What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-02-06 compared with 2024-02-07 · 174 added, 194 removed, 791 unchanged (32% of the section changed)

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Issuer Purchases of Equity Securities

In the fourth quarter of 2023, we completed a modest anti-dilutive share repurchase program to offset the dilutive effect of share-based compensation granted during 2023.

In the fourth quarter of 2024, we completed an anti-dilutive share repurchase program to offset the dilutive effect of share-based compensation granted during 2024.

The program authorized repurchases of up to 53 million shares of Ford Common Stock.

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Total / Average 13,700,000 $ 10.91 13,700,000

(a) The share repurchase program announced November 20, 2023 authorized repurchases of up to 51 million shares of Ford Common Stock.

(a) The share repurchase program announced February 7, 2024 authorized repurchases of up to 53 million shares of Ford Common Stock.

Although we have repurchased 36.43 million shares and the program was authorized for up to 53 million, we do not intend to make any further purchases under this program because its anti-dilutive purpose has been fulfilled.

In December 2023, our Board of Directors approved a modest anti-dilutive share repurchase program to offset the dilutive effect of share-based compensation expected to be granted during 2024.

The program authorizes repurchases of up to 53 million shares of Ford Common Stock.

The Company may repurchase shares of Common Stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to satisfy the conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions.

The timing and total amount of repurchases of Ford Common Stock under this program will depend upon business, economic, and market conditions, corporate, legal, and regulatory requirements, prevailing stock prices, trading volume, and other considerations.

The share repurchase program may be suspended or discontinued at any time, and does not obligate the Company to acquire any amount of Common Stock.

To the extent the Company elects to make purchases under the share repurchase program, the Company expects to utilize its existing cash and cash equivalents to fund such repurchases.

The table below shows the dividends we paid per share of Common and Class B Stock for each quarterly period in 2023 and 2024:

Quarter Second

Quarter Third

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$ 0.80 $ 0.15 $ 0.15 $ 0.15 $ 0.33 $ 0.15 $ 0.15 $ 0.15

(a) In the first quarter of 2023, in addition to a regular dividend of $0.15 per share, we paid a supplemental dividend of $0.65 per share.

(a) In the first quarter of 2023 and 2024, in addition to a regular dividend of $0.15 per share, we paid a supplemental dividend of $0.65 per share and $0.18 per share, respectively.

On February 5, 2025, we declared a regular dividend of $0.15 per share and a supplemental dividend of $0.15 per share.

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Key Trends and Economic Factors Affecting Ford and the Automotive Industry

Trade Policy.

To the extent governments in various regions implement or intensify barriers to imports, such as erecting tariff or non-tariff barriers or manipulating their currency, and provide advantages to local exporters selling into the global marketplace, there can be a significant negative impact on manufacturers based in other markets.

In addition, as governments consider an expanded use of tariffs as a lever in achieving a balance of trade, this new dynamic could have a substantial adverse effect on our business and the automotive sector.

The new, substantial tariff increases on imports to the United States from Canada and Mexico (in addition to China) announced on February 1, 2025, should they be implemented and sustained for an extended period of time, would have a significant adverse effect, including financial, on the overall automotive industry, Ford, and our supply chain.

We will continue to monitor and address the developing role that geopolitical, climate, and labor concerns are playing in trade relations.

Production and Supply Chain.

Although we saw improvements in our supply chain throughout 2023, including easing of the semiconductor shortage, we continue to face some production issues due to, among other things, labor shortages at our suppliers.

Moreover, we have received and continue to receive claims from our supply base related to inflationary pressure and production disruption.

Upon receipt, we evaluate those claims, and, in certain circumstances, in order to ensure continuity of supply and mitigate the impact on our production, have made payments to our suppliers, sometimes under duress.

We continued to see improved supply chain throughput in 2024 resulting from improved resilience to short term disruptions.

However, production constraints due to capacity and labor shortages remain as we adjust to shifting market conditions and balance our production mix, and the increased tariffs announced on February 1, 2025 and any additional tariffs, as discussed above, could have a significant impact on our supply chain and, in turn, our production.

We continue to reevaluate our supply base and sourcing decisions and may in the future incur charges to improve flexibility and cost competitiveness.

Currency Exchange Rate Volatility.

Globally, central banks have begun shifting from tightening policy by raising interest rates to holding rates steady or, in some markets, beginning to cut rates.

Globally, central banks have begun shifting from tightening policy by raising interest rates to holding rates steady or, in several markets, beginning to cut rates.

As they do, they need to carefully balance the risk that inflation remains elevated against the heightened financial and economic risks associated with high interest rates.

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Pricing Pressure.

Despite vehicle pricing remaining elevated over the last year due to strong demand, supply shortages, and inflationary costs, we have already observed moderation in the rate of new and used vehicle price increases as auto production recovers from the semiconductor shortage, but it is unclear whether prices will decline fully to pre-COVID-19 pandemic levels.

Over the long term, intense competition and excess capacity are likely to put downward pressure on inflation-adjusted prices for similarly-contented vehicles and contribute to a challenging pricing environment for the automotive industry in most major markets.

Despite vehicle pricing remaining elevated over the last year due to strong demand, supply shortages, and inflationary costs, we have already observed some declines in new and used vehicle prices as auto production recovers from the semiconductor shortage, but it is unclear whether prices will decline fully to pre-COVID-19 pandemic levels.

Intense competition and excess capacity are likely to put downward pressure on inflation-adjusted prices, including increased marketing incentives, for similarly-contented vehicles and contribute to a challenging pricing environment for the automotive industry in most major markets.

Electric Vehicle Market.

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 of the lower-than-anticipated adoption rates, near-term pricing pressures, and other factors, we recorded about $0.7 billion of charges in 2023 and may continue to incur charges, which could be substantial, related to payments to our electric vehicle-related suppliers (battery, raw material, or otherwise), inventory adjustments, or other matters.

In 2024, we recorded $1.2 billion of expenses related to the cancellation of a previously announced all-electric three-row SUV program.

We may incur additional expenses and cash expenditures of about $700 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, and we may continue to incur expenses related to payments to our electric vehicle-related suppliers (battery, raw material, or otherwise), asset write-downs, or other matters.

These market dynamics may continue to occur, which could have a substantial impact on our business, including our investments in supply and production capacity.

