Ford Motor Company

2023
Annual

2023 Annual Report

Report
Ford Motor Company

Ford Motor Company

One American Road
Dearborn, MI 48126

[Link]

Printed in U.S.A. Please recycle.

199174_CHUB02424_23AnnualReportCover_R03.indd 1 2/9/24 4:08 PM

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

☑ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2023
or
☐ 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 F 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

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☑

Indicate by check mark whether 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 ☐

199174_Ford_2023_AR_1OK.indd 1 2/9/24 2:52 PM

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
a smaller reporting company, or emerging growth company. See the 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 has filed a report on and attestation to its management’s assessment of
the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial
statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
☐

Indicate by check mark whether any of those error corrections are restatements that required recovery analysis of
incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period
pursuant to §240.10D-1(b). ☐

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

As of June 30, 2023, Ford had outstanding 3,931,183,222 shares of Common Stock and 70,852,076 shares of
Class B Stock. Based on the New York Stock Exchange Composite Transaction closing price of the Common Stock on
that date ($15.13 per share), the aggregate market value of such Common Stock was $59,478,802,149. Although there is
no quoted market for our Class B Stock, shares of Class B Stock may be converted at any time into an equal number of
shares of Common Stock for the purpose of effecting the sale or other disposition of such shares of Common Stock. The
shares of Common Stock and Class B Stock outstanding at June 30, 2023 included shares owned by persons who may
be deemed to be “affiliates” of Ford. We do not believe, however, that any such person should be considered to be an
affiliate. For information concerning ownership of outstanding Common Stock and Class B Stock, see the Proxy
Statement for Ford’s Annual Meeting of Stockholders currently scheduled to be held on May 9, 2024 (our “Proxy
Statement”), which is incorporated by reference under various Items of this Report as indicated below.

As of February 2, 2024, Ford had outstanding 3,902,781,032 shares of Common Stock and 70,852,076 shares of
Class B Stock. Based on the New York Stock Exchange Composite Transaction closing price of the Common Stock on
that date ($12.14 per share), the aggregate market value of such Common Stock was $47,379,761,728.

DOCUMENTS INCORPORATED BY REFERENCE

Document Where Incorporated
Proxy Statement* Part III (Items 10, 11, 12, 13, and 14)
__________
* As stated under various Items of this Report, only certain specified portions of such document are incorporated by
reference in this Report.

Exhibit Index begins on page 98

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 FORD MOTOR COMPANY
ANNUAL REPORT ON FORM 10-K
For the Year Ended December 31, 2023
Table of Contents Page
Part I
Item 1 Business 1
Overview 2
Ford Blue, Ford Model e, and Ford Pro Segment 2
Ford Next Segment 6
Ford Credit Segment 7
Corporate Other 8
Interest on Debt 8
Governmental Standards 8
Human Capital Resources 14
Item 1A Risk Factors 17
Item 1B Unresolved Staff Comments 30
Item 1C Cybersecurity 31
Item 2 Properties 33
Item 3 Legal Proceedings 34
Item 4 Mine Safety Disclosures 36
Item 4A Information about our Executive Officers 37
Part II
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of 38
Equity Securities
Item 6 [Reserved] 39
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 40
Key Trends and Economic Factors Affecting Ford and the Automotive Industry 40
Results of Operations - 2023 43
Ford Blue Segment 45
Ford Model e Segment 46
Ford Pro Segment 46
Ford Next Segment 48
Ford Credit Segment 49
Corporate Other 52
Interest on Debt 52
Taxes 52
Results of Operations - 2022 53
Ford Blue Segment 55
Ford Model e Segment 56
Ford Pro Segment 56
Ford Next Segment 57
Ford Credit Segment 57
Corporate Other 58
Interest on Debt 58
Taxes 58
Liquidity and Capital Resources 59
Credit Ratings 71
Outlook 72
Cautionary Note on Forward-Looking Statements 73
Non-GAAP Financial Measures That Supplement GAAP Measures 75

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 Table of Contents
(continued)
Non-GAAP Financial Measure Reconciliations 77
2023 Supplemental Financial Information 79
Critical Accounting Estimates 83
Accounting Standards Issued But Not Yet Adopted 90
Item 7A Quantitative and Qualitative Disclosures About Market Risk 91
Item 8 Financial Statements and Supplementary Data 94
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 94
Item 9A Controls and Procedures 95
Item 9B Other Information 95
Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 95
Part III
Item 10 Directors, Executive Officers of Ford, and Corporate Governance 96
Item 11 Executive Compensation 96
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder 96
Matters
Item 13 Certain Relationships and Related Transactions, and Director Independence 96
Item 14 Principal Accounting Fees and Services 96
Part IV
Item 15 Exhibits and Financial Statement Schedules 97
Item 16 Form 10-K Summary 102
Signatures 103
Ford Motor Company and Subsidiaries Financial Statements
Report of Independent Registered Public Accounting Firm 105
Consolidated Statements of Cash Flows 108
Consolidated Income Statements 109
Consolidated Statements of Comprehensive Income 109
Consolidated Balance Sheets 110
Consolidated Statements of Equity 111
Notes to the Financial Statements 112
Schedule II — Valuation and Qualifying Accounts 179

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 PART I.
ITEM 1. Business.

Ford Motor Company was incorporated in Delaware in 1919. We acquired the business of a Michigan company, also
known as Ford Motor Company, which had been incorporated in 1903 to produce and sell automobiles designed and
engineered by Henry Ford. We are a global company based in Dearborn, Michigan. With about 177,000 employees
worldwide, the Company is committed to helping build a better world, where every person is free to move and pursue their
dreams. The Company’s Ford+ plan for growth and value creation combines existing strengths, new capabilities, and
always-on relationships with customers to enrich experiences for customers and deepen their loyalty. Ford develops and
delivers innovative, must-have Ford trucks, sport utility vehicles, commercial vans and cars, and Lincoln luxury vehicles,
along with connected services. The Company does that through three customer-centered business segments: Ford Blue,
engineering iconic gas-powered and hybrid vehicles; Ford Model e, inventing breakthrough electric vehicles (“EVs”) along
with embedded software that defines always-on digital experiences for all customers; and Ford Pro, helping commercial
customers transform and expand their businesses with vehicles and services tailored to their needs. Additionally, the
Company provides financial services through Ford Motor Credit Company LLC (“Ford Credit”).

In addition to the information about Ford and our subsidiaries contained in this Annual Report on Form 10-K for the
year ended December 31, 2023 (“2023 Form 10-K Report” or “Report”), extensive information about our Company can be
found at [Link] including information about our management team, brands, products, services, and
corporate governance principles.

The corporate governance information on our website includes our Corporate Governance Principles, Code of Ethics
for Senior Financial Personnel, Code of Ethics for the Board of Directors, Code of Corporate Conduct for all employees,
and the Charters for each of the Committees of our Board of Directors. In addition, any amendments to our Code of
Ethics or waivers granted to our directors and executive officers will be posted on our corporate website. All of these
documents may be accessed by going to our corporate website, or may be obtained free of charge by writing to our
Shareholder Relations Department, Ford Motor Company, One American Road, P.O. Box 1899, Dearborn, Michigan
48126-1899.

Our recent periodic reports filed with the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge at [Link]
This includes recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K,
as well as any amendments to those reports, and our Section 16 filings. We post each of these documents on our
website as soon as reasonably practicable after it is electronically filed with the SEC. Our reports filed with the SEC also
may be found on the SEC’s website at [Link].

Our Integrated Sustainability and Financial Report, which details our performance and progress toward our
sustainability and corporate responsibility goals, is available at [Link]

The foregoing information regarding our website and its content is for convenience only and not deemed to be
incorporated by reference into this Report nor filed with the SEC.

199174_Ford_2023_AR_1OK.indd 5 2/9/24 2:53 PM

 Item 1. Business (Continued)

Item 1. Business (Continued)

OVERVIEW

OVERVIEW
On January 1, 2023, we implemented a new operating model and reporting structure. As a result of this change, we
analyze the results of our business through the following segments: Ford Blue, Ford Model e, and Ford Pro (combined,
On January
replacing 1, 2023,
the previous we implemented
Automotive a new
segment); Fordoperating model and
Next (previously thereporting structure. and
Mobility segment); As aFord
result of this Company
Credit. change, we
analyze the results of our business through the following segments: Ford Blue, Ford Model e, and Ford Pro
adjusted earnings before interest and taxes (“EBIT”) includes the financial results of these five reportable segments and (combined,
replacing
Corporatethe previous
Other, Automotive
and net segment);the
income comprises Ford Next (previously
financial the five
results of the Mobility segment);
reportable and Ford
segments andCredit.
Corporate Company
Other, as
adjusted earnings before interest and taxes (“EBIT”)
well as Interest on Debt, Special Items, and Taxes. includes the financial results of these five reportable segments and
Corporate Other, and net income comprises the financial results of the five reportable segments and Corporate Other, as
well Below
as Interest on Debt, Special
is a description of our Items, and segments
reportable Taxes. and other activities as of December 31, 2023.

Below
FORD BLUEis aSEGMENT
description of our reportable segments and other activities as of December 31, 2023.

FORDFordBLUE
BlueSEGMENT
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,
Ford Blueand
manufacture, primarily includes
distribution the vehicles,
of the sale of Ford andaccessories,
parts, Lincoln internal
and combustion engine
services. This (“ICE”)
segment and hybrid
focuses vehicles, Ford
on developing
service parts, accessories, and digital services for retail customers, together with the associated
and Lincoln ICE and hybrid vehicles. Additionally, this segment provides hardware engineering and manufacturing costs of development,
manufacture,
capabilities to and
Forddistribution
Model e and of the vehicles, parts,
manufactures accessories,
vehicles on behalfand services.
of Ford Thisinsegment
Pro and, focuses
certain cases, on Model
Ford developing Ford
e. Ford
and Lincoln ICE
Blue also includes:and hybrid vehicles. Additionally, this segment provides hardware engineering and manufacturing
capabilities to Ford
• All sales forModel
marketse and
not manufactures vehicles
presently in scope on behalf
for Ford ModelofeFord ProPro
or Ford and,(as
in further
certain described
cases, Ford Model e. Ford
below)
Blue• also includes:
In markets outside of the United States and Canada, sales to commercial, government, and rental customers of
• ICEAll sales for markets
and hybrid not not
vehicles presently in scope
considered coreforto Ford
Ford Model
Pro e or Ford Pro (as further described below)
•• Sales
In markets outside
of electric of the United
vehicles (“EVs”)States
by our and Canada, sales
unconsolidated to commercial,
affiliates in China government, and rental customers of
ICEsales
• All and hybrid vehicles
of vehicles not considered
manufactured coretotoother
and sold Ford OEMs
Pro
• Sales of electric vehicles (“EVs”) by our unconsolidated affiliates in China
FORD • MODEL
All salesEof vehicles manufactured and sold to other OEMs
SEGMENT

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

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

General
Our vehicle brands are Ford and Lincoln. In 2023, we sold approximately 4,413,000 vehicles at wholesale throughout
the world. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Our vehicle
Operations” brands
(“Item are
7”) for Ford and Lincoln.
a discussion In 2023, we
of our calculation of sold approximately
wholesale 4,413,000 vehicles at wholesale throughout
unit volumes.
the world. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations” (“Item 7”) for a discussion of our calculation of wholesale unit volumes.

