What changed in this filing

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Item 1. Financial Statements

2024-10-29 compared with 2024-07-25 · 127 added, 154 removed, 499 unchanged (36% of the section changed)

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SEGMENT INFORMATION (Continued)

Segment Revenue, Cost, and Asset Principles for Ford Blue, Ford Model e, and Ford Pro

External vehicle and digital services revenue is generally vehicle-specific and included in the segment responsible for the external vehicle sale.

A majority of parts and accessories revenue and cost is attributed to customer sales channels or vehicle lines based on recent end customer sales and is included in the respective segment.

In the normal course of business, Ford Blue, Ford Model e, and Ford Pro transact between segments and cooperate to leverage synergies, including developing and manufacturing vehicles on behalf of another segment.

When one segment produces a vehicle that is sold externally by another segment, an intersegment transaction occurs.

The producing segment will report intersegment revenue to recoup the costs associated with the unit produced.

This includes material cost, labor and overhead (including depreciation and amortization), inbound freight, and an intersegment markup.

The intersegment markup amount is set to deliver a competitive return to the producing segment for its manufacturing and distribution service.

Costs are reflected in the associated segment externally reporting the vehicle sale, as detailed in the table below:

Income Statement Elements Examples Segment Reporting

Costs specific to a particular vehicle Bill of material cost and initial warranty accrual Reported in the segment externally selling the vehicle

Costs identifiable by product line Manufacturing and logistics costs, depreciation & amortization expense, direct research & development costs Typically identifiable to the product line or production location.

Reported in the segment externally selling the vehicle, based on relative volume

Shared costs Selling, general & administrative expense, and indirect/cross product line research & development costs Typically shared across all segments, generally based on relative volume.

Certain costs clearly linked to a segment are reported in the specific segment

Intersegment markup costs for intersegment vehicle transactions Contract manufacturing and distribution fees Reported in the segment externally selling the vehicle, for each applicable vehicle transaction

Assets are reported in each segment, aligned to the appropriate operational responsibility.

Manufacturing assets, e.g., our plants and the machinery and equipment therein, are included in our Ford Blue and Ford Model e segments.

Manufacturing assets producing only, or primarily, EVs and related components are reflected in Ford Model e.

Manufacturing assets that support the production of ICE and hybrid vehicles, including those producing ICE and electric in the same facility, are included in Ford Blue.

Vendor tooling dedicated to producing EV parts is reported in Ford Model e.

There are no Ford manufacturing or vendor tooling assets reported in Ford Pro.

Regardless of the segment reporting the asset, depreciation and amortization expense is reflected on the basis of production volume and reported in the segment that reports the external vehicle sale.

Equity in net income/(loss) of affiliated companies is included in Income/(Loss) before income taxes , based primarily on which segment the entity supports or has the majority of the entity’s purchases or sales.

The table below shows the segment reporting for our most significant unconsolidated entities:

Ford Blue Ford Model e Ford Pro

∘ Changan Ford Automobile Corporation, Ltd.

∘ BlueOval SK, LLC

∘ Ford Otomotiv Sanayi Anonim Sirketi (“Ford Otosan”)

∘ Jiangling Motors Corporation, Ltd.

∘ AutoAlliance (Thailand) Co., Ltd.

Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

SEGMENT INFORMATION (Continued)

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

Key financial information for the periods ended or at September 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

Second Quarter 2023

Third Quarter 2023

External revenues $ 25,587 $ 1,758 $ 13,829 $ 1 $ 2,625 $ 1 $ — $ — $ — $ 43,801

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Income/(Loss) before income taxes $ 1,718 $ ( 1,329 ) $ 1,654 $ ( 17 ) $ 358 $ ( 186 ) $ ( 324 ) $ ( 487 ) (b) $ — $ 1,387

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

Equity in net income/(loss) of affiliated companies 90 ( 9 ) 179 ( 5 ) 9 — — ( 1 ) — 263

Total assets 60,282 10,966 3,137 235 142,615 53,097 — — ( 2,259 ) (c) 268,073

Third Quarter 2024

External revenues $ 26,238 $ 1,173 $ 15,655 $ 2 $ 3,127 $ 1 $ — $ — $ — $ 46,196

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Total revenues $ 36,815 $ 1,247 $ 15,655 $ 2 $ 3,127 $ 1 $ — $ — $ ( 10,651 ) $ 46,196

