FORD MOTOR CO 10-Q

Item 1. Financial Statements (Continued) FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 18. 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 vehicles in the same facility, are included in Ford Blue. Company-owned vendor tooling dedicated to producing EV parts is reported in Ford Model e. Purchased regulatory credit compliance assets are reported in Ford Blue. There are no Ford manufacturing, Company-owned vendor tooling, or regulatory credit compliance assets reported in Ford Pro. Depreciation and amortization expense is reflected on the basis of production volume. Regulatory compliance credit expense is allocated by vehicle line between the Ford Blue and Ford Pro segments. Regardless of the segment reporting the asset, the related expenses are 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. (“CAF”) ∘ None ∘ Ford Otomotiv Sanayi Anonim Sirketi (“Ford Otosan”) ∘ Jiangling Motors Corporation, Ltd. (“JMC”) ∘ AutoAlliance (Thailand) Co., Ltd. (“AAT”) 32 Item 1. Financial Statements (Continued) FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 18. SEGMENT INFORMATION (Continued) Key financial information for the periods ended or at June 30 was as follows (in millions): Ford Blue Ford Model e Ford Pro Ford Credit Unallocated Amounts and Eliminations (a) Total Second Quarter 2025 External revenues $ 25,784 $ 2,357 $ 18,797 $ 3,241 $ 5 $ 50,184 Intersegment revenues (b) 13,527 192 — — ( 13,719 ) — Total revenues $ 39,311 $ 2,549 $ 18,797 $ 3,241 $ ( 13,714 ) $ 50,184 Other segment items (c) 38,650 3,878 16,479 2,596 Segment EBIT/EBT $ 661 $ ( 1,329 ) $ 2,318 $ 645 $ 2,295 Reconciliation of Segment EBIT/EBT Unallocated amounts: Corporate Other ( 155 ) Interest on debt (excludes $ 1,759 of Ford Credit interest on debt) ( 297 ) Special items (d) ( 1,302 ) Income/(Loss) before income taxes $ 541 Other Segment Disclosures Depreciation and tooling amortization $ 764 $ 154 $ 349 $ 615 $ 17 $ 1,899 Investment-related interest income 50 1 15 91 211 368 Equity in net income/(loss) of affiliated companies 52 ( 17 ) 96 13 ( 394 ) ( 250 ) Cash outflow for capital spending 1,063 952 16 34 23 2,088 Total assets 64,141 16,304 4,566 157,804 49,910 292,725 Second Quarter 2026 External revenues $ 26,068 $ 1,026 $ 17,790 $ 3,405 $ 7 $ 48,296 Intersegment revenues (b) 11,453 103 — — ( 11,556 ) — Total revenues $ 37,521 $ 1,129 $ 17,790 $ 3,405 $ ( 11,549 ) $ 48,296 Other segment items (c) 36,386 2,048 16,072 2,648 Segment EBIT/EBT $ 1,135 $ ( 919 ) $ 1,718 $ 757 $ 2,691 Reconciliation of Segment EBIT/EBT Unallocated amounts: Corporate Other ( 188 ) Interest on debt (excludes $ 1,693 of Ford Credit interest on debt) ( 357 ) Special items (e) ( 4,179 ) Income/(Loss) before income taxes $ ( 2,033 ) Other Segment Disclosures Depreciation and tooling amortization $ 753 $ 48 $ 337 $ 705 $ 22 $ 1,865 Investment-related interest income 52 — 18 73 150 293 Equity in net income/(loss) of affiliated companies 63 ( 3 ) 37 14 ( 2,874 ) (f) ( 2,763 ) Cash outflow for capital spending 1,274 1,056 10 25 17 2,382 Total assets 66,551 8,783 3,850 157,653 48,694 285,531 33 Item 1. Financial Statements (Continued) FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 18. SEGMENT INFORMATION (Continued) Key financial information for the periods ended or at June 30 was as follows (in millions): Ford Blue Ford Model e Ford Pro Ford Credit Unallocated Amounts and Eliminations (a) Total First Half 2025 External revenues $ 46,781 $ 3,599 $ 33,978 $ 6,478 $ 7 $ 90,843 Intersegment revenues (b) 24,132 308 — — ( 24,440 ) — Total revenues $ 70,913 $ 3,907 $ 33,978 $ 6,478 $ ( 24,433 ) $ 90,843 Other segment items (c) 70,156 6,085 30,351 5,253 Segment EBIT/EBT $ 757 $ ( 2,178 ) $ 3,627 $ 1,225 $ 3,431 Reconciliation of Segment EBIT/EBT Unallocated amounts: Corporate Other ( 272 ) Interest on debt (excludes $ 3,549 of Ford Credit interest on debt) ( 585 ) Special items (d) ( 1,412 ) Income/(Loss) before income taxes $ 1,162 Other Segment Disclosures Depreciation and tooling amortization $ 1,493 $ 292 $ 697 $ 1,233 $ 32 $ 3,747 Investment-related interest income 98 2 30 182 407 719 Equity in net income/(loss) of affiliated companies 114 ( 37 ) 136 23 ( 392 ) ( 156 ) Cash outflow for capital spending 2,050 1,713 23 62 58 3,906 First Half 2026 External revenues $ 49,926 $ 2,258 $ 32,513 $ 6,839 $ 13 $ 91,549 Intersegment revenues (b) 20,977 179 — — ( 21,156 ) — Total revenues $ 70,903 $ 2,437 $ 32,513 $ 6,839 $ ( 21,143 ) $ 91,549 Other segment items (c) 67,826 4,133 29,110 5,299 Segment EBIT/EBT $ 3,077 $ ( 1,696 ) $ 3,403 $ 1,540 $ 6,324 Reconciliation of Segment EBIT/EBT Unallocated amounts: Corporate Other ( 333 ) Interest on debt (excludes $ 3,412 of Ford Credit interest on debt) ( 707 ) Special items (g) ( 4,405 ) Income/(Loss) before income taxes $ 879 Other Segment Disclosures Depreciation and tooling amortization $ 1,491 $ 93 $ 685 $ 1,420 $ 59 $ 3,748 Investment-related interest income 104 1 34 150 320 609 Equity in net income/(loss) of affiliated companies 117 ( 7 ) 137 27 ( 2,877 ) (f) ( 2,603 ) Cash outflow for capital spending 2,609 2,046 18 44 41 4,758 __________ (a) Unallocated amounts include Corporate Other (see above description of corporate expenses and corporate assets) and Special Items. Eliminations include intersegment transactions occurring in the ordinary course of business. (b) Intersegment revenues only reflect finished vehicle transactions between Ford Blue, Ford Model e, and Ford Pro where there is an intersegment markup and are recognized at the time of the intersegment transaction. (c) Other segment items for the Ford Blue, Ford Model e, and Ford Pro segments primarily includes material costs, manufacturing costs, warranty coverages and field service action costs, freight and distribution costs, vehicle and software engineering costs, spending-related costs, advertising and sales promotions costs, and administrative, information technology, and selling costs. Other segment items for the Ford Credit segment primarily includes interest expense and depreciation. (d) Primarily reflects a field service action for fuel injectors, our share of equity method investment asset impairments and write downs and other expenses, and charges related to the cancellation of a previously planned all-electric three-row SUV program and resulting actions. (e) Primarily reflects BOSK JV disposition (see Note 16) and continued charges related to the EV program cancellations previously announced in December 2025. (f) Primarily reflects BOSK JV disposition (see Note 16). (g) Primarily reflects BOSK JV disposition (see Note 16), charges related to the EV program cancellations previously announced in December 2025, and ongoing restructuring actions in Europe, offset partially by pension and OPEB remeasurements. 