/Losses reclassified from AOCI to net income 32 ( 17 ) 
 Less: Tax/(Tax benefit) 7 ( 3 ) 
 Net (gains)/losses reclassified from AOCI to net income (c) 25 ( 14 ) 
 Other comprehensive income/(loss), net of tax 144 ( 55 ) 
 Ending balance $ ( 49 ) $ 74 
 
 Pension and other postretirement benefits 
 Beginning balance $ ( 2,640 ) $ ( 2,610 ) 
 Amortization and recognition of prior service costs/(credits) 
 6 6 
 Less: Tax/(Tax benefit) 1 1 
 Net prior service costs/(credits) reclassified from AOCI to net income 
 5 5 
 Translation impact on non-U.S. plans 
 3 ( 2 ) 
 Other comprehensive income/(loss), net of tax 8 3 
 Ending balance $ ( 2,632 ) $ ( 2,607 ) 
 
 Total AOCI ending balance at March 31 $ ( 8,294 ) $ ( 8,788 ) 

 __________ 
 (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) Reclassified to Cost of sales . During the next twelve months, we expect to reclassify existing net gains on cash flow hedges of $ 147 million (see Note 15). 
 
 24 

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

 NOTE 19. VARIABLE INTEREST ENTITIES 
 
 Certain of our affiliates are variable interest entities in which we are not the primary beneficiary. Our maximum exposure to any potential losses associated with these unconsolidated affiliates is limited to our equity investments, accounts receivable, loans, and guarantees and was $ 1.0 billion and $ 1.6 billion at December 31, 2022 and March 31, 2023, respectively. Of these amounts, guarantees of $ 113 million at both December 31, 2022 and March 31, 2023 related to certain obligations of our VIEs also are included in Note 20. 
 
 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 March 31, 2023, Ford has contributed to BlueOval SK $ 1.3 billion of its agreed capital contribution of up to $ 6.6 billion through 2026, subject to any adjustments agreed to by the parties. 
 
 25 

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

 NOTE 20. COMMITMENTS AND CONTINGENCIES 
 
 Commitments and contingencies primarily consist of guarantees and indemnifications, litigation and claims, and warranty and field service actions. 
 
 Guarantees and Indemnifications 
 
 Financial Guarantees. Financial guarantees and indemnifications are recorded at fair value at their inception. Subsequent to initial recognition, the guarantee liability is adjusted at each reporting period to reflect the current estimate of expected payments resulting from possible default events over the remaining life of the guarantee. The maximum potential payments for financial guarantees were $ 518 million and $ 522 million at December 31, 2022 and March 31, 2023, respectively. The carrying value of recorded liabilities related to financial guarantees was $ 31 million and $ 55 million at December 31, 2022 and March 31, 2023, 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 $ 273 million and $ 165 million at December 31, 2022 and March 31, 2023, respectively. The carrying value of recorded liabilities related to non-financial guarantees was $ 0 at both December 31, 2022 and March 31, 2023. 
 
 Included in the $ 165 million of maximum potential payments at March 31, 2023 are guarantees for the resale value of vehicles sold in certain arrangements to daily rental companies. The maximum potential payment of $ 159 million as of March 31, 2023 represents the total proceeds we guarantee the rental company will receive on resale. Reflecting our present estimate of proceeds the rental companies will receive on resale from third parties, we do not expect we will have to pay under the guarantee. 
 
 In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction, such as the sale of a business. These indemnifications might include and are not limited to claims relating to any of the following: environmental, tax, and shareholder matters; intellectual property rights; power generation contracts; governmental regulations and employment-related matters; dealer, supplier, and other commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities generally would be triggered by a breach of contract claim brought by a counterparty, including a joint venture or alliance partner, or a third-party claim. While some of these indemnifications are limited in nature, many of them do not limit potential payment. Therefore, we are unable to estimate a maximum amount of future payments that could result from claims made under these unlimited indemnities. 
 26 

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

 NOTE 20. 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 a bout $ 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. 
 27 

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

 NOTE 20. COMMITMENTS AND CONTINGENCIES (Continued) 
 
 Warranty and Field Service Actions 
 
 We accrue the estimated cost of both base warranty coverages and field service actions at the time of sale. We establish our estimate of base warranty obligations using a patterned estimation model, using historical information regarding the nature, frequency, and average cost of claims for each vehicle line by model year. We establish our estimates of field service action obligations using a patterned estimation model, using historical information regarding the nature, frequency, severity, and average cost of claims for each model year. In addition, from time to time, we issue extended warranties at our expense, the estimated cost of which is accrued at the time of issuance. Warranty and field service action obligations are reported in Other liabilities and deferred revenue . We reevaluate the adequacy of our accruals on a regular basis. 
 
 We recognize the benefit from a recovery of the costs associated with our warranty and field service actions when specifics of the recovery have been agreed with our supplier and the amount of recovery is virtually certain. Recoveries are reported in Trade and other receivables, net and Other assets. 
 
 The estimate of our future warranty and field service action costs, net of estimated supplier recoveries, for the periods ended March 31 was as follows (in millions): 
 
 First Quarter 
 2022 2023 
 Beginning balance $ 8,451 $ 9,193 
 Payments made during the period ( 984 ) ( 990 ) 
 Changes in accrual related to warranties issued during the period 793 972 
 Changes in accrual related to pre-existing warranties 21 226 
 Foreign currency translation and other 38 ( 117 ) 
 Ending balance $ 8,319 $ 9,284 

 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. 
 28 

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

 NOTE 21. SEGMENT INFORMATION 
 
 We report segment information consistent with the way our chief operating decision maker (“CODM”) evaluates the operating results and performance of the Company. 
 