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

Income/(loss) before income taxes $ 1,627 $ ( 1,224 ) $ 1,814 $ ( 10 ) $ 544 $ ( 201 ) $ ( 272 ) $ ( 1,409 ) (d) $ — $ 869

Equity in net income/(loss) of affiliated companies 69 ( 13 ) 82 — 10 ( 1 ) — — — 147

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

Total assets 60,477 17,540 3,833 157 156,416 51,884 — — ( 3,260 ) (c) 287,047

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

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on Debt Special Items Eliminations/Adjustments Total

First Half 2023

First Nine Months 2023

External revenues $ 75,713 $ 4,299 $ 42,667 $ 2 $ 7,541 $ 7 $ — $ — $ — $ 130,229

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Income/(Loss) before income taxes $ 6,649 $ ( 3,131 ) $ 5,411 $ ( 87 ) $ 1,051 $ ( 530 ) $ ( 936 ) $ ( 2,593 ) (b) $ — $ 5,834

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

First Half 2024

Equity in net income/(loss) of affiliated companies 249 ( 15 ) 456 ( 23 ) 23 1 — ( 422 ) (e) — 269

First Nine Months 2024

External revenues $ 74,662 $ 2,437 $ 50,662 $ 5 $ 9,011 $ 4 $ — $ — $ — $ 136,781

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(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 .

(d) Primarily reflects a write-down of certain product-specific assets of $ 391 million and other expenses of $ 588 million related to the cancellation of a previously planned all-electric three-row SUV program, all of which was recorded in C ost of sales .

The remaining items consist of pension curtailment costs and remeasurement losses (primarily related to hourly buyouts in North America) and continued restructuring actions in Europe.

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

(f) Includes a write-down of certain product-specific assets of $ 391 million and other expenses of $ 588 million related to the cancellation of a previously planned all-electric three-row SUV program, all of which was recorded in Cost of sales .

The amount also reflects restructuring actions in Europe, buyouts for hourly employees in North America, the extended duration of the Oakville Assembly Plant changeover, and pension curtailment and separation costs in North America and Europe.

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

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Although we continue to invest in our electric vehicle strategy, we have observed lower-than-anticipated industrywide electric vehicle adoption rates and near-term pricing pressures, which has led us, and may in the future lead us, to adjust our spending, production, and/or product launches to better match the pace of electric vehicle adoption.

As a result, we have incurred, and may continue to incur, expenses related to payments to our electric vehicle-related suppliers (battery, raw material, or otherwise), inventory adjustments, or other matters.

As a result, we recorded about $1.1 billion of expenses in the third quarter of 2024 and may continue to incur expenses related to payments to our electric vehicle-related suppliers (battery, raw material, or otherwise), inventory adjustments, or other matters.

The third quarter amount includes $979 million related to the cancellation of a previously announced all-electric three-row SUV program.

We may incur additional expenses and cash expenditures of up to about $900 million related to the cancellation, the majority of which we expect to record by the first half of 2025.

Further, significant unexpected changes in the EV demand environment have led, and may in the future lead, to incremental competitive pricing actions.

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

In the third quarter of 2024, the net income attributable to Ford Motor Company was $892 million, and Company adjusted EBIT was $2,550 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):

Second Quarter First Half

Third Quarter First Nine Months

2023 2024 2023 2024

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Subtotal Restructuring $ (135) $ (120) $ (1,458) $ (927)

EV program cancellation $ — $ (979) $ — $ (979)

Transit Connect customs matter (96) — (396) —

Extended Oakville Assembly Plant Changeover

EV program dispute — 19 — 19

Other (including gains/(losses) on investments) (8) (3) (184) 6

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Pension and OPEB remeasurement $ (169) $ (168) $ (371) $ 15

Pension settlements and curtailments (59) (47) (105) (61)

Pension settlements, curtailments, and separations costs (79) (158) (184) (219)

Subtotal Pension and OPEB Gain/(Loss) $ (248) $ (326) $ (555) $ (204)

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

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.

We recorded $1.4 billion of pre-tax special item charges in the third quarter of 2024, primarily reflecting a write-down of certain product-specific assets and other expenses related to the cancellation of a previously planned all-electric three-row SUV program, pension curtailment costs and remeasurement losses (primarily related to hourly buyouts in North America), and continued restructuring actions in Europe.

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 second quarter and first half 2024 key metrics for the Company, compared to a year ago.

Second Quarter First Half

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

Third Quarter First Nine Months

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

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

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

In the third quarter of 2024, our diluted earnings per share of Common and Class B Stock was $0.22, and our diluted adjusted earnings per share was $0.49.

