Ford Motor 10Q 2024 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☑ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2024

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission file number 1-3950

Ford Motor Company

(Exact name of Registrant as specified in its charter)


Delaware		38-0549190
(State of incorporation)		(I.R.S. Employer Identification No.)

One American Road
Dearborn,	Michigan	48126
(Address of principal executive offices)		(Zip code)

313-322-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbols

Name of each exchange on which registered

Common Stock, par value $.01 per share

New York Stock Exchange

6.200% Notes due June 1, 2059

FPRB

New York Stock Exchange

6.000% Notes due December 1, 2059

FPRC

New York Stock Exchange

6.500% Notes due August 15, 2062

FPRD

New York Stock Exchange

Indicate by check mark if the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 19, 2024, Ford had outstanding 3,904,397,609 shares of Common Stock and 70,852,076 shares of Class B Stock.

Exhibit Index begins on page 69

FORD MOTOR COMPANY

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended June 30, 2024


	Table of Contents	Page
	Part I - Financial Information
Item 1	Financial Statements	3
	Consolidated Income Statements	3
	Consolidated Statements of Comprehensive Income	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Cash Flows	5
	Consolidated Statements of Equity	6
	Notes to the Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
	Recent Developments	35
	Results of Operations	36
	Ford Blue Segment	38
	Ford Model e Segment	39
	Ford Pro Segment	39
	Ford Next Segment	41
	Ford Credit Segment	41
	Corporate Other	44
	Interest on Debt	44
	Taxes	44
	Liquidity and Capital Resources	45
	Credit Ratings	54
	Outlook	55
	Cautionary Note on Forward-Looking Statements	56
	Non-GAAP Financial Measures That Supplement GAAP Measures	58
	Non-GAAP Financial Measure Reconciliations	60
	Supplemental Information	62
	Accounting Standards Issued But Not Yet Adopted	65
Item 3	Quantitative and Qualitative Disclosures About Market Risk	66
Item 4	Controls and Procedures	66

	Part II - Other Information
Item 1	Legal Proceedings	67
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 5	Other Information	68
Item 6	Exhibits	69
	Signature	70

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements.

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(in millions, except per share amounts)


	For the periods ended June 30,
	2023		2024		2023		2024
	Second Quarter				First Half
	(unaudited)
Revenues
Company excluding Ford Credit	$	42,427	$	44,811	$	81,512	$	84,701
Ford Credit	2,527		2,997		4,916		5,884
Total revenues (Note 3)	44,954		47,808		86,428		90,585

Costs and expenses
Cost of sales	37,471		40,489		72,140		76,965
Selling, administrative, and other expenses	2,750		2,678		5,256		5,054
Ford Credit interest, operating, and other expenses	2,272		2,758		4,458		5,458
Total costs and expenses	42,493		45,925		81,854		87,477
Operating income/(loss)	2,461		1,883		4,574		3,108
Interest expense on Company debt excluding Ford Credit	304		270		612		548
Other income/(loss), net (Note 4)	255		628		479		1,126
Equity in net income/(loss) of affiliated companies	(124)		197		6		364
Income/(Loss) before income taxes	2,288		2,438		4,447		4,050
Provision for/(Benefit from) income taxes	272		605		768		883
Net income/(loss)	2,016		1,833		3,679		3,167
Less: Income/(Loss) attributable to noncontrolling interests	99		2		5		4
Net income/(loss) attributable to Ford Motor Company	$	1,917	$	1,831	$	3,674	$	3,163

EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 6)
Basic income/(loss)	$	0.48	$	0.46	$	0.92	$	0.79
Diluted income/(loss)	0.47		0.46		0.91		0.79

Weighted-average shares used in computation of earnings/(loss) per share
Basic shares	4,003		3,985		3,996		3,982
Diluted shares	4,041		4,022		4,035		4,022

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)


	For the periods ended June 30,
	2023		2024		2023		2024
	Second Quarter				First Half
	(unaudited)
Net income/(loss)	$	2,016	$	1,833	$	3,679	$	3,167
Other comprehensive income/(loss), net of tax (Note 16)
Foreign currency translation	278		(521)		771		(635)
Marketable securities	(44)		28		66		20
Derivative instruments	(369)		43		(424)		248
Pension and other postretirement benefits	3		24		6		51
Total other comprehensive income/(loss), net of tax	(132)		(426)		419		(316)
Comprehensive income/(loss)	1,884		1,407		4,098		2,851
Less: Comprehensive income/(loss) attributable to noncontrolling interests	103		1		9		3
Comprehensive income/(loss) attributable to Ford Motor Company	$	1,781	$	1,406	$	4,089	$	2,848

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions)


	December 31, 2023		June 30, 2024
	(unaudited)
ASSETS
Cash and cash equivalents (Note 7)	$	24,862	$	19,953
Marketable securities (Note 7)	15,309		14,613
Ford Credit finance receivables, net of allowance for credit losses of $256 and $252 (Note 8)	46,425		47,434
Trade and other receivables, less allowances of $64 and $62	15,601		16,802
Inventories (Note 9)	15,651		17,183
Other assets	3,633		4,533
Total current assets	121,481		120,518
Ford Credit finance receivables, net of allowance for credit losses of $626 and $628 (Note 8)	55,650		58,159
Net investment in operating leases	21,384		21,545
Net property	40,821		40,709
Equity in net assets of affiliated companies	5,548		7,215
Deferred income taxes	16,985		16,468
Other assets	11,441		11,972
Total assets	$	273,310	$	276,586

LIABILITIES
Payables	$	25,992	$	25,458
Other liabilities and deferred revenue (Note 10 and Note 18)	25,870		27,380
Debt payable within one year (Note 12)
Company excluding Ford Credit	477		1,712
Ford Credit	49,192		48,853

Total current liabilities	101,531		103,403
Other liabilities and deferred revenue (Note 10 and Note 18)	28,414		28,289
Long-term debt (Note 12)
Company excluding Ford Credit	19,467		18,694
Ford Credit	80,095		81,642
Deferred income taxes	1,005		963
Total liabilities	230,512		232,991

EQUITY
Common Stock, par value $0.01 per share (4,108 million shares issued of 6 billion authorized)	41		41
Class B Stock, par value $0.01 per share (71 million shares issued of 530 million authorized)	1		1
Capital in excess of par value of stock	23,128		23,270
Retained earnings	31,029		32,240
Accumulated other comprehensive income/(loss) (Note 16)	(9,042)		(9,357)
Treasury stock	(2,384)		(2,628)
Total equity attributable to Ford Motor Company	42,773		43,567
Equity attributable to noncontrolling interests	25		28
Total equity	42,798		43,595
Total liabilities and equity	$	273,310	$	276,586


The following table includes assets to be used to settle liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheets above.
	December 31, 2023		June 30, 2024
	(unaudited)
ASSETS
Cash and cash equivalents	$	2,298	$	2,311
Ford Credit finance receivables, net	56,131		57,226
Net investment in operating leases	11,179		12,431
Other assets	90		78
LIABILITIES
Other liabilities and deferred revenue	$	45	$	24
Debt	48,177		45,152

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	For the periods ended June 30,
	2023		2024
	First Half
	(unaudited)
Cash flows from operating activities
Net income/(loss)	$	3,679	$	3,167
Depreciation and tooling amortization	3,775		3,795
Other amortization	(554)		(772)
Provision for credit and insurance losses	212		317
Pension and other postretirement employee benefits (“OPEB”) expense/(income) (Note 11)	612		201
Equity method investment dividends received in excess of (earnings)/losses and impairments	142		(124)
Foreign currency adjustments	(97)		173
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments (Note 4)	163		8
Stock compensation	238		275
Provision for/(Benefit from) deferred income taxes	3		206
Decrease/(Increase) in finance receivables (wholesale and other)	(1,473)		(1,865)
Decrease/(Increase) in accounts receivable and other assets	(1,793)		(1,603)
Decrease/(Increase) in inventory	(3,354)		(1,845)
Increase/(Decrease) in accounts payable and accrued and other liabilities	6,134		5,269
Other	148		(309)
Net cash provided by/(used in) operating activities	7,835		6,893

Cash flows from investing activities
Capital spending	(3,729)		(4,194)
Acquisitions of finance receivables and operating leases	(26,231)		(29,542)
Collections of finance receivables and operating leases	22,517		22,530
Purchases of marketable securities and other investments	(4,860)		(6,069)
Sales and maturities of marketable securities and other investments	7,584		6,812
Settlements of derivatives	(32)		(237)
Capital contributions to equity method investments	(1,047)		(1,299)
Other	(359)		78
Net cash provided by/(used in) investing activities	(6,157)		(11,921)

Cash flows from financing activities
Cash payments for dividends and dividend equivalents	(3,794)		(1,925)
Purchases of common stock	—		(244)
Net changes in short-term debt	(658)		(1,008)
Proceeds from issuance of long-term debt	26,401		28,960
Payments of long-term debt	(22,213)		(25,145)
Other	(197)		(254)
Net cash provided by/(used in) financing activities	(461)		384

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	66		(240)

Net increase/(decrease) in cash, cash equivalents, and restricted cash	$	1,283	$	(4,884)

Cash, cash equivalents, and restricted cash at beginning of period (Note 7)	$	25,340	$	25,110
Net increase/(decrease) in cash, cash equivalents, and restricted cash	1,283		(4,884)
Cash, cash equivalents, and restricted cash at end of period (Note 7)	$	26,623	$	20,226

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in millions, unaudited)


	Equity Attributable to Ford Motor Company
	Capital Stock		Cap. in Excess of Par Value of Stock		Retained Earnings		Accumulated Other Comprehensive Income/(Loss) (Note 16)		Treasury Stock		Total		Equity Attributable to Non-controlling Interests		Total Equity
Balance at December 31, 2022	$	42	$	22,832	$	31,754	$	(9,339)	$	(2,047)	$	43,242	$	(75)	$	43,167
Net income/(loss)	—		—		1,757		—		—		1,757		(94)		1,663
Other comprehensive income/(loss), net	—		—		—		551		—		551		—		551
Common Stock issued (a)	—		57		—		—		—		57		—		57
Treasury stock/other	—		—		—		—		—		—		—		—
Dividends and dividend equivalents declared ($0.80 per share) (b)	—		—		(3,241)		—		—		(3,241)		—		(3,241)
Balance at March 31, 2023	$	42	$	22,889	$	30,270	$	(8,788)	$	(2,047)	$	42,366	$	(169)	$	42,197
Net income/(loss)	—		—		1,917		—		—		1,917		99		2,016
Other comprehensive income/(loss), net	—		—		—		(136)		—		(136)		4		(132)
Common Stock issued (a)	—		140		—		—		—		140		—		140
Treasury stock/other	—		—		—		—		—		—		(5)		(5)
Dividends and dividend equivalents declared ($0.15 per share) (b)	—		—		(610)		—		—		(610)		—		(610)
Balance at June 30, 2023	$	42	$	23,029	$	31,577	$	(8,924)	$	(2,047)	$	43,677	$	(71)	$	43,606







Balance at December 31, 2023	$	42	$	23,128	$	31,029	$	(9,042)	$	(2,384)	$	42,773	$	25	$	42,798
Net income/(loss)	—		—		1,332		—		—		1,332		2		1,334
Other comprehensive income/(loss), net	—		—		—		110		—		110		—		110
Common Stock issued (a)	—		(3)		—		—		—		(3)		—		(3)
Treasury stock/other	—		—		—		—		—		—		—		—
Dividends and dividend equivalents declared ($0.33 per share) (b)	—		—		(1,342)		—		—		(1,342)		—		(1,342)
Balance at March 31, 2024	$	42	$	23,125	$	31,019	$	(8,932)	$	(2,384)	$	42,870	$	27	$	42,897
Net income/(loss)	—		—		1,831		—		—		1,831		2		1,833
Other comprehensive income/(loss), net	—		—		—		(425)		—		(425)		(1)		(426)
Common Stock issued (a)	—		145		—		—		—		145		—		145
Treasury stock/other	—		—		—		—		(244)		(244)		—		(244)
Dividends and dividend equivalents declared ($0.15 per share) (b)	—		—		(610)		—		—		(610)		—		(610)
Balance at June 30, 2024	$	42	$	23,270	$	32,240	$	(9,357)	$	(2,628)	$	43,567	$	28	$	43,595

__________

(a)Includes impact of share-based compensation.

(b)Dividends and dividend equivalents declared for Common and Class B Stock. In the first quarter of 2023 and 2024, in addition to a regular dividend of $0.15 per share, we declared a supplemental dividend of $0.65 per share and $0.18 per share, respectively.

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Table of Contents


Footnote		Page
Note 1	Presentation	8
Note 2	New Accounting Standards	8
Note 3	Revenue	9
Note 4	Other Income/(Loss)	11
Note 5	Income Taxes	11
Note 6	Capital Stock and Earnings/(Loss) Per Share	11
Note 7	Cash, Cash Equivalents, and Marketable Securities	12
Note 8	Ford Credit Finance Receivables and Allowance for Credit Losses	15
Note 9	Inventories	19
Note 10	Other Liabilities and Deferred Revenue	19
Note 11	Retirement Benefits	20
Note 12	Debt	21
Note 13	Derivative Financial Instruments and Hedging Activities	22
Note 14	Employee Separation Actions and Exit and Disposal Activities	24
Note 15	Acquisitions and Divestitures	25
Note 16	Accumulated Other Comprehensive Income/(Loss)	26
Note 17	Variable Interest Entities	27
Note 18	Commitments and Contingencies	28
Note 19	Segment Information	31

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. PRESENTATION

For purposes of this report, “Ford,” the “Company,” “we,” “our,” “us,” or similar references mean Ford Motor Company, our consolidated subsidiaries, and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise. We also make reference to Ford Motor Credit Company LLC, herein referenced to as Ford Credit. Our consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, instructions to the Quarterly Report on Form 10-Q, and Rule 10-01 of Regulation S-X.

In the opinion of management, these unaudited financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of our results of operations and financial condition for the periods, and at the dates, presented. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K Report”).

NOTE 2. NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

We adopted the following Accounting Standards Updates (“ASUs”) during 2024, none of which had a material impact to our consolidated financial statements or financial statement disclosures:


ASU		Effective Date
2023-01	Leases: Common Control Arrangements	January 1, 2024
2023-02	Investments – Equity Method and Joint Ventures - Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method	January 1, 2024

Accounting Standards Issued But Not Yet Adopted

ASU 2023-07, Segment Reporting, Improvements to Reportable Segment Disclosures. In November 2023, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (”CODM”) for each reportable segment. In addition to significant segment expenses that are separately disclosed, the standard requires disclosure of an amount for “other segment items” by reportable segment and a description of its composition. The standard also requires all annual disclosures about a reporting segment’s profit or loss and assets to be provided on an interim basis. This new standard is effective for our 2024 annual financial statements and interim periods beginning in 2025. We continue to assess the effect on our consolidated financial statement disclosures; however, adoption will not impact our consolidated balance sheets or income statements.

ASU 2023-09, Improvements to Income Tax Disclosures. In December 2023, the FASB issued a new accounting standard to enhance the transparency and decision usefulness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024, with retrospective application permitted. There will be no impact to our consolidated balance sheets or income statements; however, there will be changes to our consolidated financial statement disclosures, primarily related to the effective tax rate reconciliation and cash paid for income taxes.

