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Item 1. Financial Statements

2024-07-25 compared with 2024-04-25 · 156 added, 129 removed, 497 unchanged (36% of the section changed)

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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 2023

Second Quarter 2023

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

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

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

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

Second Quarter 2024

External revenues $ 26,670 $ 1,149 $ 16,988 $ 2 $ 2,997 $ 2 $ — $ — $ — $ 47,808

Intersegment revenues (a) 11,306 112 — — — — — — ( 11,418 ) —

Total revenues $ 37,976 $ 1,261 $ 16,988 $ 2 $ 2,997 $ 2 $ — $ — $ ( 11,418 ) $ 47,808

Income/(loss) before income taxes $ 1,171 $ ( 1,143 ) $ 2,564 $ ( 13 ) $ 343 $ ( 165 ) $ ( 270 ) $ ( 49 ) (e) $ — $ 2,438

Equity in net income/(loss) of affiliated companies 96 ( 20 ) 111 ( 1 ) 10 — — 1 — 197

Total assets 57,990 7,242 2,668 371 138,225 52,427 — — ( 2,123 ) (c) 256,800

First Quarter 2024

Total assets 59,863 16,810 3,287 174 150,159 49,936 — — ( 3,643 ) (d) 276,586

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

Other Interest

on Debt Special Items Eliminations/Adjustments Total

First Half 2023

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

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

Income/(loss) before income taxes $ 905 $ ( 1,320 ) $ 3,008 $ ( 9 ) $ 326 $ ( 147 ) $ ( 278 ) $ ( 873 ) (d) $ — $ 1,612

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

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

First Half 2024

External revenues $ 48,424 $ 1,264 $ 35,007 $ 3 $ 5,884 $ 3 $ — $ — $ — $ 90,585

Intersegment revenues (a) 23,047 133 — — — — — — ( 23,180 ) —

Total revenues $ 71,471 $ 1,397 $ 35,007 $ 3 $ 5,884 $ 3 $ — $ — $ ( 23,180 ) $ 90,585

Income/(loss) before income taxes $ 2,076 $ ( 2,463 ) $ 5,572 $ ( 22 ) $ 669 $ ( 312 ) $ ( 548 ) $ ( 922 ) (f) $ — $ 4,050

Equity in net income/(loss) of affiliated companies 158 ( 39 ) 228 ( 2 ) 18 — — 1 — 364

Total assets 61,372 14,996 3,659 177 148,901 48,613 — — ( 3,377 ) (c) 274,341

(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 restructuring actions in Europe and China and mark-to-market adjustments for our global pension and OPEB plans.

(d) Primarily reflects restructuring actions in Europe, the extended duration of the EV program changeover at Oakville, and buyouts for hourly employees in North America.

(b) 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).

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

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

(e) Primarily reflects restructuring actions in Europe (which triggered remeasurement of certain European pension plans) and updated assumptions for the duration of the Oakville Assembly Plant changeover, which is now shorter than originally planned.

(f) Primarily reflects restructuring actions in Europe, buyouts for hourly employees in North America, and the extended duration of the Oakville Assembly Plant changeover .

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

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These market dynamics may continue to occur, which could have a substantial impact on our business.

As a result, in the first quarter of 2024, we recorded about $0.4 billion of expenses and about $0.3 billion of adjustments related to revenue recognized in prior periods.

In addition, slower-than-anticipated development of the electric vehicle market may impact our strategy to comply with regulatory standards, and, in some cases, we plan to utilize credits purchased from third parties to demonstrate regulatory compliance or we may need to modify our product offerings.

In the second quarter of 2024, for example, we entered into agreements to purchase about $3.8 billion of regulatory compliance credits for use in North America and Europe for current and future model years.

Our obligations under those agreements as well as the ultimate number of credits we may purchase are dependent on the sellers’ delivery of the credits and on the continued existence of the underlying regulatory compliance obligation in the applicable jurisdiction.

During the second quarter of 2024, we recorded about $100 million of expense for our anticipated utilization of regulatory compliance credits, which is included in Ford Blue and Ford Pro results.

Risk Factors in our 2023 Form 10 ‑ K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to lower-than-anticipated electric vehicle volumes and our planned transition to a greater mix of electric vehicles.