Net income/(loss) margin was 1.9% in the third quarter of 2024, down 0.8 percentage points from a year ago.

Company adjusted EBIT margin was 5.5% in the third quarter of 2024, up 0.5 percentage points from a year ago.

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

Third Quarter First Nine Months

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

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

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.

The year-over-year decrease of $307 million in net income was primarily driven by the three-row SUV EV program cancellation special item, offset partially by higher Company adjusted EBIT and lower tax expense.

The year-over-year increase of $352 million in Company adjusted EBIT was driven by higher Ford Credit and Ford Pro EBIT and a lower Ford Model e EBIT loss, offset partially by lower Ford Blue EBIT.

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

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.

The tables below and on the following pages provide third quarter and first nine months 2024 key metrics and the change in third quarter 2024 EBIT compared with third 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

Second Quarter First Half

Third Quarter First Nine Months

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

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Change in EBIT by Causal Factor (in millions)

Second Quarter 2023 EBIT

Third Quarter 2023 EBIT

Volume / Mix 13

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Exchange (369)

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.

Third Quarter 2024 EBIT

In the third quarter of 2024, Ford Blue’s wholesales decreased 2% from a year ago, driven primarily by the end of production of the Edge in North America and fewer vehicles produced and sold in China by our unconsolidated affiliates, offset partially by higher Bronco and F-150 wholesales.

Third quarter 2024 revenue increased 3%, driven primarily by higher wholesales excluding our unconsolidated affiliates in China, offset partially by unfavorable exchange.

Ford Blue’s third quarter 2024 EBIT was $1.6 billion, a decrease of $91 million from a year ago, with an EBIT margin of 6.2%.

The lower EBIT was primarily driven by unfavorable exchange and higher manufacturing cost, offset partially by lower warranty costs and higher net pricing.

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

Ford Model e Segment

Second Quarter First Half

Third Quarter First Nine Months

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

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Change in EBIT by Causal Factor (in millions)

Second Quarter 2023 EBIT

Third Quarter 2023 EBIT

Volume / Mix 37

Net Pricing (470)

Exchange (45)

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.

Third Quarter 2024 EBIT

In the third quarter of 2024, Ford Model e’s wholesales decreased 11% from a year ago to 32,000 units due to competitive market conditions.

Third quarter 2024 revenue decreased 33%, reflecting a more competitive EV demand environment (including new entrants to the market), which resulted in lower net pricing and lower wholesales.

Ford Model e’s third quarter 2024 EBIT loss was $1.2 billion, a $105 million improvement from a year ago, with an EBIT margin of negative 104.4%.

The improved EBIT was primarily driven by lower costs (including lower battery-related raw material costs as well as other material costs and lower warranty), offset partially by unfavorable net pricing.

Ford Pro Segment

Second Quarter First Half

Third Quarter First Nine Months

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

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Change in EBIT by Causal Factor (in millions)

Second Quarter 2023 EBIT

Third Quarter 2023 EBIT

Volume / Mix 586

Net Pricing 252

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.

Third Quarter 2024 EBIT

In the third quarter of 2024, Ford Pro’s wholesales increased 9% from a year ago more than explained by higher sales of the Transit family of vehicles and Super Duty.

Third quarter 2024 revenue increased 13%, reflecting higher wholesales, favorable mix, and higher net pricing driven by continued strong demand for certain core Ford Pro products.

Ford Pro’s third quarter 2024 EBIT was $1.8 billion, an increase of $160 million from a year ago, with an EBIT margin of 11.6%.

The EBIT improvement was driven by favorable market factors, offset partially by higher warranty costs and growth-related structural 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 second quarter 2024 EBIT loss was $13 million, a $13 million improvement from a year ago.

Ford Next’s third quarter 2024 EBIT loss was $10 million, a $7 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 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.

The tables below provide third quarter and first nine months 2024 key metrics and the change in third quarter 2024 EBT compared with third 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.

Second Quarter First Half

Third Quarter First Nine Months

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

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retail financing only.

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

36-month off-lease third quarter auction values at Q3 2024 mix and YTD amounts at YTD 2024 mix.

Change in EBT by Causal Factor (in millions)

Second Quarter 2023 EBT

Third Quarter 2023 EBT

Volume / Mix 37

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Lease Residual (66)

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.