In addition, policy change in the United States could reduce or eliminate supply- and demand-side incentives, resulting in slower adoption of EVs.

Further, the pace of EV adoption could force Ford to take various product-led actions (e.g., curtailing the production and sale of certain internal combustion vehicles) that could have substantial adverse effects on our sales volume and operations.

Risk Factors for additional 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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Prices for commodities remain volatile.

In some cases, spot prices for various commodities have recently diverged somewhat, as anticipated weakening in global industrial activity mitigates price increases for base metals such as steel and aluminum, while precious metals (e.g., palladium), and raw materials that are used in batteries for electric vehicles (e.g., lithium, cobalt, nickel, graphite, and manganese, among other materials, for batteries) remain elevated.

Spot prices for various commodities have recently diverged somewhat, as weakening in global industrial activity mitigates price increases for base metals such as steel and aluminum, while precious metals (e.g., palladium), and raw materials that are used in batteries for electric vehicles (e.g., lithium, cobalt, and nickel) have declined from historic highs but remain elevated.

The net impact on us and our suppliers has been higher material costs overall.

To help ensure supply of raw materials for critical components (e.g., batteries), we, like others in the industry, have entered into multi-year sourcing agreements and may enter into additional agreements.

To help ensure supply of raw materials for critical components (e.g.,

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

batteries), we, like others in the industry, have entered into multi-year sourcing agreements and may enter into additional agreements.

Similar dynamics are impacting energy markets, with Europe particularly exposed to the risk of both higher prices and constraints on supply of natural gas due to the ongoing conflict in Ukraine.

Such shortages may impact facilities operated by us or our suppliers, which could have an impact on us in Europe and other regions.

In the long term, the outcome of de-carbonization and electrification of the vehicle fleet may depress oil demand, but the global energy transition will also contribute to ongoing volatility of oil and other energy prices.

In the long term, the outcome of de-carbonization and electrification of the vehicle fleet may depress oil demand, but geopolitical dynamics and the global energy transition will also contribute to ongoing volatility of oil and other energy prices.

Vehicle Profitability.

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In addition, government regulations aimed at reducing emissions and increasing fuel efficiency (e.g., ZEV mandates and low emission zones), and other factors that accelerate the transition to electrified vehicles, may increase the cost of vehicles by more than the perceived benefit to consumers and dampen margins.

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

Trade Policy.

While we believe the long-term trend will support the growth of free trade, we will continue to monitor and address the developing role that geopolitical, climate, and labor concerns are playing in trade relations.

Inflation and Interest Rates.

We continue to see near-term impacts on our business due to inflation, including ongoing global price pressures in the wake of geopolitical volatility, driving up energy prices, freight premiums, and other operating costs above normal rates.

Although headline inflation in the United States and Europe appears to have peaked, as gasoline and natural gas prices recede from the latest spike, core inflation (excluding food and energy prices) remains elevated and is a source of continued cost pressure on businesses and households.

Interest rates have increased significantly as central banks in developed countries attempt to subdue inflation while government deficits and debt remain at high levels in many global markets.

We continue to see lingering impacts on our business due to inflation, including ongoing geopolitical volatility, driving up energy prices, freight premiums, and other operating costs above normal rates.

Although headline inflation in the United States and Europe appears to have peaked, core inflation (excluding food and energy prices) remains elevated and is a source of continued cost pressure on businesses and households.

Interest rates have increased significantly and are only now beginning to reverse, as central banks in developed countries attempted to subdue inflation while government deficits and debt remain at high levels in many global markets.

Accordingly, the eventual implications of higher government deficits and debt, tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital for the business.

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revenue related to other future or stand-ready performance obligations is generally recognized on a straight-line basis over the period in which services are expected to be performed.

Vehicles sold to daily rental car companies with an obligation to repurchase at an agreed upon amount, exercisable at the option of the customer, are accounted for as operating leases, with lease revenue recognized over the term of the lease.

We also earn income from operating lease assets, primarily vehicles, and record the income on a straight-line basis over the term of the lease agreement.

Proceeds from the sale of vehicles at auction are recognized in revenue upon transfer of control of the vehicle to the buyer.

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depreciation and amortization;

regulatory compliance expenses;

and other associated costs.

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vehicle and software engineering;

spending-related;

spending-related (primarily depreciation and amortization for our manufacturing and engineering assets);

advertising and sales promotion;

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Restructuring (by Geography)

China $ (380) $ (958)

Europe $ (978) $ (716)

Ford Credit - Brazil (155) —

North America Hourly Buyouts — (260)

China (958) (16)

Other (a) (87) —

Subtotal Restructuring $ (2,023) $ (992)

Gain/(loss) on Rivian investment $ (7,377) $ (31)

AV strategy including Argo impairment (2,812) —

EV program cancellation $ — $ (1,200)

Transit Connect customs matter (396) —

Russia suspension of operations/asset write-off (158) —

Patent matters related to prior calendar years (124) 8

Extended Oakville Assembly Plant Changeover — (181)

EV program dispute (143) 19

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Pension and OPEB remeasurement $ (2,058) $ 687

Pension settlements and curtailments (438) (339)

Pension settlements, curtailments, and separations costs (339) (215)

Subtotal Pension and OPEB Gain/(Loss) $ (2,397) $ 472

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(a) 2023 includes $28 million related to restructuring charges in India and $41 million in North America.

2023 includes $28 million related to restructuring charges in India and $41 million in North America.

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

We recorded $5.1 billion of pre-tax special item charges in 2023, driven primarily by pension and OPEB remeasurement, restructuring actions in Europe and China, and the Transit Connect customs matter.

We recorded $1,860 million of pre-tax special item charges in 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, continued ongoing restructuring actions in Europe, and buyouts for hourly employees in North America.

Pension and OPEB remeasurement was a partial offset.

In Note 25 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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In 2024, our diluted earnings per share of Common and Class B Stock was $1.46 and our diluted adjusted earnings per share was $1.84.

Net income/(loss) margin was 2.5% in 2023, up from negative 1.3% a year ago.

Net income/(loss) margin was 3.2% in 2024, up from 2.5% a year ago.

Company adjusted EBIT margin was 5.5% in 2024, down from 5.9% a year ago.