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RESULTS OF OPERATIONS

In the first quarter of 2024, the net income attributable to Ford Motor Company was $1,332 million, and Company adjusted EBIT was $2,763 million.

In the second quarter of 2024, the net income attributable to Ford Motor Company was $1,831 million, and Company adjusted EBIT was $2,757 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

Second Quarter First Half

2023 2024 2023 2024

Restructuring (by Geography)

Europe $ (51) $ (226) $ (421) $ (547)

China (309) —

North America Hourly Buyouts — — — (260)

China (446) — (755) —

Other (159) — (147) —

Subtotal Restructuring $ (656) $ (226) $ (1,323) $ (807)

Extended Oakville EV Program Changeover

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

Extended Oakville Assembly Plant Changeover

Other (including gains/(losses) on investments) (90) 7 (176) 9

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(a) Includes related tax effect on special items and tax special items.

We recorded $873 million of pre-tax special item charges in the first quarter of 2024, driven primarily by restructuring actions in Europe, the extended duration of the EV program changeover at Oakville, and buyouts for hourly employees in North America.

We recorded $49 million of pre-tax special item charges in the second quarter of 2024, primarily reflecting restructuring actions in Europe (which triggered remeasurement of certain European pension plans) and updated assumptions for the duration of the Oakville Assembly Plant changeover, which is now shorter than originally planned.

In Note 19 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 2024 key metrics for the Company, compared to a year ago.

First Quarter

2023 2024 H / (L)

The table below shows our second quarter and first half 2024 key metrics for the Company, compared to a year ago.

Second Quarter First Half

2023 2024 H / (L) 2023 2024 H / (L)

GAAP Financial Measures

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Net Income/(Loss) ($M) 1,917 1,831 $ (86) 3,674 3,163 $ (511)

Net Income/(Loss) Margin (%) 4.2 % 3.1 % (1.1) ppts

Net Income/(Loss) Margin (%) 4.3 % 3.8 % (0.4) ppts 4.3 % 3.5 % (0.8) ppts

EPS (Diluted) $ 0.47 $ 0.46 $ (0.01) $ 0.91 $ 0.79 $ (0.12)

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EBIT ($M) 3,786 2,757 (1,029) 7,165 5,520 (1,645)

EBIT Margin (%) 8.1 % 6.5 % (1.7) ppts

EBIT Margin (%) 8.4 % 5.8 % (2.7) ppts 8.3 % 6.1 % (2.2) ppts

Adjusted EPS (Diluted) $ 0.72 $ 0.47 $ (0.25) $ 1.34 $ 0.97 $ (0.37)

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

In the first quarter of 2024, our diluted earnings per share of Common and Class B Stock was $0.33, and our diluted adjusted earnings per share was $0.49.

Net income/(loss) margin was 3.1% in the first quarter of 2024, down 1.1 percentage points from a year ago.

Company adjusted EBIT margin was 6.5% in the first quarter of 2024, down 1.7 percentage points from a year ago.

The table below shows our first quarter 2024 net income/(loss) attributable to Ford and Company adjusted EBIT by segment.

First Quarter

2023 2024 H / (L)

In the second quarter of 2024, our diluted earnings per share of Common and Class B Stock was $0.46, and our diluted adjusted earnings per share was $0.47.

Net income/(loss) margin was 3.8% in the second quarter of 2024, down 0.4 percentage points from a year ago.

Company adjusted EBIT margin was 5.8% in the second quarter of 2024, down 2.7 percentage points from a year ago.

The table below shows our second quarter and first half 2024 net income/(loss) attributable to Ford and Company adjusted EBIT by segment.

Second Quarter First Half

2023 2024 H / (L) 2023 2024 H / (L)

Ford Blue $ 2,308 $ 1,171 $ (1,137) $ 4,931 $ 2,076 $ (2,855)

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

The year-over-year decrease of $425 million in net income and $616 million in Company adjusted EBIT in the first quarter of 2024 was driven by lower Ford Blue and Model e EBIT, offset partially by higher Ford Pro EBIT.

The year-over-year decrease of $86 million in net income was primarily driven by lower Ford Blue EBIT and higher tax expense, offset partially by lower restructuring costs, the non-recurrence of an accrual for the Transit Connect customs matter, and a pension remeasurement gain.

