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Item 1. Financial Statements

2023-07-28 compared with 2023-05-03 · 127 added, 706 removed, 508 unchanged (62% of the section changed)

2 unchanged sentences

NOTES TO THE FINANCIAL STATEMENTS

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”).

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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 .

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

OTHER INCOME/(LOSS)

The amounts included in Other income/(loss), net for the periods ended March 31 were as follows (in millions):

First Quarter

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

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.

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.

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

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

government 1 $ 3,295 $ 1,045 $ 4,340

government agencies 2 2,245 150 2,395

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

government 1 $ 4,947 $ 187 $ 5,134

government agencies 2 2,641 221 2,862

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

government 1 $ 1,958 $ 1,183 $ 3,141

government agencies 2 2,320 1,045 3,365

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

government 1 $ 4,605 $ 173 $ 4,778

government agencies 2 2,300 270 2,570

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

government $ 4,797 $ 1 $ ( 145 ) $ 4,653 $ 1,008 $ 3,645 $ —

government agencies 2,508 — ( 119 ) 2,389 1,244 1,109 36

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

government $ 4,557 $ 8 $ ( 109 ) $ 4,456 $ 1,058 $ 3,387 $ 11

government agencies 2,338 — ( 94 ) 2,244 1,122 1,104 18

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

$ 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

Company excluding Ford Credit

Sales proceeds $ 4,004 $ 1,163

Gross realized gains 6 1

Gross realized losses 6 12

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

government $ 2,860 $ ( 52 ) $ 1,570 $ ( 93 ) $ 4,430 $ ( 145 )

government agencies 707 ( 14 ) 1,658 ( 105 ) 2,365 ( 119 )

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 )

$ 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

government $ 1,825 $ ( 22 ) $ 1,684 $ ( 87 ) $ 3,509 $ ( 109 )

government agencies 465 ( 3 ) 1,658 ( 91 ) 2,123 ( 94 )

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 )

$ 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):

2022 March 31,

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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):

2022 March 31,

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

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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;

• 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

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

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;

• Group IV – poor financial metrics, including dealers classified as uncollectible.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

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

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Inventories were as follows (in millions):

2022 March 31,

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.

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.

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

OTHER LIABILITIES AND DEFERRED REVENUE

Other liabilities and deferred revenue were as follows (in millions):

2022 March 31,

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

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).

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

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

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

The carrying value of Company debt excluding Ford Credit and Ford Credit debt was as follows (in millions):

2022 March 31,

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

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

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

Reclassified from AOCI to Cost of sales

Foreign currency exchange contracts (a)

$ ( 90 ) $ 26

Commodity contracts (b)

Fair value hedges

Interest rate contracts

Net interest settlements and accruals on hedging instruments

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

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

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 .

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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:

Exited manufacturing operations in 2021 resulting in the closure of facilities in Camaçari, Taubaté, and Troller

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)

Ceased production of the Mondeo at the Valencia plant in the first quarter of 2022

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

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.

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.

EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES (Continued)

Accumulated foreign currency translation losses included in Accumulated other comprehensive income/(loss) at June 30, 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.

In the second quarter and first half of 2022, we reclassified losses of $ 36 million and $ 155 million, respectively, 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.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

ACQUISITIONS AND DIVESTITURES

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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.

At December 31, 2022, the carrying value of our equity method investment in Argo AI was $ 0 , and we had $ 65 million in Other liabilities and deferred revenue related to our funding commitment for our share of Argo AI’s expenses previously incurred.

Argo AI is in the process of winding down operations, and in the second quarter of 2023, we settled our expected funding commitment.

Sanand, India (“Sanand”) Plants.

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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.

In exchange for our shares of Spin, we received preferred equity in TIER Mobility SE.

Financial Statements (Continued)

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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

The changes in the balances for each component of accumulated other comprehensive income/(loss) attributable to Ford Motor Company for the periods ended June 30 were as follows (in millions):

Second Quarter First Half

2022 2023 2022 2023

Foreign currency translation

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(Gains)/Losses reclassified from AOCI to net income (b) 47 ( 2 ) 168 ( 4 )

Other comprehensive income/(loss), net of tax 146 493

Other comprehensive income/(loss), net of tax (c) ( 1,014 ) 274 ( 868 ) 767

Ending balance $ ( 6,355 ) $ ( 5,649 ) $ ( 6,355 ) $ ( 5,649 )

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Tax/(Tax benefit) 4 ( 3 ) 11 ( 6 )

Net (gains)/losses reclassified from AOCI to net income (c) 25 ( 14 )

Net (gains)/losses reclassified from AOCI to net income (d) 2 ( 46 ) 27 ( 60 )

Other comprehensive income/(loss), net of tax ( 94 ) ( 369 ) 50 ( 424 )

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Translation impact on non-U.S.