 On January 1, 2023, we implemented a new operating model and reporting structure. As a result of this change, we analyze the results of our business through the following segments: Ford Blue, Ford Model e, and Ford Pro (combined, replacing the previous Automotive segment), Ford Next (previously the Mobility segment), and Ford Credit. Company adjusted earnings before interest and taxes (“EBIT”) include the financial results of these five reportable segments and Corporate Other, and net income comprises the financial results of the five reportable segments and Corporate Other, as well as Interest on Debt, Special Items, and Taxes. 
 
 Additionally, past service pension and OPEB income and expense plus related assets, previously reported in the Automotive segment, have been realigned to Corporate Other. 
 
 Prior period amounts were adjusted retrospectively to reflect each of the above changes. 
 
 Below is a description of our reportable segments and other activities. 
 
 Ford Blue Segment 
 
 Ford Blue primarily includes the sale of Ford and Lincoln internal combustion engine (“ICE”) and hybrid vehicles, service parts, accessories, and digital services for retail customers, together with the associated costs of development, manufacture, and distribution of the vehicles, parts, accessories, and services. This segment focuses on developing Ford and Lincoln ICE and hybrid vehicles. Additionally, this segment provides hardware engineering and manufacturing capabilities to Ford Model e and manufactures vehicles on behalf of Ford Pro and, in certain cases, Ford Model e. Ford Blue also includes: 
 • All sales for markets not presently in scope for Ford Model e or Ford Pro (as further described below) 
 • In markets outside of the United States and Canada, sales to commercial, government, and rental customers of ICE and hybrid vehicles not considered core to Ford Pro 
 • Sales of electric vehicles (“EVs”) by our unconsolidated affiliates in China 
 • All sales of vehicles manufactured and sold to other OEMs 
 
 Ford Model e Segment 
 
 Ford Model e primarily includes the sale of our electric vehicles, service parts, accessories, and digital services for retail customers, together with the associated costs of development, manufacture, and distribution of the vehicles, parts, accessories, and services. This segment focuses on developing EV and digital vehicle technologies, as well as software development. Additionally, Ford Model e provides software and connected vehicle technologies on behalf of the enterprise, and manufactures certain EVs, including for Ford Pro. Ford Model e operates in North America, Europe, and China. Ford Model e also includes EV and related sales not considered core to Ford Pro to commercial, government, and rental customers in Europe, China, and Mexico. 
 
 29 

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

 NOTE 21. SEGMENT INFORMATION (Continued) 
 
 Ford Pro Segment 
 
 Ford Pro primarily includes the sale of Ford and Lincoln vehicles, service parts, accessories, and services for commercial, government, and rental customers. Included in this segment are sales of all core Ford Pro vehicles, such as Super Duty and the Transit range of vans in North America and Europe and all sales of Ranger in Europe. In the United States and Canada, Ford Pro also includes all vehicle sales to commercial, government, and rental customers. This segment focuses on selling ICE, hybrid, and electric vehicles, and providing digital and physical services to optimize and maintain fleets, including telematics and EV charging solutions. This segment reflects external sales of vehicles produced by Ford Blue and Ford Model e, and the costs (including intersegment markup) associated with acquiring vehicles for sale and providing services are reflected in this segment. Ford Pro operates in North America and Europe. 
 
 Ford Next Segment 
 
 The Ford Next segment (formerly the Mobility segment) primarily includes expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments. 
 
 Ford Credit Segment 
 
 The Ford Credit segment is comprised of the Ford Credit business on a consolidated basis, which is primarily vehicle-related financing and leasing activities. 
 
 Corporate Other 
 
 Corporate Other primarily includes corporate governance expenses, past service pension and OPEB income and expense, interest income (excluding Ford Credit interest income and interest earned on our extended service contract portfolio) and gains and losses from our cash, cash equivalents, and marketable securities (excluding gains and losses on investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, that are not allocated to operating segments. These include expenses related to setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. Corporate Other assets include: cash, cash equivalents and marketable securities, tax related assets, defined benefit pension plan net assets, and other assets managed centrally. 
 
 Interest on Debt 
 
 Interest on Debt is presented as a separate reconciling item and consists of interest expense on Company debt excluding Ford Credit. 
 
 Special Items 
 
 Special Items are presented as a separate reconciling item. They consist of (i) pension and OPEB remeasurement gains and losses, (ii) gains and losses on investments in equity securities, (iii) significant personnel expenses, supplier- and dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix, and (iv) other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities. Our management ordinarily excludes these items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. We also report these special items separately to help investors track amounts related to these activities and to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results. 
 
 30 

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

 NOTE 21. SEGMENT INFORMATION (Continued) 
 
 Segment Revenue, Cost, and Asset Principles for Ford Blue, Ford Model e, and Ford Pro 
 
 External vehicle and digital services revenue is generally vehicle-specific and included in the segment responsible for the external vehicle sale. A majority of parts and accessories revenue and cost is attributed to customer sales channels or vehicle lines based on recent end customer sales and is included in the respective segment. 
 