199174_Ford_2023_AR_1OK.indd 6 2/9/24 2:53 PM

 Item 1. Business (Continued)

ItemSubstantially
1. Business all
(Continued)
of our vehicles, parts, and accessories are sold through distributors and dealers (collectively,
“dealerships”), the substantial majority of which are independently owned. At December 31, the approximate number of
Substantially
dealerships all of distributing
worldwide our vehicles, parts,
our andbrands
vehicle accessories
was asare sold through distributors and dealers (collectively,
follows:
“dealerships”), the substantial majority of which are independently owned. At December 31, the approximate number of
dealerships worldwide distributing our vehicle brands was as follows:
Brand 2022 2023
Ford 8,596 8,639
Brand 2022 2023
Ford-Lincoln (combined) 607 503
Ford 8,596 8,639
Lincoln 408 385
Ford-Lincoln (combined) 607 503
Total 9,611 9,527
Lincoln 408 385
Total 9,611 9,527
We do not depend on any single customer or a few customers to the extent that the loss of such customers would
have a material adverse effect on our business.
We do not depend on any single customer or a few customers to the extent that the loss of such customers would
haveInaaddition
materialtoadverse effect we
the products on our
sell business.
to our dealerships for retail sale, we also sell vehicles to our dealerships for sale to
fleet customers, including commercial fleet customers, daily rental car companies, and governments. We also sell parts
and In addition to primarily
accessories, the products wedealerships
to our sell to our dealerships for retail
(which, in turn, sale, products
sell these we also sell vehicles
to retail to our dealerships
customers) for sale to
and to authorized
fleet customers, including commercial fleet customers, daily rental car companies, and governments. We
parts distributors (which, in turn, primarily sell these products to retailers). We also offer extended service [Link] sell parts
and accessories, primarily to our dealerships (which, in turn, sell these products to retail customers) and to authorized
partsThe
distributors
worldwide (which, in turn,industry
automotive primarily sell thesesignificantly
is affected products toby retailers). We also offer
general economic and extended service contracts.
political conditions over which we
have little control. Vehicles are durable goods, and consumers and businesses have latitude in determining whether and
when The worldwide
to replace an automotive industry
existing vehicle. Theis decision
affected whether
significantly by general
to purchase economic
a vehicle mayand
be political
affectedconditions over
significantly by which we
slowing
have little control. Vehicles are durable goods, and consumers and businesses have latitude in determining
economic growth, geopolitical events, and other factors (including the cost of purchasing and operating cars, trucks, and whether and
when to replacethe
utility vehicles, anavailability
existing vehicle. The
and cost of decision
financing,whether
cost of to purchase
fuel, a vehicle
and electric may
vehicle be affected
charging significantly
availability by slowing
and cost). As a
economic growth, geopolitical events, and other factors (including the cost of purchasing and operating
result, the number of cars, trucks, and utility vehicles sold may vary substantially from year to year. Further, the cars, trucks, and
utility vehicles, the availability and cost of financing, cost of fuel, and electric vehicle charging availability
automotive industry is a highly competitive business that has a wide and growing variety of product and service offerings and cost). As a
result, the number of cars, trucks,
from a growing number of manufacturers. and utility vehicles sold may vary substantially from year to year. Further, the
automotive industry is a highly competitive business that has a wide and growing variety of product and service offerings
fromOur a growing number
wholesale of manufacturers.
unit volumes vary with the level of total industry demand and our share of that industry demand. Our
wholesale unit volumes also are influenced by the level of dealer inventory, and our ability to maintain sufficient production
Our
levels to wholesale unit volumes
support desired vary with in
dealer inventory thethe
level of total
event industry
of supplier demand and
disruptions our share
or other typesofofthat industry affecting
disruptions [Link] Our
wholesale
[Link]
share isalso are influenced
influenced by how by ourthe level ofare
products dealer inventory,
perceived and our ability
by customers to maintaintosufficient
in comparison production
those offered by
levels to support desired
other manufacturers based dealer inventory
on many in the
factors, event of
including supplier
price, disruptions
quality, or other types
styling, reliability, offuel
safety, disruptions affecting
efficiency, our
functionality,
production. Our
sustainability, andshare is influenced
reputation. by how
Our share alsoouris products
affected by arethe
perceived
timing andby frequency
customersof in new
comparison to those offered
model introductions. Ourby
other
abilitymanufacturers based
to satisfy changing on manyand
consumer factors, including
business price, quality,
preferences styling, to
with respect reliability, safety,
type or size fuel efficiency,
of vehicle, as wellfunctionality,
as design
sustainability,
and performance andcharacteristics
reputation. Our andshare also is affected
the services by theoffer,
our vehicles timing and frequency
affects our sales of andnew model significantly.
earnings introductions. Our
ability to satisfy changing consumer and business preferences with respect to type or size of vehicle, as well as design
and Asperformance
with other characteristics
manufacturers,and the the servicesofour
profitability ourvehicles
business offer, affects our
is affected sales factors,
by many and earnings significantly.
including:

As
• with other manufacturers,
Wholesale unit volumes the profitability of our business is affected by many factors, including:
• Margin of profit on each vehicle sold - which, in turn, is affected by many factors, such as:
• Wholesale
◦ Market unit volumes
factors - volume and mix of vehicles and options sold, and net pricing (reflecting, among other factors,
• Margin of profit on each vehicle sold - which, in turn, is affected by many factors, such as:
incentive programs)
◦◦ Market
Costs offactors - volume
components and
and rawmix of vehicles
materials and options
necessary sold, and of
for production net pricing (reflecting, among other factors,
vehicles
incentive programs)
◦ Costs for customer warranty claims and additional service actions
◦◦ Costs
Costs offorcomponents and raw
safety, emissions, and materials necessary
fuel economy for production
technology of vehicles
and equipment
◦ Costs for customer warranty claims and additional service actions
• A high proportion of relatively fixed structural costs, so that small changes in wholesale unit volumes can
◦significantly
Costs foraffect
safety, emissions,
overall and fuel economy technology and equipment
profitability
• A high proportion of relatively fixed structural costs, so that small changes in wholesale unit volumes can
significantly
Although supply affect overallhave
disruptions profitability
resulted in near-term upward pressure on new vehicle prices, our industry has
historically had a very competitive pricing environment, driven in part by excess capacity. For the past several decades,
Although supply
manufacturers disruptions
typically haveprice
have offered resulted in near-term
discounts upward
and other pressure
marketing on newto
incentives vehicle
provideprices,
valueour
for industry hasand
customers
historically had a very competitive pricing environment, driven in part by excess capacity. For the past
maintain market share and production levels, and we saw some of these actions resume in 2023 with more expected in several decades,
manufacturers
2024 as industry typically haveand
production offered price discounts
inventories [Link] marketing
decline in valueincentives
of foreigntocurrencies
provide value for customers
can also contributeand
maintain market share and production levels, and we saw
significantly to competitive pressures in many of our markets. some of these actions resume in 2023 with more expected in
2024 as industry production and inventories improve. The decline in value of foreign currencies can also contribute
significantly to competitive
Competitive pressures
Position. The in many
worldwide of our markets.
automotive industry consists of many producers, with no single dominant
producer. Certain manufacturers, however, account for the major percentage of total sales within particular countries,
Competitive
especially Position. ofThe
their countries worldwide automotive industry consists of many producers, with no single dominant
origin.
producer. Certain manufacturers, however, account for the major percentage of total sales within particular countries,
especially their countries of origin.
3

199174_Ford_2023_AR_1OK.indd 7 2/9/24 2:53 PM

 Item 1. Business (Continued)

ItemSeasonality.
1. Business We (Continued)
manage our vehicle production schedule based on a number of factors, including retail sales
(i.e., units sold by our dealerships to their customers at retail) and dealer stock levels (i.e., the number of units held in
Seasonality.
inventory We managefor
by our dealerships our vehicle
sale production
to their customers).schedule based we
Historically, on ahave
number of factors,
experienced someincluding retailfluctuation
seasonal sales in
(i.e.,
the business, with production in many markets tending to be higher in the first half of the year to meet demand held
units sold by our dealerships to their customers at retail) and dealer stock levels (i.e., the number of units in thein
inventory
spring andbysummer
our dealerships
(typically for
thesale to theirsales
strongest customers).
months of Historically,
the year). we have experienced some seasonal fluctuation in
the business, with production in many markets tending to be higher in the first half of the year to meet demand in the
spring
Raw and summer (typically
Materials. We purchasethe strongest sales of
a wide variety months of the year).
raw materials from numerous suppliers around the world for use in the
production of, and development of technologies in, our vehicles. These materials include base metals (e.g., steel and
preciousWe
Raw Materials.
aluminum), purchase
metals a wide variety
(e.g., palladium), of raw
energy materials
(e.g., naturalfrom numerous
gas), suppliers around
and plastics/resins the world for use
(e.g., polypropylene). Asinwethe
productiontoof,
transition and development
a greater of technologies
mix of electric vehicles, wein, our vehicles.
expect to increaseThese
our materials
reliance on include
lithium, base metals
cobalt, (e.g.,
nickel, steel and
graphite, and
aluminum), precious
manganese, among othermetals (e.g., palladium),
materials, energy
for batteries. We(e.g.,
expectnatural gas),
to have and plastics/resins
adequate supplies or (e.g., sources polypropylene).
of availability ofAsrawwe
transition
materials to a greatertomix
necessary of electric
meet vehicles,
our needs; however,we expect to increase
there always our reliance
are risks on lithium,with
and uncertainties cobalt, nickel,
respect graphite,
to the supplyandof
manganese,
raw materialsamong other
that could materials,
impact for batteries.
availability We expect
in sufficient quantitiesto have
and atadequate supplies
cost effective or sources
prices to meet of availability
our needs. See of raw
materials
“Item necessary
1A. Risk Factors” to meet our needs; of
for a discussion however,
the risksthere always with
associated are risks and uncertainties
a shortage of components with orrespect to the supply
raw materials, of
supplier
raw materials
disruptions, that
and could impact
inflationary availability
pressures, the in sufficient
“Key Trendsquantities
and Economicand atFactors
cost effective
Affecting prices
Fordtoand meet
theour needs. See
Automotive
“Item 1A. section
Industry” Risk Factors”
of Itemfor a discussion
7 for a discussionof the risks associated
of supplier disruptions,withasa well
shortage of components
as commodity or rawprice
and energy materials,
changes,supplier
and
disruptions, and inflationary pressures, the “Key Trends and Economic Factors Affecting Ford
“Item 7A. Quantitative and Qualitative Disclosures about Market Risk” (“Item 7A”) for a discussion of commodity price and the Automotive
Industry” section of Item 7 for a discussion of supplier disruptions, as well as commodity and energy price changes, and
risks.
“Item 7A. Quantitative and Qualitative Disclosures about Market Risk” (“Item 7A”) for a discussion of commodity price
risks.
Intellectual Property. We own or hold licenses to use numerous patents, trade secrets, copyrights, and trademarks on
a global basis. We expect to continue building this portfolio as we actively pursue innovation in every part of our
Intellectual
business. Property.
We also We own or
own numerous hold licenses
trademarks and to use numerous
service marks that patents, trade
contribute to secrets,
the identity copyrights, and trademarks
and recognition of our on
a global basis. We expect to continue building this portfolio as we actively pursue innovation
Company and its products and services globally. While our intellectual property rights in the aggregate are important to in every part of our
business.
the operation Weofalso
each ownof numerous trademarks
our businesses, we do and service that
not believe marks ourthat contribute
business wouldto the identity and
be materially recognition
affected by theofexpiration
our
Company and its products and services globally. While our intellectual property rights in
of any particular intellectual property right or termination of any particular intellectual property agreement. the aggregate are important to
the operation of each of our businesses, we do not believe that our business would be materially affected by the expiration
of any particular
Warranty intellectual
Coverage, property
Field Serviceright or termination
Actions, of anySatisfaction
and Customer particular intellectual
Actions. We property
provide agreement.
warranties on vehicles we
sell. Warranties are offered for specific periods of time and/or mileage and vary depending upon the type of product and
Warranty Coverage,
the geographic location ofField Service
its sale. Actions,
Pursuant to and
theseCustomer Satisfaction
warranties, Actions.
we will repair, We provide
replace, or adjustwarranties
parts on aonvehicle
vehicles
thatwe
sell. Warranties are offered for specific periods of time and/or mileage and vary depending upon the type
are defective in factory-supplied materials or workmanship during the specified warranty period. In addition to the costs of product and
the geographic location of its sale. Pursuant to these warranties, we will repair, replace, or adjust parts on
associated with this warranty coverage provided on our vehicles, we also incur costs as a result of field service actions a vehicle that
are
(i.e.,defective in factory-supplied
safety recalls, emission recalls,materials or workmanship
and other during the
product campaigns) specified
and warranty
for customer period. In
satisfaction addition to the costs
actions.
associated with this warranty coverage provided on our vehicles, we also incur costs as a result of field service actions
(i.e.,For
safety recalls,information
additional emission recalls, andwarranty
regarding other product campaigns)
and related costs,and
see for customer
“Critical satisfaction
Accounting [Link] Item 7 and
Estimates”
Note 25 of the Notes to the Financial Statements.
For additional information regarding warranty and related costs, see “Critical Accounting Estimates” in Item 7 and
Note 25 of the Notes to the Financial Statements.