8 ( 1 ) 11 ( 3 )

Other comprehensive income/(loss), net of tax 12 3 20 6

Ending balance $ ( 2,620 ) $ ( 2,604 ) $ ( 2,620 ) $ ( 2,604 )

Total AOCI ending balance at March 31 $ ( 8,294 ) $ ( 8,788 )

Total AOCI ending balance at June 30 $ ( 9,473 ) $ ( 8,924 ) $ ( 9,473 ) $ ( 8,924 )

(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.

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

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

(d) Reclassified to Cost of sales .

During the next twelve months, we expect to reclassify existing net losses on cash flow hedges of $ 139 million (see Note 15).

Financial Statements (Continued)

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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.

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 $ 2.1 billion at December 31, 2022 and June 30, 2023, respectively.

Of these amounts, guarantees of $ 113 million at both December 31, 2022 and June 30, 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.

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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.

As of June 30, 2023, Ford has contributed to BlueOval SK $ 1.6 billion of its agreed capital contribution of up to $ 6.6 billion through 2026, subject to any adjustments agreed to by the parties.

Financial Statements (Continued)

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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.

The maximum potential payments for financial guarantees were $ 518 million and $ 576 million at December 31, 2022 and June 30, 2023, respectively.

The carrying value of recorded liabilities related to financial guarantees was $ 31 million and $ 47 million at December 31, 2022 and June 30, 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.

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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.

The maximum potential payments for non-financial guarantees were $ 273 million and $ 77 million at December 31, 2022 and June 30, 2023, respectively.

The carrying value of recorded liabilities related to non-financial guarantees was $ 0 at both December 31, 2022 and June 30, 2023.

Included in the $ 77 million of maximum potential payments at June 30, 2023 are guarantees for the resale value of vehicles sold in certain arrangements to daily rental companies.

The maximum potential payment of $ 71 million as of June 30, 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.

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For non-pattern matters, we evaluate whether there is a reasonable possibility of a material loss in excess of any accrual that can be estimated.

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

Our estimate of reasonably possible loss in excess of our accruals for all material matters currently reflects indirect tax and customs matters, for which we estimate the aggregate risk to be a range of up to a bout $ 1.4 billion.

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

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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

The estimate of our future warranty and field service action costs, net of estimated supplier recoveries, for the periods ended June 30 was as follows (in millions):

Beginning balance $ 8,451 $ 9,193

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Changes to our estimated costs are reported as changes in accrual related to pre-existing warranties in the table above.

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

Our estimate of reasonably possible costs in excess of our accruals for material field service actions and customer satisfaction actions is a range of up to about $ 1 billion in the aggregate.

Financial Statements (Continued)

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SEGMENT INFORMATION (Continued)

Key financial information for the periods ended or at March 31 was as follows (in millions):

Key financial information for the periods ended or at June 30 was as follows (in millions):

Ford Blue Ford Model e Ford Pro Ford Next Ford Credit Corporate

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on Debt Special Items Eliminations/Adjustments Total

First Quarter 2022

Second Quarter 2022

External revenues $ 23,834 $ 1,320 $ 12,748 $ 25 $ 2,256 $ 7 $ — $ — $ — $ 40,190

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Income/(Loss) before income taxes $ 2,504 $ ( 510 ) $ 879 $ ( 221 ) $ 939 $ 131 $ ( 312 ) $ ( 2,619 ) (b) $ — $ 791

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

Equity in net income/(loss) of affiliated companies 76 ( 3 ) 84 ( 83 ) 4 — — ( 20 ) — 58

Total assets 56,047 3,670 2,016 3,284 127,493 54,566 — — ( 1,321 ) (c) 245,755

Second Quarter 2023

External revenues $ 25,002 $ 1,834 $ 15,589 $ — $ 2,527 $ 2 $ — $ — $ — $ 44,954

Intersegment revenues (a) 10,206 172 — — — — — — ( 10,378 ) —

Total revenues $ 35,208 $ 2,006 $ 15,589 $ — $ 2,527 $ 2 $ — $ — $ ( 10,378 ) $ 44,954

Income/(loss) before income taxes $ 2,308 $ ( 1,080 ) $ 2,391 $ ( 26 ) $ 390 $ ( 197 ) $ ( 304 ) $ ( 1,194 ) (d) $ — $ 2,288