 In the normal course of business, Ford Blue, Ford Model e, and Ford Pro transact between segments and cooperate to leverage synergies, including developing and manufacturing vehicles on behalf of another segment. When one segment produces a vehicle that is sold externally by another segment, an intersegment transaction occurs. The producing segment will report intersegment revenue to recoup the costs associated with the unit produced. This includes material cost, labor and overhead (including depreciation and amortization), inbound freight, and an intersegment markup. The intersegment markup amount is set to deliver a competitive return to the producing segment for its manufacturing and distribution service. Costs are reflected in the associated segment externally reporting the vehicle sale, as detailed in the table below: 
 
 Income Statement Elements Examples Segment Reporting 
 Costs specific to a particular vehicle Bill of material cost and initial warranty accrual Reported in the segment externally selling the vehicle 
 Costs identifiable by product line Manufacturing and logistics costs, depreciation & amortization expense, direct research & development costs Typically identifiable to the product line or production location. Reported in the segment externally selling the vehicle, based on relative volume 
 Shared costs Selling, general & administrative expense, and indirect / cross product line research & development costs Typically shared across all segments, generally based on relative volume. Certain costs clearly linked to a segment are reported in the specific segment 
 Intersegment markup costs for intersegment vehicle transactions Contract manufacturing and distribution fees Reported in the segment externally selling the vehicle, for each applicable vehicle transaction 

 Assets are reported in each segment, aligned to the appropriate operational responsibility. Manufacturing assets, e.g., our plants and the machinery and equipment therein, are included in our Ford Blue and Ford Model e segments. Manufacturing assets producing only, or primarily, EVs and related components are reflected in Ford Model e. Manufacturing assets that support the production of ICE and hybrid vehicles, including those producing ICE and electric in the same facility, are included in Ford Blue. Vendor tooling dedicated to producing EV parts is reported in Ford Model e. There are no Ford manufacturing assets or vendor tooling reported in Ford Pro. Regardless of the segment reporting the asset, depreciation and amortization expense is reflected on the basis of production volume and reported in the segment that reports the external vehicle sale. 
 
 Equity in net income/(loss) of affiliated companies is included in Income/(Loss) before income taxes , based primarily on which segment the entity supports or has the majority of the entity’s purchases or sales. The table below shows the segment reporting for our most significant unconsolidated entities: 
 
 Ford Blue Ford Model e Ford Pro 
 ∘ Changan Ford Automobile Corporation, Ltd. (“CAF”) 
 ∘ BlueOval SK, LLC 
 ∘ Ford Otomotiv Sanayi Anonim Sirketi (“Ford Otosan”) 
 
 ∘ Jiangling Motors Corporation, Ltd. (“JMC”) 
 
 ∘ AutoAlliance (Thailand) Co., Ltd. (“AAT”) 
 
 31 

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

 NOTE 21. SEGMENT INFORMATION (Continued) 
 
 Key financial information for the periods ended or at March 31 was as follows (in millions): 
 
 Ford Blue Ford Model e Ford Pro Ford Next Ford Credit Corporate 
Other Interest
on Debt Special Items Eliminations/Adjustments Total 
 First Quarter 2022 
 External Revenues $ 20,810 $ 972 $ 10,324 $ 84 $ 2,281 $ 5 $ — $ — $ — $ 34,476 
 Intersegment Revenues (a) 7,254 27 — — — — — — ( 7,281 ) — 
 Total Revenues $ 28,064 $ 999 $ 10,324 $ 84 $ 2,281 $ 5 $ — $ — $ ( 7,281 ) $ 34,476 
 
 Income/(Loss) before income taxes $ 1,328 $ ( 380 ) $ 491 $ ( 242 ) $ 928 $ 201 $ ( 308 ) $ ( 5,866 ) (b) $ — $ ( 3,848 ) 
 
 Equity in net income/(loss) of affiliated companies 56 ( 2 ) 85 ( 75 ) 6 1 — ( 104 ) (c) — ( 33 ) 
 
 Total assets 58,329 2,951 1,679 3,501 132,582 54,608 — — ( 664 ) (d) 252,986 
 
 Ford Blue Ford Model e Ford Pro Ford Next Ford Credit Corporate 
Other Interest
on Debt Special Items Eliminations/Adjustments Total 
 First Quarter 2023 
 External Revenues $ 25,124 $ 707 $ 13,249 $ 1 $ 2,389 $ 4 $ — $ — $ — $ 41,474 
 Intersegment Revenues (a) 9,177 9 — — — — — — ( 9,186 ) — 
 Total Revenues $ 34,301 $ 716 $ 13,249 $ 1 $ 2,389 $ 4 $ — $ — $ ( 9,186 ) $ 41,474 
 
 Income/(loss) before income taxes $ 2,623 $ ( 722 ) $ 1,366 $ ( 44 ) $ 303 $ ( 147 ) $ ( 308 ) $ ( 912 ) (e) $ — $ 2,159 
 
 Equity in net income/(loss) of affiliated companies 55 ( 3 ) 117 ( 12 ) 7 — — ( 34 ) — 130 
 
 Total assets 57,990 7,242 2,668 371 138,225 52,427 — — ( 2,123 ) (d) 256,800 
 
 __________ 
 (a) Intersegment revenues only reflect finished vehicle transactions between Ford Blue, Ford Model e, and Ford Pro where there is an intersegment markup and are recognized at the time of the intersegment transaction. 
 (b) Primarily reflects gains/(losses) on our Rivian investment. 
 (c) Primarily reflects the full impairment of our Ford Sollers Netherlands B.V. (the parent company of our joint venture in Russia) equity method investment, resulting from the ongoing regulatory and economic uncertainty in Russia. 
 (d) Primarily includes eliminations of intersegment transactions occurring in the ordinary course of business. 
 (e) Primarily reflects restructuring actions in Europe and China and mark-to-market adjustments for our global pension and OPEB plans. 
 