The year-over-year decrease of $1.0 billion in Company adjusted EBIT was driven by lower Ford Blue and Ford Model e EBIT, offset partially by higher Ford Pro EBIT.

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

The tables below and on the following pages provide first quarter 2024 key metrics and the change in first quarter 2024 EBIT compared with first quarter 2023 by causal factor for each of our segments.

The tables below and on the following pages provide second quarter and first half 2024 key metrics and the change in second quarter 2024 EBIT compared with second quarter 2023 by causal factor for each of our Ford Blue, Ford Model e, and Ford Pro 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 2023 2024 H / (L)

Second Quarter First Half

Key Metrics 2023 2024 H / (L) 2023 2024 H / (L)

Wholesale Units (000) (a) 720 741 21 1,426 1,367 (59)

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EBIT ($M) 2,308 1,171 (1,137) 4,931 2,076 (2,855)

EBIT Margin (%) 10.4 % 4.2 % (6.3) ppts

EBIT Margin (%) 9.2 % 4.4 % (4.8) ppts 9.8 % 4.3 % (5.6) ppts

(a) Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 107,000 units in Q2 2023 and 105,000 units in Q2 2024).

Change in EBIT by Causal Factor (in millions)

First Quarter 2023 EBIT

Second Quarter 2023 EBIT

Volume / Mix 299

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Exchange (200)

First Quarter 2024 EBIT

In the first quarter of 2024, Ford Blue’s wholesales decreased 11% from a year ago, driven primarily by lower F-150 volume due to the new model launch in the quarter and ceasing production of the Fiesta in Europe.

First quarter 2024 revenue decreased 13%, driven by lower wholesales and unfavorable mix, offset partially by higher currency-related pricing in South America.

Ford Blue’s first quarter 2024 EBIT was $905 million, a decrease of $1.7 billion from a year ago, with an EBIT margin of 4.2%.

The lower EBIT was driven by lower wholesales and unfavorable mix (primarily fewer F-150s due to the new model launch).

Higher costs reflected primarily material cost for new products and higher warranty costs, offset partially by lower structural costs.

Second Quarter 2024 EBIT

In the second quarter of 2024, Ford Blue’s wholesales increased 3% from a year ago, driven primarily by higher F-150, Maverick, and Ranger volumes, offset partially by ceasing production of the Fiesta in Europe.

Second quarter 2024 revenue increased 7%, driven primarily by higher wholesales.

Ford Blue’s second quarter 2024 EBIT was $1.2 billion, a decrease of $1.1 billion from a year ago, with an EBIT margin of 4.4%.

The lower EBIT was primarily driven by higher warranty costs, higher material costs for new products, and higher manufacturing cost, offset partially by higher wholesales.

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

Ford Model e Segment

First Quarter

Key Metrics 2023 2024 H / (L)

Second Quarter First Half

Key Metrics 2023 2024 H / (L) 2023 2024 H / (L)

Wholesale Units (000) 34 26 (8) 47 36 (10)

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EBIT ($M) (1,080) (1,143) (63) (1,802) (2,463) (661)

EBIT Margin (%) (102.1) % (1,145.9) % (1,043.8) ppts

EBIT Margin (%) (58.9) % (99.5) % (40.6) ppts (70.9) % (194.8) % (123.9) ppts

Change in EBIT by Causal Factor (in millions)

First Quarter 2023 EBIT

Second Quarter 2023 EBIT

Volume / Mix (202)

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Exchange (45)

First Quarter 2024 EBIT

In the first quarter of 2024, Ford Model e’s wholesales decreased 20% from a year ago to 10,000 units.

First quarter 2024 revenue decreased 84%, primarily driven by the accrual impacts for units in dealer stock at December 31, 2023 (about $0.3 billion) as well as lower net pricing.

Ford Model e’s first quarter 2024 EBIT loss was $1.3 billion, a $598 million higher loss than a year ago.

The lower EBIT was primarily driven by lower net pricing and exchange.

Favorable cost performance included lower battery raw materials and engineering expense, offset partially by volume-related obligations of about $90 million for batteries and certain other commodities and higher manufacturing costs ahead of the upcoming Explorer EV launch in Europe.