Equity in net income/(loss) of affiliated companies 104 ( 3 ) 160 ( 6 ) 7 1 — ( 387 ) (e) — ( 124 )

Total assets 58,475 9,420 2,754 253 143,155 54,063 — — ( 2,129 ) (c) 265,991

Ford Blue Ford Model e Ford Pro Ford Next Ford Credit Corporate

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on Debt Special Items Eliminations/Adjustments Total

First Quarter 2023

First Half 2022

External revenues $ 44,644 $ 2,292 $ 23,072 $ 109 $ 4,537 $ 12 $ — $ — $ — $ 74,666

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Total revenues $ 61,600 $ 2,369 $ 23,072 $ 109 $ 4,537 $ 12 $ — $ — $ ( 17,033 ) $ 74,666

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

Income/(Loss) before income taxes $ 3,832 $ ( 890 ) $ 1,370 $ ( 463 ) $ 1,867 $ 332 $ ( 620 ) $ ( 8,485 ) (b) $ — $ ( 3,057 )

Equity in net income/(loss) of affiliated companies 132 ( 5 ) 169 ( 158 ) 10 1 — ( 124 ) (f) — 25

First Half 2023

External revenues $ 50,126 $ 2,541 $ 28,838 $ 1 $ 4,916 $ 6 $ — $ — $ — $ 86,428

Intersegment revenues (a) 19,383 181 — — — — — — ( 19,564 ) —

Total revenues $ 69,509 $ 2,722 $ 28,838 $ 1 $ 4,916 $ 6 $ — $ — $ ( 19,564 ) $ 86,428

Income/(loss) before income taxes $ 4,931 $ ( 1,802 ) $ 3,757 $ ( 70 ) $ 693 $ ( 344 ) $ ( 612 ) $ ( 2,106 ) (d) $ — $ 4,447

Equity in net income/(loss) of affiliated companies 159 ( 6 ) 277 ( 18 ) 14 1 — ( 421 ) (e) — 6

(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.

(d) Primarily reflects restructuring actions, mark-to-market adjustments for our global pension and OPEB plans, and an accrual for the Transit Connect customs matter (relating to certain Transit Connect vehicles produced between 2009 and 2013).

(e) Primarily reflects our share of charges from an equity method investment resulting from Ford’s ongoing restructuring actions in China.

(f) 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.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

RECENT DEVELOPMENTS

On September 14, 2023, our collective bargaining agreement with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (“UAW”) in the United States will expire, and on September 18, 2023, our collective bargaining agreement with Unifor in Canada will expire, which will require negotiation of new agreements.

Risk Factors in our 2022 Form 10-K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to production disruptions.

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.

In the second quarter of 2023, the net income attributable to Ford Motor Company was $1,917 million, and Company adjusted EBIT was $3,786 million.

Net income/(loss) includes certain items (“special items”) that are excluded from Company adjusted EBIT.

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Our pre-tax and tax special items were as follows (in millions):

First Quarter

Restructuring

Second Quarter First Half

2022 2023 2022 2023

Restructuring (by Geography)

Europe $ (27) $ (51) $ (49) $ (421)

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$ (2,447) $ (6) $ (7,896) $ (31)

Transit Connect customs matter — (300) — (300)

Russia suspension of operations/asset write-off 6 — (132) —

Patent matters related to prior calendar years

Other 33 (61)

Other (including gains/(losses) on investments) (33) (92) — (153)

Subtotal Other Items $ (2,460) $ (390) $ (8,149) $ (476)

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(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.

We recorded $1.2 billion of pre-tax special item charges in the second quarter of 2023, driven primarily by restructuring actions in China and an accrual for the Transit Connect customs matter (relating to certain Transit Connect vehicles produced between 2009 and 2013).

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.

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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)

The table below shows our second quarter 2023 key metrics for the Company, compared to a year ago.

Second Quarter First Half

2022 2023 H / (L) 2022 2023 H / (L)

GAAP Financial Measures

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Net Income/(Loss) ($M) 667 1,917 $ 1,250 (2,443) 3,674 $ 6,117

Net Income/(Loss) Margin (%) (9.0) % 4.2 % 13.2 ppts

Net Income/(Loss) Margin (%) 1.7 % 4.3 % 2.6 ppts (3.3) % 4.3 % 7.6 ppts

EPS (Diluted) $ 0.16 $ 0.47 $ 0.31 $ (0.61) $ 0.91 $ 1.52

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EBIT ($M) 3,722 3,786 64 6,048 7,165 1,117

EBIT Margin (%) 6.7 % 8.1 % 1.4 ppts

EBIT Margin (%) 9.3 % 8.4 % (0.8) ppts 8.1 % 8.3 % 0.2 ppts

Adjusted EPS (Diluted) $ 0.68 $ 0.72 $ 0.04 $ 1.06 $ 1.34 $ 0.28

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(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)

In the second quarter of 2023, our diluted earnings per share of Common and Class B Stock was $0.47, and our diluted adjusted earnings per share was $0.72.