34 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. RECENT DEVELOPMENTS Trade Policy and Tariffs As of June 30, 2026, we expect to receive about $3 billion related to tariff reimbursements from the federal government and suppliers and as offsets to Company payment obligations to suppliers. As previously disclosed, included in this amount is about $1.3 billion related to the International Emergency Economic Powers Act (“IEEPA”) and tariff rulings from the United States Supreme Court and the Court of International Trade in the first quarter of 2026. Although we have started to receive reimbursements from the federal government (excluding IEEPA), the timing for our receipt of these reimbursements is uncertain and is subject to changes in trade policy. Despite this uncertainty, we currently expect to receive about $500 million of reimbursements related to IEEPA in the second half of 2026. For additional information regarding the impact and potential impact of trade policy and tariffs on our business, see Item 1A. Risk Factors and “Key Trends and Economic Factors Affecting Ford and the Automotive Industry” in Item 7 in our 2025 Form 10-K Report. Production and Supply Chain As previously disclosed, in September 2025 and November 2025, fires at a Novelis Inc. plant in New York disrupted operations at the facility. Novelis is a major aluminum supplier to Ford, and since the initial fire occurred, we have been working closely with Novelis to address the situation and have temporarily sourced an alternative supply of aluminum. We have also sought mitigating actions to minimize potential disruptions to our operations. We experienced lower production subsequent to the Novelis fires in September and November 2025, and although the ultimate impact on Ford depends on a number of factors, in the second half of 2026, we expect to partially recover the production lost to date. For more information regarding the impact and potential impact of the Novelis fires on our business, see the Outlook section on page 55 of this 10-Q Report. See Item 1A. Risk Factors in our 2025 Form 10-K Report for additional discussion of the risks related to disruptions to Ford’s and Ford’s suppliers’ production and operations. Electric Vehicle Market In December 2025, we announced our decision to rationalize our EV manufacturing capacity and product roadmap, including cancelling three previously planned EVs and ending production of the current generation F-150 Lightning EV. Related to the foregoing, in the second quarter of 2026, we recorded $481 million of charges to be paid in cash, primarily related to contractual commitments related to those programs. As previously disclosed, we may incur additional expenses and cash expenditures related to these actions, which we now expect to be up to $2 billion (on a pre-tax basis). We will recognize those charges in the quarter they are incurred as a special item. Also as previously disclosed, in May 2026, Ford, SK On Co., Ltd., and SK Battery America, Inc., and BlueOval SK, LLC (“BOSK”) closed on the transactions contemplated by the Joint Venture Disposition Agreement (“JVDA”) the parties entered into in December 2025. In conjunction with the closing, our membership interest in BOSK was redeemed, we acquired from BOSK all of BOSK’s interests in two battery plants located in Kentucky, and we entered into a Loan Arrangement and Reimbursement Agreement with U.S. Department of Energy (the “Ford DOE Loan Agreement”), pursuant to which we assumed from BOSK all of its obligations under its U.S. Department of Energy loan related to the single Kentucky plant for which advances were made. Upon closing of the transactions, we recognized pre-tax special item charges of $3.6 billion, which includes about $500 million of cash expenditures. For additional information about BOSK, the JVDA, and the Ford DOE Loan Agreement, see Notes 12 and 16 of the Notes to the Financial Statements. We expect that the regulatory and market dynamics we have observed in the EV market will continue to occur, which may have a substantial adverse impact on our results of operations and/or business, including our investments in supply, production capacity, and equity method investments. For additional discussion of the impact of changes in the EV market to our business, and the risks related thereto, see the “Governmental Standards” discussion in “Item 1. Business” and “Item 1A. Risk Factors” in our 2025 Form 10-K Report. 35 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) RESULTS OF OPERATIONS In the second quarter of 2026, the net loss attributable to Ford Motor Company was $1,327 million, and Company adjusted EBIT was $2,503 million. Net income/(loss) includes certain items (“special items”) that are excluded from Company adjusted EBIT. These items are discussed in more detail under “Non-GAAP Financial Measures That Supplement GAAP Measures” on page 58 and in Note 18 of the Notes to the Financial Statements. We report special items separately to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when analyzing ongoing operating results. Our pre-tax and tax special items were as follows (in millions): Second Quarter First Half 2025 2026 2025 2026 Restructuring (by Geography) Europe $ (18) $ (9) $ (50) $ (360) Subtotal Restructuring $ (18) $ (9) $ (50) $ (360) Other Items EV program cancellations announced in December 2025 $ — $ (481) $ — $ (584) BOSK JV disposition — (3,612) — (3,612) All-electric three-row SUV program cancellation and resulting actions (308) (9) (372) 44 Fuel injector field service action (571) — (571) — Ford share of equity method investment’s asset impairment / other (201) — (201) — Ford share of BOSK’s asset write-down / other (193) — (193) — Subtotal Other Items $ (1,273) $ (4,102) $ (1,337) $ (4,152) Pension and OPEB Gain/(Loss) Pension and OPEB remeasurement $ — $ (54) $ 10 $ 189 Pension settlements, curtailments, and separations costs (11) (14) (35) (82) Subtotal Pension and OPEB Gain/(Loss) $ (11) $ (68) $ (25) $ 107 Total EBIT Special Items $ (1,302) $ (4,179) $ (1,412) $ (4,405) Provision for/(Benefit from) tax special items (a) $ 233 $ (1,152) $ 204 $ (1,228) __________ (a) Includes related tax effect on special items and tax special items. We recorded $4,179 million of pre-tax special item charges in the second quarter of 2026, primarily reflecting charges we recognized upon the closing of the transactions contemplated by the BOSK JVDA and charges related to the EV program cancellations previously announced in December 2025. We recorded a $1,152 million benefit from tax special items in the second quarter of 2026, primarily reflecting the tax effect of pre-tax special item charges and a $273 million benefit from the recognition of a U.S. Qualified Opportunity Zone tax incentive. In Note 18 of the Notes to the Financial Statements, special items are reflected as a separate reconciling item, as opposed to being allocated among our segments. This reflects the fact that management excludes these items from its review of operating segment results for purpose of measuring segment profitability and allocating resources. 36 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) COMPANY KEY METRICS The table below shows our second quarter and first half 2026 key metrics for the Company, compared to a year ago. Second Quarter First Half 2025 2026 H / (L) 2025 2026 H / (L) GAAP Financial Measures Cash Flows from Operating Activities ($B) $ 6.3 $ 4.3 $ (2.0) $ 10.0 $ 5.7 $ (4.3) Revenue ($M) 50,184 48,296 (4)% 90,843 91,549 1% Net Income/(Loss) ($M) (36) (1,327) $ (1,291) 435 1,221 $ 786 Net Income/(Loss) Margin (%) (0.1) % (2.7) % (2.7) ppts 0.5 % 1.3 % 0.9 ppts EPS (Diluted) $ (0.01) $ (0.33) $ (0.32) $ 0.11 $ 0.30 $ 0.19 Non-GAAP Financial Measures (a) Company Adj. Free Cash Flow ($B) $ 2.8 $ 2.1 $ (0.7) $ 1.3 $ 0.2 $ (1.1) Company Adj. EBIT ($M) 2,140 2,503 363 3,159 5,991 2,832 Company Adj. EBIT Margin (%) 4.3 % 5.2 % 0.9 ppts 3.5 % 6.5 % 3.1 ppts Adjusted EPS (Diluted) $ 0.37 $ 0.42 $ 0.05 $ 0.51 $ 1.08 $ 0.57 Adjusted ROIC (Trailing Four Quarters) 10.1 % 13.2 % 3.1 ppts __________ (a) See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP. In the second quarter of 2026, our diluted earnings/(loss) per share of Common and Class B Stock was a loss of $0.33, and our diluted adjusted earnings per share was $0.42. Net income/(loss) margin was negative 2.7% in the second quarter of 2026, down 2.7 percentage points from a year ago. Company adjusted EBIT margin was 5.2% in the second quarter of 2026, up 0.9 percentage points from a year ago. The table below shows the details of our second quarter and first half 2026 net income/(loss) attributable to Ford and Company adjusted EBIT (in millions). Second Quarter First Half 2025 2026 H / (L) 2025 2026 H / (L) Ford Blue $ 661 $ 1,135 $ 474 $ 757 $ 3,077 $ 2,320 Ford Model e (1,329) (919) 410 (2,178) (1,696) 482 Ford Pro 2,318 1,718 (600) 3,627 3,403 (224) Ford Credit 645 757 112 1,225 1,540 315 Corporate Other (155) (188) (33) (272) (333) (61) Company Adjusted EBIT (a) 2,140 2,503 363 3,159 5,991 2,832 Interest on Debt (297) (357) (60) (585) (707) (122) Special Items (1,302) (4,179) (2,877) (1,412) (4,405) (2,993) Taxes / Noncontrolling Interests (577) 706 1,283 (727) 342 1,069 Net Income/(Loss) $ (36) $ (1,327) $ (1,291) $ 435 $ 1,221 $ 786 __________ (a) See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP. The year-over-year decrease of $1,291 million in net income is primarily explained by higher special item charges, as described on page 36 , offset partially by lower taxes. The year-over-year increase of $363 million in Company adjusted EBIT in the second quarter of 2026 primarily reflects higher Ford Blue and Model e EBIT and improved Ford Credit EBT, offset partially by lower Ford Pro EBIT. 37 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) The tables below and on the following pages provide second quarter and first half 2026 key metrics and the change in second quarter 2026 EBIT compared with second quarter 2025 by causal factor for each of our Ford Blue, Ford Model e, and Ford Pro segments. For a description of these causal factors, see Definitions and Information Regarding Ford Blue, Ford Model e, and Ford Pro Causal Factors. Ford Blue Segment Second Quarter First Half Key Metrics 2025 2026 H / (L) 2025 2026 H / (L) Wholesale Units (000) (a) 696 639 (57) 1,284 1,223 (61) Revenue ($M) $ 25,784 $ 26,068 $ 284 $ 46,781 $ 49,926 $ 3,145 EBIT ($M) 661 1,135 474 757 3,077 2,320 EBIT Margin (%) 2.6 % 4.4 % 1.8 ppts 1.6 % 6.2 % 4.5 ppts __________ (a) Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 97,000 units in Q2 2025 and 82,000 units in Q2 2026). Change in EBIT by Causal Factor (in millions) Second Quarter 2025 EBIT $ 661 Volume / Mix 269 Net Pricing 162 Cost (390) Exchange 209 Other 224 Second Quarter 2026 EBIT $ 1,135 In the second quarter of 2026, Ford Blue’s wholesales decreased 8% from a year ago, primarily reflecting the end of production of the Escape in North America and Focus in Europe and the impact of the Middle East conflict, offset partially by higher utility wholesales, including Expedition, Explorer, and Bronco. Second quarter 2026 revenue increased 1%, driven by favorable mix, exchange, and net pricing, offset partially by lower wholesales. Ford Blue’s second quarter 2026 EBIT was $1,135 million, an increase of $474 million from a year ago, with an EBIT margin of 4.4%. The higher EBIT primarily reflects improved market factors, favorable exchange, lower regulatory compliance expense, and higher parts and accessories profit, offset partially by higher cost. The improved market factors reflect favorable product mix and higher net pricing, offset partially by lower volume. The higher cost primarily reflects higher commodity prices and temporary sourcing costs associated with the disruption in aluminum supply, offset partially by lower tariffs (excluding temporary Novelis-related). 38 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Ford Model e Segment Second Quarter First Half Key Metrics 2025 2026 H / (L) 2025 2026 H / (L) Wholesale Units (000) 60 28 (32) 91 62 (29) Revenue ($M) $ 2,357 $ 1,026 $ (1,331) $ 3,599 $ 2,258 $ (1,341) EBIT ($M) (1,329) (919) 410 (2,178) (1,696) 482 EBIT Margin (%) (56.4) % (89.6) % (33.2) ppts (60.5) % (75.1) % (14.6) ppts Change in EBIT by Causal Factor (in millions) Second Quarter 2025 EBIT $ (1,329) Volume / Mix 263 Net Pricing (13) Cost 184 Exchange (12) Other (12) Second Quarter 2026 EBIT $ (919) In the second quarter of 2026, Ford Model e’s wholesales decreased 53% from a year ago, primarily reflecting the right-sizing of Mustang Mach-E production to market demand and discontinuation of the F-150 Lightning. Second quarter 2026 revenue decreased 56%, driven by lower wholesales. Ford Model e’s second quarter 2026 EBIT loss was $919 million, a $410 million improvement from a year ago, with an EBIT margin of negative 89.6%. The improved EBIT primarily reflects lower losses on Gen-1 products, including lower volume and a favorable one-time adjustment related to a multi-year supply agreement, offset partially by higher warranty expenses. Ford Pro Segment Second Quarter First Half Key Metrics 2025 2026 H / (L) 2025 2026 H / (L) Wholesale Units (000) (a) 429 372 (57) 781 688 (93) Revenue ($M) $ 18,797 $ 17,790 $ (1,007) $ 33,978 $ 32,513 $ (1,465) EBIT ($M) 2,318 1,718 (600) 3,627 3,403 (224) EBIT Margin (%) 12.3 % 9.7 % (2.7) ppts 10.7 % 10.5 % (0.2) ppts __________ (a) Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 21,000 units in Q2 2025 and 18,000 units in Q2 2026). Change in EBIT by Causal Factor (in millions) Second Quarter 2025 EBIT $ 2,318 Volume / Mix (507) Net Pricing 52 Cost (194) Exchange (12) Other 61 Second Quarter 2026 EBIT $ 1,718 In the second quarter of 2026, Ford Pro’s wholesales decreased 13% from a year ago, primarily reflecting the end of production of the Escape in North America for fleet customers (including daily rental), lower wholesales as a result of the aluminum supply disruption, and lower Ranger wholesales in Europe. Second quarter 2026 revenue decreased 5%, reflecting lower wholesales, offset partially by favorable mix and exchange. Ford Pro’s second quarter 2026 EBIT was $1,718 million, a decrease of $600 million from a year ago as we continue to recover from the temporary disruption in aluminum supply, with an EBIT margin of 9.7%. The lower EBIT was primarily driven by the lower volume, higher commodity prices, and temporary sourcing costs associated with the disruption in aluminum supply. Favorable mix and net pricing, lower tariffs (excluding temporary Novelis-related), lower regulatory compliance expense, and higher parts and accessories profit were partial offsets. 39 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Definitions and Information Regarding Ford Blue, Ford Model e, and Ford Pro Causal Factors In general, we measure year-over-year change in Ford Blue, Ford Model e, and Ford Pro segment EBIT using the causal factors listed below, with net pricing and cost variances calculated at present-period volume and mix and exchange: • Market Factors (exclude the impact of unconsolidated affiliate wholesale units): ◦ Volume and Mix – primarily measures EBIT variance from changes in wholesale unit volumes (at prior-year average contribution margin per unit) driven by changes in industry volume, market share, and dealer stocks, as well as the EBIT variance resulting from changes in product mix, including mix among vehicle lines and mix of trim levels and options within a vehicle line ◦ Net Pricing – primarily measures EBIT variance driven by changes in wholesale unit prices to dealers and marketing incentive programs such as rebate programs, low-rate financing offers, special lease offers, and stock adjustments on dealer inventory • Cost: ◦ Contribution Costs – primarily measures EBIT variance driven by per-unit changes in cost categories that typically vary with volume, such as material costs (including commodity and component costs), warranty expense, and freight and duty (including tariff) costs ◦ Structural Costs – primarily measures EBIT variance driven by absolute change in cost categories that typically do not have a directly proportionate relationship to production volume. Structural costs include the following cost categories: ▪ Manufacturing, Including Volume-Related – consists primarily of costs for hourly and salaried manufacturing personnel, plant overhead (such as utilities and taxes), and new product launch expense. These costs could be affected by volume for operating pattern actions such as overtime, line-speed, and shift schedules ▪ Engineering and Connectivity – consists primarily of costs for vehicle and software engineering personnel, prototype materials, testing, and outside engineering and software services ▪ Spending-Related – consists primarily of depreciation and amortization of our manufacturing and engineering assets, but also includes asset retirements and operating leases ▪ Advertising and Sales Promotions – includes costs for advertising, marketing programs, brand promotions, customer mailings and promotional events, and auto shows ▪ Administrative, Information Technology, and Selling – includes primarily costs for salaried personnel and purchased services related to our staff activities, information technology, and selling functions • Exchange – primarily measures EBIT variance driven by one or more of the following: (i) transactions denominated in currencies other than the functional currencies of the relevant entities, (ii) effects of converting functional currency income to U.S. 