Second Quarter 2024 EBIT

In the second quarter of 2024, Ford Model e’s wholesales decreased 23% from a year ago to 26,000 units due to competitive market conditions.

Second quarter 2024 revenue decreased 37%, primarily driven by lower wholesales and lower net pricing.

Ford Model e’s second quarter 2024 EBIT loss was $1.1 billion, a $63 million higher loss than a year ago, with an EBIT margin of negative 99.5%.

The lower EBIT was primarily driven by lower net pricing, lower wholesales, and adverse mix, offset partially by favorable material cost, including lower battery-related raw materials.

Ford Pro Segment

First Quarter

Key Metrics 2023 2024 H / (L)

Second Quarter First Half

Key Metrics 2023 2024 H / (L) 2023 2024 H / (L)

Wholesale Units (000) (a) 365 375 10 702 783 81

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EBIT ($M) 2,391 2,564 173 3,757 5,572 1,815

EBIT Margin (%) 10.3 % 16.7 % 6.4 ppts

EBIT Margin (%) 15.3 % 15.1 % (0.2) ppts 13.0 % 15.9 % 2.9 ppts

(a) Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 24,000 units in Q2 2023 and 21,000 units in Q2 2024).

Change in EBIT by Causal Factor (in millions)

First Quarter 2023 EBIT

Second Quarter 2023 EBIT

Volume / Mix 498

Net Pricing 275

First Quarter 2024 EBIT

In the first quarter of 2024, Ford Pro’s wholesales increased 21% from a year ago, driven by a full quarter of the all new Super Duty truck, which launched in the first quarter of 2023, and higher sales of the Transit range of vans.

First quarter 2024 revenue increased 36%, driven by higher wholesales, favorable mix, and higher net pricing.

Ford Pro’s first quarter 2024 EBIT was $3.0 billion, an increase of $1.6 billion from a year ago, with an EBIT margin of 16.7%.

The improvement in EBIT was driven by higher volume, favorable mix, and higher net pricing.

Higher cost was a partial offset, including material costs (primarily new product-related and inflationary increases), higher growth-related structural costs (including engineering and manufacturing), and higher warranty costs.

Second Quarter 2024 EBIT

In the second quarter of 2024, Ford Pro’s wholesales increased 3% from a year ago.

Second quarter 2024 revenue increased 9%, reflecting higher wholesales, favorable mix, and higher net pricing driven by continued strong demand for our products.

Ford Pro’s second quarter 2024 EBIT was $2.6 billion, an increase of $173 million from a year ago, with an EBIT margin of 15.1%.

The improvement in EBIT was driven by higher volume, favorable mix, and higher net pricing, offset partially by higher growth-related structural costs and higher manufacturing costs.

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

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The Ford Next segment primarily includes expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments.

Ford Next’s first quarter 2024 EBIT loss was $9 million, a $35 million improvement from a year ago.

Ford Next’s second quarter 2024 EBIT loss was $13 million, a $13 million improvement from a year ago.

Ford Credit Segment

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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 2024 key metrics and the change in first quarter 2024 EBT compared with first quarter 2023 by causal factor for the Ford Credit segment.

The tables below provide second quarter and first half 2024 key metrics and the change in second quarter 2024 EBT compared with second quarter 2023 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 2023 2024 H / (L)

Second Quarter First Half

Key Metrics 2023 2024 H / (L) 2023 2024 H / (L)

Total Net Receivables ($B) $ 126.1 $ 137.7 $ 11.6

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EBT ($M) 390 343 $ (47) 693 669 $ (24)

ROE (%) 8 % 7 % (1) ppts

ROE (%) 9 % 8 % (1) ppts 9 % 7 % (2) ppts

Other Balance Sheet Metrics

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retail financing only.

36-month off-lease first quarter auction values at Q1 2024 mix.

36-month off-lease second quarter auction values at Q2 2024 mix and YTD amounts at YTD 2024 mix.

Change in EBT by Causal Factor (in millions)

First Quarter 2023 EBT

Second Quarter 2023 EBT

Volume / Mix 53

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Lease Residual (123)

First Quarter 2024 EBT

Ford Credit’s total net receivables of $136 billion were 10% higher than a year ago, reflecting the impact of increased consumer and non-consumer financing, offset partially by a smaller lease portfolio.