Net income/(loss) margin was 4.3% in the second quarter of 2023, up 2.6 percentage points from a year ago.

Company adjusted EBIT margin was 8.4% in the second quarter of 2023, down 0.8 percentage points from a year ago.

The year-over-year increase of $1.3 billion in net income in the second quarter of 2023 was primarily driven by the non-recurrence of a mark-to-market loss on our Rivian investment (included in special items in the second quarter of 2022), offset partially by higher restructuring and pension expense in the second quarter of 2023 (also included in special items).

The year-over-year increase of $64 million in Company adjusted EBIT was driven by higher Ford Pro EBIT and a lower EBIT loss in Ford Next.

Partial offsets include higher EBIT losses in Ford Model e, lower Ford Blue EBIT and Ford Credit EBT, and lower past service pension and OPEB income in Corporate Other.

The table below shows our second quarter and first half 2023 net income/(loss) attributable to Ford and Company adjusted EBIT by segment.

Second Quarter First Half

2022 2023 H / (L) 2022 2023 H / (L)

Ford Blue $ 2,504 $ 2,308 $ (196) $ 3,832 $ 4,931 $ 1,099

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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.

The tables below and on the following pages provide second quarter and first half 2023 key metrics and the change in second quarter 2023 EBIT compared with second 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)

Second Quarter First Half

Key Metrics 2022 2023 H / (L) 2022 2023 H / (L)

Wholesale Units (000) (a) 670 720 49 1,333 1,426 92

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EBIT ($M) 2,504 2,308 (196) 3,832 4,931 1,099

EBIT Margin (%) 6.4 % 10.4 % 4.1 ppts

EBIT Margin (%) 10.5 % 9.2 % (1.3) ppts 8.6 % 9.8 % 1.2 ppts

(a) Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 111,000 units in Q2 2022 and 107,000 units in Q2 2023).

Change in EBIT by Causal Factor (in millions)

First Quarter 2022 EBIT $ 1,328

Second Quarter 2022 EBIT $ 2,504

Volume / Mix 267

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Exchange (367)

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.

Second Quarter 2023 EBIT $ 2,308

In the second quarter of 2023, Ford Blue’s wholesales increased 7% from a year ago driven by improvements in production-related supply constraints.

Second quarter 2023 revenue increased 5%, driven by higher wholesales.

Ford Blue’s second quarter 2023 EBIT was $2.3 billion, a decrease of $196 million from a year ago, with an EBIT margin of 9.2%.

The lower EBIT was driven by weaker currencies and the non-recurrence of an insurance claim recovery in the second quarter of 2022 (included in Other), offset partially by higher wholesales, higher net pricing, and improved cost, primarily driven by improved commodity costs.

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)

Second Quarter First Half

Key Metrics 2022 2023 H / (L) 2022 2023 H / (L)

Wholesale Units (000) 24 34 10 42 47 5

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EBIT ($M) (510) (1,080) (570) (890) (1,802) (912)

EBIT Margin (%) (39.1) % (102.1) % (63.0) ppts

EBIT Margin (%) (38.6) % (58.9) % (20.3) ppts (38.8) % (70.9) % (32.1) ppts

Change in EBIT by Causal Factor (in millions)

First Quarter 2022 EBIT $ (380)

Second Quarter 2022 EBIT $ (510)

Volume / Mix 66

Net Pricing (177)

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.

Second Quarter 2023 EBIT $ (1,080)

In the second quarter of 2023, Ford Model e’s wholesales increased 44% from a year ago, reflecting increased production capacity for Mustang Mach-E and a full quarter of F-150 Lightning production, which launched in late April 2022.

Second quarter 2023 revenue increased 39%, primarily driven by higher wholesales, offset partially by lower net pricing.

Ford Model e’s second quarter 2023 EBIT loss was $1.1 billion, a $570 million higher loss than a year ago, with an EBIT margin of negative 58.9%.

The lower EBIT was primarily driven by lower net pricing, higher launch-related supplier costs, as well as higher warranty, engineering, spending-related, and selling, general & administrative costs.