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

The year-over-year increase of $6.3 billion in net income/(loss) in 2023 was primarily driven by the non-recurrences of the mark-to-market net loss on our Rivian investment and the impairment on our Argo investment (both of which were included in special items in 2022), partially offset by a pension and OPEB remeasurement loss and higher charges for restructuring actions in Europe and China.

The flat year-over-year Company adjusted EBIT primarily reflects higher Ford Pro and Ford Blue EBIT and a lower EBIT loss in Ford Next.

Offsets included higher EBIT losses in Ford Model e, lower past service pension and OPEB income in Corporate Other, and lower Ford Credit EBT.

The year-over-year increase of $1,532 million in net income/(loss) in 2024 was primarily driven by lower special items and higher Ford Pro EBIT, offset partially by lower Ford Blue EBIT and higher taxes.

The lower year-over-year special items primarily reflect the non-recurrence of a pension and OPEB remeasurement loss in 2023, a pension remeasurement gain in 2024, and lower year-over-year restructuring related charges, offset partially by expenses related to the three-row SUV EV program cancellation.

The year-over-year decrease of $208 million in Company adjusted EBIT primarily reflects lower Ford Blue and Model e EBIT, offset partially by higher Ford Pro EBIT and Ford Credit EBT.

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

The tables below and on the following pages provide full year 2024 key metrics and the change in full year 2024 EBIT compared with full year 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 .

For a description of these causal factors, see Definitions and Information Regarding Ford Blue, Ford Model e, and Ford Pro Causal Factors .

Ford Blue Segment

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2024 Full Year EBIT

In 2023, Ford Blue’s wholesales increased 3% from a year ago, primarily reflecting an improvement in production-related supply constraints, offset partially by ceasing production of EcoSport and Fiesta small vehicles and production losses during the UAW strike.

Full year 2023 revenue increased 8%, driven by higher wholesales, favorable mix, and higher net pricing, offset partially by weaker currencies.

Ford Blue’s 2023 full year EBIT was $7.5 billion, an increase of $615 million from a year ago, with an EBIT margin of 7.3%.

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

Partial offsets primarily include higher warranty costs (reflecting inflationary cost pressures and increased field service actions), higher material costs related to new products, higher structural costs and supplemental compensation (including the impact of the new UAW collective bargaining agreement), and weaker currencies.

In 2024, Ford Blue’s wholesales decreased 2% from a year ago, driven primarily by the end of production of the Fiesta in Europe and the Edge in North America, offset partially by higher Ranger and Bronco wholesales.

Full year 2024 revenue is flat year over year, primarily reflecting favorable currency-related pricing in South America and higher outside component sales revenue, offset by unfavorable exchange resulting from a stronger U.S.

Ford Blue’s 2024 full year EBIT was $5,284 million, a decrease of $2,178 million from a year ago, with an EBIT margin of 5.2%.

The lower EBIT was driven primarily by unfavorable exchange, adverse mix (primarily supplier-related constraints and fewer F-150s due to the new model launch) and lower wholesales, and higher cost (including higher material cost for new products and higher warranty costs).

Higher currency-related pricing in South America was a partial offset.

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

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Net Pricing (1,575)

Exchange (112)

2024 Full Year EBIT

In 2023, Ford Model e’s wholesales increased 20% from a year ago, primarily reflecting higher production of F-150 Lightning.

Full year 2023 revenue increased 12%, driven by higher wholesales, offset partially by lower net pricing.

Ford Model e’s 2023 full year EBIT loss was $4.7 billion, a $2.6 billion higher loss than a year ago, with an EBIT margin of negative 79.7%.

The EBIT deterioration was primarily driven by lower net pricing, higher material cost (including volume-related obligations for batteries of about $310 million, inflationary cost increases, and higher launch-related supplier costs), higher volume/capacity-related manufacturing and spending-related costs, higher warranty costs, and higher engineering costs for future programs, offset partially by lower commodity costs and stronger currencies.

In 2024, Ford Model e’s wholesales decreased 9% from a year ago, reflecting lower Mustang Mach-E and F-150 Lightning wholesales due to competitive market conditions, offset partially by the introduction of the Explorer BEV and Capri in Europe.

Full year 2024 revenue decreased 35%, driven primarily by lower net pricing and lower wholesales.

Ford Model e’s 2024 full year EBIT loss was $5,076 million, a $375 million higher loss than a year ago, with an EBIT margin of negative 131.8%.

The lower EBIT was primarily driven by lower net pricing due to industrywide competitive pressures, offset partially by lower costs (including battery-related raw material costs as well as other material costs and lower engineering and warranty expense).

Ford Pro Segment

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2024 Full Year EBIT

In 2023, Ford Pro’s wholesales increased 6% from a year ago, primarily reflecting an improvement in production-related supply constraints, offset partially by production losses during the UAW strike.

Full year 2023 revenue increased 19%, driven by higher net pricing and wholesales, offset partially by unfavorable mix.

Ford Pro’s 2023 full year EBIT was $7.2 billion, an increase of $4.0 billion from a year ago, with an EBIT margin of 12.4%.

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

Partial offsets primarily include higher material costs (related to inflationary cost pressures, new products, and about $80 million of volume-related obligations for batteries), higher warranty costs (reflecting inflationary cost pressures and increased field service actions), and higher structural costs (including volume-related) and supplemental compensation (including the impact of the new UAW collective bargaining agreement).

In 2024, Ford Pro’s wholesales increased 9% from a year ago, primarily reflecting higher sales of Super Duty and the Transit family of vehicles, offset partially by the end of production of the Edge in North America for fleet customers (including daily rental).

Full year 2024 revenue increased 15%, driven by higher wholesales, favorable mix, and higher net pricing.

Ford Pro’s 2024 full year EBIT was $9,015 million, an increase of $1,793 million from a year ago, with an EBIT margin of 13.5%.

The EBIT improvement was driven by favorable market factors.

Higher cost was a partial offset, including material costs (primarily new product-related and the impact of inflation at our Ford Otosan joint venture in Türkiye), higher warranty costs, and higher growth-related structural costs.

