FORD MOTOR CO 10-Q

ITEM 1. Legal Proceedings. 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 37 of our 2025 Form 10-K Report. OTHER MATTERS Brazilian Tax Matters (as previously reported on page 38 of our 2025 Form 10-K Report and page 65 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026). 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. Versata v. Ford. Plaintiff, Versata Software, LLC, filed a trade secret and breach of contract action against Ford in the United States District Court for the Eastern District of Michigan on February 19, 2015, alleging that Ford misappropriated its trade secrets and breached the parties’ licensing contract. After a trial in October 2022, a jury found Ford liable and awarded plaintiff $105 million in damages. On February 17, 2023, Ford filed a post-trial motion based upon insufficient evidence of plaintiff’s damages. On May 1, 2023, the trial court granted Ford’s post-trial motion and reduced the damages award from $105 million to $3. The revised award represented a nominal award of $1 for each of plaintiff’s three breach of contract claims and no damages for its trade secrets misappropriation claim. On October 26, 2023, plaintiff appealed to the United States Court of Appeals for the Federal Circuit, which issued its decision on May 22, 2026. The Federal Circuit reinstated $82 million of the jury award for breach of contract damages and remanded to the trial court for a new trial on trade secret misappropriation damages. On June 22, 2026, Ford filed a Combined Petition for Panel Rehearing and Rehearing En Banc. The Federal Circuit has not ruled on Ford’s motion. Plaintiff may claim interest on a final damages award from the date of filing.