All other ASUs issued but not yet adopted were assessed and determined to be not applicable or are not expected to have a material impact on our consolidated financial statements or financial statement disclosures.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3. REVENUE

The following tables disaggregate our revenue by major source for the periods ended June 30 (in millions):


	Second Quarter 2023
	Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories	$	41,241	$	—	$	41,241
Used vehicles	457		—		457
Services and other revenue (a)	683		49		732
Revenues from sales and services	42,381		49		42,430

Leasing income	46		1,029		1,075
Financing income	—		1,426		1,426
Insurance income	—		23		23
Total revenues	$	42,427	$	2,527	$	44,954

	Second Quarter 2024
	Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories	$	43,542	$	—	$	43,542
Used vehicles	489		—		489
Services and other revenue (a)	726		42		768
Revenues from sales and services	44,757		42		44,799

Leasing income	54		1,030		1,084
Financing income	—		1,889		1,889
Insurance income	—		36		36
Total revenues	$	44,811	$	2,997	$	47,808

	First Half 2023
	Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories	$	79,168	$	—	$	79,168
Used vehicles	926		—		926
Services and other revenue (a)	1,328		66		1,394
Revenues from sales and services	81,422		66		81,488

Leasing income	90		2,078		2,168
Financing income	—		2,727		2,727
Insurance income	—		45		45
Total revenues	$	81,512	$	4,916	$	86,428

	First Half 2024
	Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories	$	82,187	$	—	$	82,187
Used vehicles	999		—		999
Services and other revenue (a)	1,414		62		1,476
Revenues from sales and services	84,600		62		84,662

Leasing income	101		2,047		2,148
Financing income	—		3,708		3,708
Insurance income	—		67		67
Total revenues	$	84,701	$	5,884	$	90,585

__________

(a)Includes extended service contract revenue.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3. REVENUE (Continued)

The amount of consideration we receive and revenue we recognize on our vehicles, parts, and accessories varies with changes in return rights, marketing incentives we offer to our customers and their customers, and other pricing adjustments. Estimates of marketing incentives and other pricing adjustments are based on our expectations of retail and fleet sales volumes, mix of products to be sold, competitor actions, and incentive programs to be offered. Customer acceptance of products and programs, as well as other market conditions, will impact these estimates. As a result of changes in our estimate of variable consideration (e.g., marketing incentives), we recorded a decrease related to revenue recognized in prior periods of $3 million and $256 million in the second quarter of 2023 and 2024, respectively.

We had a balance of $4.8 billion and $5.0 billion of unearned revenue associated primarily with outstanding extended service contracts reported in Other liabilities and deferred revenue at December 31, 2023 and June 30, 2024, respectively. We expect to recognize approximately $900 million of the unearned amount in the remainder of 2024, $1.4 billion in 2025, and $2.7 billion thereafter. We recognized $374 million and $427 million of unearned amounts from prior years as revenue during the second quarter of 2023 and 2024, respectively, and $754 million and $858 million in the first half of 2023 and 2024, respectively.

Amounts paid to dealers to obtain extended service contracts are deferred and recorded as Other assets. We had a balance of $317 million and $319 million in deferred costs as of December 31, 2023 and June 30, 2024, respectively. We recognized $25 million and $27 million of amortization during the second quarter of 2023 and 2024, respectively, and $51 million and $53 million in the first half of 2023 and 2024, respectively.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4. OTHER INCOME/(LOSS)

The amounts included in Other income/(loss), net for the periods ended June 30 were as follows (in millions):


	Second Quarter				First Half
	2023		2024		2023		2024
Net periodic pension and OPEB income/(cost), excluding service cost (Note 11)	$	(167)	$	105	$	(332)	$	81
Investment-related interest income	372		367		720		777
Interest income/(expense) on income taxes	(2)		(9)		(6)		(23)
Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments	(112)		21		(163)		(8)
Gains/(Losses) on changes in investments in affiliates	13		17		17		24
Royalty income	127		113		230		237
Other	24		14		13		38
Total	$	255	$	628	$	479	$	1,126

NOTE 5. INCOME TAXES

For interim tax reporting, we estimate one single effective tax rate for tax jurisdictions not subject to a valuation allowance, which is applied to the year-to-date ordinary income/(loss). Tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.

NOTE 6. CAPITAL STOCK AND EARNINGS/(LOSS) PER SHARE

Earnings/(Loss) Per Share Attributable to Ford Motor Company Common and Class B Stock

Basic and diluted earnings/(loss) per share were calculated using the following (in millions):


	Second Quarter				First Half
	2023		2024		2023		2024
Net income/(loss) attributable to Ford Motor Company	$	1,917	$	1,831	$	3,674	$	3,163

Basic and Diluted Shares
Basic shares (average shares outstanding)	4,003		3,985		3,996		3,982
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt	38		37		39		40
Diluted shares	4,041		4,022		4,035		4,022

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES

The fair values of cash, cash equivalents, and marketable securities measured at fair value on a recurring basis were as follows (in millions):


		December 31, 2023
	Fair Value Level	Company excluding Ford Credit		Ford Credit		Consolidated
Cash and cash equivalents
U.S. government	1	$	2,320	$	912	$	3,232
U.S. government agencies	2	2,075		625		2,700
Non-U.S. government and agencies	2	699		276		975
Corporate debt	2	1,617		101		1,718
Total marketable securities classified as cash equivalents		6,711		1,914		8,625
Cash, time deposits, and money market funds		7,493		8,744		16,237
Total cash and cash equivalents		$	14,204	$	10,658	$	24,862

Marketable securities
U.S. government	1	$	4,467	$	207	$	4,674
U.S. government agencies	2	1,774		49		1,823
Non-U.S. government and agencies	2	2,096		109		2,205
Corporate debt	2	5,807		268		6,075
Equities	1	23		—		23
Other marketable securities	2	353		156		509
Total marketable securities		$	14,520	$	789	$	15,309

Restricted cash		$	111	$	137	$	248

Cash, cash equivalents, and restricted cash - held for sale		$	—	$	—	$	—
		June 30, 2024
	Fair Value Level	Company excluding Ford Credit		Ford Credit		Consolidated
Cash and cash equivalents
U.S. government	1	$	250	$	60	$	310
U.S. government agencies	2	3,095		—		3,095
Non-U.S. government and agencies	2	400		283		683
Corporate debt	2	439		279		718
Total marketable securities classified as cash equivalents		4,184		622		4,806
Cash, time deposits, and money market funds		8,321		6,826		15,147
Total cash and cash equivalents		$	12,505	$	7,448	$	19,953

Marketable securities
U.S. government	1	$	4,021	$	227	$	4,248
U.S. government agencies	2	1,876		—		1,876
Non-U.S. government and agencies	2	2,358		55		2,413
Corporate debt	2	5,197		255		5,452
Equities	1	19		—		19
Other marketable securities	2	460		145		605
Total marketable securities		$	13,931	$	682	$	14,613

Restricted cash		$	123	$	105	$	228

Cash, cash equivalents, and restricted cash - held for sale (Note 15)		$	45	$	—	$	45

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

The cash equivalents and marketable securities accounted for as available-for-sale (“AFS”) securities were as follows (in millions):


	December 31, 2023
									Fair Value of Securities with Contractual Maturities
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Within 1 Year		After 1 Year through 5 Years		After 5 Years
Company excluding Ford Credit
U.S. government	$	4,458	$	6	$	(66)	$	4,398	$	2,172	$	2,216	$	10
U.S. government agencies	2,053		4		(62)		1,995		490		1,487		18
Non-U.S. government and agencies	1,948		1		(75)		1,874		587		1,275		12
Corporate debt	7,433		27		(67)		7,393		2,830		4,558		5
Other marketable securities	322		2		(4)		320		—		247		73
Total	$	16,214	$	40	$	(274)	$	15,980	$	6,079	$	9,783	$	118

	June 30, 2024
									Fair Value of Securities with Contractual Maturities
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Within 1 Year		After 1 Year through 5 Years		After 5 Years
Company excluding Ford Credit
U.S. government	$	4,004	$	2	$	(53)	$	3,953	$	1,560	$	2,383	$	10
U.S. government agencies	1,999		—		(58)		1,941		553		1,370		18
Non-U.S. government and agencies	1,996		1		(62)		1,935		679		1,217		39
Corporate debt	5,650		13		(49)		5,614		1,046		4,543		25
Other marketable securities	430		1		(3)		428		—		321		107
Total	$	14,079	$	17	$	(225)	$	13,871	$	3,838	$	9,834	$	199

Sales proceeds and gross realized gains/losses from the sale of AFS securities for the periods ended June 30 were as follows (in millions):


	Second Quarter				First Half
	2023		2024		2023		2024
Company excluding Ford Credit
Sales proceeds	$	715	$	2,715	$	1,878	$	6,434
Gross realized gains	—		3		1		5
Gross realized losses	9		8		21		16

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

The present fair values and gross unrealized losses for cash equivalents and marketable securities accounted for as AFS securities that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position, were as follows (in millions):


	December 31, 2023
	Less than 1 Year				1 Year or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Company excluding Ford Credit
U.S. government	$	619	$	(2)	$	2,735	$	(64)	$	3,354	$	(66)
U.S. government agencies	283		(1)		1,068		(61)		1,351		(62)
Non-U.S. government and agencies	67		—		1,654		(75)		1,721		(75)
Corporate debt	2,608		(2)		2,192		(65)		4,800		(67)
Other marketable securities	26		—		122		(4)		148		(4)
Total	$	3,603	$	(5)	$	7,771	$	(269)	$	11,374	$	(274)

	June 30, 2024
	Less than 1 Year				1 Year or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Company excluding Ford Credit
U.S. government	$	1,285	$	(12)	$	2,289	$	(41)	$	3,574	$	(53)
U.S. government agencies	751		(5)		1,161		(53)		1,912		(58)
Non-U.S. government and agencies	313		(3)		1,558		(59)		1,871		(62)
Corporate debt	2,275		(8)		1,585		(41)		3,860		(49)
Other marketable securities	117		(1)		117		(2)		234		(3)
Total	$	4,741	$	(29)	$	6,710	$	(196)	$	11,451	$	(225)

We determine credit losses on AFS debt securities using the specific identification method. During the first half of 2024, we did not recognize any credit loss. The unrealized losses on securities are due to changes in interest rates and market liquidity.

Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash, as reported in the consolidated statements of cash flows, were as follows (in millions):


	December 31, 2023		June 30, 2024
Cash and cash equivalents	$	24,862	$	19,953
Restricted cash (a)	248		228
Cash, cash equivalents, and restricted cash - held for sale (Note 15)	—		45
Total cash, cash equivalents, and restricted cash	$	25,110	$	20,226

__________

(a)Included in Other assets in the non-current assets section of our consolidated balance sheets.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios. The receivables are generally secured by the vehicles, inventory, or other property being financed.

Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses.

For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date.

Ford Credit finance receivables, net were as follows (in millions):


	December 31, 2023		June 30, 2024
Consumer
Retail installment contracts, gross	$	73,825	$	77,264
Finance leases, gross	7,793		8,138
Retail financing, gross	81,618		85,402
Unearned interest supplements	(3,344)		(4,211)
Consumer finance receivables	78,274		81,191
Non-Consumer
Dealer financing	24,683		25,282
Non-Consumer finance receivables	24,683		25,282
Total recorded investment	$	102,957	$	106,473

Recorded investment in finance receivables	$	102,957	$	106,473
Allowance for credit losses	(882)		(880)
Total finance receivables, net	$	102,075	$	105,593

Current portion	$	46,425	$	47,434
Non-current portion	55,650		58,159
Total finance receivables, net	$	102,075	$	105,593

Net finance receivables subject to fair value (a)	$	94,728	$	97,936
Fair value (b)	93,189		96,509

__________

(a)Net finance receivables subject to fair value exclude finance leases.

(b)The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy.

Ford Credit’s finance leases are comprised of sales-type and direct financing leases. Financing revenue from finance leases for the second quarter of 2023 and 2024 was $91 million and $122 million, respectively, and for the first half of 2023 and 2024 was $174 million and $239 million, respectively, and is included in Ford Credit revenues on our consolidated income statements.

At December 31, 2023 and June 30, 2024, accrued interest was $294 million and $306 million, respectively, which we report in Other assets in the current assets section of our consolidated balance sheets.

Included in the recorded investment in finance receivables at December 31, 2023 and June 30, 2024, were consumer receivables of $46.0 billion and $45.1 billion, respectively, and non-consumer receivables of $21.3 billion and $22.7 billion, respectively, (including Ford Blue, Ford Model e, and Ford Pro receivables sold to Ford Credit, which we report in Trade and other receivables) that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables 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 or the claims of Ford Credit’s other creditors. 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.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Credit Quality

Consumer Portfolio. Credit quality ratings for consumer receivables are based on Ford Credit’s aging analysis. Consumer receivables credit quality ratings are as follows:

•Pass – current to 60 days past due;

•Special Mention – 61 to 120 days past due and in intensified collection status; and

•Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral less costs to sell.

The credit quality analysis of consumer receivables at December 31, 2023 was as follows (in millions):


	Amortized Cost Basis by Origination Year
	Prior to 2019		2019		2020		2021		2022		2023		Total		Percent
Consumer
31 - 60 days past due	$	40	$	49	$	130	$	125	$	187	$	159	$	690	0.9	%
61 - 120 days past due	9		11		30		37		58		50		195		0.2
Greater than 120 days past due	7		4		7		10		10		5		43		0.1
Total past due	56		64		167		172		255		214		928		1.2
Current	891		2,359		7,385		11,301		20,247		35,163		77,346		98.8
Total	$	947	$	2,423	$	7,552	$	11,473	$	20,502	$	35,377	$	78,274	100.0	%

Gross charge-offs	$	47	$	40	$	75	$	85	$	117	$	37	$	401

The credit quality analysis of consumer receivables at June 30, 2024 was as follows (in millions):


	Amortized Cost Basis by Origination Year
	Prior to 2020		2020		2021		2022		2023		2024		Total		Percent
Consumer
31 - 60 days past due	$	58	$	100	$	112	$	178	$	205	$	55	$	708	0.9	%
61 - 120 days past due	11		20		27		44		60		16		178		0.2
Greater than 120 days past due	8		6		11		14		9		1		49		0.1
Total past due	77		126		150		236		274		72		935		1.2
Current	1,710		5,036		8,116		16,155		29,648		19,591		80,256		98.8
Total	$	1,787	$	5,162	$	8,266	$	16,391	$	29,922	$	19,663	$	81,191	100.0	%

Gross charge-offs	$	26	$	31	$	39	$	74	$	81	$	2	$	253

Non-Consumer Portfolio. The credit quality of dealer financing receivables is evaluated based on Ford Credit’s internal dealer risk rating analysis. Ford Credit uses a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance data to identify key factors about a dealer that are considered most significant in predicting a dealer’s ability to meet its financial obligations. Ford Credit also considers numerous other financial and qualitative factors of the dealer’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Ford Credit and other creditors.

Dealers are assigned to one of four groups according to risk ratings as follows:

•Group I – strong to superior financial metrics;

•Group II – fair to favorable financial metrics;

•Group III – marginal to weak financial metrics; and

•Group IV – poor financial metrics, including dealers classified as uncollectible.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The credit quality analysis of dealer financing receivables at December 31, 2023 was as follows (in millions):


	Amortized Cost Basis by Origination Year														Wholesale Loans
	Dealer Loans
	Prior to 2019		2019		2020		2021		2022		2023		Total				Total		Percent
Group I	$	383	$	30	$	58	$	156	$	61	$	331	$	1,019	$	20,419	$	21,438	86.9	%
Group II	16		—		1		3		2		44		66		2,834		2,900		11.7
Group III	—		—		—		—		1		8		9		292		301		1.2
Group IV	—		1		—		—		—		2		3		41		44		0.2
Total (a)	$	399	$	31	$	59	$	159	$	64	$	385	$	1,097	$	23,586	$	24,683	100.0	%

Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	1	$	1	$	3	$	4

__________

(a)Total past due dealer financing receivables at December 31, 2023 were $33 million.