The first quarter 2024 U.S.

loss-to-receivables (“LTR”) ratio of 47 basis points increased from a year ago, but remained low by historical standards.

auction values in the first quarter of 2024 were lower compared to a year ago.

Ford Credit’s first quarter 2024 EBT of $326 million was $23 million higher than a year ago, explained primarily by higher financing margin and favorable volume and mix, offset partially by unfavorable lease residual performance.

Second Quarter 2024 EBT

Ford Credit’s total net receivables of $137.7 billion were 9% higher than a year ago, explained primarily by higher consumer and non-consumer financing.

The second quarter 2024 U.S.

loss-to-receivables (“LTR”) ratio of 41 basis points increased from a year ago, and U.S.

auction values in the second quarter of 2024 were lower year over year.

Ford Credit’s second quarter 2024 EBT of $343 million was $47 million lower than a year ago, explained primarily by higher operating lease depreciation reflecting higher lease return rates, higher insurance losses due to severe weather events (included in Other), and higher credit losses, offset partially by higher financing margin, higher volume, and favorable mix.

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

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• 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 (“ABS”) (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

• 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.

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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 2024, Corporate Other had a $147 million EBIT loss, unchanged from a year ago.

In the second quarter of 2024, Corporate Other had a $165 million EBIT loss, a $32 million improvement from a year ago.

Interest on Debt

Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was $278 million in the first quarter of 2024, $30 million lower than a year ago.

Our Provision for/(Benefit from) income taxes for the first quarter of 2024 was a provision of $278 million, resulting in an effective tax rate of 17.2%.

Our first quarter 2024 adjusted effective tax rate, which excludes special items, was 20.0%.

Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was $270 million in the second quarter of 2024, $34 million lower than a year ago.

Our Provision for/(Benefit from) income taxes for the second quarter and first half of 2024 was a provision of $605 million and $883 million, respectively, resulting in effective tax rates of 24.8% and 21.8%, respectively.

Our second quarter and first half 2024 adjusted effective tax rates, which exclude special items, were 23.1% and 21.6%, 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, 2024, total balance sheet cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $34.7 billion.

At June 30, 2024, total balance sheet cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $34.8 billion.

We consider our key balance sheet metrics to be:

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Company excluding Ford Credit

2023 March 31,

2023 June 30,

Balance Sheets ($B)

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Total Funded Status OPEB $ (4.7) $ (4.6)

(a) Balances at March 31, 2024 reflect net funded status at December 31, 2023, updated for service and interest cost;

(a) Balances at June 30, 2024 reflect net funded status at December 31, 2023, updated for service and interest cost;

expected return on assets;

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Our key priority is to maintain a strong balance sheet to withstand potential stress scenarios, while having resources available to invest in and grow our business.

At March 31, 2024, we had Company cash of $25.1 billion and liquidity of $42.6 billion.

At March 31, 2024, about 86% of Company cash was held by consolidated entities domiciled in the United States.

At June 30, 2024, we had Company cash of $26.6 billion and liquidity of $44.8 billion.

At June 30, 2024, about 86% of Company cash was held by consolidated entities domiciled in the United States.

To be prepared for an economic downturn and other stress scenarios, 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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• 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 2023 Form 10-K Report)

• Purchase of regulatory compliance credits

• Marketing incentive payments to dealers

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The net impact of this typically results in cash outflows from changes in our working capital balances during these shutdown periods.

Our finished product inventory at March 31, 2024 was higher than at December 31, 2023, primarily reflecting new vehicle launches and units awaiting final quality review.

Our finished product inventory at June 30, 2024 was higher than at December 31, 2023, primarily reflecting new vehicle launches and units awaiting final quality review.

In response to, or in anticipation of, supplier disruptions, we may stockpile certain components or raw materials to help prevent disruption in our production of vehicles.

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Subject to satisfaction of those conditions, we will be obligated to purchase the materials at the cost determined by the purchase price mechanism.