 32 

 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 
 
 RESULTS OF OPERATIONS 
 
 In the first quarter of 2023, the net income attributable to Ford Motor Company was $1,757 million, and Company adjusted EBIT was $3,379 million. 
 
 Net income/(loss) includes certain items (“special items”) that are excluded from Company adjusted EBIT. These items are discussed in more detail in Note 21 of the Notes to the Financial Statements. We report special items separately to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results. Our pre-tax and tax special items were as follows (in millions): 
 
 First Quarter 
 2022 2023 
 Restructuring 
 Europe $ (22) $ (370) 
 China — (309) 
 Ford Credit - Brazil (119) — 
 Other (36) 12 
 Subtotal Restructuring $ (177) $ (667) 
 Pension and OPEB Gain/(Loss) 
 Pension and OPEB remeasurement $ — $ (113) 
 Pension settlements and curtailments — (46) 
 Subtotal Pension and OPEB Gain/(Loss) $ — $ (159) 
 Other Items 
 Gain/(loss) on Rivian investment 
 $ (5,449) $ (25) 
 Russia suspension of operations/asset write-off (138) — 
 Patent matters related to prior calendar years 
 (135) — 
 Other 33 (61) 
 Subtotal Other Items $ (5,689) $ (86) 
 Total EBIT Special Items $ (5,866) $ (912) 
 
 Provision for/(Benefit from) tax special items (a) $ (1,192) $ (144) 

 __________ 
 (a) Includes related tax effect on special items and tax special items. 
 
 We recorded $912 million of pre-tax special item charges in the first quarter of 2023, driven primarily by restructuring actions in Europe and China. 
 
 In Note 21 of the Notes to the Financial Statements, special items are reflected as a separate reconciling item, as opposed to being allocated among our segments. This reflects the fact that management excludes these items from its review of operating segment results for purposes of measuring segment profitability and allocating resources. 
 33 

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

 COMPANY KEY METRICS 
 
 The table below shows our first quarter 2023 key metrics for the Company, compared to a year ago. 
 
 First Quarter 
 2022 2023 H / (L) 
 GAAP Financial Measures 
 Cash Flows from Operating Activities ($B) $ (1.1) $ 2.8 $ 3.9 
 Revenue ($M) 34,476 41,474 20 % 
 Net Income/(Loss) ($M) (3,110) 1,757 $ 4,867 
 Net Income/(Loss) Margin (%) (9.0) % 4.2 % 13.2 ppts 
 EPS (Diluted) $ (0.78) $ 0.44 $ 1.22 
 
 Non-GAAP Financial Measures (a) 
 
 Company Adj. Free Cash Flow ($B) $ (0.6) $ 0.7 $ 1.3 
 Company Adj. EBIT ($M) 2,326 3,379 1,053 
 Company Adj. EBIT Margin (%) 6.7 % 8.1 % 1.4 ppts 
 Adjusted EPS (Diluted) $ 0.38 $ 0.63 $ 0.25 
 Adjusted ROIC (Trailing Four Quarters) 7.8 % 13.5 % 5.8 ppts 

 __________ 
 (a) See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP. 
 
 In the first quarter of 2023, our diluted earnings per share of Common and Class B Stock was $0.44, and our diluted adjusted earnings per share was $0.63. 
 
 Net income/(loss) margin was 4.2% in the first quarter of 2023, up 13.2 percentage points from a year ago. Company adjusted EBIT margin was 8.1% in the first quarter of 2023, up 1.4 percentage points from a year ago. 
 
 The year-over-year increase of $4.9 billion in net income/(loss) in the first quarter of 2023 was driven by the non-recurrence of a mark-to-market loss on our Rivian investment (included in special items in the first quarter of 2022) and higher Ford Blue and Ford Pro EBIT. The year-over-year increase of $1.1 billion in Company adjusted EBIT was driven by higher Ford Blue and Ford Pro EBIT as well as a lower loss in Ford Next. Partial offsets included lower Ford Credit EBT, lower past service pension and OPEB income in Corporate Other, and lower Ford Model e EBIT. 
 
 The table below shows our first quarter 2023 net income/(loss) attributable to Ford and Company adjusted EBIT by segment. 
 
 First Quarter 
 2022 2023 H / (L) 
 Ford Blue $ 1,328 $ 2,623 $ 1,295 
 Ford Model e (380) (722) (342) 
 Ford Pro 491 1,366 875 
 Ford Next (242) (44) 198 
 Ford Credit 928 303 (625) 
 Corporate Other 201 (147) (348) 
 Company Adjusted EBIT (a) 2,326 3,379 1,053 
 Interest on Debt (308) (308) — 
 Special Items (5,866) (912) (4,954) 
 Taxes / Noncontrolling Interests 738 (402) 1,140 
 Net Income/(Loss) $ (3,110) $ 1,757 $ 4,867 

 __________ 
 (a) See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP. 
 34 

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

 The tables below and on the following pages provide first quarter 2023 key metrics and the change in first quarter 2023 EBIT compared with first quarter 2022 by causal factor for each of our segments. For a description of these causal factors, see Definitions and Information Regarding Ford Blue, Ford Model e, Ford Pro Causal Factors. 
 