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

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▪ Administrative, Information Technology, and Selling – includes primarily costs for salaried personnel and purchased services related to our staff activities, information technology, and selling functions

▪ Pension and OPEB – consists primarily of past service pension costs and other postretirement employee benefit costs

• Exchange – primarily measures EBIT variance driven by one or more of the following:

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dollars, (iii) effects of remeasuring monetary assets and liabilities of the relevant entities in currencies other than their functional currency, or (iv) results of our foreign currency hedging

• Other – includes a variety of items, such as parts and services earnings, royalties, government incentives, and compensation-related changes

• Other – includes a variety of items, such as parts and services earnings, royalties, government incentives, compensation-related changes, and regulatory compliance expenses

In addition, definitions and calculations used in this report include:

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Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our revenue.

Excludes transactions between Ford Blue, Ford Model e, and Ford Pro segments

• Industry Volume and Market Share – based, in part, on estimated vehicle registrations;

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Ford Next Segment

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

In this segment, our 2023 EBIT loss was $138 million, a $788 million improvement from a year ago.

In 2024, the Ford Next segment primarily included expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments.

As of January 1, 2025, Ford Next is no longer a reportable segment, and those expenses and investments are reflected in either the reportable segments that benefit from those expenses and investments or Corporate Other.

Our Ford Next segment EBIT loss in 2024 was $50 million, an $88 million improvement from a year ago.

Ford Next has evolved from primarily investing in the development of autonomous vehicle capabilities to focus exclusively on incubating and launching new businesses creating strategic value for Ford.

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

Ford Credit Segment

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2024 Full Year EBT

Total net receivables at December 31, 2023 were 9% higher than a year ago, primarily reflecting higher consumer and non-consumer financing and currency exchange rates, partially offset by fewer operating leases.

Ford Credit’s loss metrics continue to normalize from historic lows.

Total net receivables at December 31, 2024 were $10.4 billion higher than a year ago, reflecting higher consumer and non-consumer financing and a larger lease portfolio.

Ford Credit’s U.S.

36-month auction values for off-lease vehicles were down 4% from a year ago.

We are planning for full year 2024 auction values to decrease as vehicle availability continues to improve.

Ford Credit’s 2023 EBT of $1,331 million was $1,326 million lower than a year ago, reflecting lower financing margin, non-recurrence of supplemental depreciation and credit loss reserve releases, lower lease residual performance, unfavorable derivative market valuation, and higher credit losses.

Ford Credit’s 2024 EBT of $1,654 million was $323 million higher than a year ago, explained primarily by higher financing margin and favorable volume and mix, offset partially by higher operating lease depreciation, reflecting higher return rates and lower expected auction values, and higher retail credit losses.

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.

For full year 2023, Corporate Other had a $760 million EBIT loss, compared with $748 million of positive EBIT in 2022.

The EBIT deterioration was driven by lower past service pension and OPEB income, partially offset by higher Company excluding Ford Credit interest income, reflecting higher interest rates.

For full year 2024, Corporate Other had a $619 million EBIT loss, compared with a $760 million EBIT loss in 2023.

The EBIT improvement was driven by lower corporate governance expenses and higher Company excluding Ford Credit interest income.

Interest on Debt

Interest on Debt consists of interest expense on Company debt excluding Ford Credit.

Our full year 2023 interest expense on Company debt excluding Ford Credit was $1,302 million, $43 million higher than in 2022.

Our Provision for/(Benefit from) income taxes for full year 2023 was a $362 million benefit, resulting in an effective tax rate of negative 9.1%.

This includes benefits arising from U.S.

research tax credits and legal entity restructuring within our leasing operations and China.

Our full year 2024 interest expense on Company debt excluding Ford Credit was $1,115 million, compared with $1,302 million in 2023.

Our Provision for/(Benefit from) income taxes for full year 2024 was a provision of $1,339 million, resulting in an effective tax rate of 18.5%.

Our full year 2024 adjusted effective tax rate, which excludes special items, was 18.3%.

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RESULTS OF OPERATIONS - 2023

The net loss attributable to Ford Motor Company was $1,981 million in 2022.

The net income attributable to Ford Motor Company was $4,347 million in 2023.

Company adjusted EBIT was $10,416 million.

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

Global Redesign

Restructuring (by Geography)

China $ (380) $ (958)

Europe (151) (978)

India (468) (298)

South America (803) 53

China (including Taiwan) 150 (380)

North America (72) (198)

Subtotal Global Redesign $ (1,720) $ (967)

Ford Credit - Brazil (155) —

Other (a) (436) (87)

Subtotal Restructuring $ (1,122) $ (2,023)

Gain/(loss) on Rivian investment

$ (7,377) $ (31)

Debt extinguishment premium (1,692) (135)

AV strategy including Argo impairment (2,812) —

Ford Credit – Brazil restructuring 14 (155)

Transit Connect customs matter — (396)

Russia suspension of operations/asset write-off (158) —

Patent matters related to prior calendar years (124) 8

Other 82 (35)

EV program dispute — (143)

Other (including gains/(losses) on investments) (170) (165)

Subtotal Other Items $ (10,641) $ (727)

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Total EBIT Special Items $ (12,172) $ (5,147)

Cash effect of Global Redesign (incl.

separations) $ (1,935) $ (377)

Provision for/(Benefit from) tax special items (a) $ (1,924) $ (2,573)

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

For full year 2022, we recorded $12.2 billion of pre-tax special item charges, driven by a $7.4 billion mark-to-market net loss on our Rivian investment and a $2.7 billion impairment on our Argo investment.

Provision for/(Benefit from) tax special items (b) $ (2,573) $ (1,273)

(a) 2022 includes $298 million related to restructuring charges in India and $198 million in North America.

2023 includes $28 million related to restructuring charges in India and $41 million in North America.

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

In Note 25 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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(a) See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP.

In 2022, our diluted earnings per share of Common and Class B Stock was a loss of $0.49 and our diluted adjusted earnings per share was $1.88.

Net income/(loss) margin was negative 1.3% in 2022, down from 13.2% in 2021.

In 2023, our diluted earnings per share of Common and Class B Stock was $1.08 and our diluted adjusted earnings per share was $2.01.

Net income/(loss) margin was 2.5% in 2023, up from negative 1.3% in 2022.

Company adjusted EBIT margin was 5.9% in 2023, down from 6.6% in 2022.