As of March 31, 2024, our estimated expenditures for the maximum quantity that we are committed to purchase under these offtake agreements through 2035, subject to certain conditions, consist of approximately $3.9 billion of purchase obligations and approximately $6.9 billion of contingent purchase obligations based on our present forecast;

As of June 30, 2024, our estimated expenditures for the maximum quantity that we are committed to purchase under these offtake agreements through 2035, subject to certain conditions, consist of approximately $3.7 billion of purchase obligations and approximately $6.8 billion of contingent purchase obligations based on our present forecast;

however, our forecast could fluctuate from period to period based on market prices, which could result in significant increases or decreases in our estimate.

The actual price paid for these materials will be recorded on our balance sheet at the time of purchase.

In addition, as market conditions dictate, we may enter into additional offtake agreements with raw material suppliers or seek to renegotiate existing agreements.

Based on the offtake agreements we have entered into thus far, the earliest date by which we could be obligated to purchase any output, subject to satisfaction of the applicable conditions, will be in the second half of 2024.

Risk Factors in our 2023 Form 10-K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to our offtake agreements and other long-term purchase contracts.

In the event that we do not expect to consume all of the materials we are obligated to purchase pursuant to the terms of these agreements, we may sell the excess materials to a replacement purchaser or back to the supplier.

The resale price may or may not be the same as the original purchase price, depending on then-current market conditions and negotiated terms.

As a result, in certain instances when the purchase price mechanism under our agreements is higher than the expected resale price of the excess materials, we have recorded and may in the future record accruals related to the resale.

Accruals recorded to date for such items have been immaterial.

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

As market conditions dictate, we have and may in the future enter into additional offtake agreements with raw material suppliers or renegotiate existing agreements.

In addition, as mentioned above, we may seek to resell excess materials.

Risk Factors in our 2023 Form 10-K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to our offtake agreements and other long-term purchase contracts.

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.

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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, 2024, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was $213 million.

The amount settled through the SCF program during the first quarter of 2024 was $383 million.

As of June 30, 2024, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was $194 million.

The amount settled through the SCF program during the first half of 2024 was $767 million.

Changes in Company cash excluding Ford Credit are summarized below (in billions):

First Quarter

Second Quarter First Half

2023 2024 2023 2024

Company Excluding Ford Credit

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Numbers may not sum due to rounding.

Our first quarter 2024 Net cash provided by/(used in) operating activities was positive $1.4 billion, $1.4 billion lower than a year ago (see page 60 for additional information).

The decrease reflects higher inventory and lower net income, offset partially by higher accounts payable as reflected on our Consolidated Statement of Cash Flows.

Company adjusted free cash flow was negative $0.5 billion, $1.2 billion lower than a year ago.

The decrease was primarily driven by lower Company adjusted EBIT excluding Ford Credit and higher capital spending.

Capital spending was $2.1 billion in the first quarter of 2024, an increase of $0.3 billion from a year ago.

We now expect full year 2024 capital spending to be in the range of $8 billion to $9 billion.

First quarter 2024 working capital impact was $1.2 billion negative, driven by higher inventory, offset partially by higher trade payables, each compared to December 31, 2023.

All other and timing differences were negative $0.2 billion.

Timing differences include differences between accrual-based EBIT and the associated cash flows (e.g., marketing incentive and warranty payments to dealers, JV equity income, compensation payments, and pension and OPEB income or expense).

In the first quarter of 2024, we contributed $550 million to our global funded pension plans.

We continue to expect to contribute about $1 billion to our global funded pension plans in 2024.

Shareholder distributions were $1.3 billion in the first quarter of 2024, all of which was attributable to our regular and supplemental dividend.

Our second quarter 2024 Net cash provided by/(used in) operating activities was positive $5.5 billion, $0.5 billion higher than a year ago (see page 61 for additional information).

The increase reflects lower working capital and higher Ford Credit operating cash flow.

Company adjusted free cash flow was $3.2 billion, $0.3 billion higher than a year ago, primarily driven by lower working capital.

Capital spending was $2.1 billion in the second quarter of 2024, an increase of $0.2 billion from a year ago.

We continue to expect full year 2024 capital spending to be in the range of $8 billion to $9 billion.

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

Second quarter 2024 working capital impact was flat, driven by lower inventory, offset by higher trade receivables and lower trade payables, each compared to March 31, 2024.

All other and timing differences were positive $2.0 billion.