 Ford Blue Segment 
 
 First Quarter 
 Key Metrics 2022 2023 H / (L) 
 Wholesale Units (000) (a) 663 706 43 
 Revenue ($M) $ 20,810 $ 25,124 $ 4,314 
 EBIT ($M) 1,328 2,623 1,295 
 EBIT Margin (%) 6.4 % 10.4 % 4.1 ppts 

 __________ 
 (a) Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 128,000 units in Q1 2022 and 97,000 units in Q1 2023). 
 
 Change in EBIT by Causal Factor (in millions) 
 First Quarter 2022 EBIT $ 1,328 
 Volume / Mix 2,230 
 Net Pricing 116 
 Cost (1,011) 
 Exchange (133) 
 Other 93 
 First Quarter 2023 EBIT $ 2,623 

 In the first quarter of 2023, Ford Blue’s wholesales increased 6% from a year ago, driven by improvements in production-related supply constraints (including semiconductors). First quarter 2023 revenue increased 21%, driven by favorable mix as well as higher wholesales and net pricing, offset partially by weaker currencies. 
 
 Ford Blue’s first quarter 2023 EBIT was $2.6 billion, an increase of $1.3 billion from a year ago, with an EBIT margin of 10.4%. The higher EBIT was driven by favorable mix as well as higher wholesales and net pricing. Partial offsets included inflationary cost increases on commodities, materials, and freight, higher material costs for new products, as well as higher volume-related structural costs, weaker currencies, and higher warranty costs. 
 35 

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

 Ford Model e Segment 
 
 First Quarter 
 Key Metrics 2022 2023 H / (L) 
 Wholesale Units (000) 18 12 (6) 
 Revenue ($M) $ 972 $ 707 $ (265) 
 EBIT ($M) (380) (722) (342) 
 EBIT Margin (%) (39.1) % (102.1) % (63.0) ppts 

 Change in EBIT by Causal Factor (in millions) 
 First Quarter 2022 EBIT $ (380) 
 Volume / Mix (42) 
 Net Pricing 7 
 Cost (380) 
 Exchange 34 
 Other 39 
 First Quarter 2023 EBIT $ (722) 

 In the first quarter of 2023, Ford Model e’s wholesales decreased 32% from a year ago, driven by downtime at the Cuautitlan assembly plant for changes to increase production capacity of Mustang Mach-E. First quarter 2023 revenue decreased 27%, primarily driven by lower wholesales, offset partially by favorable mix. 
 
 Ford Model e’s first quarter 2023 EBIT loss was $722 million, a $342 million higher loss than a year ago, with an EBIT margin of negative 102.1%. The lower EBIT was driven by higher engineering and spending-related expense, inflationary cost increases on commodities and materials, and lower wholesales. 
 
 Ford Pro Segment 
 
 First Quarter 
 Key Metrics 2022 2023 H / (L) 
 Wholesale Units (000) (a) 285 337 53 
 Revenue ($M) $ 10,324 $ 13,249 $ 2,925 
 EBIT ($M) 491 1,366 875 
 EBIT Margin (%) 4.8 % 10.3 % 5.6 ppts 

 __________ 
 (a) Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 13,000 units in Q1 2022 and 22,000 units in Q1 2023). 
 
 Change in EBIT by Causal Factor (in millions) 
 First Quarter 2022 EBIT $ 491 
 Volume / Mix 497 
 Net Pricing 1,505 
 Cost (1,025) 
 Exchange (58) 
 Other (44) 
 First Quarter 2023 EBIT $ 1,366 

 In the first quarter of 2023, Ford Pro’s wholesales increased 18% from a year ago, driven by improvements in production-related supply constraints (including semiconductors). First quarter 2023 revenue increased 28%, driven by higher net pricing and wholesales, offset partially by weaker currencies. 
 
 Ford Pro’s first quarter 2023 EBIT was $1.4 billion, an increase of $875 million from a year ago, with an EBIT margin of 10.3%. The improvement in EBIT was driven by higher net pricing and wholesales. Partial offsets included inflationary cost increases (including commodities), new Super Duty product and launch expense, as well as higher volume-related structural costs, weaker currencies, and higher warranty costs. 
 36 

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

 Definitions and Information Regarding Ford Blue, Ford Model e, Ford Pro Causal Factors 
 
 In general, we measure year-over-year change in Ford Blue, Ford Model e, and Ford Pro EBIT using the causal factors listed below, with net pricing and cost variances calculated at present-period volume and mix and exchange: 
 
 • Market Factors (exclude the impact of unconsolidated affiliate wholesale units): 
 ◦ Volume and Mix – primarily measures EBIT variance from changes in wholesale unit volumes (at prior-year average contribution margin per unit) driven by changes in industry volume, market share, and dealer stocks, as well as the EBIT variance resulting from changes in product mix, including mix among vehicle lines and mix of trim levels and options within a vehicle line 
 ◦ Net Pricing – primarily measures EBIT variance driven by changes in wholesale unit prices to dealers and marketing incentive programs such as rebate programs, low-rate financing offers, special lease offers, and stock adjustments on dealer inventory 
 
