FORD MOTOR CO 10-Q

ITEM 1. Legal Proceedings. PRODUCT LIABILITY MATTERS Hill v. Ford (as previously reported on page 35 of our 2024 Form 10-K Report). Plaintiffs in this product liability action filed in Georgia state court alleged that the roof of a 2002 Ford F-250 involved in a rollover accident was defectively designed. During the first trial in 2018, the judge declared a mistrial, ruled that Ford’s attorneys had violated pre-trial rulings while presenting evidence, and sanctioned Ford by prohibiting Ford from introducing any evidence at the second trial to show that the roof design of the F-250 was not defective. During the second trial in August 2022, a jury found that Pep Boys (the party that sold the tires on the vehicle involved in the rollover accident) was responsible for 30% of the damages, and Ford, as a direct result of the sanctions order prohibiting Ford from presenting its defense, was responsible for 70% of the damages, resulting in $16.8 million in damages being apportioned to Ford. The jury subsequently awarded punitive damages against Ford in the amount of $1.7 billion. We filed post-trial motions seeking a new trial, and on September 14, 2023, the trial court denied our post-trial motions. On October 13, 2023, Ford filed a notice of appeal with the Georgia Court of Appeals, and on November 1, 2024, the Georgia Court of Appeals vacated the trial court’s judgment and remanded the matter for a new trial. On November 7, 2024, the plaintiffs filed their notice of intent to petition the Georgia Supreme Court for a writ of certiorari, and on December 19, 2024, the plaintiffs filed their petition with the Georgia Supreme Court. Ford filed its response to the petition on February 5, 2025. On August 12, 2025, the Georgia Supreme Court denied plaintiffs’ petition for certiorari. On September 12, 2025, following a settlement reached between the plaintiffs and Ford, plaintiffs filed a Notice of Dismissal with Prejudice. Brogdon v. Ford (as previously reported on page 64 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025). Plaintiffs, the adult children of Debra and Herman Mills, filed this product liability action against Ford in the U.S. District Court for the Middle District of Georgia on May 23, 2023, alleging that the roof of a 2015 Ford F-250 involved in a rollover accident was defectively designed. After a trial in February 2025, a jury found that Ford was responsible for 85% of the damages, resulting in $25.9 million in damages being apportioned to Ford. The jury subsequently awarded punitive damages against Ford in the amount of $2.5 billion, after which we filed post-trial motions with the trial court. On September 12, 2025, following a settlement reached between the plaintiffs and Ford, this matter was dismissed. ENVIRONMENTAL MATTERS Any legal proceeding arising under any federal, state, or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment, in which (i) a governmental authority is a party, and (ii) we believe there is the possibility of monetary sanctions (exclusive of interest and costs) in excess of $1,000,000 is described on page 36 of our 2024 Form 10-K Report. OTHER MATTERS Brazilian Tax Matters (as previously reported on page 37 of our 2024 Form 10-K Report, page 64 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and page 67 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025). One Brazilian state (São Paulo) and the Brazilian federal tax authority currently have outstanding substantial tax assessments against Ford Motor Company Brasil Ltda. (“Ford Brazil”) related to state and federal tax incentives Ford Brazil received for its operations in the Brazilian state of Bahia. The São Paulo assessment is part of a broader conflict among various states in Brazil. The federal legislature enacted laws designed to encourage the states to end that conflict, and in 2017 the states reached an agreement on a framework for resolution. Ford Brazil continues to pursue a resolution under the framework and expects the amount of any remaining assessments by the states to be resolved under that framework. The federal assessments are outside the scope of the legislation. All of the outstanding assessments have been appealed to the relevant administrative court of each jurisdiction and some appeals are now pending in the judicial court system. To proceed with an appeal within the judicial court system, an appellant may be required to post collateral. If we are required to post collateral, which could be in excess of $1 billion for all the cases in the aggregate, we expect it to be in the form of fixed assets, surety bonds, and/or letters of credit, but we may be required to post cash collateral. To date, we have received collateral waivers for most of the cases that have been appealed to the judicial court system, although we have been required to post less than $100 million of collateral. Although the ultimate resolution of these matters may take many years, we consider our overall risk of loss to be remote. 68