Third Quarter 2024 EBT

Ford Credit’s total net receivables of $142.2 billion were 13% higher than a year ago, explained primarily by higher consumer and non-consumer financing and a larger lease portfolio.

The third quarter 2024 U.S.

loss-to-receivables (“LTR”) ratio of 57 basis points increased from a year ago, reflecting increased loss severity and higher repossessions.

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

Ford Credit’s third quarter 2024 EBT of $544 million was $186 million higher than a year ago, explained primarily by higher financing margin and higher receivables, offset partially by lower expected auction values and higher return rates on existing operating leases.

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

In the third quarter of 2024, Corporate Other had a $201 million EBIT loss, compared to a $186 million EBIT loss a year ago.

Interest on Debt

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.

Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was $272 million in the third quarter of 2024, $52 million lower than a year ago.

Our Provision for/(Benefit from) income taxes for the third quarter and first nine months of 2024 was a benefit of $27 million and a provision of $856 million, respectively, resulting in effective tax rates of negative 3.1% and 17.4%, respectively.

During the third quarter of 2024, we recognized tax benefits from a change in our full-year forecast of tax expense, including benefits related to the write-down of certain product-specific manufacturing and vendor tooling assets classified as a special item.

Our third quarter and first nine months of 2024 adjusted effective tax rates, which exclude special items, were 13.9% and 19.2%, 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 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.

At September 30, 2024, total balance sheet cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $37.2 billion.

We consider our key balance sheet metrics to be:

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Company excluding Ford Credit

2023 June 30,

2023 September 30,

Balance Sheets ($B)

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

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

(a) Balances at September 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 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.

At September 30, 2024, we had Company cash of $27.9 billion and liquidity of $46.1 billion.

At September 30, 2024, about 84% 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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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 June 30, 2024 was higher than at December 31, 2023, primarily reflecting new vehicle launches and units awaiting final quality review.

Our finished product inventory at September 30, 2024 was higher than at December 31, 2023, reflecting higher in-plant and in-transit inventory, partially driven by new vehicle launches.

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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The terms may also include conditions to our obligation to purchase the materials, such as quality or minimum output.

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 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;

Subject to satisfaction of those conditions, we will be obligated to purchase the materials or otherwise compensate the supplier in an amount determined by the contract.

As of September 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 $3.4 billion of purchase obligations and approximately $4.9 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.

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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.

As a result, we have recorded, and may in the future record, accruals related to either the resale when the purchase price mechanism under our agreements is higher than the expected resale price of the excess materials or when we are required to otherwise compensate the supplier.

Accruals recorded to date for such items have been immaterial.

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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 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.

As of September 30, 2024, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was $211 million.

The amount settled through the SCF program during the first nine months of 2024 was $1.1 billion.

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

Second Quarter First Half

Third Quarter First Nine Months

2023 2024 2023 2024

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Numbers may not sum due to rounding.

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.

Our third quarter 2024 Net cash provided by/(used in) operating activities was positive $5.5 billion, $0.9 billion higher than a year ago (see page 61 for additional information).

The increase reflects higher working capital, offset partially by lower Ford Credit operating cash flow and lower net income.

Company adjusted free cash flow was $3.2 billion, $2.0 billion higher than a year ago, primarily driven by working capital changes, adjusted EBIT improvement, and Ford Credit distributions, offset partially by all other and timing differences.

Capital spending was $2.0 billion in the third quarter of 2024, a decrease of $0.2 billion from a year ago.

We now expect full year 2024 capital spending to be in the range of $8 billion to $8.5 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.

Third quarter 2024 working capital impact was $0.8 billion, driven by higher trade payables, partially offset by higher inventory, each compared to June 30, 2024.

All other and timing differences were positive $1.4 billion.

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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.

In the third quarter and first nine months of 2024, we contributed $334 million and $967 million, respectively, 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 (including cash dividends and anti-dilutive share repurchases) were $0.6 billion in the third quarter of 2024 and $2.8 billion for the first nine months of 2024.

Available Credit Lines .

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.

Total Company committed credit lines, excluding Ford Credit, at September 30, 2024 were $20.2 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 $2.2 billion of local credit facilities.

At September 30, 2024, $1.8 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates, and the full amount under each of our corporate, supplemental, and 364-day credit facilities was available.

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.

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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.

Prior to 2024, the specified targets related to global manufacturing facility greenhouse gas emissions, renewable electricity consumption, and Ford Europe CO 2 tailpipe emissions;

Ford outperformed all three of these sustainability-linked metrics in 2023.