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

The year-over-year decrease of $19.9 billion in net income/(loss) in 2022 includes the effect of special items, including

the mark-to-market net loss on our Rivian investment and the impairment on our Argo investment.

The year-over-year increase of $415 million in Company adjusted EBIT primarily reflects higher Ford Blue and Ford Pro EBIT, offset partially by lower Ford Credit EBT, higher EBIT losses in Ford Model e, and lower past service pension and OPEB income in Corporate Other.

The flat year-over-year Company adjusted EBIT primarily reflected higher Ford Pro and Ford Blue EBIT and a lower EBIT loss in Ford Next.

Offsets included higher EBIT losses in Ford Model e, lower past service pension and OPEB income in Corporate Other, and lower Ford Credit EBT.

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

Ford Blue Segment

The tables below and on the following pages provide full year 2023 key metrics and the change in full year 2023 EBIT compared with full year 2022 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, and Ford Pro Causal Factors.

Ford Blue Segment

2022 2023 H / (L)

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2023 Full Year EBIT

In 2022, Ford Blue’s wholesales increased 5% from 2021, primarily reflecting an improvement in production-related supply constraints and a full year of Bronco and Maverick production, offset partially by our India restructuring, suspension of our joint venture in Russia, and COVID-related restrictions in China.

Full year 2022 revenue increased 18%, driven by higher net pricing and wholesales, offset partially by weaker currencies.

Ford Blue’s full year 2022 EBIT was $6.8 billion, an increase of $3.6 billion from 2021, with an EBIT margin of 7.2%.

The EBIT improvement was driven by higher net pricing and higher wholesales, offset partially by inflationary increases on commodity, material, and freight costs, higher warranty costs, higher structural costs, and weaker currencies.

In 2023, Ford Blue’s wholesales increased 3% from 2022, primarily reflecting an improvement in production-related supply constraints, offset partially by ceasing production of EcoSport and Fiesta small vehicles and production losses during the UAW strike.

Full year 2023 revenue increased 8%, driven by higher wholesales, favorable mix, and higher net pricing, offset partially by weaker currencies.

Ford Blue’s 2023 full year EBIT was $7.5 billion, an increase of $615 million from 2022, with an EBIT margin of 7.3%.

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

Partial offsets primarily included higher warranty costs (reflecting inflationary cost pressures and increased field service actions), higher material costs related to new products, higher structural costs and supplemental compensation (including the impact of the UAW collective bargaining agreement), and weaker currencies.

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

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Net Pricing (1,005)

Exchange (94)

2023 Full Year EBIT

In 2022, Ford Model e’s wholesales increased 58% from 2021, primarily reflecting the launch of the F-150 Lightning and incremental Mach-E production.

Full year 2022 revenue increased 70%, driven by higher wholesales and net pricing.

Model e’s full year 2022 EBIT loss was $2.1 billion, a $1.2 billion higher loss than in 2021, with an EBIT margin of negative 40.6%.

The lower EBIT was primarily driven by inflationary increases on commodity, material, and freight costs, higher structural costs (including higher engineering cost for future programs), and unfavorable mix.

Partial offsets included higher net pricing and wholesales.

In 2023, Ford Model e’s wholesales increased 20% from 2022, primarily reflecting higher production of F-150 Lightning.

Full year 2023 revenue increased 12%, driven by higher wholesales, offset partially by lower net pricing.

Ford Model e’s 2023 full year EBIT loss was $4.7 billion, a $2.6 billion higher loss than in 2022, with an EBIT margin of negative 79.7%.

Ford Pro Segment

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Net Pricing 7,067

Exchange (156)

2023 Full Year EBIT

In 2022, Ford Pro’s wholesales increased 10% from 2021, primarily reflecting an improvement in production-related supply constraints.

Full year 2022 revenue increased 15%, driven by higher net pricing and wholesales, offset partially by weaker currencies.

Ford Pro’s full year 2022 EBIT was $3.2 billion, an increase of $557 million from 2021, with an EBIT margin of 6.6%.

The EBIT improvement was driven by higher net pricing and wholesales, offset partially by inflationary increases on commodity, material, and freight costs, higher structural costs, and unfavorable mix.

In 2023, Ford Pro’s wholesales increased 6% from 2022, primarily reflecting an improvement in production-related supply constraints, offset partially by production losses during the UAW strike.

Full year 2023 revenue increased 19%, driven by higher net pricing and wholesales, offset partially by unfavorable mix.

Ford Pro’s 2023 full year EBIT was $7.2 billion, an increase of $4.0 billion from 2022, with an EBIT margin of 12.4%.

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

Partial offsets primarily included higher material costs (related to inflationary cost pressures, new products, and about $80 million of volume-related obligations for batteries), higher warranty costs (reflecting inflationary cost pressures and increased field service actions), and higher structural costs (including volume-related) and supplemental compensation (including the impact of the UAW collective bargaining agreement).

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

Ford Next Segment

In our Ford Next segment (formerly Mobility), our 2022 EBIT loss improved $104 million from 2021.

The $926 million EBIT loss reflected our strategic investments in our autonomous vehicle capabilities and support of our mobility initiatives.

In our Ford Next segment, our 2023 EBIT loss was $138 million, a $788 million improvement from 2022.

Ford Credit Segment

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Lease Residual (466)

Exchange (25)

2023 Full Year EBT

Total net receivables at December 31, 2022 were 3% higher than at December 31, 2021, primarily reflecting higher non-consumer financing, offset partially by fewer operating leases, lower consumer financing, and currency exchange rates.

Ford Credit’s loss metrics reflected healthy and stable consumer credit conditions and strong auction values.

Total net receivables at December 31, 2023 were 9% higher than at December 31, 2022, primarily reflecting higher consumer and non-consumer financing and currency exchange rates, offset partially by fewer operating leases.

Ford Credit’s U.S.

36-month auction values for off-lease vehicles were up 5% from 2021, reflecting strong demand for used vehicles, including the impact of lower new vehicle production due to the semiconductor shortage.

Ford Credit’s 2022 EBT of $2,657 million was $2,060 million lower than 2021, reflecting lower credit loss and lease residual reserve releases, lower financing margin, and lower lease return rates.

36-month auction values for off-lease vehicles were down 7% from 2022.