The credit quality analysis of dealer financing receivables at June 30, 2024 was as follows (in millions):


	Amortized Cost Basis by Origination Year														Wholesale Loans
	Dealer Loans
	Prior to 2020		2020		2021		2022		2023		2024		Total				Total		Percent
Group I	$	291	$	64	$	107	$	59	$	274	$	130	$	925	$	21,459	$	22,384	88.5	%
Group II	9		—		3		2		3		25		42		2,550		2,592		10.3
Group III	—		—		—		—		1		6		7		288		295		1.2
Group IV	—		—		—		—		—		—		—		11		11		—
Total (a)	$	300	$	64	$	110	$	61	$	278	$	161	$	974	$	24,308	$	25,282	100.0	%

Gross charge-offs	$	1	$	—	$	—	$	—	$	—	$	—	$	1	$	6	$	7

__________

(a)Total past due dealer financing receivables at June 30, 2024 were $4 million.

Non-Accrual of Revenue. The accrual of financing revenue is discontinued at the time a receivable is determined to be uncollectible or when it is 90 days past due. Accounts may be restored to accrual status only when a customer settles all past-due deficiency balances and future payments are reasonably assured. For receivables in non-accrual status, subsequent financing revenue is recognized only to the extent a payment is received. Payments are generally applied first to outstanding interest and then to the unpaid principal balance.

Loan Modifications. Consumer and non-consumer receivables that have a modified interest rate and/or a term extension (including receivables that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code) are typically considered to be loan modifications. Ford Credit does not grant modifications to the principal balance of the receivables. If a receivable is modified in a reorganization proceeding, all payment requirements of the reorganization plan need to be met before remaining balances are forgiven.

The use of interest rate modifications and term extensions helps Ford Credit mitigate financial loss. Term extensions may assist in cases where Ford Credit believes the customer will recover from short-term financial difficulty and resume regularly scheduled payments. The effect of most loan modifications made to borrowers experiencing financial difficulty is included in the historical trends used to measure the allowance for credit losses. A loan modification that improves the delinquency status of a borrower reduces the probability of default, which results in a lower allowance for credit losses. At June 30, 2024, an insignificant portion of Ford Credit's total finance receivables portfolio had been granted a loan modification, and these modifications are generally treated as a continuation of the existing loan.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Allowance for Credit Losses

The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in finance receivables as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly.

Adjustments to the allowance for credit losses are made by recording charges to Ford Credit interest, operating, and other expenses on our consolidated income statements. The uncollectible portion of a finance receivable is charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the customer or borrower, the value of the collateral, recourse to guarantors, and other factors.

Charge-offs on finance receivables include uncollected amounts related to principal, interest, late fees, and other allowable charges. Recoveries on finance receivables previously charged off as uncollectible are credited to the allowance for credit losses. In the event Ford Credit repossesses the collateral, the receivable is charged off and the collateral is recorded at its estimated fair value less costs to sell and reported in Other assets on our consolidated balance sheets.

An analysis of the allowance for credit losses related to finance receivables for the periods ended June 30 was as follows (in millions):


	Second Quarter 2023						First Half 2023
	Consumer		Non-Consumer		Total		Consumer		Non-Consumer		Total
Allowance for credit losses
Beginning balance	$	863	$	7	$	870	$	838	$	7	$	845
Charge-offs	(78)		—		(78)		(174)		—		(174)
Recoveries	38		—		38		76		1		77
Provision for credit losses	40		—		40		118		(1)		117
Other (a)	3		—		3		8		—		8
Ending balance	$	866	$	7	$	873	$	866	$	7	$	873


	Second Quarter 2024						First Half 2024
	Consumer		Non-Consumer		Total		Consumer		Non-Consumer		Total
Allowance for credit losses
Beginning balance	$	877	$	3	$	880	$	879	$	3	$	882
Charge-offs	(124)		(7)		(131)		(253)		(7)		(260)
Recoveries	42		—		42		81		3		84
Provision for credit losses	87		8		95		178		5		183
Other (a)	(6)		—		(6)		(9)		—		(9)
Ending balance	$	876	$	4	$	880	$	876	$	4	$	880

__________

(a) Primarily represents amounts related to translation adjustments.

The allowance for credit losses remained unchanged during the second quarter of 2024 and decreased $2 million during the first half of 2024, driven by the impact of improvement in Ford Credit’s macroeconomic outlook assumptions, offset partially by an increase in Ford Credit finance receivables. Net charge-offs increased from a year ago, reflecting normalization from lower levels following the COVID-19 pandemic. While credit performance has remained strong, high inflationary pressure and high interest rates have caused economic uncertainty, which is expected to have an unfavorable impact on future consumer credit losses. Ford Credit will continue to monitor economic trends and conditions and portfolio performance and will adjust the reserve accordingly.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9. INVENTORIES

Inventories were as follows (in millions):


	December 31, 2023		June 30, 2024
Raw materials, work-in-process, and supplies	$	6,196	$	5,589
Finished products	9,455		11,594
Total inventories	$	15,651	$	17,183

Our finished product inventory at June 30, 2024 was higher than at December 31, 2023, primarily reflecting new vehicle launches and units awaiting final quality review.

NOTE 10. OTHER LIABILITIES AND DEFERRED REVENUE

Other liabilities and deferred revenue were as follows (in millions):


	December 31, 2023		June 30, 2024
Current
Dealer and dealers’ customer allowances and claims	$	12,910	$	13,213
Deferred revenue	2,515		3,159
Employee benefit plans	2,282		2,448
Accrued interest	1,224		1,310
Operating lease liabilities	481		505
OPEB (a)	331		329
Pension (a)	205		204
Other (b)	5,922		6,212
Total current other liabilities and deferred revenue	$	25,870	$	27,380
Non-current
Dealer and dealers’ customer allowances and claims	$	7,506	$	8,289
Pension (a)	6,383		5,459
OPEB (a)	4,365		4,273
Deferred revenue	5,051		4,899
Operating lease liabilities	1,395		1,489
Employee benefit plans	837		933
Other (b)	2,877		2,947
Total non-current other liabilities and deferred revenue	$	28,414	$	28,289

__________

(a)Balances at June 30, 2024 reflect pension and OPEB liabilities at December 31, 2023, 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. The discount rate and rate of expected return assumptions are unchanged from year-end 2023. Included in Other assets are pension assets of $4.3 billion at both December 31, 2023 and June 30, 2024.

(b)Includes current derivative liabilities of $1.0 billion and $1.2 billion at December 31, 2023 and June 30, 2024, respectively. Includes non-current derivative liabilities of $1.3 billion and $0.9 billion at December 31, 2023 and June 30, 2024, respectively (see Note 13).

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 11. RETIREMENT BENEFITS

Defined Benefit Plans - Expense

The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the periods ended June 30 were as follows (in millions):


	Second Quarter
	2023						2024
	Pension Benefits				OPEB		Pension Benefits				OPEB
	U.S. Plans		Non-U.S. Plans		Worldwide		U.S. Plans		Non-U.S. Plans		Worldwide
Service cost	$	75	$	61	$	6	$	73	$	61	$	6
Interest cost	405		242		57		401		233		56
Expected return on assets	(480)		(223)		—		(455)		(252)		—
Amortization of prior service costs/(credits)	—		5		1		24		6		3
Net remeasurement (gain)/loss	81		8		—		—		(172)		—
Separation programs/other	10		57		—		1		53		—
Settlements and curtailments	3		1		—		—		(3)		—
Net periodic benefit cost/(income)	$	94	$	151	$	64	$	44	$	(74)	$	65


	First Half
	2023						2024
	Pension Benefits				OPEB		Pension Benefits				OPEB
	U.S. Plans		Non-U.S. Plans		Worldwide		U.S. Plans		Non-U.S. Plans		Worldwide
Service cost	$	147	$	122	$	11	$	146	$	124	$	12
Interest cost	813		479		115		801		468		113
Expected return on assets	(966)		(442)		—		(910)		(507)		—
Amortization of prior service costs/(credits)	—		10		2		47		12		5
Net remeasurement (gain)/loss	194		8		—		—		(183)		—
Separation programs/other	12		61		—		9		67		—
Settlements and curtailments	45		1		—		—		(3)		—
Net periodic benefit cost/(income)	$	245	$	239	$	128	$	93	$	(22)	$	130

The service cost component is included in Cost of sales and Selling, administrative, and other expenses. Other components of net periodic benefit cost/(income) are included in Other income/(loss), net on our consolidated income statements.

Pension Plan Contributions

During 2024, we continue to expect to contribute about $1 billion of cash to our global funded pension plans. We also expect to make about $420 million of benefit payments to participants in unfunded plans. In the first half of 2024, we contributed $633 million to our global funded pension plans and made $210 million of benefit payments to participants in unfunded plans.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 12. DEBT

The carrying value of Company debt excluding Ford Credit and Ford Credit debt was as follows (in millions):


	December 31, 2023		June 30, 2024
Company excluding Ford Credit
Debt payable within one year
Short-term	$	362	$	799
Long-term payable within one year
U.K. Export Finance Program	—		790
Other debt (including finance leases)	117		147
Unamortized (discount)/premium	(2)		(21)
Unamortized issuance costs	—		(3)
Total debt payable within one year	477		1,712
Long-term debt payable after one year
Public unsecured debt securities	14,935		14,935
Convertible notes (a)	2,300		2,300
U.K. Export Finance Program	1,749		948
Other debt (including finance leases)	811		790
Unamortized (discount)/premium	(155)		(119)
Unamortized issuance costs	(173)		(160)
Total long-term debt payable after one year	19,467		18,694
Total Company excluding Ford Credit	$	19,944	$	20,406
Fair value of Company debt excluding Ford Credit (b)	$	19,775	$	20,239
Ford Credit
Debt payable within one year
Short-term	$	18,658	$	17,030
Long-term payable within one year
Unsecured debt	11,755		11,805
Asset-backed debt	18,851		20,164
Unamortized (discount)/premium	(1)		(1)
Unamortized issuance costs	(13)		(16)
Fair value adjustments (c)	(58)		(129)
Total debt payable within one year	49,192		48,853
Long-term debt payable after one year
Unsecured debt	45,435		51,232
Asset-backed debt	36,074		31,897
Unamortized (discount)/premium	10		(17)
Unamortized issuance costs	(224)		(235)
Fair value adjustments (c)	(1,200)		(1,235)
Total long-term debt payable after one year	80,095		81,642
Total Ford Credit	$	129,287	$	130,495
Fair value of Ford Credit debt (b)	$	130,533	$	132,119

__________

(a)As of June 30, 2024, each $1,000 principal amount of the notes will be convertible into 68.17 shares of our Common Stock, which is equivalent to a conversion price of approximately $14.67 per share. We recognized issuance cost amortization of $2 million and $3 million during the second quarter and first half of 2023 and 2024, respectively.

(b)At December 31, 2023 and June 30, 2024, the fair value of debt includes $362 million and $799 million of Company excluding Ford Credit short-term debt, respectively, and $15.5 billion and $15.2 billion of Ford Credit short-term debt, respectively, carried at cost, which approximates fair value. All other debt is categorized within Level 2 of the fair value hierarchy.

(c)These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $(681) million and $(527) million at December 31, 2023 and June 30, 2024, respectively. The carrying value of hedged debt was $38.7 billion and $42.0 billion at December 31, 2023 and June 30, 2024, respectively.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 13. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into highly effective derivative contracts. We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.

Income Effect of Derivative Financial Instruments

The gains/(losses), by hedge designation, reported in income for the periods ended June 30 were as follows (in millions):


	Second Quarter				First Half
Cash flow hedges	2023		2024		2023		2024
Reclassified from AOCI to Cost of sales
Foreign currency exchange contracts (a)	$	64	$	50	$	90	$	64
Commodity contracts (b)	(15)		(3)		(24)		(29)
Fair value hedges
Interest rate contracts
Net interest settlements and accruals on hedging instruments	(130)		(106)		(270)		(202)
Fair value changes on hedging instruments	(316)		(26)		(66)		(269)
Fair value changes on hedged debt	292		17		13		237
Cross-currency interest rate swap contracts
Net interest settlements and accruals on hedging instruments	(19)		(35)		(33)		(64)
Fair value changes on hedging instruments	(24)		(47)		(2)		(111)
Fair value changes on hedged debt	22		40		3		102
Derivatives not designated as hedging instruments
Foreign currency exchange contracts (c)	25		126		22		195
Cross-currency interest rate swap contracts	(60)		(30)		25		(196)
Interest rate contracts	109		3		97		51
Commodity contracts	(45)		9		(56)		(11)
Total	$	(97)	$	(2)	$	(201)	$	(233)

__________

(a)For the second quarter and first half of 2023, a $328 million loss and a $391 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax. For the second quarter and first half of 2024, a $49 million gain and a $337 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax.

(b)For the second quarter and first half of 2023, a $108 million loss and a $100 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax. For the second quarter and first half of 2024, a $54 million gain and a $22 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax.

(c)For the second quarter and first half of 2023, a $32 million gain and a $51 million gain, respectively, were reported in Cost of sales, and a $7 million loss and a $29 million loss, respectively, were reported in Other income/(loss), net. For the second quarter and first half of 2024, an $81 million gain and a $58 million gain, respectively, were reported in Cost of sales, and a $45 million gain and a $137 million gain, respectively, were reported in Other income/(loss), net.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 13. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Balance Sheet Effect of Derivative Financial Instruments

Derivative assets and liabilities are reported on our consolidated balance sheets at fair value and are presented on a gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts exchanged by the parties and are not a direct measure of our financial exposure. We also enter into master agreements with counterparties that may allow for netting of exposures in the event of default or breach of the counterparty agreement. Collateral represents cash received or paid under reciprocal arrangements that we have entered into with our derivative counterparties, which we do not use to offset our derivative assets and liabilities.

The fair value of our derivative instruments and the associated notional amounts were as follows (in millions):


	December 31, 2023						June 30, 2024
	Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities
Cash flow hedges
Foreign currency exchange contracts	$	19,530	$	69	$	385	$	19,610	$	117	$	160
Commodity contracts	983		23		36		988		44		12
Fair value hedges
Interest rate contracts	12,119		106		633		17,311		81		807
Cross-currency interest rate swap contracts	2,078		69		104		3,802		16		139
Derivatives not designated as hedging instruments
Foreign currency exchange contracts	22,802		201		261		22,295		266		96
Cross-currency interest rate swap contracts	7,100		119		252		5,301		82		234
Interest rate contracts	73,134		465		1,036		72,746		397		860
Commodity contracts	1,051		35		31		955		51		29
Total derivative financial instruments, gross (a) (b)	$	138,797	$	1,087	$	2,738	$	143,008	$	1,054	$	2,337

Current portion			$	493	$	1,464			$	718	$	1,392
Non-current portion			594		1,274				336		945
Total derivative financial instruments, gross			$	1,087	$	2,738			$	1,054	$	2,337

__________

(a)At December 31, 2023 and June 30, 2024, we held collateral of $40 million and $22 million, respectively, and we posted collateral of $185 million and $119 million, respectively.