199174_Ford_2023_AR_1OK.indd 8 2/9/24 2:53 PM

 Item 1. Business (Continued)

Item 1. Business (Continued)

Wholesales

Wholesales
Wholesales consist primarily of vehicles sold to dealerships. For the majority of such sales, we recognize revenue
when we ship the vehicles to our dealerships from our manufacturing facilities. See Item 7 for additional discussion of
Wholesales
revenue consist
recognition primarily
practices. of vehiclesinsold
Wholesales to dealerships.
certain key marketsFor the majority
during the past of such
three sales,
years we as
were recognize
follows:revenue
when we ship the vehicles to our dealerships from our manufacturing facilities. See Item 7 for additional discussion of
Wholesales (a)
revenue recognition practices. Wholesales in certain key markets during the past three years were as follows:
(in thousands of units)
Wholesales (a)
2021 2022 2023
(in thousands of units)
United States 1,716 2,012 2,097
2021 2022 2023
China (b) 649 495 467
United States 1,716 2,012 2,097
Canada 233 258 260
China (b) 649 495 467
United Kingdom 227 263 243
Canada 233 258 260
Germany 152 182 162
United Kingdom 227 263 243
Türkiye 72 85 124
Germany 152 182 162
Italy (c) 93 107 122
Türkiye 72 85 124
France (c) 77 90 104
Italy (c) 93 107 122
Other Markets 723 739 834
France (c) 77 90 104
Total Company 3,942 4,231 4,413
Other Markets 723 739 834
__________
(a) Total Company
Wholesale unit volumes include sales of medium and heavy trucks. Wholesale unit volumes also include 3,942 4,231badged units 4,413
all Ford and Lincoln
(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
(a) manufacturers, units distributed
Wholesale unit volumes include by Ford
sales of for other and
medium manufacturers,
heavy trucks. local brand units
Wholesale unitproduced
volumes by ourinclude
also unconsolidated Chinese
all Ford and Lincoln joint venture
badged Jiangling
units
Motors
(whetherCorporation,
produced by Ltd.
Ford(“JMC”)
or by that are sold to dealerships
an unconsolidated or others,
affiliate) that andtofrom
are sold the second
dealerships quarterunits
or others, of 2021, Ford badged
manufactured vehicles
by Ford that produced
are sold toinother
Taiwan by Lio Ho
manufacturers, Group.
units Vehicles
distributed by sold
Fordtofordaily
otherrental car companies
manufacturers, localthat areunits
brand subject to a guaranteed
produced repurchase option
by our unconsolidated (i.e.,joint
Chinese rental repurchase),
venture Jianglingas
well as other
Motors sales ofLtd.
Corporation, finished vehicles
(“JMC”) forsold
that are which
to the recognition
dealerships of revenue
or others, and is deferred
from (e.g., consignments),
the second quarter of 2021,alsoFordare included
badged in wholesale
vehicles producedunit
in
volumes.
Taiwan by Revenue from certain
Lio Ho Group. vehicles
Vehicles sold toindaily
wholesale unitcompanies
rental car volumes (specifically, Ford to
that are subject badged vehiclesrepurchase
a guaranteed produced and distributed
option by our
(i.e., rental repurchase), as
unconsolidated affiliates,
well as other sales as well
of finished as JMC
vehicles forbrand
whichvehicles) are notof
the recognition included
revenueinisour revenue.
deferred (e.g., consignments), also are included in wholesale unit
(b) China includes
volumes. Taiwan.
Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles produced and distributed by our
(c) Not previously presented.
unconsolidated affiliates, as well as JMC brand vehicles) are not included in our revenue.
(b) China includes Taiwan.
(c)
Sales,Not Industry
previously presented.
Volume, and Market Share

Sales, Industry
Sales, Volume,
industry and
volume, andMarket
marketShare
share in certain key markets during the past three years were as follows:

Sales, industry volume, and market share in certain key markets during the past three years were as follows:
Sales (a) Industry Volume (b) Market Share (c)
(in millions of units) (in millions of units) (as a percentage)
Sales (a) Industry Volume (b) Market Share (c)
2021 2022 2023 2021 2022 2023 2021 2022 2023
(in millions of units) (in millions of units) (as a percentage)
United States 1.9 1.9 2.0 15.4 14.2 16.1 12.4 % 13.1 % 12.4 %
2021 2022 2023 2021 2022 2023 2021 2022 2023
China (d) 0.6 0.5 0.5 26.3 23.9 25.1 2.4 2.1 1.8
United States 1.9 1.9 2.0 15.4 14.2 16.1 12.4 % 13.1 % 12.4 %
Canada 0.2 0.2 0.2 1.7 1.6 1.8 14.3 15.2 13.7
China (d) 0.6 0.5 0.5 26.3 23.9 25.1 2.4 2.1 1.8
United Kingdom 0.2 0.2 0.2 2.0 1.9 2.3 11.8 12.1 10.8
Canada 0.2 0.2 0.2 1.7 1.6 1.8 14.3 15.2 13.7
Germany 0.2 0.2 0.2 3.0 3.0 3.2 5.7 5.7 5.1
United Kingdom 0.2 0.2 0.2 2.0 1.9 2.3 11.8 12.1 10.8
Türkiye 0.1 0.1 0.1 0.8 0.8 1.3 9.7 10.5 8.9
Germany 0.2 0.2 0.2 3.0 3.0 3.2 5.7 5.7 5.1
Italy (e) 0.1 0.1 0.1 1.7 1.5 1.8 6.2 6.4 6.1
Türkiye 0.1 0.1 0.1 0.8 0.8 1.3 9.7 10.5 8.9
France (e) 0.1 0.1 0.1 2.1 2.0 2.3 3.4 3.9 3.9
Italy (e) 0.1 0.1 0.1 1.7 1.5 1.8 6.2 6.4 6.1
__________
France
(a) (e)
Represents primarily sales by dealers, sales to0.1the government,
0.1 0.1 to Ford2.1
and leases 2.0 and is based,
management, 2.3 in part,
3.4on estimated
3.9 vehicle 3.9
registrations;
__________ includes medium and heavy trucks.
(b)
(a) Industry
Represents volume is ansales
primarily internal
by estimate basedtoon
dealers, sales publicly
the available
government, anddata collected
leases to Fordfrom various government,
management, private,
and is based, and on
in part, public sources
estimated around the
vehicle
globe; includes
registrations; medium
includes and heavy
medium and trucks.
heavy trucks.
(c)
(b) Market
Industryshare
volumerepresents reported
is an internal retail based
estimate sales of
onour brands
publicly as a percent
available of total industry
data collected volume
from various in the relevant
government, market
private, andorpublic
region.
sources around the
(d) China
globe; includes
includes Taiwan;
mediumChina market
and heavy share includes Ford brand and JMC brand vehicles produced and sold by our unconsolidated affiliates.
trucks.
(e)
(c) Not
Marketpreviously [Link] retail sales of our brands as a percent of total industry volume in the relevant market or region.
share represents
(d) China includes Taiwan; China market share includes Ford brand and JMC brand vehicles produced and sold by our unconsolidated affiliates.
(e) Not previously presented.

199174_Ford_2023_AR_1OK.indd 9 2/9/24 2:53 PM

 Item 1. Business (Continued)

Item Sales
U.S. 1. Business (Continued)
by Type

[Link]
Sales by Type
following table shows U.S. sales volume and U.S. wholesales (consisting primarily of vehicles sold to
dealerships) segregated by electric, hybrid, and internal combustion vehicles. U.S. sales volume represents primarily
The
sales by following table to
dealers, sales shows U.S. sales volume
the government, and U.S.
and leases wholesales
to Ford (consisting
management, and isprimarily
based, inof part,
vehicles sold to vehicle
on estimated
dealerships) segregated by electric, hybrid, and
registrations and includes medium and heavy trucks. 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
2022 2023 2022 2023
U.S. Sales U.S. Wholesales
Electric Vehicles 61,575 72,608 71,418 99,928
2022 2023 2022 2023
Hybrid Vehicles 106,705 133,743 101,662 146,249
Electric Vehicles 61,575 72,608 71,418 99,928
Internal Combustion Vehicles 1,696,184 1,789,561 1,839,265 1,850,448
Hybrid Vehicles 106,705 133,743 101,662 146,249
Total Vehicles 1,864,464 1,995,912 2,012,345 2,096,625
Internal Combustion Vehicles 1,696,184 1,789,561 1,839,265 1,850,448
Total Vehicles 1,864,464 1,995,912 2,012,345 2,096,625
FORD NEXT SEGMENT

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

199174_Ford_2023_AR_1OK.indd 10 2/9/24 2:53 PM

 Item 1. Business (Continued)