 • Cost: 
 ◦ Contribution Costs – primarily measures EBIT variance driven by per-unit changes in cost categories that typically vary with volume, such as material costs (including commodity and component costs), warranty expense, and freight and duty costs 
 ◦ Structural Costs – primarily measures EBIT variance driven by absolute change in cost categories that typically do not have a directly proportionate relationship to production volume. Structural costs include the following cost categories: 
 ▪ Manufacturing, Including Volume-Related – consists primarily of costs for hourly and salaried manufacturing personnel, plant overhead (such as utilities and taxes), and new product launch expense. These costs could be affected by volume for operating pattern actions such as overtime, line-speed, and shift schedules 
 ▪ Engineering and Connectivity – consists primarily of costs for vehicle and software engineering personnel, prototype materials, testing, and outside engineering and software services 
 ▪ Spending-Related – consists primarily of depreciation and amortization of our manufacturing and engineering assets and capital project expense, but also includes asset retirements and operating leases 
 ▪ Advertising and Sales Promotions – includes costs for advertising, marketing programs, brand promotions, customer mailings and promotional events, and auto shows 
 ▪ Administrative, Information Technology, and Selling – includes primarily costs for salaried personnel and purchased services related to our staff activities, information technology, and selling functions 
 
 • Exchange – primarily measures EBIT variance driven by one or more of the following: (i) transactions denominated in currencies other than the functional currencies of the relevant entities, (ii) effects of converting functional currency income to U.S. dollars, (iii) effects of remeasuring monetary assets and liabilities of the relevant entities in currencies other than their functional currency, or (iv) results of our foreign currency hedging 
 
 • Other – includes a variety of items, such as parts and services earnings, royalties, government incentives, and compensation-related changes 
 
 In addition, definitions and calculations used in this report include: 
 
 • Wholesales and Revenue – wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that are sold to dealerships or others, units manufactured by Ford that are sold to other manufacturers, units distributed by Ford for other manufacturers, and local brand units produced by our China joint venture, Jiangling Motors Corporation, Ltd. (“JMC”), that are sold to dealerships or others. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option (i.e., rental repurchase), as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), also are included in wholesale unit volumes. Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our revenue. Excludes transactions between Ford Blue, Ford Model e, and Ford Pro segments 
 
 • Industry Volume and Market Share – based, in part, on estimated vehicle registrations; includes medium and heavy duty trucks 
 
 • SAAR – seasonally adjusted annual rate 
 37 

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

 Ford Next Segment 
 
 The Ford Next segment (formerly Mobility) primarily includes expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments. 
 
 In this segment, our first quarter 2023 EBIT loss was $44 million, a $198 million improvement from a year ago. Ford Next has evolved from primarily investing in the development of autonomous vehicle capabilities to focus exclusively on incubating and launching new businesses creating strategic value for Ford. 
 38 

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

 Ford Credit Segment 
 
 Ford Credit files periodic reports with the SEC that contain additional information regarding Ford Credit. The reports are available through Ford Credit’s website located at www.fordcredit.com/investor-center and can also be found on the SEC’s website located at www.sec.gov . The foregoing information regarding Ford Credit’s website and its content is for convenience only and not deemed to be incorporated by reference into this Report nor filed with the SEC. 
 
 The tables below provide first quarter 2023 key metrics and the change in first quarter 2023 EBT compared with first quarter 2022 by causal factor for the Ford Credit segment. For a description of these causal factors, see Definitions and Information Regarding Ford Credit Causal Factors. 
 
 First Quarter 
 Key Metrics 2022 2023 H / (L) 
 Total Net Receivables ($B) $ 117 $ 124 6 % 
 Loss-to-Receivables (bps) (a) 8 35 27 
 Auction Values (b) $ 34,410 $ 31,185 (9) % 
 EBT ($M) 928 303 $ (625) 
 ROE (%) 22 % 8 % (14) ppts 
 
 Other Balance Sheet Metrics 
 Debt ($B) $ 116 $ 120 4 % 
 Net Liquidity ($B) 28 26 (8) % 
 Financial Statement Leverage 
(to 1) 9.5 9.8 0.3 

 __________ 
 (a) U.S. retail financing only. 
 (b) U.S. 36-month off-lease first quarter auction values at Q1 2023 mix. 
 
 Change in EBT by Causal Factor (in millions) 
 First Quarter 2022 EBT $ 928 
 Volume / Mix 23 
 Financing Margin (288) 
 Credit Loss (141) 
 Lease Residual (139) 
 Exchange (8) 
 Other (72) 
 First Quarter 2023 EBT $ 303 

 Ford Credit’s total net receivables of $124 billion were $7 billion higher than a year ago, reflecting the impact of increased non-consumer financing and consumer financing, partially offset by fewer operating leases. The loss-to-receivables (“LTR”) ratio remained at a low level in the first quarter of 2023, at 35 basis points, though higher than a year ago as losses begin to normalize from historic lows. U.S. auction values in the first quarter of 2023 were lower compared to a year ago. 
 