(b)At December 31, 2023 and June 30, 2024, the fair value of assets and liabilities available for counterparty netting was $815 million and $603 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 14. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES

We generally record costs associated with voluntary separations at the time of employee acceptance. We record costs associated with involuntary separation programs when management has approved the plan for separation, the affected employees are identified, and it is unlikely that actions required to complete the separation plan will change significantly. Costs associated with benefits that are contingent on the employee continuing to provide service are accrued over the required service period.

Company Excluding Ford Credit

Employee separation actions and exit and disposal activities include employee separation costs, facility and other asset-related charges (e.g., impairment, accelerated depreciation), dealer and supplier payments, other statutory and contractual obligations, and other expenses, which are recorded in Cost of sales and Selling, administrative, and other expenses. Below are actions that have been initiated:

•Brazil. Exited manufacturing operations in 2021 resulting in the closure of facilities in Camaçari, Taubaté, and Troller. Sales of the Taubaté and Camaçari plants were completed in 2023

•India. Ceased vehicle manufacturing in Sanand in the fourth quarter of 2021 and ceased manufacturing in Chennai in the third quarter of 2022. A sale of the Sanand vehicle assembly and powertrain plants was completed in the first quarter of 2023 (see Note 15)

•Spain. Ceased production of the Mondeo at the Valencia plant in the first quarter of 2022

•China. Ceased development of certain product programs in 2023

•Germany. Production of the Focus will cease at our Saarlouis Body and Assembly Plant in 2025. Our plan is to repurpose the facility into a technology center, retaining 1,000 positions

In addition, we are continuing to reduce our global workforce and take other restructuring actions, including the separation of salaried workers announced in 2023 and separation packages for certain members of our hourly workforce.

The following table summarizes the activities for the periods ended June 30, which are recorded in Other liabilities and deferred revenue (in millions):


	Second Quarter				First Half
	2023		2024		2023		2024
Beginning balance	$	1,126	$	1,466	$	588	$	1,086
Changes in accruals (a)	290		195		919		789
Payments	(112)		(315)		(195)		(503)
Foreign currency translation and other	(27)		(13)		(35)		(39)
Ending balance	$	1,277	$	1,333	$	1,277	$	1,333

__________

(a)Excludes pension costs of $55 million and $50 million in the second quarter of 2023 and 2024, respectively, and $59 million and $64 million in the first half of 2023 and 2024, respectively.

We recorded $2 million in the second quarter of 2023 and $50 million in the first half of 2023 for accelerated depreciation and other non-cash items.

We recorded costs of $1 billion and $853 million in the first half of 2023 and 2024, respectively, related to the actions above. We estimate that we will incur about $1 billion in total charges in 2024 related to such actions, primarily attributable to employee separations and supplier settlements; some charges are related to plans that are subject to negotiations with a works council, union, or other social partner. In addition, we continue to review our global businesses and may take additional restructuring actions where a path to sustained profitability is not feasible when considering the capital allocation required for those businesses.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 15. ACQUISITIONS AND DIVESTITURES

Company Excluding Ford Credit

Ford Sales and Service Korea Company (“FSSK”). In the first quarter of 2024, we entered into an agreement to sell 100% of our equity interest in FSSK. Accordingly, as of June 30, 2024, we reported $55 million of held-for-sale assets, including $45 million of cash, and $37 million of held-for-sale liabilities in Other assets and Other liabilities, respectively. We determined the assets held for sale were not impaired.

Auto Motive Power (“AMP”). In the fourth quarter of 2023, we acquired AMP, a California-based energy management

startup focused on electric vehicle charging solutions. Assets acquired primarily include goodwill and technology, which are reported in Other assets. The acquisition did not have a material impact on our financial statements.

Sanand, India (“Sanand”) Plants. In the first quarter of 2023, we completed the sale of our Sanand vehicle assembly and powertrain plants to Tata Passenger Electric Mobility Limited, a subsidiary of Tata Motors Limited. Ford continues to operate the powertrain facility by leasing back the associated land and building. As a result of the sale transaction, we derecognized the fixed assets and recognized the powertrain facility operating lease right-of-use asset and related lease liability in the first quarter of 2023. The fair value of the cash consideration received approximated the carrying value of the fixed assets at the time of sale.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 16. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The changes in the balances for each component of accumulated other comprehensive income/(loss) attributable to Ford Motor Company for the periods ended June 30 were as follows (in millions):


	Second Quarter				First Half
	2023		2024		2023		2024
Foreign currency translation
Beginning balance	$	(5,923)	$	(5,557)	$	(6,416)	$	(5,443)
Gains/(Losses) on foreign currency translation	276		(496)		761		(614)
Less: Tax/(Tax benefit) (a)	—		23		(10)		19
Net gains/(losses) on foreign currency translation	276		(519)		771		(633)
(Gains)/Losses reclassified from AOCI to net income (b)	(2)		(1)		(4)		(1)
Other comprehensive income/(loss), net of tax (c)	274		(520)		767		(634)
Ending balance	$	(5,649)	$	(6,077)	$	(5,649)	$	(6,077)

Marketable securities
Beginning balance	$	(332)	$	(178)	$	(442)	$	(170)
Gains/(Losses) on available for sale securities	(67)		30		68		15
Less: Tax/(Tax benefit)	(16)		5		17		3
Net gains/(losses) on available for sale securities	(51)		25		51		12
(Gains)/Losses reclassified from AOCI to net income	9		5		20		11
Less: Tax/(Tax benefit)	2		2		5		3
Net (gains)/losses reclassified from AOCI to net income (b)	7		3		15		8
Other comprehensive income/(loss), net of tax	(44)		28		66		20
Ending balance	$	(376)	$	(150)	$	(376)	$	(150)

Derivative instruments
Beginning balance	$	74	$	(126)	$	129	$	(331)
Gains/(Losses) on derivative instruments	(436)		103		(491)		359
Less: Tax/(Tax benefit)	(113)		24		(127)		84
Net gains/(losses) on derivative instruments	(323)		79		(364)		275
(Gains)/Losses reclassified from AOCI to net income	(49)		(47)		(66)		(35)
Less: Tax/(Tax benefit)	(3)		(11)		(6)		(8)
Net (gains)/losses reclassified from AOCI to net income (d)	(46)		(36)		(60)		(27)
Other comprehensive income/(loss), net of tax	(369)		43		(424)		248
Ending balance	$	(295)	$	(83)	$	(295)	$	(83)

Pension and other postretirement benefits
Beginning balance	$	(2,607)	$	(3,071)	$	(2,610)	$	(3,098)
Amortization and recognition of prior service costs/(credits)	6		33		12		64
Less: Tax/(Tax benefit)	2		7		3		15
Net prior service costs/(credits) reclassified from AOCI to net income	4		26		9		49
Translation impact on non-U.S. plans	(1)		(2)		(3)		2
Other comprehensive income/(loss), net of tax	3		24		6		51
Ending balance	$	(2,604)	$	(3,047)	$	(2,604)	$	(3,047)

Total AOCI ending balance at June 30	$	(8,924)	$	(9,357)	$	(8,924)	$	(9,357)

__________

(a)We do not recognize deferred taxes for a majority of the foreign currency translation gains and losses because we do not anticipate reversal in the foreseeable future. However, we have made elections to tax certain non-U.S. operations simultaneously in U.S. tax returns, and have recorded deferred taxes for temporary differences that will reverse, independent of repatriation plans, in U.S. tax returns. Taxes or tax benefits resulting from foreign currency translation of the temporary differences are recorded in Other comprehensive income/(loss), net of tax.

(b)Reclassified to Other income/(loss), net.

(c)Excludes a $4 million gain and a $1 million loss related to noncontrolling interests in 2023 and 2024, respectively.

(d)Reclassified to Cost of sales. During the next twelve months, we expect to reclassify existing net gains on cash flow hedges of $13 million (see Note 13).

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. VARIABLE INTEREST ENTITIES

Certain of our affiliates are variable interest entities in which we are not the primary beneficiary. Our maximum exposure to any potential losses associated with these unconsolidated affiliates is limited to our equity investments, accounts receivable, loans, and guarantees and was $3.7 billion and $5.2 billion at December 31, 2023 and June 30, 2024, respectively. Of these amounts, guarantees of $125 million at both December 31, 2023 and June 30, 2024 related to certain obligations of our VIEs also are included in Note 18.

On July 13, 2022, Ford, SK On Co., Ltd., and SK Battery America, Inc. (a wholly owned subsidiary of SK On) completed the creation of BlueOval SK, LLC (“BOSK”), a 50/50 joint venture that will build and operate electric vehicle battery plants in Tennessee and Kentucky to supply batteries to Ford and Ford affiliates. BOSK is a variable interest entity of which we are not the primary beneficiary, and we use the equity method of accounting for our investment. As of June 30, 2024, Ford has recognized contributions to BOSK of $4.8 billion of its agreed capital contribution of up to $6.6 billion through 2026. The total amount of capital contributions is subject to adjustments agreed to by the parties.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 18. COMMITMENTS AND CONTINGENCIES

Commitments and contingencies primarily consist of guarantees and indemnifications, litigation and claims, and warranty and field service actions.

Guarantees and Indemnifications

Financial Guarantees. Financial guarantees and indemnifications are recorded at fair value at their inception. Subsequent to initial recognition, the guarantee liability is adjusted at each reporting period to reflect the current estimate of expected payments resulting from possible default events over the remaining life of the guarantee. The maximum potential payments for financial guarantees were $535 million and $537 million at December 31, 2023 and June 30, 2024, respectively. The carrying value of recorded liabilities related to financial guarantees was $59 million and $39 million at December 31, 2023 and June 30, 2024, respectively.

Our financial guarantees consist of debt and lease obligations of certain joint ventures, as well as certain financial obligations of outside third parties, including suppliers, to support our business and economic growth. Expiration dates vary through 2037, and guarantees will terminate on payment and/or cancellation of the underlying obligation. A payment by us would be triggered by failure of the joint venture or other third party to fulfill its obligation covered by the guarantee. In some circumstances, we are entitled to recover from a third party amounts paid by us under the guarantee.

Non-Financial Guarantees. Non-financial guarantees and indemnifications are recorded at fair value at their inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we will be required to perform under a guarantee or indemnity, the amount of probable payment is recorded. The maximum potential payments and carrying values of recorded liabilities related to non-financial guarantees were de minimis at both December 31, 2023 and June 30, 2024.

In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction, such as the sale of a business. These indemnifications might include and are not limited to claims relating to any of the following: environmental, tax, and shareholder matters; intellectual property rights; power generation contracts; governmental regulations and employment-related matters; dealer, supplier, and other commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities generally would be triggered by a breach of contract claim brought by a counterparty, including a joint venture or alliance partner, or a third-party claim. While some of these indemnifications are limited in nature, many of them do not limit potential payment. Therefore, we are unable to estimate a maximum amount of future payments that could result from claims made under these unlimited indemnities.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 18. COMMITMENTS AND CONTINGENCIES (Continued)

Litigation and Claims

Various legal actions, proceedings, and claims (generally, “matters”) are pending or may be instituted or asserted against us. These include, but are not limited to, matters arising out of alleged defects in our products; product warranties; governmental regulations relating to safety, emissions, and fuel economy or other matters; government incentives; tax matters, including trade and customs; alleged illegal acts resulting in fines or penalties; financial services; employment-related matters; dealer, supplier, and other contractual relationships; intellectual property rights; environmental matters; shareholder or investor matters; and financial reporting matters. Certain of the pending legal actions are, or purport to be, class actions. Some of the matters involve or may involve claims for compensatory, punitive, or antitrust or other treble damages in very large amounts, or demands for field service actions, environmental remediation programs, sanctions, loss of government incentives, assessments, or other relief, which, if granted, would require very large expenditures.

The extent of our financial exposure to these matters is difficult to estimate. Many matters do not specify a dollar amount for damages, and many others specify only a jurisdictional minimum. To the extent an amount is asserted, our historical experience suggests that in most instances the amount asserted is not a reliable indicator of the ultimate outcome.

We accrue for matters when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood that we will prevail, and the severity of any potential loss. We reevaluate and update our accruals as matters progress over time.

For the majority of matters, which generally arise out of alleged defects in our products, we establish an accrual based on our extensive historical experience with similar matters. We do not believe there is a reasonably possible outcome materially in excess of our accrual for these matters.

For the remaining matters, where our historical experience with similar matters is of more limited value (i.e., “non-pattern matters”), we evaluate the matters primarily based on the individual facts and circumstances. For non-pattern matters, we evaluate whether there is a reasonable possibility of a material loss in excess of any accrual that can be estimated. Our estimate of reasonably possible loss in excess of our accruals for all material matters currently reflects indirect tax and regulatory matters, for which we estimate the aggregate risk to be a range of up to about $0.6 billion.

As noted, the litigation process is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. Our assessments are based on our knowledge and experience, but the ultimate outcome of any matter could require payment substantially in excess of the amount that we have accrued and/or disclosed.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 18. COMMITMENTS AND CONTINGENCIES (Continued)

Warranty and Field Service Actions

We accrue the estimated cost of both base warranty coverages and field service actions at the time of sale. We establish our estimate of base warranty obligations using a patterned estimation model, using historical information regarding the nature, frequency, and average cost of claims for each vehicle line by model year. We establish our estimates of field service action obligations using a patterned estimation model, using historical information regarding the nature, frequency, severity, and average cost of claims for each model year. In addition, from time to time, we issue extended warranties at our expense, the estimated cost of which is accrued at the time of issuance. Warranty and field service action obligations are reported in Other liabilities and deferred revenue. We reevaluate the adequacy of our accruals on a regular basis.

We recognize the benefit from a recovery of the costs associated with our warranty and field service actions when specifics of the recovery have been agreed with our supplier and the amount of recovery is virtually certain. Recoveries are reported in Trade and other receivables, net and Other assets.

The estimate of our future warranty and field service action costs, net of estimated supplier recoveries, for the periods ended June 30 was as follows (in millions):


	First Half
	2023		2024
Beginning balance	$	9,193	$	11,504
Payments made during the period	(2,011)		(2,862)
Changes in accrual related to warranties issued during the period	2,146		2,671
Changes in accrual related to pre-existing warranties	882		1,438
Foreign currency translation and other	(314)		(198)
Ending balance	$	9,896	$	12,553

Changes to our estimated costs are reported as changes in accrual related to pre-existing warranties in the table above. Our estimate of reasonably possible costs in excess of our accruals for material field service actions and customer satisfaction actions is a range of up to about $1.3 billion in the aggregate.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. SEGMENT INFORMATION

We report segment information consistent with the way our chief operating decision maker (“CODM”) evaluates the operating results and performance of the Company. Accordingly, we analyze the results of our business through the following segments: Ford Blue, Ford Model e, Ford Pro, Ford Next, and Ford Credit.

Below is a description of our reportable segments and other activities.