Item 1. CREDIT
FORD Business (Continued)
SEGMENT

FORDTheCREDIT SEGMENT
Ford Credit segment is comprised of the Ford Credit business on a consolidated basis, which is primarily vehicle-
related financing and leasing activities.
The Ford Credit segment is comprised of the Ford Credit business on a consolidated basis, which is primarily vehicle-
related
Fordfinancing and leasing
Credit offers activities.
a wide variety of automotive financing products to and through automotive dealers throughout the
world. The predominant share of Ford Credit’s business consists of financing our vehicles and supporting our
Ford Ford
dealers. CreditCredit
offersearns
a wide itsvariety
revenueof primarily
automotive financing
from products
payments made to and retail
under through automotive
installment saledealers throughout
and finance lease the
world. The predominant share of Ford Credit’s business consists of financing our vehicles and supporting
(retail financing) and operating lease contracts that it originates and purchases; interest rate supplements and other our
dealers. Ford Credit
support payments earns
from us andits revenue primarily
our affiliates; andfrom payments
payments mademade
under under retail
dealer installment
financing sale and finance lease
programs.
(retail financing) and operating lease contracts that it originates and purchases; interest rate supplements and other
support
As apayments from us
result of these and ouractivities,
financing affiliates;Ford
and Credit
payments
has made
a largeunder dealer
portfolio financing
of finance [Link] operating leases
receivables
which it classifies into two portfolios —“consumer” and “non-consumer.” Finance receivables and operating leases in the
As a result
consumer of these
portfolio financing
include productsactivities,
offered Ford Credit has
to individuals anda large portfolio
businesses of finance
that finance thereceivables andofoperating
acquisition leases
our vehicles from
which it classifies into two portfolios —“consumer” and “non-consumer.” Finance receivables
dealers for personal and commercial use. Retail financing includes retail installment sale contracts for new and used and operating leases in the
consumer
vehicles and portfolio
finance include
leasesproducts offered
(comprised to individuals
of sales-type and and businesses
direct that finance
financing leases) the vehicles
for new acquisition of ourand
to retail vehicles from
dealers for personal and commercial use. Retail financing includes retail installment sale contracts
commercial customers, including leasing companies, government entities, daily rental companies, and fleet customers. for new and used
vehicles and finance leases (comprised of sales-type and direct financing leases) for new
Finance receivables in the non-consumer portfolio include products offered to automotive dealers. Ford Credit makes vehicles to retail and
commercial
wholesale loans customers,
to dealersincluding leasing
to finance the companies,
purchase of government entities,
vehicle inventory, alsodaily
knownrental
ascompanies, and fleetas
floorplan financing, customers.
well as
Finance receivables in the non-consumer portfolio include products offered to automotive dealers.
loans to dealers to finance working capital and improvements to dealership facilities, finance the purchase of dealership Ford Credit makes
wholesale loans to dealers to finance the purchase of vehicle inventory, also known as floorplan
real estate, and finance other dealer vehicle programs. Ford Credit also purchases receivables generated by us and financing, as well as our
loans to dealers
affiliates, primarily to related
financetoworking capital
the sale andand
of parts improvements
accessoriesto todealership
dealers and facilities,
certain finance the purchase
used vehicles of dealership
from daily rental fleet
real estate, and
companies. Fordfinance
Creditother dealer vehicle
also provides programs.
financing to us forFord Credit
vehicles also
that wepurchases
lease to our receivables
employees. generated by us and our
affiliates, primarily related to the sale of parts and accessories to dealers and certain used vehicles from daily rental fleet
companies.
The majorityFordofCredit
Ford also provides
Credit’s financing
business to us
is in the for vehicles
United States andthatCanada.
we lease Outside
to our employees.
of the United States, Europe is
Ford Credit’s largest operation. Ford Credit’s European operations are managed primarily through its United Kingdom-
The
based majority ofFCE
subsidiary, FordBank
Credit’s businessWithin
plc (“FCE”). is in the UnitedFord
Europe, States and Canada.
Credit’s Outsideare
largest markets of the
the United
United States,
Kingdom Europe
and is
Ford Credit’s largest operation. Ford Credit’s European operations are managed primarily through its United Kingdom-
Germany.
based subsidiary, FCE Bank plc (“FCE”). Within Europe, Ford Credit’s largest markets are the United Kingdom and
Germany.
See Item 7 and Notes 10 and 12 of the Notes to the Financial Statements for a detailed discussion of Ford Credit’s
receivables, credit losses, allowance for credit losses, loss-to-receivables ratios, funding sources, and funding strategies.
SeeSee
ItemItem 7 and
7A for Notes 10 of
a discussion and
how12Ford
of theCredit
Notesmanages
to the Financial Statements
its financial for a detailed discussion of Ford Credit’s
market risks.
receivables, credit losses, allowance for credit losses, loss-to-receivables ratios, funding sources, and funding strategies.
SeeWe
Itemroutinely
7A for asponsor
discussion of how
special Ford
retail Credit manages
financing and leaseits financial to
incentives market risks.
dealers’ customers who choose to finance or
lease our vehicles from Ford Credit. In order to compensate Ford Credit for the lower interest or lease payments offered
We
to the routinely
retail sponsor
customer, special
we pay the retail financing
discounted and
value oflease incentives
the incentive to dealers’
directly to Fordcustomers whoit choose
Credit when to finance
originates or
the retail
lease our vehicles from Ford Credit. In order to compensate Ford Credit for the lower interest or lease
finance or lease contract with the dealer’s customer. These programs increase Ford Credit’s financing volume and payments offered
to the retail
share. See customer, we pay
Note 2 of the thetodiscounted
Notes value
the Financial of the incentive
Statements directly to
for information Fordour
about Credit when it for
accounting originates the retail
these programs.
finance or lease contract with the dealer’s customer. These programs increase Ford Credit’s financing volume and
share.
We See
haveNote 2 ofAmended
a Third the Notesand
to the Financial
Restated Statements
Relationship for information
Agreement aboutCredit,
with Ford our accounting
pursuant toforwhich,
these ifprograms.
Ford Credit’s
financial statement leverage for a calendar quarter were to be higher than 12.5:1 (as reported in its most recent periodic
We Ford
report), have Credit
a Thirdcould
Amended
requireandusRestated Relationship
to make or cause to be Agreement with Ford
made a capital Credit, pursuant
contribution to it in antoamount
which, sufficient
if Ford Credit’s
to
financial statement leverage for a calendar quarter were to be higher than 12.5:1 (as reported in its most
have caused such financial statement leverage to have been 12.5:1. No capital contributions have been made pursuant recent periodic
report), Ford Credit In
to this agreement. could require agreement
a separate us to makewith
or cause
FCE, to be made
Ford Credit ahas
capital contribution
agreed to itFCE’s
to maintain in an net
amount
worthsufficient
in excessto of
have caused such financial statement leverage to have been
$500 million. No payments have been made pursuant to that agreement. 12.5:1. No capital contributions have been made pursuant
to this agreement. In a separate agreement with FCE, Ford Credit has agreed to maintain FCE’s net worth in excess of
$500Ford
million. Nofiles
Credit payments
periodichave been
reports made
with pursuant
the SEC that to that agreement.
contain additional information regarding Ford Credit. The reports
are available through Ford Credit’s website located at [Link]/finance/investor-center and can also be found on the
Ford
SEC’s Creditlocated
website files periodic reports with the SEC that contain additional information regarding Ford Credit. The reports
at [Link].
are available through Ford Credit’s website located at [Link]/finance/investor-center and can also be found on the
SEC’s
Thewebsite located
foregoing at [Link].
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 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.

199174_Ford_2023_AR_1OK.indd 11 2/9/24 2:53 PM

 Item 1. Business (Continued)

Item 1. Business
CORPORATE (Continued)
OTHER

CORPORATE OTHER
Corporate Other primarily includes corporate governance expenses, past service pension and other postretirement
employee benefits (“OPEB”) income and expense, interest income (excluding Ford Credit interest income and interest
Corporate
earned Other primarily
on our extended includes
service corporate
contract portfolio)governance expenses,
and gains and past our
losses from service pension
cash, and other postretirement
cash equivalents, and marketable
employee benefits (“OPEB”) income and expense, interest income (excluding Ford Credit interest
securities (excluding gains and losses on investments in equity securities), and foreign exchange derivativesincome andgains
interest
and
earned on our extended service contract portfolio) and gains and losses from our cash, cash equivalents,
losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering and marketable
securities
benefit on (excluding gains
behalf of the andenterprise,
global losses on that
investments in equity to
are not allocated securities),
operatingand foreign exchange
segments. derivatives
These include gains
expenses and to
related
losses associated with intercompany lending. Corporate governance expenses are primarily administrative,
setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. delivering
benefit on behalf of the global enterprise, that are not allocated to operating segments. These include expenses related to
setting
INTERESTand directing
ON DEBTglobal policy, providing oversight and stewardship, and promoting the Company’s interests.

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

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

GOVERNMENTAL
Many governmentalSTANDARDS
standards and regulations relating to safety, fuel economy, air pollution emissions control, noise
control, vehicle recycling, substances of concern, vehicle damage, and theft prevention are applicable to new motor
Manyengines,
vehicles, governmental standards and
and equipment. regulations
In addition, relating to safety,
manufacturing fuelautomotive
and other economy, air pollutionfacilities
assembly emissions are control,
subject noise
to
control, vehicle recycling, substances of concern, vehicle damage, and theft prevention are applicable to
stringent standards regulating air emissions, water discharges, and the handling and disposal of hazardous [Link] motor
vehicles,
The mostengines, and
significant of equipment.
the standardsIn and
addition, manufacturing
regulations affectingand other
us are automotive
discussed assembly facilities are subject to
below:
stringent standards regulating air emissions, water discharges, and the handling and disposal of hazardous substances.
The
U.S. most significant
Vehicle Emissionsof theStandards
standards and
and Fuel
regulations
Economyaffecting us are discussed below:

[Link]
Vehicleand Emissions
CaliforniaStandards
Emissionsand Fuel Economy
Standards. Both the U.S. Environmental Protection Agency (“EPA”) and the
California Air Resources Board (“CARB”) have established motor vehicle tailpipe and evaporative emissions standards
that Federal
becomeand Californiastringent
increasingly Emissions Standards.
over Both the
time. In addition toU.S. Environmental
regulating emissionsProtection
of certainAgency
pollutants(“EPA”) and the
for which EPA has
California
adopted ambient health-based standards, EPA and CARB also regulate greenhouse gas (“GHG”) emissions standards
Air Resources Board (“CARB”) have established motor vehicle tailpipe and evaporative emissions from
that become
vehicles. As increasingly
of Decemberstringent
31, 2023, over time. Instates
seventeen addition to regulating
(referenced emissions
as “opt-in” of certain
states) pollutants
have adopted for which
CARB’s EPA has
light-duty
adopted ambient health-based standards, EPA and CARB also regulate greenhouse gas (“GHG”)
emissions standards, and nine opt-in states have adopted California’s heavy-duty standards. The list of opt-in states emissions from
vehicles.
changes over As oftime,
December
based on31,the
2023, seventeen
legislative and states (referenced
regulatory actions as
by “opt-in” states) have
each individual [Link] CARB’s
Both federal andlight-duty
California
emissions standards, and nine opt-in states have adopted California’s heavy-duty standards.
regulations also require motor vehicles and motor vehicle engines to be equipped with on-board diagnostic (“OBD”) The list of opt-in states
changes over time, based on the legislative and regulatory actions by each individual state.
systems that monitor emission-related systems and components. Light- and medium-duty vehicles and heavy-duty Both federal and California
regulations also require
engines or vehicles mustmotor vehicles
be certified byand
EPAmotor
prior vehicle
to sale in engines to beStates
the United equipped
and with on-board
by CARB priordiagnostic (“OBD”) and
to sale in California
systems that monitor emission-related systems and components. Light- and medium-duty vehicles
the relevant opt-in states. Canada accepts EPA certification. Compliance with emissions standards, OBD requirements, and heavy-duty
engines or vehicles
and related must
regulations canbebecertified by EPA
challenging prior
and cantodrive
sale increased
in the United States
product and by CARB
development priorhigher
costs, to saleretail
in California
prices, and
the relevant opt-in states. Canada
warranty costs, and vehicle recalls. accepts EPA certification. Compliance with emissions standards, OBD requirements,
and related regulations can be challenging and can drive increased product development costs, higher retail prices,
warranty costs,
For light- andand vehicle recalls.
medium-duty passenger cars and light trucks, EPA promulgated a rule in 2021 establishing GHG
standards applicable from model years 2023 through 2026. This rule reversed a rollback of GHG standards that EPA had
For light-
previously and medium-duty
promulgated in [Link]
The 2021 cars
rule and
is thelight trucks,
subject EPA
of a promulgated
pending a rule in 2021
legal challenge, with aestablishing GHG
court decision expected
standards
in 2024. In 2023, EPA proposed more stringent standards regulating GHG emissions and criteria pollutants—withEPA
applicable from model years 2023 through 2026. This rule reversed a rollback of GHG standards that had
other
previously promulgated in 2020. The 2021 rule is the subject of a pending legal challenge, with
updates to durability, warranty, and OBD requirements—for light- and medium-duty vehicles that would phase in from a court decision expected
in 2024.
model In 2023,
years 2027 EPA proposed
through 2032. more
These stringent
standardsstandards regulating
are expected to beGHG emissions
finalized in the and criteria
first half pollutants—with
of 2024. The new other
updates
regulations are expected to be substantially more stringent than current standards, and are intended to drive ainsignificant
to durability, warranty, and OBD requirements—for light- and medium-duty vehicles that would phase from
model years 2027 through 2032. These standards are expected to be finalized in the first half of
increase in electric vehicle sales mix along with emissions reductions from internal combustion vehicles. The EPA rules 2024. The new
regulations
are thereforeare expected
expected to to be substantially
impose increased more stringent
challenges andthan
costscurrent standards,
for light-duty andmanufacturers,
vehicle are intended toincluding
drive a significant
Ford.
increase in electric vehicle sales mix along with emissions reductions from internal combustion vehicles. The EPA rules
are therefore expected
In 2019, EPA revokedto impose increased
California’s challenges
authority to set and and costs for
enforce light-duty
its own vehicle
vehicle GHGmanufacturers, including
standards that apply Ford.
through
model year 2025, together with the authority of the opt-in states to implement California’s standards. During this time,
FordInreached
2019, EPA revoked California’s
an agreement authority
with California on atoset
setofand
termsenforce
for anitsalternative
own vehicle GHG standards
framework in which that
Fordapply through
committed to
modelayear
meet 2025, together
designated with the authority
set of standards of thebasis
on a national opt-inforstates
modeltoyears
implement California’s
2021 through 2026standards.
that were During this time,
more stringent than
Fordthen-rolled
the reached an agreement
back with California
federal standards in lieuonofathe
setCalifornia
of terms for an alternative
regulatory framework
program. in which Ford
This framework committed
enabled Ford to to
meet a designated
continue its productset of standards
planning on a national
on a nationwide basis
basis. for model
EPA’s years
2021 rule 2021 through
established GHG 2026 that were
standards thatmore stringent
are more than
stringent
the
thanthen-rolled backframework
this California federal standards in lieu
agreement. of the California
Further, in 2022, EPA regulatory
reversed program.
the 2019This framework
revocation enabled Ford
of California’s to
authority to
continue its product
set and enforce planning
its own onGHG
vehicle a nationwide
standards. basis.
ThatEPA’s 2021
reversal is rule
also established GHG
the subject of standards
a legal that with
challenge, are more stringent
a court
than this expected
decision Californiainframework
2024. agreement. Further, in 2022, EPA reversed the 2019 revocation of California’s authority to
set and enforce its own vehicle GHG standards. That reversal is also the subject of a legal challenge, with a court
decision expected in 2024.