 Ford Credit’s first quarter 2023 EBT of $303 million was $625 million lower than a year ago, primarily reflecting lower financing margin due to higher borrowing costs, higher credit losses, the non-recurrence of credit loss reserve releases, unfavorable lease residual performance, the non-recurrence of market valuation gains, and unfavorable market valuation adjustments to derivatives (included in Other). 
 39 

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

 Definitions and Information Regarding Ford Credit Causal Factors 
 
 In general, we measure year-over-year changes in Ford Credit’s EBT using the causal factors listed below: 
 
 • Volume and Mix: 
 ◦ Volume primarily measures changes in net financing margin driven by changes in average net receivables excluding the allowance for credit losses at prior period financing margin yield (defined below in financing margin) at prior period exchange rates. Volume changes are primarily driven by the volume of new and used vehicles sold and leased, the extent to which Ford Credit purchases retail financing and operating lease contracts, the extent to which Ford Credit provides wholesale financing, the sales price of the vehicles financed, the level of dealer inventories, Ford-sponsored special financing programs available exclusively through Ford Credit, and the availability of cost-effective funding 
 ◦ Mix primarily measures changes in net financing margin driven by period-over-period changes in the composition of Ford Credit’s average net receivables excluding the allowance for credit losses by product within each region 
 
 • Financing Margin: 
 ◦ Financing margin variance is the period-to-period change in financing margin yield multiplied by the present period average net receivables excluding the allowance for credit losses at prior period exchange rates. This calculation is performed at the product and country level and then aggregated. Financing margin yield equals revenue, less interest expense and scheduled depreciation for the period, divided by average net receivables excluding the allowance for credit losses for the same period 
 ◦ Financing margin changes are driven by changes in revenue and interest expense. Changes in revenue are primarily driven by the level of market interest rates, cost assumptions in pricing, mix of business, and competitive environment. Changes in interest expense are primarily driven by the level of market interest rates, borrowing spreads, and asset-liability management 
 
 • Credit Loss: 
 ◦ Credit loss is the change in the provision for credit losses at prior period exchange rates. For analysis purposes, management splits the provision for credit losses into net charge-offs and the change in the allowance for credit losses 
 ◦ Net charge-off changes are primarily driven by the number of repossessions, severity per repossession, and recoveries. Changes in the allowance for credit losses are primarily driven by changes in historical trends in credit losses and recoveries, changes in the composition and size of Ford Credit’s present portfolio, changes in trends in historical used vehicle values, and changes in forward looking macroeconomic conditions. For additional information, refer to the “Critical Accounting Estimates - Allowance for Credit Losses” section of Item 7 of Part II of our 2022 Form 10-K Report 
 
 • Lease Residual: 
 ◦ Lease residual measures changes to residual performance at prior period exchange rates. For analysis purposes, management splits residual performance primarily into residual gains and losses, and the change in accumulated supplemental depreciation 
 ◦ Residual gain and loss changes are primarily driven by the number of vehicles returned to Ford Credit and sold, and the difference between the auction value and the depreciated value (which includes both base and accumulated supplemental depreciation) of the vehicles sold. Changes in accumulated supplemental depreciation are primarily driven by changes in Ford Credit’s estimate of the expected auction value at the end of the lease term and changes in Ford Credit’s estimate of the number of vehicles that will be returned to it and sold. Depreciation on vehicles subject to operating leases includes early termination losses on operating leases due to customer default events. For additional information, refer to the “Critical Accounting Estimates - Accumulated Depreciation on Vehicles Subject to Operating Leases” section of Item 7 of Part II of our 2022 Form 10-K Report 
 
 • Exchange: 
 ◦ Reflects changes in EBT driven by the effects of converting functional currency income to U.S. dollars 
 
 • Other: 
 ◦ Primarily includes operating expenses, other revenue, insurance expenses, and other income/(loss) at prior period exchange rates 
 ◦ Changes in operating expenses are primarily driven by salaried personnel costs, facilities costs, and costs associated with the origination and servicing of customer contracts 
 ◦ In general, other income/(loss) changes are primarily driven by changes in earnings related to market valuation adjustments to derivatives (primarily related to movements in interest rates) and other miscellaneous items 
 40 

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

 In addition, the following definitions and calculations apply to Ford Credit when used in this Report: 
 
 • Cash (as shown in the Funding Structure and Liquidity tables) – Cash, cash equivalents, and marketable securities, excluding amounts related to insurance activities 
 
 • Debt (as shown in the Key Metrics and Leverage tables) – Debt on Ford Credit’s balance sheets. Includes debt issued in securitizations and payable only out of collections on the underlying securitized assets and related enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions 
 
 • Earnings Before Taxes (“EBT” ) – Reflects Ford Credit’s income before income taxes 
 
 • Loss-to-Receivables (“LTR”) Ratio – LTR ratio is calculated using net charge-offs divided by average finance receivables, excluding unearned interest supplements and the allowance for credit losses 
 
 • Return on Equity (“ROE” ) (as shown in the Key Metrics table) – Reflects return on equity calculated by annualizing net income for the period and dividing by monthly average equity for the period 
 
 • Securitization and Restricted Cash (as shown in the Liquidity table) – Securitization cash is held for the benefit of the securitization investors (for example, a reserve fund). Restricted cash primarily includes cash held to meet certain local governmental and regulatory reserve requirements and cash held under the terms of certain contractual agreements 
 
 • Securitizations (as shown in the Public Term Funding Plan table) – Public securitization transactions, Rule 144A offerings sponsored by Ford Credit, and widely distributed offerings by Ford Credit Canada 
 
 • Term Asset-Backed Securities (as shown in the Funding Structure table) – Obligations issued in securitization transactions that are payable only out of collections on the underlying securitized assets and related enhancements 
 
 • Total Net Receivables (as shown in the Key Metrics table) – Includes finance receivables (retail financing and wholesale) sold for legal purposes and net investment in operating leases included in securitization transactions that do not satisfy the requirements for accounting sale treatment. These receivables and operating leases are reported on Ford Credit’s balance sheets and are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations of Ford Credit or the claims of Ford Credit’s other creditors 
 
 41 

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

 Corporate Other 
 
 Corporate Other primarily includes corporate governance expenses, past service pension and OPEB income and expense, interest income (excluding Ford Credit interest income and interest earned on our extended service contract portfolio) and gains and losses from our cash, cash equivalents, and marketable securities (excluding gains and losses on investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, that are not allocated to operating segments. These include expenses related to setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. In the first quarter of 2023, Corporate Other had a $147 million loss, compared with a $201 million profit a year ago. The loss was driven by lower past service pension and OPEB income, which was partially offset by higher Company excluding Ford Credit interest income due to increases in interest rates (primarily Fed Funds). 
 