Ford Blue Segment

Ford Blue primarily includes the sale of Ford and Lincoln internal combustion engine (“ICE”) and hybrid vehicles, service parts, accessories, and digital services for retail customers, together with the associated costs of development, manufacture, and distribution of the vehicles, parts, accessories, and services. This segment focuses on developing Ford and Lincoln ICE and hybrid vehicles. Additionally, this segment provides hardware engineering and manufacturing capabilities to Ford Model e and manufactures vehicles on behalf of Ford Pro and, in certain cases, Ford Model e. Ford Blue also includes:

•All sales for markets not presently in scope for Ford Model e or Ford Pro (as further described below)

•In markets outside of the United States and Canada, sales to commercial, government, and rental customers of ICE and hybrid vehicles not considered core to Ford Pro

•Sales of electric vehicles (“EVs”) by our unconsolidated affiliates in China

•All sales of vehicles manufactured and sold to other OEMs

Ford Model e Segment

Ford Model e primarily includes the sale of our electric vehicles, service parts, accessories, and digital services for retail customers, together with the associated costs of development, manufacture, and distribution of the vehicles, parts, accessories, and services. This segment focuses on developing EV and digital vehicle technologies, as well as software development. Additionally, Ford Model e provides software and connected vehicle technologies on behalf of the enterprise, and manufactures certain EVs, including for Ford Pro. Ford Model e operates in North America, Europe, and China. Ford Model e also includes EV and related sales not considered core to Ford Pro to commercial, government, and rental customers in Europe, China, and Mexico.

Ford Pro Segment

Ford Pro primarily includes the sale of Ford and Lincoln vehicles, service parts, accessories, and services for commercial, government, and rental customers. Included in this segment are sales of all core Ford Pro vehicles, such as Super Duty and the Transit range of vans in North America and Europe and all sales of Ranger in Europe. In the United States and Canada, Ford Pro also includes all vehicle sales to commercial, government, and rental customers. This segment focuses on selling ICE, hybrid, and electric vehicles, and providing digital and physical services to optimize and maintain fleets, including telematics and EV charging solutions. This segment reflects external sales of vehicles produced by Ford Blue and Ford Model e, and the costs (including intersegment markup) associated with acquiring vehicles for sale and providing services are reflected in this segment. Ford Pro operates in North America and Europe.

Ford Next Segment

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

Ford Credit Segment

The Ford Credit segment is comprised of the Ford Credit business on a consolidated basis, which is primarily vehicle-related financing and leasing activities.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. SEGMENT INFORMATION (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 gains and losses from our cash, cash equivalents, and marketable securities (excluding gains and losses on investments in equity 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. Corporate Other assets include: cash, cash equivalents and marketable securities, tax related assets, defined benefit pension plan net assets, and other assets managed centrally.

Interest on Debt

Interest on Debt is presented as a separate reconciling item and consists of interest expense on Company debt excluding Ford Credit.

Special Items

Special Items are presented as a separate reconciling item. They consist of (i) pension and OPEB remeasurement gains and losses, (ii) gains and losses on investments in equity securities, (iii) significant personnel expenses, supplier- and dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix, and (iv) other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities. Our management ordinarily excludes these items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. We also report these special items separately to help investors track amounts related to these activities and to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. SEGMENT INFORMATION (Continued)

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

External vehicle and digital services revenue is generally vehicle-specific and included in the segment responsible for the external vehicle sale. A majority of parts and accessories revenue and cost is attributed to customer sales channels or vehicle lines based on recent end customer sales and is included in the respective segment.

In the normal course of business, Ford Blue, Ford Model e, and Ford Pro transact between segments and cooperate to leverage synergies, including developing and manufacturing vehicles on behalf of another segment. When one segment produces a vehicle that is sold externally by another segment, an intersegment transaction occurs. The producing segment will report intersegment revenue to recoup the costs associated with the unit produced. This includes material cost, labor and overhead (including depreciation and amortization), inbound freight, and an intersegment markup. The intersegment markup amount is set to deliver a competitive return to the producing segment for its manufacturing and distribution service. Costs are reflected in the associated segment externally reporting the vehicle sale, as detailed in the table below:


Income Statement Elements	Examples	Segment Reporting
Costs specific to a particular vehicle	Bill of material cost and initial warranty accrual	Reported in the segment externally selling the vehicle
Costs identifiable by product line	Manufacturing and logistics costs, depreciation & amortization expense, direct research & development costs	Typically identifiable to the product line or production location. Reported in the segment externally selling the vehicle, based on relative volume
Shared costs	Selling, general & administrative expense, and indirect/cross product line research & development costs	Typically shared across all segments, generally based on relative volume. Certain costs clearly linked to a segment are reported in the specific segment
Intersegment markup costs for intersegment vehicle transactions	Contract manufacturing and distribution fees	Reported in the segment externally selling the vehicle, for each applicable vehicle transaction

Assets are reported in each segment, aligned to the appropriate operational responsibility. Manufacturing assets, e.g., our plants and the machinery and equipment therein, are included in our Ford Blue and Ford Model e segments. Manufacturing assets producing only, or primarily, EVs and related components are reflected in Ford Model e. Manufacturing assets that support the production of ICE and hybrid vehicles, including those producing ICE and electric in the same facility, are included in Ford Blue. Vendor tooling dedicated to producing EV parts is reported in Ford Model e. There are no Ford manufacturing or vendor tooling assets reported in Ford Pro. Regardless of the segment reporting the asset, depreciation and amortization expense is reflected on the basis of production volume and reported in the segment that reports the external vehicle sale.

Equity in net income/(loss) of affiliated companies is included in Income/(Loss) before income taxes, based primarily on which segment the entity supports or has the majority of the entity’s purchases or sales. The table below shows the segment reporting for our most significant unconsolidated entities:


Ford Blue	Ford Model e	Ford Pro
∘ Changan Ford Automobile Corporation, Ltd. (“CAF”)	∘ BlueOval SK, LLC	∘ Ford Otomotiv Sanayi Anonim Sirketi (“Ford Otosan”)
∘ Jiangling Motors Corporation, Ltd. (“JMC”)
∘ AutoAlliance (Thailand) Co., Ltd. (“AAT”)

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. 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 Next		Ford Credit		Corporate Other		Interest on Debt		Special Items			Eliminations/Adjustments			Total
Second Quarter 2023
External revenues	$	25,002	$	1,834	$	15,589	$	—	$	2,527	$	2	$	—	$	—		$	—		$	44,954
Intersegment revenues (a)	10,206		172		—		—		—		—		—		—			(10,378)			—
Total revenues	$	35,208	$	2,006	$	15,589	$	—	$	2,527	$	2	$	—	$	—		$	(10,378)		$	44,954

Income/(Loss) before income taxes	$	2,308	$	(1,080)	$	2,391	$	(26)	$	390	$	(197)	$	(304)	$	(1,194)	(b)	$	—		$	2,288



Equity in net income/(loss) of affiliated companies	104		(3)		160		(6)		7		1		—		(387)		(c)	—			(124)

Total assets	58,475		9,420		2,754		253		143,155		54,063		—		—			(2,129)		(d)	265,991

Second Quarter 2024
External revenues	$	26,670	$	1,149	$	16,988	$	2	$	2,997	$	2	$	—	$	—		$	—		$	47,808
Intersegment revenues (a)	11,306		112		—		—		—		—		—		—			(11,418)			—
Total revenues	$	37,976	$	1,261	$	16,988	$	2	$	2,997	$	2	$	—	$	—		$	(11,418)		$	47,808

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



Equity in net income/(loss) of affiliated companies	96		(20)		111		(1)		10		—		—		1			—			197

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

	Ford Blue		Ford Model e		Ford Pro		Ford Next		Ford Credit		Corporate Other		Interest on Debt		Special Items			Eliminations/Adjustments			Total
First Half 2023
External revenues	$	50,126	$	2,541	$	28,838	$	1	$	4,916	$	6	$	—	$	—		$	—		$	86,428
Intersegment revenues (a)	19,383		181		—		—		—		—		—		—			(19,564)			—
Total revenues	$	69,509	$	2,722	$	28,838	$	1	$	4,916	$	6	$	—	$	—		$	(19,564)		$	86,428

Income/(Loss) before income taxes	$	4,931	$	(1,802)	$	3,757	$	(70)	$	693	$	(344)	$	(612)	$	(2,106)	(b)	$	—		$	4,447
Equity in net income/(loss) of affiliated companies	159		(6)		277		(18)		14		1		—		(421)		(c)	—			6

First Half 2024
External revenues	$	48,424	$	1,264	$	35,007	$	3	$	5,884	$	3	$	—	$	—		$	—		$	90,585
Intersegment revenues (a)	23,047		133		—		—		—		—		—		—			(23,180)			—
Total revenues	$	71,471	$	1,397	$	35,007	$	3	$	5,884	$	3	$	—	$	—		$	(23,180)		$	90,585

Income/(loss) before income taxes	$	2,076	$	(2,463)	$	5,572	$	(22)	$	669	$	(312)	$	(548)	$	(922)	(f)	$	—		$	4,050
Equity in net income/(loss) of affiliated companies	158		(39)		228		(2)		18		—		—		1			—			364

__________

(a)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.

(b)Primarily reflects restructuring actions, mark-to-market adjustments for our global pension and OPEB plans, and an accrual for the Transit Connect customs matter (relating to certain Transit Connect vehicles produced between 2009 and 2013).

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

(d)Primarily includes eliminations of intersegment transactions occurring in the ordinary course of business.

(e)Primarily reflects restructuring actions in Europe (which triggered remeasurement of certain European pension plans) and updated assumptions for the duration of the Oakville Assembly Plant changeover, which is now shorter than originally planned.

(f)Primarily reflects restructuring actions in Europe, buyouts for hourly employees in North America, and the extended duration of the Oakville Assembly Plant changeover.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

RECENT DEVELOPMENTS

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, we have incurred, and may continue to incur, expenses related to payments to our electric vehicle-related suppliers (battery, raw material, or otherwise), inventory adjustments, or other matters. Further, significant unexpected changes in the EV demand environment have led, and may in the future lead, to incremental competitive pricing actions. These market dynamics may continue to occur, which could have a substantial impact on our business.

In addition, slower-than-anticipated development of the electric vehicle market may impact our strategy to comply with regulatory standards, and, in some cases, we plan to utilize credits purchased from third parties to demonstrate regulatory compliance or we may need to modify our product offerings. In the second quarter of 2024, for example, we entered into agreements to purchase about $3.8 billion of regulatory compliance credits for use in North America and Europe for current and future model years. Our obligations under those agreements as well as the ultimate number of credits we may purchase are dependent on the sellers’ delivery of the credits and on the continued existence of the underlying regulatory compliance obligation in the applicable jurisdiction. During the second quarter of 2024, we recorded about $100 million of expense for our anticipated utilization of regulatory compliance credits, which is included in Ford Blue and Ford Pro results. See Item 1A. Risk Factors in our 2023 Form 10‑K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to lower-than-anticipated electric vehicle volumes and our planned transition to a greater mix of electric vehicles.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

RESULTS OF OPERATIONS

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

Net income/(loss) includes certain items (“special items”) that are excluded from Company adjusted EBIT. These items are discussed in more detail in Note 19 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 considering the trend of ongoing operating results. Our pre-tax and tax special items were as follows (in millions):


	Second Quarter				First Half
	2023		2024		2023		2024
Restructuring (by Geography)
Europe	$	(51)	$	(226)	$	(421)	$	(547)
North America Hourly Buyouts	—		—		—		(260)
China	(446)		—		(755)		—
Other	(159)		—		(147)		—
Subtotal Restructuring	$	(656)	$	(226)	$	(1,323)	$	(807)
Other Items
Transit Connect customs matter	$	(300)	$	—	$	(300)	$	—
Extended Oakville Assembly Plant Changeover	—		45		—		(246)
Other (including gains/(losses) on investments)	(90)		7		(176)		9
Subtotal Other Items	$	(390)	$	52	$	(476)	$	(237)
Pension and OPEB Gain/(Loss)
Pension and OPEB remeasurement	$	(89)	$	172	$	(202)	$	183
Pension settlements and curtailments	(59)		(47)		(105)		(61)
Subtotal Pension and OPEB Gain/(Loss)	$	(148)	$	125	$	(307)	$	122
Total EBIT Special Items	$	(1,194)	$	(49)	$	(2,106)	$	(922)

Provision for/(Benefit from) tax special items (a)	$	(177)	$	30	$	(321)	$	(190)

__________

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

We recorded $49 million of pre-tax special item charges in the second quarter of 2024, primarily reflecting restructuring actions in Europe (which triggered remeasurement of certain European pension plans) and updated assumptions for the duration of the Oakville Assembly Plant changeover, which is now shorter than originally planned.

In Note 19 of the Notes to the Financial Statements, special items are reflected as a separate reconciling item, as opposed to being allocated among our segments. This reflects the fact that management excludes these items from its review of operating segment results for purposes of measuring segment profitability and allocating resources.

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 2024 key metrics for the Company, compared to a year ago.


	Second Quarter									First Half
	2023			2024			H / (L)			2023			2024			H / (L)
GAAP Financial Measures
Cash Flows from Operating Activities ($B)	$	5.0		$	5.5		$	0.5		$	7.8		$	6.9		$	(0.9)
Revenue ($M)	44,954			47,808			6		%	86,428			90,585			5		%
Net Income/(Loss) ($M)	1,917			1,831			$	(86)		3,674			3,163			$	(511)
Net Income/(Loss) Margin (%)	4.3		%	3.8		%	(0.4) ppts			4.3		%	3.5		%	(0.8) ppts
EPS (Diluted)	$	0.47		$	0.46		$	(0.01)		$	0.91		$	0.79		$	(0.12)

Non-GAAP Financial Measures (a)
Company Adj. Free Cash Flow ($B)	$	2.9		$	3.2		$	0.3		$	3.6		$	2.8		$	(0.9)
Company Adj. EBIT ($M)	3,786			2,757			(1,029)			7,165			5,520			(1,645)
Company Adj. EBIT Margin (%)	8.4		%	5.8		%	(2.7) ppts			8.3		%	6.1		%	(2.2) ppts
Adjusted EPS (Diluted)	$	0.72		$	0.47		$	(0.25)		$	1.34		$	0.97		$	(0.37)
Adjusted ROIC (Trailing Four Quarters)	14.2		%	11.1		%	(3.1) ppts

__________

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

In the second quarter of 2024, our diluted earnings per share of Common and Class B Stock was $0.46, and our diluted adjusted earnings per share was $0.47.

Net income/(loss) margin was 3.8% in the second quarter of 2024, down 0.4 percentage points from a year ago. Company adjusted EBIT margin was 5.8% in the second quarter of 2024, down 2.7 percentage points from a year ago.

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


	Second Quarter						First Half
	2023		2024		H / (L)		2023		2024		H / (L)
Ford Blue	$	2,308	$	1,171	$	(1,137)	$	4,931	$	2,076	$	(2,855)
Ford Model e	(1,080)		(1,143)		(63)		(1,802)		(2,463)		(661)
Ford Pro	2,391		2,564		173		3,757		5,572		1,815
Ford Next	(26)		(13)		13		(70)		(22)		48
Ford Credit	390		343		(47)		693		669		(24)
Corporate Other	(197)		(165)		32		(344)		(312)		32
Company Adjusted EBIT (a)	3,786		2,757		(1,029)		7,165		5,520		(1,645)
Interest on Debt	(304)		(270)		34		(612)		(548)		64
Special Items	(1,194)		(49)		1,145		(2,106)		(922)		1,184
Taxes / Noncontrolling Interests	(371)		(607)		(236)		(773)		(887)		(114)
Net Income/(Loss)	$	1,917	$	1,831	$	(86)	$	3,674	$	3,163	$	(511)

__________

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

The year-over-year decrease of $86 million in net income was primarily driven by lower Ford Blue EBIT and higher tax expense, offset partially by lower restructuring costs, the non-recurrence of an accrual for the Transit Connect customs matter, and a pension remeasurement gain. The year-over-year decrease of $1.0 billion in Company adjusted EBIT was driven by lower Ford Blue and Ford Model e EBIT, offset partially by higher Ford Pro EBIT.