Ford Pro Segment

First Quarter

Key Metrics 2022 2023 H / (L)

Second Quarter First Half

Key Metrics 2022 2023 H / (L) 2022 2023 H / (L)

Wholesale Units (000) (a) 338 365 27 623 702 80

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EBIT ($M) 879 2,391 1,512 1,370 3,757 2,387

EBIT Margin (%) 4.8 % 10.3 % 5.6 ppts

EBIT Margin (%) 6.9 % 15.3 % 8.4 ppts 5.9 % 13.0 % 7.1 ppts

(a) Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 17,000 units in Q2 2022 and 24,000 units in Q2 2023).

Change in EBIT by Causal Factor (in millions)

First Quarter 2022 EBIT $ 491

Second Quarter 2022 EBIT $ 879

Volume / Mix 110

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Exchange (65)

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.

Second Quarter 2023 EBIT $ 2,391

In the second quarter of 2023, Ford Pro’s wholesales increased 8% from a year ago driven by improvements in production-related supply constraints and new product launches.

Second quarter 2023 revenue increased 22%, driven by higher net pricing and wholesales.

Ford Pro’s second quarter 2023 EBIT was $2.4 billion, an increase of $1.5 billion from a year ago, with an EBIT margin of 15.3%.

The improvement in EBIT was driven by higher net pricing and wholesales, and lower commodity costs.

Partial offsets included higher material cost for new products, higher warranty costs (primarily driven by inflationary cost pressures), and the non-recurrence of an insurance claim recovery in the second quarter of 2022 (included in Other).

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

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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.

In this segment, our second quarter 2023 EBIT loss was $26 million, a $195 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.

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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.

The tables below provide second quarter and first half 2023 key metrics and the change in second quarter 2023 EBT compared with second 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)

Second Quarter First Half

Key Metrics 2022 2023 H / (L) 2022 2023 H / (L)

Total Net Receivables ($B) $ 116 $ 126 9 % $ 116 $ 126 9 %

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EBT ($M) 939 390 $ (549) 1,867 693 $ (1,174)

ROE (%) 22 % 8 % (14) ppts

ROE (%) 26 % 9 % (17) ppts 24 % 9 % (15) ppts

Other Balance Sheet Metrics

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retail financing only.

36-month off-lease first quarter auction values at Q1 2023 mix.

36-month off-lease second quarter auction values at Q2 2023 mix and YTD amounts at 2023 YTD mix.

Change in EBT by Causal Factor (in millions)

First Quarter 2022 EBT $ 928

Second Quarter 2022 EBT $ 939

Volume / Mix 47

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Lease Residual (112)

First Quarter 2023 EBT $ 303

Second Quarter 2023 EBT $ 390

Ford Credit’s total net receivables of $126 billion were $10 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.

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).

loss-to-receivables (“LTR”) ratio remained at a low level in the second quarter of 2023, at 21 basis points, though higher than a year ago as losses begin to normalize from historic lows.

auction values in the second quarter of 2023 were lower compared to a year ago.

Ford Credit’s second quarter 2023 EBT of $390 million was $549 million lower than a year ago, explained primarily by lower financing margin due to higher borrowing costs, the non-recurrence of prior year credit loss reserve releases and higher credit losses, unfavorable lease residual performance, and unfavorable market valuation adjustments to derivatives (included in Other).

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

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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.

In the second quarter of 2023, Corporate Other had a $197 million loss, compared with a $131 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.

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%.

Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was $304 million in the second quarter of 2023, $8 million lower than a year ago.

Our Provision for/(Benefit from) income taxes for the second quarter and first half of 2023 was a provision of $272 million and $768 million, respectively.

This resulted in effective tax rates of 11.9% and 17.3%, respectively.

Our second quarter and first half of 2023 adjusted effective tax rates, which exclude special items, were 12.9% and 16.6%, respectively.

We regularly review our organizational structure and income tax elections for affiliates in non-U.S.

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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.

At June 30, 2023, total balance sheet cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $43.0 billion.

We consider our key balance sheet metrics to be:

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Company excluding Ford Credit

2022 March 31,

2022 June 30,

Balance Sheets ($B)

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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;

(a) Balances at June 30, 2023 reflect net funded status at December 31, 2022, updated for service and interest cost;

expected return on assets;

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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.

At June 30, 2023, we had Company cash of $29.8 billion and liquidity of $47.3 billion.

At June 30, 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.

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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)

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

What changed 10-Q

Item 1. Financial Statements