Cash outflows related to our warranty accruals are expected to occur over several years.

In the second quarter of 2024, we contributed $83 million to our global funded pension plans.

We expect to contribute about $1 billion to our global funded pension plans in 2024.

Shareholder distributions (including a regular cash dividend and anti-dilutive share repurchases) were $0.8 billion in the second quarter of 2024.

Available Credit Lines .

Total Company committed credit lines, excluding Ford Credit, at March 31, 2024 were $19.4 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $1.8 billion of our 364-day revolving credit facility, and $2.2 billion of local credit facilities.

At March 31, 2024, the utilized portion of the corporate credit facility was $18 million, representing amounts utilized for letters of credit.

In addition, $1.7 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of March 31, 2024.

Total Company committed credit lines, excluding Ford Credit, at June 30, 2024 were $20.1 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $2.5 billion of our 364-day revolving credit facility, and $2.1 billion of local credit facilities.

At June 30, 2024, the utilized portion of the corporate credit facility was $6 million, representing amounts utilized for letters of credit.

In addition, $1.7 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of June 30, 2024.

Our corporate, supplemental, and 364-day revolving credit facilities were amended as of April 22, 2024 to extend the maturity dates of the commitments under each facility and increase the size of our 364-day revolving credit facility.

Following the corporate credit facility amendment, $25 million of commitments mature on April 26, 2026, $3.4 billion of commitments mature on April 22, 2027, $0.1 billion of commitments mature on April 26, 2028, and $10.0 billion of commitments mature on April 20, 2029.

Following the supplemental revolving credit facility amendment, $2.0 billion of commitments mature on April 22, 2027.

Following the 364-day revolving credit facility amendment, $2.5 billion of commitments mature on April 21, 2025.

Lenders under our corporate credit facility have $25 million of commitments maturing on April 26, 2026, $3.4 billion of commitments maturing on April 22, 2027, $0.1 billion of commitments maturing on April 26, 2028, and $10.0 billion of commitments maturing on April 20, 2029.

Lenders under our supplemental revolving credit facility have $2.0 billion of commitments maturing on April 22, 2027.

Lenders under our 364-day revolving credit facility have $2.5 billion of commitments maturing on April 21, 2025.

The corporate, supplemental, and 364-day credit agreements include certain sustainability-linked targets, pursuant to which the applicable margin and facility fees may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, carbon-free electricity consumption, and Ford Europe CO 2 tailpipe emissions.

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

As shown in Note 12 of the Notes to the Financial Statements, at March 31, 2024, Company debt excluding Ford Credit was $20.2 billion.

As shown in Note 12 of the Notes to the Financial Statements, at June 30, 2024, Company debt excluding Ford Credit was $20.4 billion.

This balance is $0.5 billion higher than at December 31, 2023.

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Ford Credit remains well capitalized with a strong balance sheet and funding diversified across platforms and markets.

Ford Credit ended the first quarter of 2024 with $27.0 billion of liquidity, up $1.3 billion from year-end.

Ford Credit continues to have robust access to capital markets, completing $13 billion of public term issuances through April 23, 2024.

Ford Credit ended the second quarter of 2024 with $28.3 billion of liquidity, up $2.6 billion from year-end.

Ford Credit continues to have robust access to capital markets, completing $22 billion of public term issuances through July 23, 2024.

Key elements of Ford Credit’s funding strategy include:

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• Prudently access public markets

• Continue to leverage retail deposit funding in Europe

• Flexibility to increase ABS mix as needed;

• Continue to leverage retail deposits in Europe

• Flexibility to increase asset-backed securities mix as needed;

preserving assets and committed capacity

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2023 December 31,

2023 March 31,

2023 June 30,

Funding Structure

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Securitized Funding as Percent of Total Debt 45.0 % 44.9 % 41.3 %

Net receivables of $135.5 billion at March 31, 2024 were funded primarily with term unsecured debt and term asset-backed securities.

Securitized funding as a percent of total debt was 42.5% as of March 31, 2024.

Net receivables of $137.7 billion at June 30, 2024 were funded primarily with term unsecured debt and term asset-backed securities.

Securitized funding as a percent of total debt was 41.3% as of June 30, 2024.

Public Term Funding Plan.