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 2024 key metrics and the change in second quarter 2024 EBIT compared with second quarter 2023 by causal factor for each of our Ford Blue, Ford Model e, and Ford Pro segments. For a description of these causal factors, see Definitions and Information Regarding Ford Blue, Ford Model e, Ford Pro Causal Factors.

Ford Blue Segment


	Second Quarter								First Half
Key Metrics	2023			2024			H / (L)		2023			2024			H / (L)
Wholesale Units (000) (a)	720			741			21		1,426			1,367			(59)
Revenue ($M)	$	25,002		$	26,670		$	1,668	$	50,126		$	48,424		$	(1,702)
EBIT ($M)	2,308			1,171			(1,137)		4,931			2,076			(2,855)
EBIT Margin (%)	9.2		%	4.4		%	(4.8) ppts		9.8		%	4.3		%	(5.6) ppts

__________

(a)Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 107,000 units in Q2 2023 and 105,000 units in Q2 2024).


Change in EBIT by Causal Factor (in millions)
Second Quarter 2023 EBIT	$	2,308
Volume / Mix	299
Net Pricing	194
Cost	(1,408)
Exchange	(200)
Other	(22)
Second Quarter 2024 EBIT	$	1,171

In the second quarter of 2024, Ford Blue’s wholesales increased 3% from a year ago, driven primarily by higher F-150, Maverick, and Ranger volumes, offset partially by ceasing production of the Fiesta in Europe. Second quarter 2024 revenue increased 7%, driven primarily by higher wholesales.

Ford Blue’s second quarter 2024 EBIT was $1.2 billion, a decrease of $1.1 billion from a year ago, with an EBIT margin of 4.4%. The lower EBIT was primarily driven by higher warranty costs, higher material costs for new products, and higher manufacturing cost, offset partially by higher wholesales.

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	2023			2024			H / (L)		2023			2024			H / (L)
Wholesale Units (000)	34			26			(8)		47			36			(10)
Revenue ($M)	$	1,834		$	1,149		$	(685)	$	2,541		$	1,264		$	(1,277)
EBIT ($M)	(1,080)			(1,143)			(63)		(1,802)			(2,463)			(661)
EBIT Margin (%)	(58.9)		%	(99.5)		%	(40.6) ppts		(70.9)		%	(194.8)		%	(123.9) ppts


Change in EBIT by Causal Factor (in millions)
Second Quarter 2023 EBIT	$	(1,080)
Volume / Mix	(202)
Net Pricing	(254)
Cost	422
Exchange	(45)
Other	16
Second Quarter 2024 EBIT	$	(1,143)

In the second quarter of 2024, Ford Model e’s wholesales decreased 23% from a year ago to 26,000 units due to competitive market conditions. Second quarter 2024 revenue decreased 37%, primarily driven by lower wholesales and lower net pricing.

Ford Model e’s second quarter 2024 EBIT loss was $1.1 billion, a $63 million higher loss than a year ago, with an EBIT margin of negative 99.5%. The lower EBIT was primarily driven by lower net pricing, lower wholesales, and adverse mix, offset partially by favorable material cost, including lower battery-related raw materials.

Ford Pro Segment


	Second Quarter								First Half
Key Metrics	2023			2024			H / (L)		2023			2024			H / (L)
Wholesale Units (000) (a)	365			375			10		702			783			81
Revenue ($M)	$	15,589		$	16,988		$	1,399	$	28,838		$	35,007		$	6,169
EBIT ($M)	2,391			2,564			173		3,757			5,572			1,815
EBIT Margin (%)	15.3		%	15.1		%	(0.2) ppts		13.0		%	15.9		%	2.9 ppts

__________

(a)Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 24,000 units in Q2 2023 and 21,000 units in Q2 2024).


Change in EBIT by Causal Factor (in millions)
Second Quarter 2023 EBIT	$	2,391
Volume / Mix	498
Net Pricing	275
Cost	(586)
Exchange	100
Other	(114)
Second Quarter 2024 EBIT	$	2,564

In the second quarter of 2024, Ford Pro’s wholesales increased 3% from a year ago. Second quarter 2024 revenue increased 9%, reflecting higher wholesales, favorable mix, and higher net pricing driven by continued strong demand for our products.

Ford Pro’s second quarter 2024 EBIT was $2.6 billion, an increase of $173 million from a year ago, with an EBIT margin of 15.1%. The improvement in EBIT was driven by higher volume, favorable mix, and higher net pricing, offset partially by higher growth-related structural costs and higher manufacturing costs.

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 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, and compensation-related changes

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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Ford Next Segment

The Ford Next segment primarily includes expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments. Ford Next’s second quarter 2024 EBIT loss was $13 million, a $13 million improvement from a year ago.

Ford 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 2024 key metrics and the change in second quarter 2024 EBT compared with second quarter 2023 by causal factor for the Ford Credit segment. For a description of these causal factors, see Definitions and Information Regarding Ford Credit Causal Factors.


	Second Quarter									First Half
Key Metrics	2023			2024			H / (L)			2023			2024			H / (L)
Total Net Receivables ($B)	$	126.1		$	137.7		$	11.6
Loss-to-Receivables (bps) (a)	21			41			20			28			44			16
Auction Values (b)	$	33,445		$	30,515		(9)		%	$	32,135		$	29,145		(9)		%
EBT ($M)	390			343			$	(47)		693			669			$	(24)
ROE (%)	9		%	8		%	(1) ppts			9		%	7		%	(2) ppts

Other Balance Sheet Metrics
Debt ($B)	$	123.7		$	130.5		$	6.8
Net Liquidity ($B)	28.9			28.3			(0.6)
Financial Statement Leverage (to 1)	9.9			9.6			(0.3)

__________

(a)U.S. retail financing only.

(b)U.S. 36-month off-lease second quarter auction values at Q2 2024 mix and YTD amounts at YTD 2024 mix.


Change in EBT by Causal Factor (in millions)
Second Quarter 2023 EBT	$	390
Volume / Mix	53
Financing Margin	144
Credit Loss	(54)
Lease Residual	(123)
Exchange	(1)
Other	(66)
Second Quarter 2024 EBT	$	343

Ford Credit’s total net receivables of $137.7 billion were 9% higher than a year ago, explained primarily by higher consumer and non-consumer financing. The second quarter 2024 U.S. loss-to-receivables (“LTR”) ratio of 41 basis points increased from a year ago, and U.S. auction values in the second quarter of 2024 were lower year over year.

Ford Credit’s second quarter 2024 EBT of $343 million was $47 million lower than a year ago, explained primarily by higher operating lease depreciation reflecting higher lease return rates, higher insurance losses due to severe weather events (included in Other), and higher credit losses, offset partially by higher financing margin, higher volume, and favorable mix.

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 2023 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 2023 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

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

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 gains and losses from our cash, cash equivalents, and marketable securities (excluding gains and losses on investments in equity 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 2024, Corporate Other had a $165 million EBIT loss, a $32 million improvement from a year ago.

Interest on Debt

Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was $270 million in the second quarter of 2024, $34 million lower than a year ago.

Taxes

Our Provision for/(Benefit from) income taxes for the second quarter and first half of 2024 was a provision of $605 million and $883 million, respectively, resulting in effective tax rates of 24.8% and 21.8%, respectively.

Our second quarter and first half 2024 adjusted effective tax rates, which exclude special items, were 23.1% and 21.6%, respectively.

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.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2024, total balance sheet cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $34.8 billion.

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, 2023		June 30, 2024
Balance Sheets ($B)
Company Cash	$	28.8	$	26.6
Liquidity	46.4		44.8
Debt	(19.9)		(20.4)
Cash Net of Debt	8.9		6.2

Pension Funded Status ($B) (a)
Funded Plans	$	2.1	$	2.7
Unfunded Plans	(4.4)		(4.1)
Total Global Pension	$	(2.3)	$	(1.4)

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

__________

(a)Balances at June 30, 2024 reflect net funded status at December 31, 2023, updated for service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. The discount rate and rate of expected return assumptions are unchanged from year-end 2023.

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, 2024, we had Company cash of $26.6 billion and liquidity of $44.8 billion. At June 30, 2024, about 86% of Company cash was held by consolidated entities domiciled in the United States.

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.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Material Cash Requirements. Our material cash requirements 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 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” in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 of our 2023 Form 10-K Report)

•Purchase of regulatory compliance credits

•Marketing incentive payments to dealers

•Payments for warranty and field service actions (for additional information, see Note 18 of the Notes to the Financial Statements herein)

•Debt repayments (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 19 of the Notes the Financial Statements in our 2023 Form 10-K Report)

•Discretionary and mandatory payments to our global pension plans (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 of our 2023 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 the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 18 of the Notes to the Financial Statements in our 2023 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 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.

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, 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. 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.

Our finished product inventory at June 30, 2024 was higher than at December 31, 2023, primarily reflecting new vehicle launches and units awaiting final quality review.

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. Our actual capital outlay could vary significantly based on the final project costs and potential financing opportunities. 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 mechanism included in the offtake agreement is 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 at the cost determined by the purchase price mechanism. As of June 30, 2024, our estimated expenditures for the maximum quantity that we are committed to purchase under these offtake agreements through 2035, subject to certain conditions, consist of approximately $3.7 billion of purchase obligations and approximately $6.8 billion of contingent purchase obligations based on our present forecast; however, our forecast could fluctuate from period to period based on market prices, which could 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 to a replacement purchaser or back to the supplier. The resale price may or may not be the same as the original purchase price, depending on then-current market conditions and negotiated terms. As a result, in certain instances when the purchase price mechanism under our agreements is higher than the expected resale price of the excess materials, we have recorded and may in the future record accruals related to the resale. Accruals recorded to date for such items have been immaterial.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

As market conditions dictate, we have and may in the future enter into additional offtake agreements with raw material suppliers or renegotiate existing agreements. In addition, as mentioned above, we may seek to resell excess materials. 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 the first half of 2025. See Item 1A. Risk Factors in our 2023 Form 10-K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to our offtake agreements and other long-term purchase contracts.

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, 2024, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was $194 million. The amount settled through the SCF program during the first half of 2024 was $767 million.

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


	Second Quarter				First Half
	2023		2024		2023		2024
Company Excluding Ford Credit
Company Adjusted EBIT excluding Ford Credit (a)	$	3.4	$	2.4	$	6.5	$	4.9

Capital spending	$	(1.9)	$	(2.1)	$	(3.7)	$	(4.2)
Depreciation and tooling amortization	1.3		1.3		2.6		2.5
Net spending	$	(0.6)	$	(0.8)	$	(1.1)	$	(1.6)

Receivables	$	(0.6)	$	(0.2)	$	(0.2)	$	(0.2)
Inventory	(1.4)		1.3		(3.4)		(1.8)
Trade Payables	1.4		(1.2)		1.7		0.8
Changes in working capital	$	(0.7)	$	—	$	(1.9)	$	(1.2)

Ford Credit distributions	$	—	$	0.2	$	—	$	0.2
Interest on debt and cash taxes	(0.7)		(0.5)		(1.3)		(1.2)
All other and timing differences	1.6		2.0		1.4		1.8
Company adjusted free cash flow (a)	$	2.9	$	3.2	$	3.6	$	2.8

Restructuring	$	(0.1)	$	(0.3)	$	(0.1)	$	(0.5)
Changes in debt	—		0.2		(0.2)		0.4
Funded pension contributions	(0.1)		(0.1)		(0.2)		(0.6)
Shareholder distributions	(0.6)		(0.8)		(3.8)		(2.2)
All other	(0.9)		(0.7)		(1.7)		(2.1)
Change in cash	$	1.1	$	1.5	$	(2.4)	$	(2.2)

__________

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

Note: Numbers may not sum due to rounding.

Our second quarter 2024 Net cash provided by/(used in) operating activities was positive $5.5 billion, $0.5 billion higher than a year ago (see page 61 for additional information). The increase reflects lower working capital and higher Ford Credit operating cash flow. Company adjusted free cash flow was $3.2 billion, $0.3 billion higher than a year ago, primarily driven by lower working capital.

Capital spending was $2.1 billion in the second quarter of 2024, an increase of $0.2 billion from a year ago. We continue to expect full year 2024 capital spending to be in the range of $8 billion to $9 billion.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Second quarter 2024 working capital impact was flat, driven by lower inventory, offset by higher trade receivables and lower trade payables, each compared to March 31, 2024. All other and timing differences were positive $2.0 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 2024, we contributed $83 million to our global funded pension plans. We expect to contribute about $1 billion to our global funded pension plans in 2024.

Shareholder distributions (including a regular cash dividend and anti-dilutive share repurchases) were $0.8 billion in the second quarter of 2024.

Available Credit Lines. Total Company committed credit lines, excluding Ford Credit, at June 30, 2024 were $20.1 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $2.5 billion of our 364-day revolving credit facility, and $2.1 billion of local credit facilities. At June 30, 2024, the utilized portion of the corporate credit facility was $6 million, representing amounts utilized for letters of credit. In addition, $1.7 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of June 30, 2024.

Our corporate, supplemental, and 364-day revolving credit facilities were amended as of April 22, 2024 to extend the maturity dates of the commitments under each facility and increase the size of our 364-day revolving credit facility. 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.

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 CO2 tailpipe emissions.

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.

Debt. As shown in Note 12 of the Notes to the Financial Statements, at June 30, 2024, Company debt excluding Ford Credit was $20.4 billion. This balance is $0.5 billion higher than at December 31, 2023.

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 as a separate business 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.

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 2024 with $28.3 billion of liquidity, up $2.6 billion from year-end. Ford Credit continues to have robust access to capital markets, completing $22 billion of public term issuances through July 23, 2024.

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, 2023			December 31, 2023			June 30, 2024
Funding Structure
Term unsecured debt	$	52.2		$	54.1		$	59.2
Term asset-backed securities	55.6			58.0			53.9
Retail Deposits / Ford Interest Advantage	15.9			17.2			17.4
Other	2.4			1.4			1.1
Equity	12.5			13.4			13.6
Adjustments for cash	(12.5)			(10.9)			(7.5)
Total Net Receivables	$	126.1		$	133.2		$	137.7

Securitized Funding as Percent of Total Debt	45.0		%	44.9		%	41.3		%

Net receivables of $137.7 billion at June 30, 2024 were funded primarily with term unsecured debt and term asset-backed securities. Securitized funding as a percent of total debt was 41.3% as of June 30, 2024.

Public Term Funding Plan. The following table shows Ford Credit’s issuances for full year 2022 and 2023, planned issuances for full year 2024, and its global public term funding issuances through July 23, 2024, excluding short-term funding programs (in billions):


	2022 Actual		2023 Actual		2024 Forecast	Through July 23
Unsecured	$	6	$	14	$ 14-17	$	12
Securitizations (a)	10		14		14-16	10
Total public	$	16	$	28	$ 28-33	$	22

__________

(a)See Definitions and Information Regarding Ford Credit Causal Factors section.

For 2024, Ford Credit now projects full year public term funding in the range of $28 billion to $33 billion.