199174_Ford_2023_AR_1OK.indd 12 2/9/24 2:53 PM

 Item 1. Business (Continued)

ItemIn1.2022,
Business
CARB (Continued)
adopted new light-duty emissions standards applicable to vehicles beginning in model year 2026 as
part of its new Advanced Clean Cars II (“ACC II”) regulations. ACC II includes more stringent emissions standards and
otherInnew2022, CARB adopted
emissions new light-duty
requirements, with theemissions
stated goal standards
of 100% applicable to vehicles
electrification beginning in
of new passenger carsmodel
and year
trucks2026 as
by 2035.
part of its new Advanced Clean Cars II (“ACC II”) regulations. ACC II includes more stringent emissions
EPA has yet to take final action on CARB’s request for a waiver of federal preemption for the ACC II standards, which will standards and
other new emissions
be necessary requirements,
before they with the The
can be enforced. stated goal of 100%
expected electrification
court ruling of new
in the legal passenger
challenge carsreversal
to EPA’s and trucks by 2035.
of the
EPA
revocation of California’s authority could also impact EPA’s action on CARB’s request for a waiver of preemption for ACCwill
has yet to take final action on CARB’s request for a waiver of federal preemption for the ACC II standards, which II.
be necessary before they can be enforced. The expected court ruling in the legal challenge to EPA’s reversal of the
revocation of California’s authority could also impact EPA’s action on CARB’s request for a waiver of preemption for ACC
CARB has also adopted new emissions regulations applicable to model year 2024 and later heavy-duty engines, as
II.
well as extended heavy-duty warranty requirements beginning with model year 2022. EPA has granted waivers of
preemption for some of CARB’s heavy-duty standards, and is expected to grant or deny waivers for the remaining
CARB has also adopted new emissions regulations applicable to model year 2024 and later heavy-duty engines, as
standards in 2024 (agency action which could be impacted by the outcome of the litigation over the waiver for CARB’s
well as extended heavy-duty warranty requirements beginning with model year 2022. EPA has granted waivers of
light-duty standards). EPA itself has adopted more stringent heavy-duty criteria emissions standards, beginning with the
preemption for some of CARB’s heavy-duty standards, and is expected to grant or deny waivers for the remaining
2027 model year, and proposed more stringent heavy-duty GHG emissions standards, also beginning with the 2027
standards in 2024 (agency action which could be impacted by the outcome of the litigation over the waiver for CARB’s
model year, which are expected to be finalized in the first half of 2024. These rules include more stringent emissions
light-duty standards). EPA itself has adopted more stringent heavy-duty criteria emissions standards, beginning with the
standards, as well as new requirements affecting durability testing, warranty, and OBD. In Ford’s case, the heavy-duty
2027 model year, and proposed more stringent heavy-duty GHG emissions standards, also beginning with the 2027
emissions standards—as well as the fuel economy standards discussed below—primarily affect heavy-duty pickup trucks
model year, which are expected to be finalized in the first half of 2024. These rules include more stringent emissions
and vans, as well as vocational vehicles such as shuttle buses and delivery trucks. As the heavy-duty standards increase
standards, as well as new requirements affecting durability testing, warranty, and OBD. In Ford’s case, the heavy-duty
in stringency, it may become
emissions standards—as wellmore difficult
as the to complystandards
fuel economy while continuing
discussed to offer a full lineup of
below—primarily heavy-duty
affect trucks.
heavy-duty pickup trucks
and vans, as well as vocational vehicles such as shuttle buses and delivery trucks. As the heavy-duty standards increase
The new rules
in stringency, it maypromulgated
become more by difficult
EPA and toCARB
complyare expected
while continuingto impose
to offerincreased
a full lineupchallenges and costs
of heavy-duty on Ford and
trucks.
other manufacturers of light-, medium-, and heavy-duty vehicles and engines. Stringent federal or state agency fuel
economy
The newandrules
GHGpromulgated
standards that by are
EPAmisaligned
and CARBwith are market
expected conditions
to impose could also force
increased Ford to and
challenges takecosts
variouson actions
Ford and
that could have substantial adverse effects on its sales volumes and operations.
other manufacturers of light-, medium-, and heavy-duty vehicles and engines. Stringent federal or state agency Such actions could include restricting
fuel
offerings
economy of andselected engines and
GHG standards thatpopular options; with
are misaligned taking actions
market to increase
conditions could sales
alsoofforce
Ford’s Fordmost fuel-efficient
to take vehicles;that
various actions
and
couldultimately curtailingadverse
have substantial the production anditssale
effects on salesof volumes
certain internal combustion
and operations. vehicles,
Such actions such as include
could high-performance
restricting cars,
utility
offerings of selected engines and popular options; taking actions to increase sales of Ford’s most fuel-efficientEPA
vehicles, and/or full-size light trucks in order to maintain compliance. The ongoing litigation challenging and
vehicles;
CARB standards and potential future federal reversals and rollbacks create risks for Ford’s
and ultimately curtailing the production and sale of certain internal combustion vehicles, such as high-performance cars, planning and investing for
compliance,
utility vehicles,or and/or
could also potentially
full-size relieve
light trucks in the
order burdens of misalignment
to maintain [Link] the standards with market
ongoing litigation conditions.
challenging EPA and
CARB standards and potential future federal reversals and rollbacks create risks for Ford’s planning and investing for
Compliance
compliance, with automobile
or could also potentially emissions
relievestandards
the burdens depends in part on of
of misalignment thethe widespread
standardsavailability
with marketofconditions.
high-quality and
consistent automotive fuels that the vehicles were designed to use. Legislative, regulatory, and judicial developments
related to fuel quality
Compliance at both the national
with automobile emissions and state levels
standards could in
depends affect
part vehicle manufacturers’
on the widespread warranty
availability ofcosts as well and
high-quality as
their abilityautomotive
consistent to comply with fuelsvehicle
that theemissions
vehicles standards.
were designed to use. Legislative, regulatory, and judicial developments
related to fuel quality at both the national and state levels could affect vehicle manufacturers’ warranty costs as well as
theirCalifornia ZEV Requirements.
ability to comply The California
with vehicle emissions vehicle emissions program includes requirements for manufacturers to
standards.
produce and deliver for sale zero-emission vehicles (“ZEVs”). California’s light-duty vehicle ZEV regulation, which uses a
system based ZEV
California on credits that can beThe
Requirements. banked and carried
California vehicleforward,
emissions mandates
programannual includes increases in the production
requirements for manufacturersand sale to
of battery-electric,
produce and deliver fuel
forcell,
saleand plug-in hybrid
zero-emission vehicles.
vehicles By model
(“ZEVs”). year 2025,
California’s this regulation
light-duty vehicle ZEV will require approximately
regulation, which uses a
22%
system of a manufacturer’s
based on credits that California
can belight-duty
banked and vehicle sales
carried volumemandates
forward, be ZEVs. annualIn ACCincreases
II, California has
in the revised the
production andZEVsale
regulation in a wayfuel
of battery-electric, thatcell,
will and
continue to hybrid
plug-in increase ZEV sales.
vehicles. Beginning
By model with model
year 2025, year 2026,
this regulation the
will revised
require ZEV rule
approximately
22% of a manufacturer’s
mandates a 35% light-duty California
ZEV sales light-duty vehiclerising
requirement, salestovolume
100% by be 2035.
ZEVs. The In ACC II, California
revised regulation hasalsorevised
imposesthe ZEV
regulation in
significant a way thatonwill
restrictions continue
credit usagetoandincrease ZEV sales. Beginning
new requirements for EV batterywith durability.
model yearEPA 2026, theeither
must revised ZEV that
decide rule these
mandatesfall
revisions a 35%
within light-duty
the scope ZEVof sales requirement,
prior waivers rising
of federal to 100% by
preemption 2035. for
granted TheCARB’s
revisedZEV regulation also imposes
amendments or waive
significant restrictions
preemption on credit usage
for these standards beforeandthe new requirements
standards for EV battery
can be enforced. Also,durability.
CaliforniaEPA must either
has instituted ZEVdecide that these
regulations
revisions fall
governing within the
medium- andscope of priorvehicles,
heavy-duty waivers beginning
of federal preemption
with the 2024 granted
modelfor CARB’s
year. These ZEV amendments
stringent or waive
ZEV requirements
preemption
covering for these
light-, medium-,standards before thevehicles
and heavy-duty standards could canyield
be enforced.
significantAlso,
costsCalifornia has instituted
and compliance ZEV regulations
challenges, and include
governing medium- and heavy-duty vehicles, beginning with the 2024 model
complex warranty and recall requirements. As of December 31, 2023, sixteen states have adopted California’s year. These stringent ZEV requirements
ZEV
covering light-, Additionally,
requirements. medium-, and in heavy-duty vehicles
2023, California couldnew
adopted yieldmedium-
significant andcosts and compliance
heavy-duty challenges,
fleet purchase and include
requirements that
complexawarranty
include 100% ZEV andmanufacturer
recall requirements. As of December
sales requirement starting31, 2023, sixteen
in 2036. Compliance stateswithhaveZEV adopted California’s
requirements ZEV on
depends
requirements.
market conditionsAdditionally,
(includinginconsumer
2023, California
preferenceadopted
for andnewthemedium-
pricing ofand heavy-duty
EVs) fleet purchase
in each jurisdiction whererequirements that
the requirements
include
apply a 100%
(such ZEV manufacturer
as California and each sales
opt-inrequirement
state), technologystartingreadiness,
in 2036. Compliance
and battery raw withmaterial
ZEV requirements
availability depends
as well ason the
market conditions
availability (including
of adequate consumer
infrastructure topreference for and
support vehicle the pricing of EVs) in each jurisdiction where the requirements
charging.
apply (such as California and each opt-in state), technology readiness, and battery raw material availability as well as the
availability
FederalofFuel
adequate
Economy infrastructure
Requirements to support vehicleVehicles.
- Light-Duty [Link] law requires that light-duty vehicles meet
minimum corporate average fuel economy (“CAFE”) standards set by the National Highway Traffic Safety Administration
Federal Fuel
(“NHTSA”). Economy Requirements
Manufacturers - Light-Duty
are subject to civil if they failFederal
penaltiesVehicles. to meetlaw
therequires that light-duty
CAFE standard in anyvehicles meetafter
model year,
minimum corporate average fuel economy (“CAFE”) standards set by the National Highway Traffic Safety Administration
taking into account all available credits for the preceding five model years and expected credits for the three succeeding
(“NHTSA”).
model [Link] are NHTSA
The law requires subject to
to civil penalties
promulgate if they
and fail to
enforce meet the
separate CAFE
CAFE standardapplicable
standards in any model year, after
to each
taking into account all available credits for the preceding five model years and expected
manufacturer’s fleet of domestic passenger cars, imported passenger cars, and light-duty trucks. credits for the three succeeding
model years. The law requires NHTSA to promulgate and enforce separate CAFE standards applicable to each
manufacturer’s fleet of domestic passenger cars, imported passenger cars, and light-duty trucks.
9
9

199174_Ford_2023_AR_1OK_r1.indd 13 2/13/24 8:06 PM

 Item 1. Business (Continued)