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, compensation-related changes, and regulatory compliance expenses In addition, definitions and calculations used in this report include: • Wholesales and Revenue – wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that are sold to dealerships or others, units manufactured by Ford that are sold to other manufacturers, units distributed by Ford for other manufacturers, and local brand units produced by our China joint venture, Jiangling Motors Corporation, Ltd. (“JMC”), that are sold to dealerships or others. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option (i.e., rental repurchase), as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), also are included in wholesale unit volumes. 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; includes medium and heavy duty trucks • SAAR – seasonally adjusted annual rate 40 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Ford Credit Segment Ford Credit files periodic reports with the SEC that contain additional information regarding Ford Credit. The reports are available through Ford Credit’s website located at www.ford.com/finance/investor-center and can also be found on the SEC’s website located at www.sec.gov . 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 2026 key metrics and the change in second quarter 2026 EBT compared with second quarter 2025 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 Key Metrics 2025 2026 H / (L) 2025 2026 H / (L) Total Net Receivables ($B) $ 143.7 $ 143.2 $ (0.5) Loss-to-Receivables (bps) (a) 48 52 4 56 62 6 Auction Values (b) $ 32,335 $ 32,365 0.1 % $ 31,845 $ 32,005 0.5 % EBT ($M) 645 757 $ 112 1,225 1,540 $ 315 ROE (%) 14.9 % 29.1 % 14.2 ppts 13.6 % 23.6 % 10.0 ppts Other Balance Sheet Metrics Debt ($B) $ 137.4 $ 137.3 $ (0.1) Net Liquidity ($B) 27.0 27.4 0.4 Financial Statement Leverage (to 1) 9.4 9.4 — __________ (a) U.S. retail financing only. (b) U.S. portfolio off-lease second quarter auction values at Q2 2026 mix and YTD amounts at YTD 2026 mix. Change in EBT by Causal Factor (in millions) Second Quarter 2025 EBT $ 645 Volume / Mix 20 Financing Margin 54 Credit Loss (34) Lease Residual 26 Exchange 7 Other 39 Second Quarter 2026 EBT $ 757 Ford Credit’s total net receivables of $143.2 billion were 0.3% lower than a year ago, explained primarily by lower non-consumer financing, exchange, and lower consumer financing, offset partially by a larger operating lease portfolio. The second quarter 2026 U.S. loss-to-receivables ratio of 52 basis points increased from a year ago, primarily reflecting higher repossessions and higher severities. U.S. auction values remain stable year over year. Ford Credit’s second quarter 2026 EBT of $757 million was $112 million higher than a year ago, explained primarily by improved financing margin, net favorable items included in Other, and higher volume and mix. Included in Other is the non-recurrence of a charge related to U.K. commissions redress, offset partially by a decrease in favorable derivative market valuation adjustments. 41 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Definitions and Information Regarding Ford Credit Causal Factors In general, we measure year-over-year changes in Ford Credit’s EBT using the causal factors listed below: • Volume and Mix: ◦ Volume primarily measures changes in net financing margin driven by changes in average net receivables excluding the allowance for credit losses at prior period financing margin yield (defined below in financing margin) at prior period exchange rates. Volume changes are primarily driven by the volume of new and used vehicles sold and leased, the extent to which Ford Credit purchases retail financing and operating lease contracts, the extent to which Ford Credit provides wholesale financing, the sales price of the vehicles financed, the level of dealer inventories, Ford-sponsored special financing programs available exclusively through Ford Credit, and the availability of cost-effective funding ◦ Mix primarily measures changes in net financing margin driven by period-over-period changes in the composition of Ford Credit’s average net receivables excluding the allowance for credit losses by product within each region • Financing Margin: ◦ Financing margin variance is the period-over-period change in financing margin yield multiplied by the present period average net receivables excluding the allowance for credit losses at prior period exchange rates. This calculation is performed at the product and country level and then aggregated. Financing margin yield equals revenue, less interest expense and scheduled depreciation for the period, divided by average net receivables excluding the allowance for credit losses for the same period ◦ Financing margin changes are driven by changes in revenue and interest expense. Changes in revenue are primarily driven by the level of market interest rates, cost assumptions in pricing, mix of business, and competitive environment. Changes in interest expense are primarily driven by the level of market interest rates, borrowing spreads, and asset-liability management • Credit Loss: ◦ Credit loss is the change in the provision for credit losses at prior period exchange rates. For analysis purposes, management splits the provision for credit losses into net charge-offs and the change in the allowance for credit losses ◦ Net charge-off changes are primarily driven by the number of repossessions, severity per repossession, and recoveries. Changes in the allowance for credit losses are primarily driven by changes in historical trends in credit losses and recoveries, changes in the composition and size of Ford Credit’s present portfolio, changes in trends in historical used vehicle values, and changes in forward looking macroeconomic conditions. For additional information, refer to the “Critical Accounting Estimates - Allowance for Credit Losses” section of Item 7 of Part II of our 2025 Form 10-K Report • Lease Residual: ◦ Lease residual measures changes to residual performance at prior period exchange rates. For analysis purposes, management splits residual performance primarily into residual gains and losses, and the change in accumulated supplemental depreciation ◦ Residual gain and loss changes are primarily driven by the number of vehicles returned to Ford Credit and sold, and the difference between the auction value and the depreciated value (which includes both base and accumulated supplemental depreciation) of the vehicles sold. Changes in accumulated supplemental depreciation are primarily driven by changes in Ford Credit’s estimate of the expected auction value at the end of the lease term, and changes in Ford Credit’s estimate of the number of vehicles that will be returned to it and sold. Depreciation on vehicles subject to operating leases includes early termination losses on operating leases due to customer default events. For additional information, refer to the “Critical Accounting Estimates - Accumulated Depreciation on Vehicles Subject to Operating Leases” section of Item 7 of Part II of our 2025 Form 10-K Report • Exchange: ◦ Reflects changes in EBT driven by the effects of converting functional currency income to U.S. dollars • Other: ◦ Primarily includes operating expenses, other revenue, insurance expenses, and other income/(loss) at prior period exchange rates ◦ Changes in operating expenses are primarily driven by salaried personnel costs, facilities costs, and costs associated with the origination and servicing of customer contracts ◦ In general, other income/(loss) changes are primarily driven by changes in earnings related to market valuation adjustments to derivatives (primarily related to movements in interest rates) and other miscellaneous items 42 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) In addition, the following definitions and calculations apply to Ford Credit when used in this Report: • Cash (as shown in the Funding Structure and Liquidity tables) – Cash, cash equivalents, marketable securities, and restricted cash, excluding amounts related to insurance activities • Debt (as shown in the Key Metrics and Leverage tables) – Debt on Ford Credit’s balance sheets. Includes debt issued in securitizations and payable only out of collections on the underlying securitized assets and related enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions • Earnings Before Taxes (“EBT”) – Reflects Ford Credit’s income before income taxes • Loss-to-Receivables (“LTR”) Ratio – LTR ratio is calculated using net charge-offs divided by average finance receivables, excluding unearned interest supplements and the allowance for credit losses • Return on Equity (“ROE” ) (as shown in the Key Metrics table) – Reflects return on equity calculated by annualizing net income for the period and dividing by monthly average equity for the period • Securitization and Restricted Cash (as shown in the Liquidity table) – Securitization cash is held for the benefit of the securitization investors (for example, a reserve fund). Restricted cash primarily includes cash held to meet certain local governmental and regulatory reserve requirements and cash held under the terms of certain contractual agreements • Securitizations (as shown in the Public Term Funding Plan table) – Public securitization transactions, Rule 144A offerings sponsored by Ford Credit, and widely distributed offerings by Ford Credit Canada • Term Asset-Backed Securities (as shown in the Funding Structure table) – Obligations issued in securitization transactions that are payable only out of collections on the underlying securitized assets and related enhancements • Total Net Receivables (as shown in the Key Metrics table) – Includes finance receivables (retail financing and wholesale) sold for legal purposes and net investment in operating leases included in securitization transactions that do not satisfy the requirements for accounting sale treatment. These receivables and operating leases are reported on Ford Credit’s balance sheets and are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations of Ford Credit or the claims of Ford Credit’s other creditors 43 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Corporate Other Corporate Other primarily includes corporate governance expenses, past service pension and OPEB income and expense, interest income (excluding Ford Credit interest income and interest earned on our extended service contract portfolio) and realized and unrealized gains and losses on our cash, cash equivalents, and marketable securities, and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, that are not allocated to operating segments. 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 2026, Corporate Other had a $188 million EBIT loss, compared to a $155 million EBIT loss a year ago. Interest on Debt Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was $357 million in the second quarter of 2026, $60 million higher than a year ago, which includes the impact of our assumption of the DOE loan from BOSK. Taxes Our Provision for/(Benefit from) income taxes for the second quarter and first half of 2026 was a benefit of $711 million and $350 million, respectively, resulting in an effective tax rate of 35.0% for the second quarter and negative 39.8% for the first half. These rates were driven by a benefit of $273 million in the second quarter resulting from the recognition of a U.S. Qualified Opportunity Zone tax incentive, which was treated as a special item. The first half rate was also driven by a benefit resulting from a tax law change in the United Kingdom. Our second quarter and first half 2026 adjusted effective tax rates, which exclude special items, were 20.5% and 16.6%, respectively. During the third quarter of 2026, we anticipate recognizing a tax benefit of up to $200 million, resulting from legal entity restructuring of our South American operations. The benefit is expected to be treated as a special item. We regularly review our organizational structure and income tax elections for affiliates in non-U.S. and U.S. tax jurisdictions, which may result in changes in affiliates that are included in or excluded from our U.S. tax return. Any future changes to our structure, as well as any changes in income tax laws in the countries that we operate, could cause increases or decreases to our deferred tax balances and related valuation allowances. 44 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) LIQUIDITY AND CAPITAL RESOURCES At June 30, 2026, total cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $31.6 billion. We consider our key balance sheet metrics to be: (i) Company cash, which includes cash equivalents, marketable securities, and restricted cash (including cash held for sale), excluding Ford Credit’s cash, cash equivalents, marketable securities, and restricted cash; and (ii) Company liquidity, which includes Company cash, less restricted cash, and total available committed credit lines, excluding Ford Credit’s total available committed credit lines. Company excluding Ford Credit December 31, 2025 June 30, 2026 Balance Sheets ($B) Company Cash 28.7 $ 22.3 Liquidity 49.8 43.4 Debt (excluding finance leases) (21.0) (22.6) Cash Net of Debt (excluding finance leases) (a) 7.7 (0.3) Pension Funded Status ($B) (b) Funded Plans $ 3.7 $ 4.2 Unfunded Plans (3.9) (3.7) Total Global Pension $ (0.2) $ 0.5 Total Funded Status OPEB $ (4.4) $ (4.3) __________ (a) June 30, 2026 includes assumption of the DOE loan from BOSK. (b) Balances at June 30, 2026 reflect net funded status at December 31, 2025, updated for: service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. For plans without interim remeasurement, the discount rate and rate of expected return assumptions are unchanged from year-end 2025. Liquidity . 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, 2026, we had Company cash of $22.3 billion and liquidity of $43.4 billion. At June 30, 2026, about 86% of Company cash was held by consolidated entities domiciled in the United States. To be prepared for an economic downturn and other stress scenarios, we target an ongoing Company cash balance at or above $20 billion plus significant additional liquidity above our Company cash target. We expect to have periods when we will be above or below this amount due to: (i) future cash flow expectations, such as for investments in future opportunities, capital investments, debt maturities, pension contributions, or restructuring requirements, (ii) short-term timing differences, and (iii) changes in the global economic or operating environment. Our Company cash investments primarily include U.S. Department of Treasury obligations, federal agency securities, bank time deposits with investment-grade institutions, investment-grade corporate securities, investment-grade commercial paper, and debt obligations of a select group of non-U.S. governments, non-U.S. governmental agencies, and supranational institutions. The average maturity of these investments is approximately one year and adjusted based on market conditions and liquidity needs. We monitor our Company cash levels and average maturity on a daily basis. 