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, 2023		December 31, 2023		June 30, 2024
Liquidity Sources (a)
Cash	$	12.5	$	10.9	$	7.5
Committed asset-backed facilities	42.3		42.9		42.5
Other unsecured credit facilities	2.6		2.4		2.2
Total liquidity sources	$	57.4	$	56.2	$	52.2

Utilization of Liquidity (a)
Securitization and restricted cash	$	(2.9)	$	(2.8)	$	(2.8)
Committed asset-backed facilities	(23.1)		(27.5)		(21.1)
Other unsecured credit facilities	(1.2)		(0.4)		(0.2)
Total utilization of liquidity	$	(27.2)	$	(30.7)	$	(24.1)

Available liquidity	$	30.2	$	25.5	$	28.1
Other adjustments	(1.3)		0.2		0.2
Net liquidity available for use	$	28.9	$	25.7	$	28.3

__________

(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, 2024, Ford Credit’s net liquidity available for use was $28.3 billion, $2.6 billion higher than year-end 2023, reflecting strong access to public funding markets. At June 30, 2024, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $52.2 billion, down $4.0 billion from year-end 2023, primarily explained by lower cash due to higher receivables.

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 “Aggregate Contractual Obligations” table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 19 of the Notes to the Financial Statements in our 2023 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 - Ford Credit Segment - Funding and Liquidity Risks” section of Item 7 of Part II of our 2023 Form 10-K Report for more information.

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, 2023		December 31, 2023		June 30, 2024
Leverage Calculation
Debt	$	123.7	$	129.3	$	130.5
Equity (a)	12.5		13.4		13.6
Financial statement leverage (to 1)	9.9		9.7		9.6

__________

(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, 2024, Ford Credit’s financial statement leverage was 9.6:1. Ford Credit targets financial statement leverage in the range of 9:1 to 10:1.

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, 2024, our total Company pension underfunded status reported on our consolidated balance sheets was $1.4 billion and reflects the net funded status at December 31, 2023, updated for: 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 2023.

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, 2023			June 30, 2024
Adjusted Net Operating Profit/(Loss) After Cash Tax
Net income/(loss) attributable to Ford	$	4.1		$	3.8
Add: Noncontrolling interest	(0.2)			—
Less: Income tax	(0.5)			0.2
Add: Cash tax	(1.0)			(1.2)
Less: Interest on debt	(1.3)			(1.2)
Less: Total pension/OPEB income/(cost)	(0.6)			(2.6)
Add: Pension/OPEB service costs	(0.7)			(0.6)
Net operating profit/(loss) after cash tax	$	4.5		$	5.7
Less: Special items (excl. pension/OPEB) pre-tax	(5.1)			(2.0)
Adjusted net operating profit/(loss) after cash tax	$	9.6		$	7.7

Invested Capital
Equity	$	43.6		$	43.6
Debt (excl. Ford Credit)	19.6			20.4
Net pension and OPEB liability	4.6			6.0
Invested capital (end of period)	$	67.8		$	70.0
Average invested capital	$	67.6		$	69.1

ROIC (a)	6.7		%	8.2		%
Adjusted ROIC (Non-GAAP) (b)	14.2		%	11.1		%

__________

(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.

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, 2024.

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)

Stable

BBB (low)

R-2 (low)

Stable

BBB (low)

Fitch

BBB-

Stable

BBB-

Stable

BBB-

Moody’s

N/A

Ba1

Stable

Ba1

Stable

Baa3

S&P

BBB-

Stable

BBB-

A-3

Stable

BBB-

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

OUTLOOK

We provided 2024 Company guidance in our earnings release furnished on Form 8-K dated July 24, 2024. The guidance is based on our expectations as of July 24, 2024, and assumes no material change to our current assumptions for inflation, logistics issues, production, or macroeconomic conditions. Our actual results could differ materially from our guidance due to risks, uncertainties, and other factors, including those set forth in “Risk Factors” in Item 1A of our 2023 Form 10-K Report and as updated by our subsequent filings with the SEC.


						2024 Guidance
Total Company
Adjusted EBIT (a)						$10 - $12 billion
Adjusted Free Cash Flow (a)						$7.5 - $8.5 billion
Capital spending						$8 - $9 billion

Ford Credit
EBT						About $1.5 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 2024, we expect adjusted EBIT of $10 billion to $12 billion and adjusted free cash flow of $7.5 billion to $8.5 billion.

On a segment basis, we expect:

•Ford Pro EBIT of $9 billion to $10 billion driven by continued growth and favorable mix, offset partially by moderated pricing

•Ford Blue EBIT of $6 billion to $6.5 billion, reflecting a balanced market equation and higher product, manufacturing, and warranty costs, offset partially by cost efficiencies

•Ford Model e EBIT loss of $5 billion to $5.5 billion driven by continued pricing pressure and investments in new electric vehicles

•Ford Credit EBT of about $1.5 billion

Our outlook for 2024 assumes:

•Flat to modest U.S. industry growth at 16 million to 16.5 million

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

•Lower industry pricing

•$2 billion of cost reductions in material, freight, and manufacturing

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Cautionary Note on Forward-Looking Statements

Statements included or incorporated by reference herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:

•Ford is highly dependent on its suppliers to deliver components in accordance with Ford’s production schedule and specifications, and a shortage of or inability to acquire key components or raw materials, such as lithium, cobalt, nickel, graphite, and manganese, can disrupt Ford’s production of vehicles;

•To facilitate access to the raw materials and other components necessary for the production of electric vehicles, Ford has entered into and may, in the future, enter into multi-year commitments to raw material and other suppliers that subject Ford to risks associated with lower future demand for such items as well as costs that fluctuate and are difficult to accurately forecast;

•Ford’s long-term competitiveness depends on the successful execution of Ford+;

•Ford’s vehicles could be affected by defects that result in recall campaigns, increased warranty costs, or delays in new model launches, and the time it takes to improve the quality of our vehicles and services could continue to have an adverse effect on our business;

•Ford may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures, or business strategies;

•Ford may not realize the anticipated benefits of restructuring actions and such actions may cause Ford to incur significant charges, disrupt our operations, or harm our reputation;

•Operational information systems, security systems, vehicles, and services could be affected by cybersecurity incidents, ransomware attacks, and other disruptions and impact Ford and Ford Credit as well as their suppliers and dealers;

•Ford’s production, as well as Ford’s suppliers’ production, and/or the ability to deliver products to consumers could be disrupted by labor issues, public health issues, natural or man-made disasters, adverse effects of climate change, financial distress, production difficulties, capacity limitations, or other factors;

•Failure to develop and deploy secure digital services that appeal to customers could have a negative impact on Ford’s business;

•Ford’s ability to maintain a competitive cost structure could be affected by labor or other constraints;

•Ford’s ability to attract, develop, grow, and reward talent is critical to its success and competitiveness;

•Ford’s new and existing products and digital, software, and physical services are subject to market acceptance and face significant competition from existing and new entrants in the automotive and digital and software services industries, and its reputation may be harmed if it is unable to achieve the initiatives it has announced;

•Ford’s results are dependent on sales of larger, more profitable vehicles, particularly in the United States;

•With a global footprint and supply chain, Ford’s results and operations could be adversely affected by economic or geopolitical developments, including protectionist trade policies such as tariffs, or other events;

•Industry sales volume can be volatile and could decline if there is a financial crisis, recession, public health emergency, or significant geopolitical event;

•Ford may face increased price competition or a reduction in demand for its products resulting from industry excess capacity, currency fluctuations, competitive actions, or other factors, particularly for electric vehicles;

•Inflationary pressure and fluctuations in commodity and energy prices, foreign currency exchange rates, interest rates, and market value of Ford or Ford Credit’s investments, including marketable securities, can have a significant effect on results;

•Ford and Ford Credit’s access to debt, securitization, or derivative markets around the world at competitive rates or in sufficient amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory requirements, or other factors;

•The impact of government incentives on Ford’s business could be significant, and Ford’s receipt of government incentives could be subject to reduction, termination, or clawback;

•Ford Credit could experience higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles;

•Economic and demographic experience for pension and OPEB plans (e.g., discount rates or investment returns) could be worse than Ford has assumed;

•Pension and other postretirement liabilities could adversely affect Ford’s liquidity and financial condition;

•Ford and Ford Credit could experience unusual or significant litigation, governmental investigations, or adverse publicity arising out of alleged defects in products, services, perceived environmental impacts, or otherwise;

•Ford may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel economy, autonomous driving technology, environmental, and other regulations;

•Ford and Ford Credit could be affected by the continued development of more stringent privacy, data use, data protection, and artificial intelligence laws and regulations as well as consumers’ heightened expectations to safeguard their personal information; and

•Ford Credit could be subject to new or increased credit regulations, consumer protection regulations, or other regulations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

We cannot be certain that any expectation, forecast, or assumption made in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise. For additional discussion, see “Item 1A. Risk Factors” in our 2023 Form 10-K Report, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

NON-GAAP FINANCIAL MEASURES THAT SUPPLEMENT GAAP MEASURES

We use both generally accepted accounting principles (“GAAP”) and non-GAAP financial measures for operational and financial decision making, and to assess Company and segment business performance. The non-GAAP measures listed below are intended to be considered by users as supplemental information to their equivalent GAAP measures, to aid investors in better understanding our financial results. We believe that these non-GAAP measures provide useful perspective on underlying operating results and trends, and a means to compare our period-over-period results. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP measures may not be the same as similarly titled measures used by other companies due to possible differences in method and in items or events being adjusted.

•Company Adjusted EBIT (Most Comparable GAAP Measure: Net Income/(Loss) Attributable to Ford) – Earnings before interest and taxes (EBIT) excludes interest on debt (excl. Ford Credit Debt), taxes, and pre-tax special items. This non-GAAP measure is useful to management and investors because it focuses on underlying operating results and trends, and improves comparability of our period-over-period results. Our management ordinarily excludes special items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. Our categories of pre-tax special items and the applicable significance guideline for each item (which may consist of a group of items related to a single event or action) are as follows:


Pre-Tax Special Item						Significance Guideline
∘ Pension and OPEB remeasurement gains and losses						∘ No minimum

∘ Gains and losses on investments in equity securities						∘ No minimum

∘ Personnel expenses, supplier- and dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix						∘ Generally $100 million or more

∘ Other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities						∘ $500 million or more for individual field service actions; generally $100 million or more for other items

When we provide guidance for adjusted EBIT, we do not provide guidance on a net income basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty, including gains and losses on pension and OPEB remeasurements and on investments in equity securities.

•Company Adjusted EBIT Margin (Most Comparable GAAP Measure: Company Net Income/(Loss) Margin) – Company Adjusted EBIT margin is Company adjusted EBIT divided by Company revenue. This non-GAAP measure is useful to management and investors because it allows users to evaluate our operating results aligned with industry reporting.

•Adjusted Earnings/(Loss) Per Share (Most Comparable GAAP Measure: Earnings/(Loss) Per Share) – Measure of Company’s diluted net earnings/(loss) per share adjusted for impact of pre-tax special items (described above), tax special items, and restructuring impacts in noncontrolling interests. The measure provides investors with useful information to evaluate performance of our business excluding items not indicative of earnings from ongoing operating activities. When we provide guidance for adjusted earnings/(loss) per share, we do not provide guidance on an earnings/(loss) per share basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and OPEB remeasurement gains and losses.

•Adjusted Effective Tax Rate (Most Comparable GAAP Measure: Effective Tax Rate) – Measure of Company’s tax rate excluding pre-tax special items (described above) and tax special items. The measure provides an ongoing effective rate which investors find useful for historical comparisons and for forecasting. When we provide guidance for adjusted effective tax rate, we do not provide guidance on an effective tax rate basis because the GAAP measure will include potentially significant special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and OPEB remeasurement gains and losses.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

•Company Adjusted Free Cash Flow (Most Comparable GAAP Measure: Net Cash Provided By/(Used In) Operating Activities) – Measure of Company’s operating cash flow excluding Ford Credit’s operating cash flows. The measure contains elements management considers operating activities, including Company excluding Ford Credit capital spending, Ford Credit distributions to its parent, and settlement of derivatives. The measure excludes cash outflows for funded pension contributions, restructuring actions, and other items that are considered operating cash flows under U.S. GAAP. This measure is useful to management and investors because it is consistent with management’s assessment of the Company’s operating cash flow performance. When we provide guidance for Company adjusted free cash flow, we do not provide guidance for net cash provided by/(used in) operating activities because the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, including cash flows related to the Company's exposures to foreign currency exchange rates and certain commodity prices (separate from any related hedges), Ford Credit's operating cash flows, and cash flows related to special items, including separation payments, each of which individually or in the aggregate could have a significant impact to our net cash provided by/(used in) our operating activities.

•Adjusted ROIC – 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. Adjusted Return on Invested Capital (“Adjusted ROIC”) provides management and investors with useful information to evaluate the Company’s after-cash tax operating return on its invested capital for the period presented. Adjusted net operating profit/(loss) after cash tax measures operating results less special items, interest on debt (excl. Ford Credit Debt), and certain pension/OPEB costs. Average invested capital is the sum of average balance sheet equity, debt (excl. Ford Credit Debt), and net pension/OPEB liability.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Non-GAAP Financial Measure Reconciliations

The following tables show our Non-GAAP financial measure reconciliations.

Net Income/(Loss) Reconciliation to Adjusted EBIT ($M)


	Second Quarter						First Half
	2023			2024			2023			2024
Net income/(loss) attributable to Ford (GAAP)	$	1,917		$	1,831		$	3,674		$	3,163
Income/(Loss) attributable to noncontrolling interests	99			2			5			4
Net income/(loss)	$	2,016		$	1,833		$	3,679		$	3,167
Less: (Provision for)/Benefit from income taxes	(272)			(605)			(768)			(883)
Income/(Loss) before income taxes	$	2,288		$	2,438		$	4,447		$	4,050
Less: Special items pre-tax	(1,194)			(49)			(2,106)			(922)
Income/(Loss) before special items pre-tax	$	3,482		$	2,487		$	6,553		$	4,972
Less: Interest on debt	(304)			(270)			(612)			(548)
Adjusted EBIT (Non-GAAP)	$	3,786		$	2,757		$	7,165		$	5,520

Memo:
Revenue ($B)	$	45.0		$	47.8		$	86.4		$	90.6
Net income/(loss) margin (GAAP) (%)	4.3		%	3.8		%	4.3		%	3.5		%
Adjusted EBIT margin (Non-GAAP) (%)	8.4		%	5.8		%	8.3		%	6.1		%

Earnings per Share Reconciliation to Adjusted Earnings per Share


	Second Quarter				First Half
	2023		2024		2023		2024
Diluted After-Tax Results ($M)
Diluted after-tax results (GAAP)	$	1,917	$	1,831	$	3,674	$	3,163
Less: Impact of pre-tax and tax special items (a)	(1,012)		(79)		(1,722)		(732)
Adjusted net income/(loss) – diluted (Non-GAAP)	$	2,929	$	1,910	$	5,396	$	3,895

Basic and Diluted Shares (M)
Basic shares (average shares outstanding)	4,003		3,985		3,996		3,982
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt	38		37		39		40
Diluted shares	4,041		4,022		4,035		4,022

Earnings/(Loss) per share – diluted (GAAP)	$	0.47	$	0.46	$	0.91	$	0.79
Less: Net impact of adjustments	(0.25)		(0.01)		(0.43)		(0.18)
Adjusted earnings/(loss) per share – diluted (Non-GAAP)	$	0.72	$	0.47	$	1.34	$	0.97

_________

(a)Includes adjustment for noncontrolling interest in the second quarter and first half of 2023.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Effective Tax Rate Reconciliation to Adjusted Effective Tax Rate


	Second Quarter						First Half
	2023			2024			2023			2024			Memo: FY 2023
Pre-Tax Results ($M)
Income/(Loss) before income taxes (GAAP)	$	2,288		$	2,438		$	4,447		$	4,050		$	3,967
Less: Impact of special items	(1,194)			(49)			(2,106)			(922)			(5,147)
Adjusted earnings before taxes (Non-GAAP)	$	3,482		$	2,487		$	6,553		$	4,972		$	9,114

Taxes ($M)
(Provision for)/Benefit from income taxes (GAAP) (a)	$	(272)		$	(605)		$	(768)		$	(883)		$	362
Less: Impact of special items (b)	177			(30)			321			190			1,273
Adjusted (provision for)/benefit from income taxes (Non-GAAP)	$	(449)		$	(575)		$	(1,089)		$	(1,073)		$	(911)

Tax Rate (%)
Effective tax rate (GAAP)	11.9		%	24.8		%	17.3		%	21.8		%	(9.1)		%
Adjusted effective tax rate (Non-GAAP)	12.9		%	23.1		%	16.6		%	21.6		%	10.0		%

_________

(a)Full Year 2023 reflects benefits from U.S. research tax credits and legal entity restructuring within our leasing operations and China.