ItemBecause
1. Business (Continued)
the vast majority of GHGs emitted by a vehicle are the result of fuel combustion, GHG emissions correspond
closely with fuel economy. Historically, NHTSA and EPA have therefore coordinated with each other on their fuel economy
and Because the vastrespectively,
GHG standards, majority of GHGs emitted
to avoid by ainconsistencies.
potential vehicle are the result of fuelwith
Beginning combustion,
the 2012 GHG
modelemissions
year, EPAcorrespond
and
closely with fuel economy. Historically, NHTSA and EPA have therefore coordinated
NHTSA jointly promulgated harmonized GHG and fuel economy regulations under what came to be known with each other on theirasfuel
theeconomy
“One
and GHGProgram”
National standards, respectively,
(“ONP”) to avoid
framework, andpotential
California inconsistencies. Beginning
agreed that compliance with
with the
the 2012 program
federal model year, EPA
would and
satisfy
NHTSA jointly
compliance promulgated
with its own GHG harmonized GHGthereby
requirements, and fuel economy
avoiding regulationsofunder
a patchwork federalwhat
andcame
state to be known In
standards. as2022,
the “One
National Program” (“ONP”) framework, and California agreed that compliance with the federal program
NHTSA finalized more stringent fuel economy standards for model years 2024-2026, which are substantially aligned with would satisfy
compliance
EPA’s GHG with its own These
standards. GHG requirements,
standards arethereby
subject avoiding
to a legalachallenge,
patchworkwithof federal
a courtand state standards.
decision expected inIn 2022,In
2024.
NHTSA finalized more stringent fuel economy standards for model years 2024-2026, which are substantially
2023, NHTSA proposed increasingly stringent fuel economy standards for passenger cars and light trucks in model years aligned with
EPA’s GHG standards. These standards are subject to a legal challenge, with a court decision
2027-2031 and heavy-duty pickup trucks and vans in model years 2030 through 2035. NHTSA proposed these fuel expected in 2024. In
2023, NHTSA
economy proposed
standards increasingly
separately stringent
from EPA’s fuel economy
proposed standardsforforthe
GHG standards passenger
same model carsyears,
and light
andtrucks in clear
it is not modelwhether
years
2027-2031 and heavy-duty pickup trucks and vans in model years 2030 through 2035. NHTSA proposed
the NHTSA and EPA standards will be aligned, or whether they will be aligned with CARB’s ACC II standards. Different these fuel
economy
standardsstandards separately
pose additional from EPA’s
compliance proposed
burdens, GHGcomplexity
including standardsandfor the same model years, and it is not clear whether
costs.
the NHTSA and EPA standards will be aligned, or whether they will be aligned with CARB’s ACC II standards. Different
standards pose additional
Global Vehicle Emissionscompliance
Standardsburdens,
and Fuel including
Economy complexity and costs.

Global VehicleEmissions
European Emissions Standards
Standards. EUand andFuel
[Link]
regulations, directives, and related legislation limit the amount of
regulated pollutants that may be emitted by new motor vehicles and engines sold in the European Union and the United
European
Kingdom. Emissions
Regulatory Standards.
stringency EU and U.K.
has increased regulations,
significantly withdirectives, and related
the application of Stage legislation limit the
VI emission amount(first
standards of
regulated pollutants
introduced in 2014) and that the
mayimplementation
be emitted by new motor vehicles
of a laboratory and engines
test cycle for CO2 soldand in the European
emissions and the Union and the United
introduction of on-
Kingdom.
road emission Regulatory stringency
testing using hasemission
portable increasedanalyzers
significantly with
(Real the application
Driving Emission of or Stage
“RDE”). VI These
emission standards
on-road (first tests
emission
introduced
are in addition in 2014)
to theand the implementation
laboratory-based of a laboratory
tests (first introducedtest cycle for
in 2017). COdivergence
The 2 and emissions between andthetheregulatory
introduction ofthat
limit on- is
road emission testing using portable emission analyzers (Real Driving Emission or “RDE”).
tested in laboratory conditions and the allowed values measured in RDE tests will ultimately be reduced to zero as the These on-road emission tests
are in addition to the laboratory-based tests (first introduced in 2017). The divergence between
regulatory demands increase. In addition, new requirements for tailpipe and non-tailpipe emissions will be included in the the regulatory limit that is
tested in laboratory conditions and the allowed values measured in RDE tests will ultimately
upcoming Euro 7 regulation. The costs associated with complying with all of these requirements are significant, and be reduced to zero as the
regulatory
following the demands increase. In
EU Commission’s addition,ofnew
indication requirements
its intent for tailpipe
to accelerate and non-tailpipe
emissions rules in its roademissions will be included
map publication in the
“EU Green
upcoming Euro 7 regulation. The costs associated with complying with all of these requirements
Deal” as well as the EU sustainable mobility action plan, these challenges will continue in European markets, including the are significant, and
following the EU Commission’s
United Kingdom. In addition, the indication of its intent
Whole Vehicle Type to accelerate
Approval emissions
(“WVTA”) rules inhas
regulation its been
road map publication
updated “EU the
to increase Green
Deal”
stringency of in-market surveillance. Moreover, following the U.K.’s withdrawal from the European Union, we may be the
as well as the EU sustainable mobility action plan, these challenges will continue in European markets, including
United
subjectKingdom.
to diverging In requirements
addition, the Whole Vehicle Type
in our European Approval
markets, (“WVTA”)
which regulation
could increase has been
vehicle updated
complexity and to duties.
increase the
stringency of in-market surveillance. Moreover, following the U.K.’s withdrawal from the European Union, we may be
subject
Thereto diverging requirements
is an increasing trend ofincity
ouraccess
European markets,for
restrictions which could
internal increase vehicle
combustion engine complexity and duties.
powered vehicles. The access
rules being introduced are developed by individual cities based on their specific concerns, resulting in rapid deployment of
There
access rulesis an
thatincreasing
differ greatlytrend of citycities.
among access restrictions
The speed of for internal combustion
implementation of access engine
rulespowered vehicles.
may directly The access
influence
rules
customer vehicle residual values and choice of next purchase. In an effort to support the Paris Accord, some countries of
being introduced are developed by individual cities based on their specific concerns, resulting in rapid deployment
access rules that
are adopting yearlydiffer greatly in
increases among cities. where
CO2 taxes, The speed
such aofsystem
implementation
is in place,of and
access rules may
publishing directly
dates by wheninfluence
internal
combustion powered vehicles may no longer be registered, e.g., Norway in 2025 and the Netherlands in [Link]
customer vehicle residual values and choice of next purchase. In an effort to support the Paris Accord, some
are adopting yearly increases in CO2 taxes, where such a system is in place, and publishing dates by when internal
combustion powered
Other National vehicles Control
Emissions may no Requirements.
longer be registered,Many e.g., Norway
countries, in in
an2025
effortand the Netherlands
to address air qualityinand2030.
climate
change concerns, are adopting previous versions of European or United Nations Economic Commission for Europe (“UN-
ECE”)Other National
mobile sourceEmissions
emissionControl Requirements.
regulations. Many countries,
Some countries have adopted in anmore
effortadvanced
to address air qualitybased
regulations and climate
on the most
changeversion
recent concerns, are adopting
of European previous
or U.S. versionsFor
regulations. of example,
Europeanthe or United Nations
China Stage VIEconomic
light-duty Commission
vehicle emission for Europe (“UN-
standards,
ECE”) mobile
based sourceStage
on European emission regulations.
VI emission Somefor
standards countries have
light-duty adopted
vehicles, more
U.S. advancedand
evaporative regulations
refuelingbased on the most
emissions
recent version
standards, andof European
CARB OBD or U.S. regulations.
II requirements, For example,
incorporate the China
two levels Stage VIfor
of stringency light-duty vehicle emission
tailpipe emissions. Understandards,
the level
based
one on European
(VI(a)) standard,Stage VI emission
the emissions standards
limits for light-duty
are comparable to thevehicles,
EU Stage U.S.
VI evaporative
limits, exceptand for refueling emissionswhich is
carbon monoxide,
standards,
30% and CARB
lower than the EUOBD II requirements,
Stage VI limit. The moreincorporate
stringenttwo levels
level twoof(VI(b))
stringency for tailpipe
standard’s emissions.
emissions Underare
limits, which the currently
level
one
in (VI(a))
place standard,inthe
nationwide emissions
China, limits are comparable
are approximately 30-50% lowerto the EUthe
than Stage
EU VI limits,
Stage VI except for carbon monoxide,
limits, depending which is
on the pollutants.
30%
Both lower
Chinathan
StagetheVII
EU Stage VIvehicles
light-duty limit. The
andmore stringent
heavy-duty level two
vehicles (VI(b)) regulations
emission standard’s emissions
are expected limits, which
to be are currently
drafted between
in place nationwide in China, are approximately 30-50% lower than the EU Stage VI limits, depending
2024 and 2025, and the Ministry of Ecology and Environment has advised that the Stage VII regulations will have more on the pollutants.
Both China
stringent Stage
limits VII light-duty
on pollutant vehicles
emissions and
and willheavy-duty vehicles
establish limits emission regulations
for greenhouse are expected
gas (primarily CO2) tailpipeto beemissions.
drafted between
2024
Mexico and most countries in Central America, the Caribbean, and South America are evolving to implementhave
and 2025, and the Ministry of Ecology and Environment has advised that the Stage VII regulations will moremore
stringent limits on pollutant emissions and will establish limits for greenhouse
stringent requirements accepting Europe and U.S. regulations, except Brazil, which has a unique gas (primarily CO ) tailpipe emissions.
2 local process called
Mexico
PROCONVE and most
basedcountries
on [Link]
Central America, the Caribbean,
for light-duty vehicles and andEuropean
South America are evolving
regulations to implement
for heavy-duty moreOther
vehicles.
stringent
countries across Southeast Asia, the Middle East, and Australasia expect to introduce regulations based on EU called
requirements accepting Europe and U.S. regulations, except Brazil, which has a unique local process Stage VI
PROCONVE based
standards in the nearonterm.
U.S. Canadian
regulationscriteria
for light-duty vehicles
emissions and European
regulations regulations
are largely aligned withfor heavy-duty vehicles.
U.S. requirements andOther
are
countries
anticipated to remain aligned with the new EPA rules that will be published in 2024 for 2027 model year and beyond. VI
across Southeast Asia, the Middle East, and Australasia expect to introduce regulations based on EU Stage
standards in the near term. Canadian criteria emissions regulations are largely aligned with U.S. requirements and are
anticipated to remain aligned with the new EPA rules that will be published in 2024 for 2027 model year and beyond.