The corporate credit facility is unsecured and free of material adverse change conditions to borrowing, restrictive financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and minimum net worth requirements), and credit rating triggers that could limit our ability to obtain funding or trigger early repayment.

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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 June 30, 2024, Company debt excluding Ford Credit was $20.4 billion.

As shown in Note 12 of the Notes to the Financial Statements, at September 30, 2024, Company debt excluding Ford Credit was $20.6 billion.

This balance is $0.7 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 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.

Ford Credit ended the third quarter of 2024 with $29.6 billion of liquidity, up $3.9 billion from year-end.

Ford Credit continues to have robust access to capital markets, completing $29 billion of public term issuances through October 25, 2024.

Key elements of Ford Credit’s funding strategy include:

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The following table shows funding for Ford Credit’s net receivables (in billions):

September 30,

2023 December 31,

2023 June 30,

2023 September 30,

Funding Structure

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Equity 12.6 13.4 14.0

Adjustments for cash (12.5) (10.9) (7.5)

Cash (11.4) (10.9) (8.6)

Total Net Receivables $ 126.3 $ 133.2 $ 142.2

Securitized Funding as Percent of Total Debt 45.5 % 44.9 % 41.2 %

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.

Net receivables of $142.2 billion at September 30, 2024 were funded primarily with term unsecured debt and term asset-backed securities.

Securitized funding as a percent of total debt was 41.2% as of September 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 July 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 October 25, 2024, excluding short-term funding programs (in billions):

Forecast Through

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The following table shows Ford Credit’s liquidity sources and utilization (in billions):

September 30,

2023 December 31,

2023 June 30,

2023 September 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 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.

At September 30, 2024, Ford Credit’s net liquidity available for use was $29.6 billion, $3.9 billion higher than year-end 2023, primarily reflecting strong access to public funding markets resulting in lower utilization of committed asset-backed facilities.

At September 30, 2024, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $55.0 billion, down $1.2 billion from year-end 2023, primarily explained by lower cash due to higher receivables.

Material Cash Requirements.

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Ford Credit’s funding plan is subject to risks and uncertainties, many of which are beyond its control, including disruption in the capital markets, that could impact both unsecured debt and asset-backed securities issuance and the effects of regulatory changes on the financial markets.

Refer to the “Liquidity - Ford Credit Segment - Funding and Liquidity Risks” section of Item 7 of Part II of our 2023 Form 10-K Report for more information.

Refer to the “Liquidity and Capital Resources - Ford Credit Segment - Funding and Liquidity Risks” section of Item 7 of Part II of our 2023 Form 10-K Report for more information.

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

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The table below shows the calculation of Ford Credit’s financial statement leverage (in billions):

September 30,

2023 December 31,

2023 June 30,

2023 September 30,

Leverage Calculation

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

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

At September 30, 2024, Ford Credit’s financial statement leverage was 9.7:1.

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 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:

As of September 30, 2024, our total Company pension underfunded status reported on our consolidated balance sheets was $1.3 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 June 30,

September 30,

2023 September 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

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 June 30, 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 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.

We provided 2024 Company guidance in our earnings release furnished on Form 8-K dated October 28, 2024.

The guidance is based on our expectations as of October 28, 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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Total Company

Adjusted EBIT (a) $10 - $12 billion

Adjusted EBIT (a) About $10 billion

Adjusted Free Cash Flow (a) $7.5 - $8.5 billion

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(a) When we provide guidance for Adjusted EBIT and Adjusted Free Cash Flow, we do not provide guidance for the most comparable GAAP measures because, as described in more detail below in “Non-GAAP Measures That Supplement GAAP Measures,” they include items that are difficult to predict with reasonable certainty.

For full-year 2024, we expect adjusted EBIT of $10 billion to $12 billion and adjusted free cash flow of $7.5 billion to $8.5 billion.

On a segment basis, we expect:

• 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 $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

For full-year 2024, we now expect adjusted EBIT of about $10 billion and adjusted free cash flow of $7.5 billion to $8.5 billion, including lower-than-planned volume in the second half of 2024 for Ford Pro and Ford Blue due to supplier disruptions.

On a segment basis, we now expect:

• Ford Pro EBIT of about $9 billion driven by continued growth and favorable mix as well as continued pricing strength on core products

• Ford Blue EBIT of about $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 about $5 billion driven by continued pricing pressure and investments in new electric vehicles

• Ford Credit EBT of about $1.6 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