45 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Material Cash Requirements. Our material cash requirements may include: • Capital expenditures (for additional information, see the “Changes in Company Cash” section below) and other payments for engineering, software, product development, and implementation of our plans for electrified products • Purchase of raw materials and components to support the manufacturing and sale of vehicles (including electrified vehicles), parts, accessories, and payment of tariffs (for additional information, see the description of our “purchase obligations” in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 of our 2025 Form 10-K Report) • Marketing incentive payments to dealers • Payments for warranty and field service actions (for additional information, see Note 17 of the Notes to the Financial Statements herein) • Debt repayments including finance lease payments (for additional information, see Note 18 of the Notes to the Financial Statements in our 2025 Form 10-K Report) • Discretionary and mandatory payments to our global pension plans (for additional information, see the “Liquidity and Capital Resources - Total Company” section in Item 7 of our 2025 Form 10-K Report, the “Changes in Company Cash” section below, and Note 11 of the Notes to the Financial Statements herein) • Employee wages, benefits, and incentives • Operating lease payments (for additional information, see Note 17 of the Notes to the Financial Statements in our 2025 Form 10-K Report) • Cash effects related to the restructuring of our business • 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 share-based compensation) may require the expenditure of a material amount of cash. We generally target shareholder distributions of 40% to 50% of adjusted free cash flow. Moreover, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions, and other matters. We plan to utilize our liquidity (as described above) and our cash flows from business operations to fund our material cash requirements. 46 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Changes in Company Cash. In managing our business, we classify changes in Company cash into operating and non-operating items. Operating items include: Company adjusted EBIT excluding Ford Credit EBT; capital spending; depreciation and tooling amortization; changes in working capital; Ford Credit distributions; interest on debt; cash taxes; and all other and timing differences (including timing differences between accrual-based EBIT and associated cash flows). Non-operating items include: restructuring costs; changes in Company debt excluding Ford Credit and finance lease payments; finance lease payments; contributions to funded pension plans; shareholder distributions; and other items (including gains and losses on investments in equity securities, acquisitions and divestitures, equity investments, and other transactions with Ford Credit). With respect to “Changes in working capital,” in general, the Company excluding Ford Credit carries relatively low trade receivables compared with our trade payables because the majority of our wholesales are financed (primarily by Ford Credit) immediately upon the sale of vehicles to dealers, which generally occurs shortly after being produced. In contrast, our trade payables are based primarily on industry-standard production supplier payment terms of about 45 days. As a result, our cash flow deteriorates if wholesale volumes (and the corresponding revenue) decrease while trade payables continue to become due. Conversely, our cash flow improves if wholesale volumes (and the corresponding revenue) increase while new trade payables are generally not due for about 45 days. For example, the suspension of production at most of our assembly plants and lower industry volumes due to COVID-19 in early 2020 resulted in an initial deterioration of our cash flow, while the subsequent resumption of manufacturing operations and return to pre-COVID-19 production levels at most of our assembly plants resulted in a subsequent improvement of our cash flow. Disruptions to our production due to supplier shortages or otherwise may have similar cash flow timing impacts. Even in normal economic conditions, however, these working capital balances generally are subject to seasonal changes that can impact cash flow. For example, we typically experience cash flow timing differences associated with inventories and payables due to our annual shutdown periods when production, and therefore inventories and wholesale volumes, are usually at their lowest levels, while payables continue to come due and be paid. The net impact of this typically results in cash outflows from changes in our working capital balances during these shutdown periods. In response to, or in anticipation of, supplier disruptions, we may stockpile certain components or raw materials to help prevent disruption in our production operations. Such actions could have a short-term adverse impact on our cash and increase our inventory. Moreover, in order to secure critical materials to manufacture electrified products, 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. Such investments could have an additional adverse impact on our cash in the near-term. 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 mechanisms included in our offtake agreements are typically based on the market price of the material at the time of delivery. 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 or otherwise compensate the supplier in an amount determined by the contract. As of June 30, 2026, our estimated expenditures for the maximum quantity that we are committed to purchase under these offtake agreements through 2035, subject to certain conditions, total approximately $6.4 billion based on our present forecast; 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 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 discussion of the risks related to our offtake agreements and other long-term purchase contracts, see Item 1A. Risk Factors in our 2025 Form 10-K Report. 47 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Financial institutions participate in a supply chain finance (“SCF”) program that enables our suppliers, at their sole discretion, to sell their Ford receivables (i.e., our payment obligations to the suppliers) to the financial institutions on a non-recourse basis in order to be paid earlier than our payment terms provide. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms, the amounts we pay, or our liquidity. We have no economic interest in a supplier’s decision to participate in the SCF program, and we do not provide any guarantees in connection with it. As of June 30, 2026, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was $68 million. The amount settled through the SCF program during the first half of 2026 was $491 million. Changes in Company cash excluding Ford Credit are summarized below (in billions): Second Quarter First Half 2025 2026 2025 2026 Company Excluding Ford Credit Company Adjusted EBIT excluding Ford Credit (a) $ 1.5 $ 1.7 $ 1.9 $ 4.5 Capital spending $ (2.1) $ (2.4) $ (3.8) $ (4.7) Depreciation and tooling amortization 1.3 1.2 2.5 2.3 Net spending $ (0.8) $ (1.2) $ (1.3) $ (2.4) Receivables $ (1.7) $ (0.1) $ (2.2) $ (0.9) Inventory 1.2 (0.4) (1.4) (1.7) Trade Payables 0.8 1.0 3.4 2.3 Changes in working capital $ 0.3 $ 0.6 $ (0.3) $ (0.3) Ford Credit distributions $ 0.5 $ 0.9 $ 0.7 $ 1.9 Interest on debt and cash taxes (0.4) (0.6) (0.9) (1.0) All other and timing differences 1.8 0.6 1.2 (2.4) Company adjusted free cash flow (a) $ 2.8 $ 2.1 $ 1.3 $ 0.2 Restructuring $ 0.2 $ (0.1) $ 0.1 $ (0.8) Changes in debt excluding finance lease payments (0.7) 