 Interest on Debt 
 
 Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was $308 million in the first quarter of 2023, unchanged from a year ago. 
 
 Taxes 
 
 Our Provision for/(Benefit from) income taxes for the first quarter of 2023 was a provision of $496 million, resulting in an effective tax rate of 23.0%. 
 
 Our first quarter 2023 adjusted effective tax rate, which excludes special items, was 20.8%. 
 
 We regularly review our organizational structure and income tax elections for affiliates in non-U.S. and U.S. tax jurisdictions, which may result in changes in affiliates that are included in or excluded from our U.S. tax return. Any future changes to our structure, as well as any changes in income tax laws in the countries that we operate, could cause increases or decreases to our deferred tax balances and related valuation allowances. 
 42 

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

 LIQUIDITY AND CAPITAL RESOURCES 
 
 At March 31, 2023, total balance sheet cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $39.7 billion. 
 
 We consider our key balance sheet metrics to be: (i) Company cash, which includes cash equivalents, marketable securities, and restricted cash, including cash held for sale, excluding Ford Credit’s cash, cash equivalents, marketable securities, and restricted cash; and (ii) Company liquidity, which includes Company cash, less restricted cash, and total available committed credit lines, excluding Ford Credit’s total available committed credit lines. 
 
 Company excluding Ford Credit 
 
 December 31,
2022 March 31,
2023 
 Balance Sheets ($B) 
 
 Company Cash $ 32.3 $ 28.7 
 Liquidity 48.0 46.2 
 Debt (19.9) (19.7) 
 Cash Net of Debt 12.3 9.0 
 
 Pension Funded Status ($B) (a) 
 
 Funded Plans $ 4.1 $ 4.1 
 Unfunded Plans (4.3) (4.3) 
 Total Global Pension $ (0.2) $ (0.2) 
 
 Total Funded Status OPEB $ (4.5) $ (4.4) 

 __________ 
 (a) Balances at March 31, 2023 reflect net funded status at December 31, 2022, updated for service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. The discount rate and rate of expected return assumptions are unchanged from year-end 2022. 
 
 Liquidity . One of our key priorities is to maintain a strong balance sheet, while at the same time having resources available to invest in and grow our business. At March 31, 2023, we had Company cash of $28.7 billion and liquidity of $46.2 billion. At March 31, 2023, about 90% of Company cash was held by consolidated entities domiciled in the United States. 
 
 To be prepared for an economic downturn, we target an ongoing Company cash balance at or above $20 billion plus significant additional liquidity above our Company cash target. We expect to have periods when we will be above or below this amount due to: (i) future cash flow expectations, such as for investments in future opportunities, capital investments, debt maturities, pension contributions, or restructuring requirements, (ii) short-term timing differences, and (iii) changes in the global economic environment. 
 
 Our Company cash investments primarily include U.S. Department of Treasury obligations, federal agency securities, bank time deposits with investment-grade institutions, investment-grade corporate securities, investment-grade commercial paper, and debt obligations of a select group of non-U.S. governments, non-U.S. governmental agencies, and supranational institutions. The average maturity of these investments is approximately one year and adjusted based on market conditions and liquidity needs. We monitor our Company cash levels and average maturity on a daily basis. 
 43 

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

 Material Cash Requirements. Our material cash requirements include: 
 
 • Capital expenditures (for additional information, see the “Changes in Company Cash” section below) and other payments for engineering, software, product development, and implementation of our plans for battery electric vehicles 
 
 • Purchase of raw materials and components to support the manufacturing and sale of vehicles (including electric vehicles), parts, and accessories (for additional information, see the Aggregate Contractual Obligations table and the accompanying description of our “Purchase obligations” in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 of our 2022 Form 10-K Report) 
 
 • Marketing incentive payments to dealers 
 
 • Payments for warranty and field service actions (for additional information, see Note 20 of the Notes to the Financial Statements herein) 
 
 • Debt repayments (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 19 of the Notes the Financial Statements in our 2022 Form 10-K Report) 
 
 • Discretionary and mandatory payments to our global pension plans (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 of our 2022 Form 10-K Report, the “Changes in Company Cash” section below, and Note 13 of the Notes to the Financial Statements herein) 
 
 • Employee wages, benefits, and incentives 
 
 • Operating lease payments (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 18 of the Notes to the Financial Statements in our 2022 Form 10-K Report) 
 
 • Cash effects related to the restructuring of our business 
 
 • Strategic acquisitions and investments to grow our business, including electrification 
 
 Subject to approval by our Board of Directors, shareholder distributions in the form of dividend payments and/or a share repurchase program (including share repurchases to offset the anti-dilutive effect of increased shared-based compensation) may require the expenditure of a material amount of cash. Moreover, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions, and other matters. 
 
 We plan to utilize our liquidity (as described above) and our cash flows from business operations to fund our material cash requirements. 
 
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
FORD MOTOR CO 10-Q

Item 1. Financial Statements