Ford Credit’s 2023 EBT of $1,331 million was $1,326 million lower than 2022, reflecting lower financing margin, the non-recurrence of supplemental depreciation and credit loss reserve releases, lower lease residual performance, unfavorable derivative market valuation, and higher credit losses.

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

Corporate Other

For full year 2022, Corporate Other EBIT was $748 million, compared with EBIT of $1,247 million in 2021.

The deterioration was driven by lower past service pension and OPEB income.

For full year 2023, Corporate Other had a $760 million EBIT loss, compared with $748 million of positive EBIT in 2022.

The EBIT deterioration was driven by lower past service pension and OPEB income, partially offset by higher Company excluding Ford Credit interest income, reflecting higher interest rates.

Interest on Debt

Our full year 2022 interest expense on Company debt excluding Ford Credit was $1,259 million, $544 million lower than in 2021, primarily explained by U.S.

debt restructuring actions taken in the fourth quarter of 2021 and during 2022.

Our Provision for/(Benefit from) income taxes for full year 2022 was a $864 million benefit, resulting in an effective tax rate of 28.6%.

This includes benefits arising from the reversal of U.S.

valuation allowances, primarily as a result of planning actions.

Our full year 2023 interest expense on Company debt excluding Ford Credit was $1,302 million, $43 million higher than in 2022.

Our Provision for/(Benefit from) income taxes for full year 2023 was a $362 million benefit, resulting in an effective tax rate of negative 9.1%.

This includes benefits arising from U.S.

research tax credits and legal entity restructuring within our leasing operations and China.

Our full year 2023 adjusted effective tax rate, which excludes special items, was 10.0%.

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governmental agencies, and supranational institutions.

The average maturity of these investments is approximately one year and adjusted based on market conditions and liquidity needs.

The average maturity of these investments is approximately one year and is adjusted based on market conditions and liquidity needs.

We monitor our Company cash levels and average maturity on a daily basis.

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• Capital expenditures (for additional information, see the “Changes in Company Cash” section below) and other payments for engineering, software, product development, and implementation of our plans for electric vehicles

• Purchase of raw materials and components to support the manufacturing and sale of vehicles (including electric vehicles), parts, and accessories (for additional information, see the Aggregate Contractual Obligations table and the accompanying description of our “Purchase obligations” below)

• Purchases 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” below)

• Purchases of regulatory compliance credits

• Marketing incentive payments to dealers

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• Debt repayments (for additional information, see the Aggregate Contractual Obligations table below and Note 18 of the Notes the Financial Statements)

• Discretionary and mandatory payments to our global pension plans (for additional information, see the Aggregate Contractual Obligations table below, the “Changes in Company Cash” section below, and Note 17 of the Notes to the Financial Statements)

• Discretionary and mandatory payments to our global pension plans (for additional information, see the “Liquidity and Capital Resources - Total Company” section below and Note 16 of the Notes to the Financial Statements)

• Employee wages, benefits, and incentives

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• Strategic acquisitions and investments to grow our business, including electrification

Subject to approval by our Board of Directors, shareholder distributions in the form of dividend payments and/or a share repurchase program (including share repurchases to offset the anti-dilutive effect of increased shared-based compensation) may require the expenditure of a material amount of cash.

Subject to approval by our Board of Directors, shareholder distributions in the form of dividend payments and/or a share repurchase program (including share repurchases to offset the anti-dilutive effect of increased share-based compensation) may require the expenditure of a material amount of cash.

We target shareholder distributions of 40% to 50% of adjusted free cash flow.

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Operating leases (d) 639 970 515 505 2,629

Pension funding (e) 195 397 402 — 994

Off-balance sheet

Purchase obligations (f) 1,579 2,470 860 692 5,601

Purchase obligations (e) (f) 2,573 4,015 2,125 1,053 9,766

Total Company excluding Ford Credit 5,348 11,934 5,148 23,676 46,106

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(d) Excludes approximately $707 million in future lease payments for various operating leases commencing in a future period.

(e) Amounts represent our estimate of contractually obligated contributions to the Ford-Werke plan.

See Note 17 of the Notes to the Financial Statements for further information regarding our expected pension contributions.

(f) Purchase obligations under existing offtake agreements for scarce raw materials are not included in the table above.

(e) Includes regulatory compliance credit purchase commitments.

For additional information on our regulatory compliance credit purchases, see page 10 in the “Government Standards” section in “Item 1.

(f) Purchase obligations under existing offtake agreements for certain battery raw materials are not included in the table above.

As of December 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 $1.8 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.

However, our forecast could fluctuate from period to period based on market prices, which may 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.

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 back to the supplier or another party.

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, 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.

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

For additional information, see the discussion of our offtake agreements below on page 62.

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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 December 31, 2023 was higher than at December 31, 2022, primarily reflecting higher in-transit inventory.

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.

Such actions could have a short-term adverse impact on our cash and increase our inventory.

Moreover, in order to secure critical materials for production of electric vehicles, we have entered into and we may, in the future, enter into offtake agreements with raw material suppliers and make investments in certain raw material and battery suppliers, including contributing up to a maximum of $6.6 billion in capital to BlueOval SK, LLC over a five-year period ending in 2026.

Through January 2025, we have recognized $2.4 billion of contributions to BOSK, net of returns of capital (for additional information, see Note 23 of the Notes to the Financial Statements).

Our actual capital outlay could vary significantly based on the final project costs and potential financing opportunities.

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The terms of the offtake agreements we have entered into, and those we may enter into in the future, vary by transaction, though they generally obligate us to purchase a certain percentage or minimum amount of output produced by the counterparty over an agreed upon period of time.

The purchase price mechanism included in the offtake agreement is typically based on the market price of the material at the time of delivery.

The purchase price mechanisms included in our offtake agreements are typically based on the market price of the material at the time of delivery.

The terms also may 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.

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 2024.

Unlike our historical arrangements with suppliers, under multi-year offtake agreements, the risks associated with lower-than-expected electric vehicle production volumes or changes in battery technology that reduce the need for certain raw materials are borne by Ford rather than our suppliers.

Accordingly, in the event we do not purchase the materials pursuant to the terms of these agreements and we are unable to restructure an agreement or an alternate purchaser is unable to be found, Ford retains its obligation for the cost of those materials.