0.1 (0.7) (2.1) Finance lease payments — — (0.1) (0.1) Funded pension contributions (0.3) (0.1) (0.5) (0.3) Shareholder distributions (0.6) (0.6) (1.8) (1.5) All other (0.1) (1.0) 1.4 (1.8) Change in cash $ 1.3 $ 0.3 $ (0.1) $ (6.4) __________ (a) See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP. Note: Numbers may not sum due to rounding. Our second quarter 2026 Net cash provided by/(used in) operating activities was $4.3 billion, $2.0 billion lower than a year ago (see page 61 for additional information). The decrease primarily reflects lower net income and lower Ford Credit operating cash flows, offset partially by higher working capital. Company adjusted free cash flow was $2.1 billion, $0.7 billion lower than a year ago, primarily driven by unfavorable timing differences and higher net spending and tax and interest payments. Higher Ford Credit distributions, working capital, and Company adjusted EBIT excluding Ford Credit were partial offsets. Capital spending was $2.4 billion in the second quarter of 2026, an increase of $0.3 billion from a year ago. We continue to expect full year 2026 capital spending to be in the range of $9.5 billion to $10.5 billion. Second quarter 2026 working capital impact was $0.6 billion, driven by higher trade payables, offset partially by higher inventory and higher receivables, each compared to March 31, 2026. All other and timing differences were $0.6 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. In the second quarter of 2026, we contributed $148 million to our global funded pension plans. We continue to expect to contribute about $550 million to our global funded pension plans in 2026. 48 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Shareholder distributions were $0.6 billion in the second quarter of 2026, all of which was attributable to our regular dividend. Available Credit Lines . Total Company committed credit lines, excluding Ford Credit, at June 30, 2026 were $23.7 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, $3.0 billion of our delayed draw term loan facility, and $2.7 billion of local credit facilities. At June 30, 2026, $2.3 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, 364-day, and delayed draw term loan credit facilities was available. Our corporate, supplemental, and 364-day revolving credit facilities were amended as of April 15, 2026 to extend the maturity dates of the commitments under each facility. Lenders under our corporate credit facility have $3.4 billion of commitments maturing on April 13, 2029 and $10.1 billion of commitments maturing on April 15, 2031. Lenders under our supplemental revolving credit facility have $2.0 billion of commitments maturing on April 13, 2029. Lenders under our 364-day revolving credit facility have $2.5 billion of commitments maturing on April 14, 2027. Our delayed draw term loan facility was also amended as of April 15, 2026 to extend the available draw period for the $3.0 billion of commitments to December 31, 2026. Any unused commitments shall automatically terminate after December 31, 2026, and any loans drawn under the facility will mature on December 31, 2028. The sustainability-linked targets previously included in the corporate, supplemental, and 364-day credit agreements were removed as part of the April 2026 amendments and the applicable margin and facility fees under those facilities will no longer be adjusted based on whether Ford achieves, or fails to achieve, certain sustainability-linked targets. 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 revolving credit facility, the 364-day revolving credit facility, and the delayed draw term loan facility 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. Debt. As shown in Note 12 of the Notes to the Financial Statements, at June 30, 2026, Company debt excluding Ford Credit was $23.6 billion (including $1.0 billion of finance leases). This balance is $1.7 billion higher than at December 31, 2025, primarily reflecting our assumption of the DOE loan from BOSK in May 2026, offset partially by the repayment of the principal amount of our 0.00% Convertible Senior Notes due March 15, 2026 in the first quarter. Leverage. 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 separately as described in the “Liquidity and Capital Resources - Ford Credit Segment” section of Item 2. Ford Credit is self-funding and its debt, which is used to fund its operations, is separate from our Company debt excluding Ford Credit. 49 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Ford Credit Segment Ford Credit remains well capitalized with a strong balance sheet and funding diversified across platforms and markets. Ford Credit ended the second quarter of 2026 with $27.4 billion of liquidity, up $2.8 billion from year-end. Ford Credit continues to have robust access to capital markets, completing $19 billion of public term issuances through July 27, 2026. Key elements of Ford Credit’s funding strategy include: • Maintain strong liquidity and funding diversity • Prudently access public markets • Continue to leverage retail deposits in Europe • Flexibility to increase asset-backed securities mix as needed; preserving assets and committed capacity • Target financial statement leverage of 9:1 to 10:1 • Maintain self-liquidating balance sheet Ford Credit’s liquidity profile continues to be diverse, robust, and focused on maintaining liquidity levels that meet its business and funding requirements. Ford Credit regularly stress tests its balance sheet and liquidity to ensure that it can continue to meet its financial obligations through economic cycles. The following table shows funding for Ford Credit’s net receivables (in billions): June 30, 2025 December 31, 2025 June 30, 2026 Funding Structure Term unsecured debt $ 63.1 $ 63.4 $ 64.2 Term asset-backed securities 55.7 59.5 55.9 Retail Deposits / Ford Interest Advantage 18.6 18.5 17.2 Other 0.3 (0.6) (0.2) Equity 14.5 14.8 14.6 Cash (8.5) (9.3) (8.5) Total Net Receivables $ 143.7 $ 146.3 $ 143.2 Securitized Funding as Percent of Total Debt 40.5 % 42.0 % 40.7 % Net receivables of $143.2 billion at June 30, 2026 were funded primarily with term unsecured debt and term asset-backed securities. Securitized funding as a percent of total debt was 40.7% as of June 30, 2026. Public Term Funding Plan. The following table shows Ford Credit’s issuances for full year 2024 and 2025, planned issuances for full year 2026, and its global public term funding issuances through July 27, 2026, excluding short-term funding programs (in billions): 2024 Actual 2025 Actual 2026 Forecast Through July 27 Unsecured $ 17 $ 13 $ 12 - 15 $ 9 Securitizations (a) 16 13 $ 14 - 16 10 Total public $ 33 $ 26 $ 26 - 31 $ 19 __________ (a) See Definitions and Information Regarding Ford Credit Causal Factors section. For 2026, Ford Credit now projects full year public term funding in the range of $26 billion to $31 billion. 50 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Liquidity. The following table shows Ford Credit’s liquidity sources and utilization (in billions): June 30, 2025 December 31, 2025 June 30, 2026 Liquidity Sources (a) Cash $ 8.5 $ 9.3 $ 8.5 Committed asset-backed facilities 42.8 43.6 42.9 Other unsecured credit facilities 1.7 1.5 1.3 Total liquidity sources $ 53.0 $ 54.4 $ 52.7 Utilization of Liquidity (a) Securitization and restricted cash $ (2.9) $ (3.0) $ (2.9) Committed asset-backed facilities (22.9) (26.4) (22.4) Other unsecured credit facilities (0.3) (0.6) (0.4) Total utilization of liquidity $ (26.1) $ (30.0) $ (25.7) Available liquidity $ 26.9 $ 24.4 $ 27.0 Other adjustments 0.1 0.2 0.4 Net liquidity available for use $ 27.0 $ 24.6 $ 27.4 __________ (a) See Definitions and Information Regarding Ford Credit Causal Factors section. 