10

10

199174_Ford_2023_AR_1OK.indd 14 2/9/24 2:53 PM

 Item 1. Business (Continued)

ItemElsewhere,
1. Business (Continued)
there is a mix of regulations and processes based on U.S. and EU standards. Not all countries have
adopted appropriate fuel quality standards to accompany the stringent emission standards adopted. This could lead to
Elsewhere,
compliance there isparticularly
problems, a mix of regulations
if OBD or in-useand processes
surveillance based on U.S. andare
requirements EUimplemented.
standards. Not all countries have
adopted appropriate fuel quality standards to accompany the stringent emission standards adopted. This could lead to
compliance problems, particularly
Global Developments. Vehicleif emissions
OBD or in-use surveillance
regulators continue requirements
to focus on are the implemented.
use of “defeat devices.” Defeat devices
are elements of design (typically embedded in software) that improperly cause the emission control system to function
lessGlobal
effectively Developments.
during normal Vehicle
on-road emissions
driving thanregulators
during continue
an officialtolaboratory
focus on the use of “defeat
emissions test, withoutdevices.” Defeat devices
justification. They
are prohibited
are elements of bydesign
law in (typically embeddedand
many jurisdictions, in software)
we do notthat useimproperly
defeat devices causeinthe ouremission
[Link] system to function
less effectively during normal on-road driving than during an official laboratory emissions test, without justification. They
are prohibited
Regulatorsby law inthe
around manyworldjurisdictions,
continue toand we do not
scrutinize use defeatemission
automakers’ devices testing,
in our vehicles.
which has led to a number of defeat
device settlements by various manufacturers. EPA is carrying out additional non-standard tests as part of its vehicle
Regulators
certification aroundCARB
program. the worldhas continue
also beentoconducting
scrutinize automakers’ emission testing,
extensive non-standard emissionwhich haswhich
tests, led to in a number
some cases of defeat
have
device settlements by various manufacturers. EPA is carrying out additional non-standard
resulted in certification delays for diesel vehicles. In the past, several European countries have conducted non-standard tests as part of its vehicle
certification
emission tests program.
and publishedCARB has also been
the results, and,conducting
in some cases, extensive this non-standard
supplementalemission testing has tests, which investigations
triggered in some casesofhave
resulted in certification delays for diesel vehicles. In the past, several
manufacturers for possible defeat devices. Testing is expected to continue on an ongoing basis. In addition, European countries have conducted non-standard
plaintiffs’
emission tests and published the results, and, in some cases, this supplemental
attorneys are pursuing consumer class action lawsuits based on alleged excessive emissions from cars and trucks, which testing has triggered investigations of
manufacturers for possible defeat devices.
could, in turn, prompt further investigations by regulators. Testing is expected to continue on an ongoing basis. In addition, plaintiffs’
attorneys are pursuing consumer class action lawsuits based on alleged excessive emissions from cars and trucks, which
could, in turn, prompt
European further investigations
GHG Requirements. by regulators.
The European Union regulates passenger car and light commercial vehicle CO2
emissions using sliding scales with different CO2 targets for each manufacturer based on the respective average vehicle
weightEuropean
for its fleetGHG of Requirements. The European
vehicles first registered Union regulates
in a calendar year, withpassenger
separate targets car and forlight commercial
passenger carsvehicle
and light CO2
emissions using sliding scales with different CO targets for each manufacturer
commercial vehicles. A penalty system applies to manufacturers failing to meet the individual CO2 targets. Pooling
2 based on the respective average vehicle
weight for its fleet of vehicles first registered in a calendar year, with separate
agreements between manufacturers to utilize credits are possible under certain conditions, and we have entered into suchtargets for passenger cars and light
commercial
pooling [Link]
agreements penalty systemwith
to comply applies
fuel to manufacturers
economy regulationsfailing to meet
without payingthe individual
a penaltyCO and2 targets.
to enablePoolingother
agreements
manufacturers to benefit from our positive CO2 performance. For “multi-stage vehicles” (e.g., Ford’shave
between manufacturers to utilize credits are possible under certain conditions, and we Transitentered
chassisintocabs),
such
pooling agreements in order to comply with fuel economy regulations without paying
the base manufacturer (e.g., Ford) is fully responsible for the CO2 performance of the final up-fitted vehicles. The initial a penalty and to enable other
manufacturers
target levels gettosignificantly
benefit frommore our positive
stringentCO 2 performance.
every five years (2025, For “multi-stage
2030, and 2035, vehicles”after (e.g.,
which Ford’s
all newTransit chassis
light-duty cabs),
vehicles
the base manufacturer (e.g., Ford) is fully responsible for the CO performance
must be zero emission), requiring significant investments in propulsion technologies and extensive fleet management to
2 of the final up-fitted vehicles. The initial
target
enablelevels
low CO get significantly more stringent every five years (2025, 2030, and 2035, after which all new light-duty vehicles
2 emissions for our fleet. EU heavy-duty CO2 regulations are being finalized and will also limit CO2 fleet
must be zero emission),
performance, with slightlyrequiring
differentsignificant
requirements. investments
The United in propulsion
Kingdom technologies
and Switzerland andhaveextensive fleet management
introduced similar rules for to
enable
light-dutylowvehicles,
CO2 emissionsand the for our fleet.
United Kingdom EU heavy-duty
has adoptedCO ZEV 2 regulations
mandates are being
as well asfinalized
CO2 fleet and willfor
limits also limit COvehicles
non-ZEV 2 fleet
performance,
starting in 2024. with slightly different requirements. The United Kingdom and Switzerland have introduced similar rules for
light-duty vehicles, and the United Kingdom has adopted ZEV mandates as well as CO2 fleet limits for non-ZEV vehicles
starting
The in EU 2024.
Commission is investigating the introduction of Real Driving CO2 and Life Cycle Assessment elements, and
heavy-duty vehicles are addressed in separate regulations with analogous requirements and challenges. As discussed
above,Thethe EUEU Commission
Commission is investigating
has announced the aintroduction
“Green Deal” of Real Driving
with more CO2 and
stringent Life Cycle Assessment
requirements for CO2 emissions elements, and
(including
heavy-duty vehicles are addressed in separate regulations with analogous requirements
stricter CO2 fleet regulations) and other regulated emissions and include recycling and substance restrictions. While the and challenges. As discussed
above,
EU the EU Commission
Commission targets net has announced
climate neutralitya by “Green
2050Deal”
and an with more stringent
ambitious 2030 interimrequirements
target (afor 55% COCO 2 emissions (including
2 reduction across
stricter CO
all industries fleet regulations) and other regulated emissions and include recycling
2 compared to 1990), several countries, such as Germany, have adopted stricter interim targets and earlier and substance restrictions. While thenet
EU Commission targets
climate neutrality targets. net climate neutrality by 2050 and an ambitious 2030 interim target (a 55% CO 2 reduction across
all industries compared to 1990), several countries, such as Germany, have adopted stricter interim targets and earlier net
climate
Fordneutrality
also faces targets.
the risk of advance premium payments for both passenger cars and light commercial vehicles in all
European markets due to, for example, unexpected market fluctuations and shorter lead times impacting average fleet
Ford also faces the risk of advance premium payments for both passenger cars and light commercial vehicles in all
performance.
European markets due to, for example, unexpected market fluctuations and shorter lead times impacting average fleet
performance.
The United Nations developed a technical regulation for passenger car emissions and CO2. This world light-duty test
procedure (“WLTP”) is focused primarily on better aligning laboratory CO2 and fuel consumption figures with customer-
The United
reported [Link] developedof
The introduction a technical
WLTP in Europe regulation for passenger
started in September car emissions
2017 and requiresand CO2updates . This world to CO light-duty
2 labeling,
test
procedure
thereby (“WLTP”)
impacting is focused
taxes primarily
in countries withon better
a CO 2
aligning
tax scheme laboratory
as well as COCO2 and
2 fleetfuel consumption
regulations for figures
passenger with customer-
cars and light
reported
commercial figures.
[Link] introduction
Costs associated of WLTP withinnewEurope started in September
or incremental testing for WLTP 2017 and requires updates to CO2 labeling,
are significant.
thereby impacting taxes in countries with a CO2 tax scheme as well as CO2 fleet regulations for passenger cars and light
commercial
Some [Link]
Costs associated with new or
have implemented or incremental
are considering testing for initiatives
other WLTP arefor significant.
reducing CO2 vehicle emissions,
including fiscal measures and CO2 labeling to address country specific targets associated with the Paris Accord. For
Somethe
example, European countries have
United Kingdom, France, implemented
Germany, Spain, or are considering
Portugal, and other
the initiatives
Netherlands, for reducing
among others, CO2 vehicle emissions,
have introduced
including fiscal measures and CO labeling to address country specific targets
taxation based on CO2 emissions.2 The EU CO2 requirements are likely to trigger further measures. In addition, delayed associated with the Paris Accord. For
example, the United Kingdom, France, Germany, Spain, Portugal, and the Netherlands,
vehicle launches and supply shortages, as well as an insufficient charging infrastructure and lower demand for ZEV and among others, have introduced
taxation
low CO2 basedemission CO2 emissions.
on vehicles as certain The EU CO
electric 2 requirements
vehicle incentivesare arelikely to trigger
reduced or forfurther measures.
other reasons, canIntrigger
addition, delayed
compliance
vehicle launches and
risks in all European markets. supply shortages, as well as an insufficient charging infrastructure and lower demand for ZEV and
low CO2 emission vehicles as certain electric vehicle incentives are reduced or for other reasons, can trigger compliance
risks in all European markets.

11

11

199174_Ford_2023_AR_1OK.indd 15 2/9/24 2:53 PM

 Item 1. Business (Continued)