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

Unlike our standard arrangements with suppliers, under multi-year offtake agreements, the risks associated with lower-than-expected electric vehicle production volumes or changes in battery technology that reduce the need for certain raw materials are borne by Ford rather than our suppliers.

Accordingly, in the event we do not purchase the materials pursuant to the terms of these agreements, and we are unable to restructure an agreement or an alternate purchaser is unable to be found, Ford retains a financial obligation for those materials.

For additional discussion of the risks related to our offtake agreements and other long-term purchase contracts, see “Item 1A.

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

(b) 2021 includes our investment in Rivian of $10.6 billion and cash premium paid of $(1.6) billion associated with repurchasing and redeeming $7.6 billion of higher-coupon debt.

2022 includes a $7.4 billion loss on our Rivian investment.

(b) 2022 includes a $7.4 billion loss on our Rivian investment.

2023 includes $2.6 billion of capital contributions to BlueOval SK, LLC.

2024 includes $2.3 billion of capital contributions to BlueOval SK, LLC, offset by a return of capital of $1.4 billion.

Numbers may not sum due to rounding.

Our full year 2024 Net cash provided by/(used in) operating activities was positive $15.4 billion, an increase of $0.5 billion from a year ago (see page 78 for additional information).

The year-over-year increase was primarily driven by higher net income.

Company adjusted free cash flow was $6.7 billion, $0.1 billion lower than a year ago.

An improvement in Company adjusted EBIT excluding Ford Credit and timing differences were more than offset by the non-repeat of working capital improvements and Ford Credit distributions, as well as higher capital spending.

Capital spending was $8.6 billion in 2024, $0.4 billion higher than a year ago, and is expected to be in the range of $8 billion to $9 billion in 2025.

The full year 2023 working capital impact was $2.4 billion negative, driven by an increase in inventory and receivables.

The full year 2024 working capital impact was $1.5 billion negative, driven by a decrease in payables and an increase in receivables, offset partially by lower inventory.

All other and timing differences were positive $4.7 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).

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

Shareholder distributions (including cash dividends and anti-dilutive share repurchases) were $3.5 billion in 2024.

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Total Company committed credit lines, excluding Ford Credit, at December 31, 2024 were $20.0 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 $2.0 billion of local credit facilities.

At December 31, 2023, the utilized portion of the corporate credit facility was $18 million, representing amounts utilized for letters of credit.

In addition, $1.8 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of December 31, 2023.

Lenders under our corporate credit facility have $3.4 billion of commitments maturing on April 26, 2026 and $10.1 billion of commitments maturing on April 26, 2028.

Lenders under our supplemental revolving credit facility have $0.1 billion of commitments maturing on September 29, 2024 and $1.9 billion of commitments maturing on April 26, 2026.

At December 31, 2024, $1.7 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.

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.

On August 17, 2023, we entered into a new 364-day revolving credit facility, with $4 billion of commitments maturing on August 15, 2024.

At the time we entered into this credit facility, it provided additional working capital flexibility to manage through uncertainties in the present environment, including a potential labor disruption.

With the ratification of the new UAW contract, this credit facility was terminated as of November 24, 2023.

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

Ford outperformed the 2022 targets for all three of the sustainability-linked metrics, which favorably impacted pricing beginning in the third quarter of 2023 .

The corporate, supplemental, and 364-day credit agreements include certain sustainability-linked targets, pursuant to which the applicable margin and facility fees may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, 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 the sustainability-linked metrics for the most recent performance period.

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

The corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4 billion in aggregate of domestic cash, cash equivalents, and loaned and marketable securities and/or availability under the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility.

If our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P, the guarantees of certain subsidiaries will be required.

The terms and conditions of the supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility.

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

Each of the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility include a covenant that requires us to provide guarantees from certain of our subsidiaries in the event that our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P.

On October 30, 2023, following the upgrade by S&P of our senior, unsecured, long-term debt credit rating to BBB-, the unsecured guarantees provided by the following subsidiaries to the lenders under the credit facilities were released:

Ford Component Sales, LLC;

Ford European Holdings Inc.;

Ford Global Technologies, LLC;

Ford Holdings LLC (the parent company of Ford Credit);

Ford International Capital LLC;

Ford Mexico Holdings LLC;

Ford Motor Service Company;

Ford Next LLC;

Ford Trading Company, LLC;

and Ford Van Dyke Investment Fund, Inc.

As shown in Note 19 of the Notes to the Financial Statements, at December 31, 2023, Company debt excluding Ford Credit was $19.9 billion, unchanged from December 31, 2022.

As shown in Note 18 of the Notes to the Financial Statements, at December 31, 2024, Company debt excluding Ford Credit was $20.7 billion.

This balance is $0.7 billion higher than at December 31, 2023.

We manage Company debt (excluding Ford Credit) levels with a leverage framework that targets investment grade credit ratings through a normal business cycle.

The leverage framework includes a ratio of total Company debt (excluding Ford Credit), underfunded pension liabilities, operating leases, and other adjustments, divided by Company adjusted EBIT (excluding Ford Credit EBT), and further adjusted to exclude depreciation and tooling amortization (excluding Ford Credit).

Ford Credit’s leverage is calculated as a separate business as described in the “Liquidity - Ford Credit Segment” section of Item 7.

Ford Credit’s leverage is calculated as a separate business as described in the “Liquidity and Capital Resources - Ford Credit Segment” section of Item 7.

Ford Credit is self-funding and its debt, which is used to fund its operations, is separate from our Company debt excluding Ford Credit.

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

Ford Credit continues to have robust access to the capital markets, and ended 2023 with $25.7 billion of liquidity, up $4.6 billion from 2022.

Ford Credit continues to have robust access to capital markets and ended 2024 with $25.2 billion of liquidity.

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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Ford Credit sponsors a number of securitization programs that can be structured to provide both short-term and long-term funding through institutional investors and other financial institutions in the United States and international capital markets.

Ford Credit obtains unsecured funding from the sale of demand notes under its Ford Interest Advantage program and through the retail deposit programs at FCE Bank plc (“FCE”) and Ford Bank GmbH (“Ford Bank”).

Ford Credit obtains unsecured funding from the sale of demand notes under its Ford Interest Advantage program and through the retail deposit programs at FCE and Ford Bank.