The following table shows Ford Credit’s issuances for full year 2022 and 2023, planned issuances for full year 2024, and its global public term funding issuances through April 23, 2024, excluding short-term funding programs (in billions):

The following table shows Ford Credit’s issuances for full year 2022 and 2023, planned issuances for full year 2024, and its global public term funding issuances through July 23, 2024, excluding short-term funding programs (in billions):

Forecast Through

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(a) See Definitions and Information Regarding Ford Credit Causal Factors section.

For 2024, Ford Credit continues to project full year public term funding in the range of $27 billion to $33 billion.

For 2024, Ford Credit now projects full year public term funding in the range of $28 billion to $33 billion.

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

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2023 December 31,

2023 March 31,

2023 June 30,

Liquidity Sources (a)

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Ford Credit’s net liquidity available for use will fluctuate quarterly based on factors including near-term debt maturities, receivable growth and decline, and timing of funding transactions.

At March 31, 2024, Ford Credit’s net liquidity available for use was $27.0 billion, $1.3 billion higher than year-end 2023, reflecting strong access to public funding markets.

At March 31, 2024, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $53.8 billion, down $2.4 billion from year-end 2023.

At June 30, 2024, Ford Credit’s net liquidity available for use was $28.3 billion, $2.6 billion higher than year-end 2023, reflecting strong access to public funding markets.

At June 30, 2024, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $52.2 billion, down $4.0 billion from year-end 2023, primarily explained by lower cash due to higher receivables.

Material Cash Requirements.

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2023 December 31,

2023 March 31,

2023 June 30,

Leverage Calculation

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Ford Credit plans its leverage by considering market conditions and the risk characteristics of its business.

At March 31, 2024, Ford Credit’s financial statement leverage was 9.6:1.

At June 30, 2024, Ford Credit’s financial statement leverage was 9.6:1.

Ford Credit targets financial statement leverage in the range of 9:1 to 10:1.

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Pension Plans - Funded Balances.

As of March 31, 2024, our total Company pension underfunded status reported on our consolidated balance sheets was $1.7 billion and reflects the net funded status at December 31, 2023, updated for:

As of June 30, 2024, our total Company pension underfunded status reported on our consolidated balance sheets was $1.4 billion and reflects the net funded status at December 31, 2023, updated for:

service and interest cost;

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Four Quarters Ending

2023 March 31,

2023 June 30,

Adjusted Net Operating Profit/(Loss) After Cash Tax

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Each rating agency may have different criteria for evaluating company risk and, therefore, ratings should be evaluated independently for each rating agency.

There have been no rating actions taken by these NRSROs since the filing of our 2023 Form 10-K Report.

There have been no rating actions taken by these NRSROs since the filing of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

The following table summarizes certain of the credit ratings and outlook presently assigned by these four NRSROs:

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

We provided 2024 Company guidance in our earnings release furnished on Form 8-K dated April 24, 2024.

The guidance is based on our expectations as of April 24, 2024, and assumes no material change to our current assumptions for inflation, logistics issues, production, or macroeconomic conditions.

We provided 2024 Company guidance in our earnings release furnished on Form 8-K dated July 24, 2024.

The guidance is based on our expectations as of July 24, 2024, and assumes no material change to our current assumptions for inflation, logistics issues, production, or macroeconomic conditions.

Our actual results could differ materially from our guidance due to risks, uncertainties, and other factors, including those set forth in “Risk Factors” in Item 1A of our 2023 Form 10-K Report and as updated by our subsequent filings with the SEC.

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• Ford Pro EBIT of $9 billion to $10 billion driven by continued growth and favorable mix, offset partially by moderated pricing

• Ford Blue EBIT of $7 billion to $7.5 billion, reflecting a balanced market equation and cost efficiencies offsetting higher labor and product costs

• Ford Model e EBIT loss of $5 billion to $5.5 billion, driven by continued pricing pressure and investments in new vehicles

• Ford Blue EBIT of $6 billion to $6.5 billion, reflecting a balanced market equation and higher product, manufacturing, and warranty costs, offset partially by cost efficiencies

• Ford Model e EBIT loss of $5 billion to $5.5 billion driven by continued pricing pressure and investments in new electric vehicles

• Ford Credit EBT of about $1.5 billion

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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