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, 2026, Ford Credit’s net liquidity available for use was $27.4 billion, $2.8 billion higher than year-end 2025, reflecting strong access to public funding markets. At June 30, 2026, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and committed unsecured credit facilities, totaled $52.7 billion, down $1.7 billion from year-end 2025, primarily explained by lower cash and committed asset-backed facilities. Material Cash Requirements. Ford Credit’s material cash requirements include: (1) the purchase of retail financing and operating lease contracts from dealers and providing wholesale financing for dealers to finance new and used vehicles; and (2) debt repayments (for additional information on debt, see the “Balance Sheet Liquidity Profile” section in the “Liquidity and Capital Resources - Ford Credit Segment” section in Item 7 of Part II and Note 18 of the Notes to the Financial Statements in our 2025 Form 10-K Report). In addition, subject to approval by Ford Credit’s Board of Directors, shareholder distributions may require the expenditure of a material amount of cash. Moreover, Ford Credit may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions, and other matters. Ford Credit plans to utilize its liquidity (as described above) and its cash flows from business operations to fund its material cash requirements. Funding and Liquidity Risks. 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 and Capital Resources - Ford Credit Segment - Funding and Liquidity Risks” section of Item 7 of Part II of our 2025 Form 10-K Report for more information. 51 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Leverage. Ford Credit uses leverage, or the debt-to-equity ratio, to make various business decisions, including evaluating and establishing pricing for finance receivable and operating lease financing, and assessing its capital structure. The table below shows the calculation of Ford Credit’s financial statement leverage (in billions): June 30, 2025 December 31, 2025 June 30, 2026 Leverage Calculation Debt $ 137.4 $ 141.4 $ 137.3 Equity (a) 14.5 14.8 14.6 Financial statement leverage (to 1) 9.4 9.6 9.4 __________ (a) Total shareholder’s interest reported on Ford Credit’s balance sheets. Ford Credit plans its leverage by considering market conditions and the risk characteristics of its business. At June 30, 2026, Ford Credit’s financial statement leverage was 9.4:1. 52 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Total Company Pension Plans - Funded Balances. As of June 30, 2026, our total Company pension overfunded status reported on our consolidated balance sheets was $501 million and reflects the net funded status at December 31, 2025, updated for: service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. For plans without interim remeasurement, the discount rate and rate of expected return assumptions are unchanged from year-end 2025. Return on Invested Capital (“ROIC”). We analyze total Company performance using an adjusted ROIC financial metric based on an after-tax, rolling four-quarter average. The following table contains the calculation of our ROIC for the periods shown (in billions): Four Quarters Ending June 30, 2025 June 30, 2026 Adjusted Net Operating Profit/(Loss) After Cash Tax Net income/(loss) attributable to Ford $ 3.2 $ (7.4) Add: Noncontrolling interest — — Less: Income tax (1.2) 4.7 Add: Cash tax (0.7) (0.7) Less: Interest on debt (1.2) (1.4) Less: Total pension/OPEB income/(cost) (0.1) (0.8) Add: Pension/OPEB service costs (0.5) (0.4) Net operating profit/(loss) after cash tax $ 4.4 $ (11.0) Less: Special items (excl. pension/OPEB) pre-tax (2.7) (19.8) Adjusted net operating profit/(loss) after cash tax $ 7.1 $ 8.7 Invested Capital Equity $ 45.1 $ 35.8 Debt (excl. Ford Credit) 20.3 23.6 Net pension and OPEB liability 4.3 3.8 Invested capital (end of period) $ 69.7 $ 63.1 Average invested capital $ 70.2 $ 65.9 ROIC (a) 6.3 % (16.7) % Adjusted ROIC (Non-GAAP) (b) 10.1 % 13.2 % __________ (a) Calculated as the sum of net operating profit/(loss) after cash tax from the last four quarters, divided by the average invested capital over the last four quarters. (b) Calculated as the sum of adjusted net operating profit/(loss) after cash tax from the last four quarters, divided by the average invested capital over the last four quarters. Note: Numbers may not sum due to rounding. 53 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) CREDIT RATINGS Our short-term and long-term debt is rated by four credit rating agencies designated as nationally recognized statistical rating organizations (“NRSROs”) by the U.S. Securities and Exchange Commission: DBRS, Fitch, Moody’s, and S&P. In several markets, locally recognized rating agencies also rate us. A credit rating reflects an assessment by the rating agency of the credit risk associated with a corporate entity or particular securities issued by that entity. Rating agencies’ ratings of us are based on information provided by us and other sources. Credit ratings are not recommendations to buy, sell, or hold securities and are subject to revision or withdrawal at any time by the assigning rating agency. 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, 2026. The following table summarizes certain of the credit ratings and outlook presently assigned by these four NRSROs: NRSRO RATINGS Ford Ford Credit NRSROs Issuer Default / Corporate / Issuer Rating Long-Term Senior Unsecured Outlook / Trend Long-Term Senior Unsecured Short-Term Unsecured Outlook / Trend Minimum Long-Term Investment Grade Rating DBRS BBB (low) BBB (low) Stable BBB (low) R-2 (low) Stable BBB (low) Fitch BBB- BBB- Stable BBB- F3 Stable BBB- Moody’s N/A Ba1 Stable Ba1 NP Stable Baa3 S&P BBB- BBB- Negative BBB- A-3 Negative BBB- 54 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) OUTLOOK We provided 2026 Company guidance in our earnings release furnished on Form 8-K dated July 28, 2026. The guidance is based on our expectations and best estimates as of July 28, 2026, and assumes no material change to our current assumptions for inflation, logistics issues, production, or macroeconomic conditions. Our guidance does not include potential impacts of a significant escalation in the Middle East or a material downturn in the U.S. economy, which could have a substantial impact on industry demand. Moreover, our guidance has not factored in any new policy changes by the administration in the United States, including future or revised tariffs or related offsets, that have not been announced or tariffs or other policy changes that may be announced by other governments after the date hereof. 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 2025 Form 10-K Report and as updated by our subsequent filings with the SEC. 2026 Guidance Total Company Adjusted EBIT (a) $10.0 - $11.0 billion Adjusted Free Cash Flow (a) $6.0 - $7.0 billion __________ (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 2026, we now expect adjusted EBIT of $10.0 billion to $11.0 billion and adjusted free cash flow of $6.0 billion to $7.0 billion. On a segment basis we expect: • Ford Pro EBIT of $7.0 billion to $7.5 billion • Ford Blue EBIT of $5.0 billion to $5.5 billion • Ford Model e EBIT loss of about $4.0 billion • Ford Credit EBT of above $2.5 billion Our outlook for 2026 assumes: • U.S. SAAR of 16.0 million to 16.5 million • U.S. industry pricing up about 0.5% • A net $1.0 billion improvement from the Novelis recovery, which includes about $1.5 billion of temporary costs (including tariffs) • Commodity headwinds of just above $2.0 billion, largely due to higher aluminum pricing driven by global supply constraints. This excludes Novelis-related aluminum costs. • A $1.0 billion improvement in material costs and warranty reductions (primarily coverages) • An incremental investment of about $1.0 billion in Model e to support the ramp of our Universal EV platform and Ford Energy • IEEPA cash recovery of about $0.5 billion in 2026 55