(b)Full Year 2023 reflects benefits from China legal entity restructuring.

Net Cash Provided by/(Used in) Operating Activities Reconciliation to Company Adjusted Free Cash Flow ($M)


	Second Quarter				First Half
	2023		2024		2023		2024
Net cash provided by/(used in) operating activities (GAAP)	$	5,035	$	5,508	$	7,835	$	6,893

Less: Items not included in Company Adjusted Free Cash Flows
Ford Credit operating cash flows	$	581	$	685	$	1,207	$	1,866
Funded pension contributions	(109)		(83)		(234)		(633)
Restructuring (including separations) (a)	(118)		(289)		(199)		(465)
Ford Credit tax payments/(refunds) under tax sharing agreement	—		—		(5)		(33)
Other, net	(73)		4		(213)		(605)

Add: Items included in Company Adjusted Free Cash Flows
Company excluding Ford Credit capital spending	$	(1,927)	$	(2,078)	$	(3,687)	$	(4,151)
Ford Credit distributions	—		150		—		150
Settlement of derivatives	92		(26)		20		(3)
Company adjusted free cash flow (Non-GAAP)	$	2,919	$	3,237	$	3,612	$	2,758

_________

(a)Restructuring excludes cash flows reported in investing activities.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

SUPPLEMENTAL INFORMATION

The tables below provide supplemental consolidating financial information, other financial information, and U.S. sales by type. Company excluding Ford Credit includes our Ford Blue, Ford Model e, Ford Pro, and Ford Next reportable segments, Corporate Other, Interest on Debt, and Special Items. Eliminations, where presented, primarily represent eliminations of intersegment transactions and deferred tax netting.

Selected Income Statement Information. The following table provides supplemental income statement information (in millions):


	For the period ended June 30, 2024
	Second Quarter
	Company excluding Ford Credit		Ford Credit		Consolidated
Revenues	$	44,811	$	2,997	$	47,808
Total costs and expenses	43,167		2,758		45,925
Operating income/(loss)	1,644		239		1,883
Interest expense on Company debt excluding Ford Credit	270		—		270
Other income/(loss), net	534		94		628
Equity in net income/(loss) of affiliated companies	187		10		197
Income/(Loss) before income taxes	2,095		343		2,438
Provision for/(Benefit from) income taxes	517		88		605
Net income/(loss)	1,578		255		1,833
Less: Income/(Loss) attributable to noncontrolling interests	2		—		2
Net income/(loss) attributable to Ford Motor Company	$	1,576	$	255	$	1,831

	For the period ended June 30, 2024
	First Half
	Company excluding Ford Credit		Ford Credit		Consolidated
Revenues	$	84,701	$	5,884	$	90,585
Total costs and expenses	82,019		5,458		87,477
Operating income/(loss)	2,682		426		3,108
Interest expense on Company debt excluding Ford Credit	548		—		548
Other income/(loss), net	901		225		1,126
Equity in net income/(loss) of affiliated companies	346		18		364
Income/(Loss) before income taxes	3,381		669		4,050
Provision for/(Benefit from) income taxes	703		180		883
Net income/(loss)	2,678		489		3,167
Less: Income/(Loss) attributable to noncontrolling interests	4		—		4
Net income/(loss) attributable to Ford Motor Company	$	2,674	$	489	$	3,163

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Selected Balance Sheet Information. The following tables provide supplemental balance sheet information (in millions):


	June 30, 2024
Assets	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated
Cash and cash equivalents	$	12,505	$	7,448	$	—	$	19,953
Marketable securities	13,931		682		—		14,613
Ford Credit finance receivables, net	—		47,434		—		47,434
Trade and other receivables, net	6,035		10,767		—		16,802
Inventories	17,183		—		—		17,183
Other assets	3,272		1,261		—		4,533
Receivable from other segments	1,291		2,270		(3,561)		—
Total current assets	54,217		69,862		(3,561)		120,518

Ford Credit finance receivables, net	—		58,159		—		58,159
Net investment in operating leases	1,170		20,375		—		21,545
Net property	40,420		289		—		40,709
Equity in net assets of affiliated companies	7,090		125		—		7,215
Deferred income taxes	16,307		156		5		16,468
Other assets	10,791		1,181		—		11,972
Receivable from other segments	75		12		(87)		—
Total assets	$	130,070	$	150,159	$	(3,643)	$	276,586
Liabilities
Payables	$	24,550	$	908	$	—	$	25,458
Other liabilities and deferred revenue	24,400		2,980		—		27,380
Debt payable within one year	1,712		48,853		—		50,565

Payable to other segments	3,427		134		(3,561)		—
Total current liabilities	54,089		52,875		(3,561)		103,403

Other liabilities and deferred revenue	26,624		1,665		—		28,289
Long-term debt	18,694		81,642		—		100,336
Deferred income taxes	611		347		5		963
Payable to other segments	12		75		(87)		—
Total liabilities	$	100,030	$	136,604	$	(3,643)	$	232,991

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Selected Cash Flow Information. The following tables provide supplemental cash flow information (in millions):


	For the period ended June 30, 2024
	First Half
Cash flows from operating activities	Company excluding Ford Credit		Ford Credit		Eliminations		Consolidated
Net income/(loss)	$	2,678	$	489	$	—	$	3,167
Depreciation and tooling amortization	2,550		1,245		—		3,795
Other amortization	29		(801)		—		(772)


Provision for credit and insurance losses	7		310		—		317
Pension and OPEB expense/(income)	201		—		—		201
Equity method investment dividends received in excess of (earnings)/losses and impairments	(117)		(7)		—		(124)
Foreign currency adjustments	202		(29)		—		173
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments	4		4		—		8
Stock compensation	266		9		—		275
Provision for/(Benefit from) deferred income taxes	157		49		—		206
Decrease/(Increase) in finance receivables (wholesale and other)	—		(1,865)		—		(1,865)
Decrease/(Increase) in intersegment receivables/payables	457		(457)		—		—
Decrease/(Increase) in accounts receivable and other assets	(1,357)		(246)		—		(1,603)
Decrease/(Increase) in inventory	(1,845)		—		—		(1,845)
Increase/(Decrease) in accounts payable and accrued and other liabilities	4,968		301		—		5,269
Other	(303)		(6)		—		(309)
Interest supplements and residual value support to Ford Credit	(2,870)		2,870		—		—
Net cash provided by/(used in) operating activities	$	5,027	$	1,866	$	—	$	6,893
Cash flows from investing activities
Capital spending	$	(4,151)	$	(43)	$	—	$	(4,194)
Acquisitions of finance receivables and operating leases	—		(29,542)		—		(29,542)
Collections of finance receivables and operating leases	—		22,530		—		22,530
Purchases of marketable and other investments	(5,974)		(95)		—		(6,069)
Sales and maturities of marketable securities and other investments	6,612		200		—		6,812
Settlements of derivatives	(3)		(234)		—		(237)
Capital contributions to equity method investments	(1,299)		—		—		(1,299)
Other	78		—		—		78
Investing activity (to)/from other segments	150		4		(154)		—
Net cash provided by/(used in) investing activities	$	(4,587)	$	(7,180)	$	(154)	$	(11,921)
Cash flows from financing activities
Cash payments for dividends and dividend equivalents	$	(1,925)	$	—	$	—	$	(1,925)
Purchases of common stock	(244)		—		—		(244)
Net changes in short-term debt	421		(1,429)		—		(1,008)
Proceeds from issuance of long-term debt	—		28,960		—		28,960
Payments of long-term debt	(79)		(25,066)		—		(25,145)
Other	(161)		(93)		—		(254)
Financing activity to/(from) other segments	(4)		(150)		154		—
Net cash provided by/(used in) financing activities	$	(1,992)	$	2,222	$	154	$	384

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	$	(90)	$	(150)	$	—	$	(240)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Selected Other Information.

Equity. At June 30, 2024, total equity attributable to Ford was $43.6 billion, an increase of $0.8 billion compared with December 31, 2023. The detail for this change is shown below (in billions):


	Increase/ (Decrease)
Net income/(loss)	$	3.2
Shareholder distributions	(2.2)
Other comprehensive income/(loss), net	(0.3)
Common stock issued (including share-based compensation impacts)	0.1

Total	$	0.8

U.S. Sales by Type. The following table shows second quarter 2024 U.S. sales volume and U.S. wholesales segregated by electric, hybrid, and internal combustion vehicles. U.S. sales volume represents primarily sales by dealers, sales to the government, and leases to Ford management, and is based, in part, on estimated vehicle registrations and includes medium and heavy trucks.


	U.S. Sales	U.S. Wholesales
Electric Vehicles	23,957	24,323
Hybrid Vehicles	53,822	65,360
Internal Combustion Vehicles	458,271	490,285
Total Vehicles	536,050	579,968

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

For a discussion of recent accounting standards, see Note 2 of the Notes to the Financial Statements.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

Company Excluding Ford Credit

Foreign Currency Risk. The net fair value of foreign exchange forward contracts (including adjustments for credit risk) as of June 30, 2024, was an asset of $51 million, compared with a liability of $319 million as of December 31, 2023. The potential change in the fair value from a 10% change in the underlying exchange rates, in U.S. dollar terms, would have been $3.1 billion at June 30, 2024, compared with $3.1 billion at December 31, 2023.

Commodity Price Risk. The net fair value of commodity forward contracts (including adjustments for credit risk) as of June 30, 2024, was an asset of $54 million, compared with a liability of $9 million at December 31, 2023. The potential change in the fair value from a 10% change in the underlying commodity prices would have been $200 million at June 30, 2024, compared with $203 million at December 31, 2023.

Ford Credit Segment

Interest Rate Risk. To provide a quantitative measure of the sensitivity of its pre-tax cash flow to changes in interest rates, Ford Credit uses interest rate scenarios that assume a hypothetical, instantaneous decrease or increase of one percentage point in all interest rates across all maturities (a “parallel shift”), as well as a base case that assumes that all interest rates remain constant at existing levels. Maturing assets and liabilities are also instantaneously reinvested, capturing 100% of any hypothetical change in interest rates. The differences in pre-tax cash flow between these scenarios and the base case over a 12-month period represent an estimate of the sensitivity of Ford Credit’s pre-tax cash flow. Under this model, Ford Credit estimates that at June 30, 2024, all else constant, such a decrease in interest rates would decrease its pre-tax cash flow by $95 million over the next 12 months, compared with a decrease of $78 million at December 31, 2023. In reality, new assets and liabilities may not immediately capture changes in interest rates, and interest rate changes are rarely instantaneous, parallel, or move exactly the one percentage point assumed in Ford Credit’s analysis. As a result, the actual impact to pre-tax cash flow could be higher or lower than the results detailed above.

ITEM 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. James D. Farley, Jr., our Chief Executive Officer (“CEO”), and John T. Lawler, our Chief Financial Officer (“CFO”), have performed an evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of June 30, 2024, and each has concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by SEC rules and forms, and that such information is accumulated and communicated to the CEO and CFO to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting. There were no changes in internal control over financial reporting during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

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 35 of our 2023 Form 10-K Report.

OTHER MATTERS

Brazilian Tax Matters (as previously reported on page 35 of our 2023 Form 10-K Report and page 66 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024). 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. To proceed with an appeal within the judicial court system, an appellant may be required to post collateral. To date, we have not been required to post any collateral. If we are required to post collateral, which could be in excess of $1 billion, 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. Although the ultimate resolution of these matters may take many years, we consider our overall risk of loss to be remote.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

In the second quarter of 2024, we repurchased shares of Ford Common Stock as part of an anti-dilutive share repurchase program to offset the dilutive effect of share-based compensation granted during 2024. The program originally authorized repurchases of up to 53 million shares of Ford Common Stock.


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly-Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2024 through April 30, 2024	—	$	—	—	53,000,000
May 1, 2024 through May 31, 2024	19,299,600	12.34		19,299,600	33,700,400
June 1, 2024 through June 30, 2024	480,400	11.95		480,400	33,220,000
Total / Average	19,780,000	$	12.33	19,780,000

ITEM 5. Other Information.

During the quarter ended June 30, 2024, no director or officer of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. Exhibits.

Designation

Description

Method of Filing

Exhibit 10.1

Twenty-First Amendment dated April 22, 2024 to the Credit Agreement dated as of December 15, 2006, as amended and restated as of November 24, 2009, as amended and restated as of April 30, 2014, as amended and restated as of April 30, 2015, as amended and restated as of September 29, 2021.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed April 22, 2024. (a)

Exhibit 10.2

Sixth Amendment dated April 22, 2024 to the Revolving Credit Agreement dated as of April 23, 2019, as amended and restated as of September 29, 2021.

Filed as Exhibit 10.2 to our Current Report on Form 8-K filed April 22, 2024. (a)

Exhibit 10.3

Third Amendment dated April 22, 2024 to the 364-Day Revolving Credit Agreement dated June 23, 2022.

Filed as Exhibit 10.3 to our Current Report on Form 8-K filed April 22, 2024. (a)

Exhibit 31.1

Rule 15d-14(a) Certification of CEO.

Filed with this Report.

Exhibit 31.2

Rule 15d-14(a) Certification of CFO.

Filed with this Report.

Exhibit 32.1

Section 1350 Certification of CEO.

Furnished with this Report.

Exhibit 32.2

Section 1350 Certification of CFO.

Furnished with this Report.

Exhibit 101.INS

Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”).

(b)

Exhibit 101.SCH

XBRL Taxonomy Extension Schema Document.

(b)

Exhibit 101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

(b)

Exhibit 101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

(b)

Exhibit 101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

(b)

Exhibit 101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

(b)

Exhibit 104

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

(b)

__________

(a)Incorporated by reference as an exhibit to this Report (file number reference 1-3950, unless otherwise indicated).

(b)Submitted electronically with this Report in accordance with the provisions of Regulation S-T.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FORD MOTOR COMPANY


By:			/s/ Mark Kosman
			Mark Kosman, Chief Accounting Officer
			(principal accounting officer)

Date:			July 24, 2024

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Ford Motor (F) 10-Q2024 Q2 Quarterly report

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