At December 31, 2024, the principal amount outstanding of Ford Interest Advantage notes, which may be redeemed at any time at the option of the holders thereof without restriction, and FCE and Ford Bank deposits was $18.3 billion.

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Equity 11.9 13.4 13.8

Adjustments for cash (12.5) (11.3) (10.9)

Cash (11.3) (10.9) (9.3)

Total Net Receivables $ 122.3 $ 133.2 $ 143.6

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For 2025, Ford Credit projects full year public term funding in the range of $24 billion to $30 billion.

Through February 5, 2024, we completed $5 billion of public term issuances.

Through February 4, 2025, Ford Credit completed $5 billion of public term issuances.

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

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Total utilization of liquidity $ (30.3) $ (30.7) $ (29.2)

Gross liquidity $ 34.9 $ 20.7 $ 25.5

Asset-backed capacity in excess of eligible receivables and other adjustments (2.8) 0.4 0.2

Available liquidity $ 20.7 $ 25.5 $ 24.7

Other adjustments 0.4 0.2 0.5

Net liquidity available for use $ 21.1 $ 25.7 $ 25.2

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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 December 31, 2023, Ford Credit’s net liquidity available for use was $25.7 billion, $4.6 billion higher than year-end 2022, reflecting strong access to public funding markets and the addition of $5.5 billion in committed asset-backed capacity.

At December 31, 2024, Ford Credit’s net liquidity available for use was $25.2 billion, $0.5 billion lower than year-end 2023.

Ford Credit’s sources of liquidity include cash, committed asset-backed facilities, and unsecured credit facilities.

At December 31, 2023, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $56.2 billion, up $5.2 billion from year-end 2022.

At December 31, 2024, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $53.9 billion, down $2.3 billion from year-end 2023, primarily explained by lower cash.

Material Cash Requirements.

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Contributions for Funded Plans 0.6 1.1 0.5

Worldwide, our defined benefit pension plans were underfunded by $2.3 billion at December 31, 2023, a deterioration of $2.1 billion from December 31, 2022, primarily reflecting the impact of lower discount rates compared to year-end 2022 and pension benefit enhancements as part of the collective bargaining agreements in the United States and Canada, partially offset by asset gains in excess of our assumptions.

Worldwide, our defined benefit pension plans were underfunded by $0.5 billion at December 31, 2024, an improvement of $1.8 billion from December 31, 2023, primarily reflecting 2024 plan contributions and the impact of higher discount rates compared to year-end 2023, partially offset by actual asset returns lower than our assumptions.

Of the $0.5 billion underfunded status at year-end 2024, our funded plans were $3.4 billion overfunded and our unfunded plans were $3.9 billion underfunded.

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In 2024, we contributed $1,073 million to our global funded pension plans, an increase of $481 million compared with 2023.

During 2024, we expect to contribute about $1 billion of cash to our global funded pension plans.

During 2025, we expect to contribute about $800 million of cash to our global funded pension plans.

We also expect to make about $450 million of benefit payments to participants in unfunded plans.

Based on current assumptions and regulations, we do not expect to have a legal requirement to fund our major U.S.

plans in 2024.

pension plans in 2025.

Our global funded plans remain fully funded in aggregate, demonstrating the effectiveness of our de-risking strategy and our commitment to a strong balance sheet.

For a detailed discussion of our pension plans, refer to the “Critical Accounting Estimates - Pensions and Other Postretirement Employee Benefits” section of Item 7 of Part II of our 2023 Form 10-K Report and Note 17 of the Notes to the Financial Statements.

For a detailed discussion of our pension plans, refer to the “Critical Accounting Estimates - Pensions and Other Postretirement Employee Benefits” section of Item 7 and Note 16 of the Notes to the Financial Statements.

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

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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.

The following rating actions were taken by these NRSROs since the filing of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023:

• On October 30, 2023, S&P upgraded the credit ratings for Ford and Ford Credit to BBB- from BB+ and revised the outlook to stable from positive.

There have been no rating actions by these NRSROs since the filing of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

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

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The guidance is based on our expectations as of February 5, 2025, and assumes no material change to our current assumptions for inflation, logistics issues, production, or macroeconomic conditions.

Moreover, our guidance has not factored in any new policy changes by the administration in the United States, including recently announced or future tariffs, or tariffs that may be imposed by other governments.

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 Part I.

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On a segment basis, we expect:

• Ford Pro EBIT of $8 billion to $9 billion driven by continued growth and favorable mix, partially offset by moderated pricing

• Ford Blue EBIT of $7 billion to $7.5 billion, reflecting a balanced market equation, including the impact of our all-new F-150 launch;

we also expect costs to be flat as we offset higher labor and product cost with efficiencies

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

• Ford Pro EBIT of $7.5 billion to $8.0 billion, reflecting continued strength of core Ford Pro products and services along with moderated pricing across fleets, including daily rental

• Ford Blue EBIT of $3.5 billion to $4.0 billion, reflecting lower wholesales as inventories rebalance and exchange rate pressures.

We also expect cost efficiencies to be a partial offset

• Ford Model e EBIT loss of $5.0 billion to $5.5 billion, reflecting continued pricing pressure and on-going investments in our next generation products, offset partially by continued cost efficiencies

• Ford Credit EBT of about $2.0 billion

Our outlook for 2025 assumes:

• Flat to modest U.S.

industry growth at 16 million to 16.5 million

• Non-recurrence of the UAW strike

• Full year of all-new Super Duty, which drives positive pricing and mix in Ford Pro

• Lower industry pricing as supply and demand normalize

• $2 billion benefit from cost reduction initiatives, offsetting higher labor and major product refresh actions

industry sales of 16.0 million to 16.5 million units

• Lower pricing across the industry with inventory at normalized levels

• Net cost reduction of at least $1.0 billion

We are continuing to assess the full implications of the tariffs on imports to the United States from Canada and Mexico (in addition to China) announced on February 1, 2025.

The precise impacts depend on scope and timing in addition to a number of secondary and tertiary effects, e.g., price elasticities, how our Tier 1 and Tier 2 suppliers react, possible substitution effects, and possible duty drawbacks.

However, should 25% tariffs be implemented and remain in place for an extended period of time, it would significantly reduce Ford’s earnings over the course of the year.

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-K

Item 5. Market for Registrant’s Common Equity