[Link]
Business (Continued)
to imposing strict emissions requirements, European regulations are increasingly including other
sustainability requirements, such as reporting obligations and supply chain due diligence. While these regulations are
In addition
applicable to imposing
in European strict emissions
jurisdictions, requirements,
they often European
apply to global regulations
corporations are increasingly
and require including
adjustments other
in corporate
sustainability requirements, such as reporting obligations and supply chain due diligence. While these regulations
processes, policies, and strategies, which may be costly. For example, the Corporate Sustainability Reporting Directive are
applicable in European jurisdictions, they often apply to global corporations and require adjustments in corporate
requires companies to disclose how their business model and strategy align with limiting global warming to 1.5°C in line
processes,
with policies,
the Paris and strategies,
Agreement. Companies which
thatmay becomply
fail to costly. with
For example, the Corporate
these requirements Sustainability
could Reporting
face significant Directive
monetary
requires companies to disclose how
penalties and suffer reputational harm. their business model and strategy align with limiting global warming to 1.5°C in line
with the Paris Agreement. Companies that fail to comply with these requirements could face significant monetary
penalties andthe
In 2023, suffer
EU reputational
adopted the harm.
Carbon Border Adjustment Mechanism (“CBAM”), which will subject certain imported
materials (such as iron, steel, and aluminum) to a carbon levy linked to the carbon price payable on domestic goods under
In 2023, the
the European EU adopted
Trading Scheme. the The
Carbon Border
CBAM Adjustment
could Mechanism
increase our (“CBAM”),such
costs of importing which will subject
materials certain
and/or imported
limit our ability to
materials (such as iron, steel, and aluminum) to
import lower cost materials from non-EU countries. a carbon levy linked to the carbon price payable on domestic goods under
the European Trading Scheme. The CBAM could increase our costs of importing such materials and/or limit our ability to
import lower
Other cost materials
National GHG and from non-EU
Fuel countries.
Economy Requirements. Regional governments across the globe are considering
implementing, and in some cases introducing, emissions regulations that align with CAFE standards. The Canadian
Other
federal National GHG
government and Fuel
regulates Economy
vehicle Requirements.
GHG emissions under Regional
the Canadian governments
Environmental acrossProtection
the globe Act.
are considering
In
implementing, and in some cases introducing, emissions regulations that align
October 2014, the Canadian federal government published the final changes to the regulation for light-duty with CAFE standards. The Canadian
vehicles,
federal government
which maintain regulates
alignment withvehicle
U.S. EPA GHG emissions
vehicle under the Canadian
GHG standards Environmental
for the 2017-2025 model Protection
years. TheAct. In U.S. EPA
revised
October
standards 2014,
werethe Canadian federal
automatically adopted government
in Canada published
by reference the for
final
thechanges
2022-2026 to the regulation
model years,for
andlight-duty vehicles, for
draft amendments
which
a few standalone administrative elements not automatically adopted by reference were published in DecemberU.S.
maintain alignment with U.S. EPA vehicle GHG standards for the 2017-2025 model years. The revised EPA
2022. The
standards were automatically adopted in Canada by reference for the 2022-2026
heavy-duty vehicle and engine GHG emissions regulations for the 2021 model year and beyond were published in model years, and draft amendments for
a few standalone administrative elements not automatically adopted by reference were
May 2018 and are in line with U.S. requirements, subject to any change in those requirements. Ford expects that the published in December 2022. The
heavy-duty vehicle and
federal government engine will
in Canada GHG emissions
continue regulations
to align for thewith
its standards 2021 themodel
new EPA year standards
and beyond forwere published
the 2027 modelinyear
May 2018 and are in line with U.S. requirements, subject to any change in those requirements.
and beyond. On December 20, 2023, the Canadian federal government also published light-duty ZEV sales requirements Ford expects that the
federal
through amendments to the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations. The year
government in Canada will continue to align its standards with the new EPA standards for the 2027 model
and beyond. On
amendments December
require annual 20, 2023,
sales the Canadian
percentages startingfederal
with government
20% for the 2026 also published
model year light-duty
to 100%ZEV sales
by the 2035requirements
model
through
year. The federal government has also published its intent to develop ZEV sales requirements for heavy-dutyThe
amendments to the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations. vehicles
amendments
beginning withrequire
the 2027 annual
modelsales
[Link]
Both Quebec starting with 20%
and British for the 2026
Columbia model year requiring
have regulations to 100% by the
that 2035ofmodel
100% new
year. The federal government has also published its intent to develop ZEV sales requirements
vehicle sales be ZEVs by 2035, but finalized amendments in 2023 that increase their interim annual targets starting for heavy-duty vehicles
in
beginning with the
2025 and 2026. 2027
Both model year.
provinces haveBoth
also Quebec and Britishheavy-duty
started developing Columbia have ZEV regulations
mandates based requiring that 100%
on CARB’s of new
standards.
vehicle saleswith
Compliance be ZEVs by 2035, but finalized
ZEV requirements depends amendments
heavily on market in 2023 that increase
conditions their interim
that promote annualpreference
consumer targets starting in
for EVs,
2025 as
such andtechnology
2026. Both provincespurchase
readiness, have also started developing
incentives, heavy-duty
and affordability, ZEV
as well asmandates basedand
the availability on reliability
CARB’s standards.
of adequate
Compliance with
infrastructure ZEV requirements
to support depends
vehicle charging. heavily on
In addition to market
the ZEVconditions
mandates, that promote
Quebec consumer
is also preference
developing for EVs,
a regulation to ban
suchsale
the as technology
of light-dutyreadiness, purchase incentives,
internal combustion engine vehicles and affordability,
as of 2035, which as wellisas the availability
intended andonly
to capture reliability
small of adequate
infrastructure tonot
manufacturers support
already vehicle charging.
obligated under In theaddition to the ZEV
ZEV mandate. mandates,
Other provinces Quebec is also developing
have signaled a regulation
their interest to ban
in light-duty
the sale
ZEV of regulations
sales light-duty internal
but arecombustion engine the
waiting to assess vehicles as ofimpact
provincial 2035, which
of the is intended
final federaltoZEV capture only small
regulations.
manufacturers not already obligated under the ZEV mandate. Other provinces have signaled their interest in light-duty
ZEVChina’s
sales regulations
Corporate but are waiting
Average to assess theand
Fuel Consumption provincial impactVehicle
New Energy of the final
(“NEV”)federal ZEV
Credit regulations. Rules contain
Administrative
fuel consumption requirements as well as credit mandates for NEV passenger vehicles, i.e., plug-in hybrids, electric
China’s
vehicles, Corporate
or fuel AverageThe
cell vehicles. Fuel Consumption
fuel consumption and New Energy
requirement Vehicle
uses (“NEV”) Credit
a weight-based Administrative
approach Rules
to establish contain
targets, with
fuel consumption requirements as well as credit mandates for NEV passenger vehicles, i.e., plug-in
year-over-year target reductions. China set a target of 4.6L/100km for the 2025 passenger vehicle industry fuel hybrids, electric
vehicles, or fuel
consumption cell
fleet vehicles.
average andThe fuel consumption
is projecting a furtherrequirement uses areduction
fuel consumption weight-based approach
to a target to establish
of 3.5L/100km in targets, with
2030, based
year-over-year target reductions. China set a target of 4.6L/100km for the 2025 passenger vehicle
on the WLTP. The NEV mandate requires that OEMs generate a specific amount of NEV credits each year, with NEV industry fuel
consumption fleet 28%
credits of at least average
andand
38%isof
projecting a further
the annual fuel consumption
ICE passenger reduction to
vehicle production or aimport
targetvolumes
of 3.5L/100km in in
required 2030,
2024based
and
on the WLTP. The NEV mandate requires that OEMs generate a specific amount of NEV credits
2025, respectively. Future percentages are currently proposed as 45%, 50%, and 54% of the annual ICE plus NEV each year, with NEV
credits of atvehicles
passenger least 28% and 38%
production orof the annual
import volumesICEfor
passenger vehicle
2026, 2027, and production or import volumes required in 2024 and
2028, respectively.
2025, respectively. Future percentages are currently proposed as 45%, 50%, and 54% of the annual ICE plus NEV
passenger
Demand vehicles
for EVsproduction
continues or
to import volumes
grow, at for 2026,
fluctuating rates. 2027, and 2028,
As discussed respectively.
below in Item 1A. Risk Factors under “Ford
may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel economy,
Demand driving
autonomous for EVstechnology,
continues toenvironmental,
grow, at fluctuating [Link],”
and other As discussed below intoItem
in addition the 1A.
ratesRisk Factors
of EV under
growth, “Ford
production
may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel
disruptions, stop ships, supply chain limitations, lower-than-planned market acceptance of our vehicles, and/or other economy,
autonomous
circumstances driving technology,
may cause environmental,
us to modify and other
product plans some cases,inpurchase
or, inregulations,” addition to the rates
credits of EV
in order to growth,
comply production
with
disruptions, stop ships, supply chain limitations, lower-than-planned market acceptance of our
emissions standards, fuel economy standards, or ZEV requirements. In the fourth quarter of 2023, for example, vehicles, and/or other
we
circumstances
entered into anmay cause us
agreement to to modify product
purchase plans
about $700 or, inof
million some cases,compliance
regulatory purchase credits
creditsinfor
order to comply
future with
use in the United
emissions
States, thestandards, fuel economy
ultimate number of whichstandards, or ZEV
is dependent requirements.
on the Into
seller’s ability the fourththe
deliver quarter of 2023, for example, we
credits.
entered into an agreement to purchase about $700 million of regulatory compliance credits for future use in the United
States, the ultimate number of which is dependent on the seller’s ability to deliver the credits.

12

12

199174_Ford_2023_AR_1OK.indd 16 2/9/24 2:53 PM

 Item 1. Business (Continued)

Item 1. Business
Vehicle Safety (Continued)

Vehicle
U.S. Safety
Requirements. The National Traffic and Motor Vehicle Safety Act of 1966 (the “Safety Act”) regulates vehicles
and vehicle equipment in two primary ways. First, the Safety Act prohibits the sale in the United States of any new vehicle
U.S. Requirements.
or equipment that does not The National
conform to Traffic and Motor
applicable vehicleVehicle
safety Safety
standardsAct established
of 1966 (theby “Safety
NHTSA. Act”)Meeting
regulates or vehicles
exceeding
and vehicle
many safetyequipment
standards in two primary
is costly and has ways. First, the
continued Safetyas
to evolve Actglobal
prohibits the sale requirements
compliance in the United States
and publicof any new vehicle
domain (e.g.,
or equipment
New that doesPrograms
Car Assessment not conform to applicable
(“NCAPs”), vehicle
Insurance safety for
Institute standards
Highwayestablished
Safety (“IIHS”),by NHTSA.
and theMeeting or exceeding
China Insurance Auto
many safety
Safety Index)standards
ratings and is costly and hascontinue
assessments continued to to evolve
evolve, asincreasing
are global compliance
in demands, requirements and public domain
and lack harmonization (e.g.,
globally.
New
As weCar Assessment
expand our businessPrograms (“NCAPs”),
priorities Insurance
to include autonomousInstitute for Highway
vehicle Safetyand
technologies (“IIHS”),
broaderandmobility
the China Insurance
products and Auto
Safety Index)
services, ratings and
our financial assessments
exposure continue Similarly,
has increased. to evolve,federal
are increasing
and stateinregulatory
demands,requirements
and lack harmonization
are growingglobally.
quickly
As lawmakers
as we expand and our business
regulatorspriorities
adapt totoadvancements
include autonomous vehicle ranging
in automation, technologies and broader mobility
from driver-assistance products and
technologies such as
services, our
automatic financial
braking exposure
to fully has increased.
autonomous vehicles. Similarly,
Second, the federal andAct
Safety state regulatory
requires requirements
that defects relatedare growing
to motor quickly
vehicle
as lawmakers
safety be remedied and regulators adaptrecall
through safety to advancements
campaigns. A in manufacturer
automation, ranging from to
is obligated driver-assistance
recall vehicles iftechnologies
it or NHTSA such as
automatic braking to fully autonomous vehicles. Second, the Safety Act requires
determines the vehicles contain a non-compliance or a defect resulting in an unreasonable risk to safety. that defects related to motor
Should vehicle
we or
safety be remedied through safety recall campaigns. A manufacturer is obligated to recall
NHTSA determine that either a safety defect or noncompliance issue exists with respect to any of our vehicles, the cost ofvehicles if it or NHTSA
determines the vehiclescould
such recall campaigns contain a non-compliance or a defect resulting in an unreasonable risk to safety. Should we or
be substantial.
NHTSA determine that either a safety defect or noncompliance issue exists with respect to any of our vehicles, the cost of
suchEuropean
recall campaigns
[Link] be substantial.
The EU has established vehicle safety standards and regulations and is likely to adopt
additional or more stringent requirements in the future, especially in the areas of access to in-vehicle data, artificial
European
intelligence, andRequirements.
autonomous vehicleThe EUtechnologies.
has established vehicle safety standards and regulations and is likely to adopt
additional or more stringent requirements in the future, especially in the areas of access to in-vehicle data, artificial
intelligence,
The Europeanand autonomous
General Safety vehicle technologies.
Regulation (“GSR”) introduced UN-ECE regulations, which are required for the
European Type Approval process. The GSR includes the mandatory introduction of multiple active and passive safety
The European
features, General Safety
including cybersecurity Regulation (“GSR”)
requirements for new introduced UN-ECE
vehicle models from regulations,
2022 and forwhich are required
all registrations in for the EU
2024.
European Type Approval process. The GSR includes the mandatory introduction of multiple
regulators are focusing on active safety features, such as lane departure warning systems, electronic stability control, active and passive safetyand
features,
automatic brake assist. Furthermore, mobile network providers in certain EU Member States have begun shutting EU
including cybersecurity requirements for new vehicle models from 2022 and for all registrations in 2024. down
regulators
their 2G and are3G focusing
networks, on active
which safety
form the features,
basis forsuch as lane
e-Call departure
system warning
functionality systems,
in existing electronic
vehicles. The stability
e-Callcontrol,
systemsand in
automatic
existing brake assist.
vehicles may need Furthermore,
to be updated mobile network
as these providers
systems are in certainout.
phased EU ItMember States have
is also possible that begun
the EUshutting down
may mandate
their 2G and
Member 3Gto
States networks,
maintainwhich these form the basis
networks for e-Call
to allow for thesystem functionality
continued functionalityin existing
of existingvehicles.
e-Call The
systems.e-Call systems in
existing vehicles may need to be updated as these systems are phased out. It is also possible that the EU may mandate
Member
OtherStates
Nationalto maintain these networks
Requirements. Globally,togovernments
allow for thegenerally
continuedhave
functionality of existing
been adopting e-Callbased
UN-ECE systems. regulations with
minor variations to address local concerns. Any difference between North American and UN-ECE based regulations can
add Other National
complexity andRequirements. Globally, governments
costs to the development generally
of global platform have and
vehicles, beenwe adopting
continue UN-ECE based
to support regulations
efforts with
to harmonize
minor variations to address local concerns. Any difference between North American and
regulations to reduce vehicle design complexity while providing a common level of safety performance; we are seeking UN-ECE based regulations can
add complexity and costs to the development of global platform vehicles,
new opportunities in bilateral negotiations that can potentially contribute to this goal. and we continue to support efforts to harmonize
regulations to reduce vehicle design complexity while providing a common level of safety performance; we are seeking
newSafety
opportunities
and recallin bilateral negotiations
requirements that
in Brazil, can potentially
China, India, Southcontribute to this
Korea, and goal.
Gulf Cooperation Council (“GCC”) countries
may add substantial costs and complexity to our global recall practice. Brazil has set mandatory fleet safety targets and
Safetyare
penalties and recall ifrequirements
applied these levels in Brazil,
are China, India,
not maintained, South
while Korea,
a tax and Gulf
reduction mayCooperation
be availableCouncil (“GCC”) countries
for over-performance. In
may add substantial costs and complexity to our global recall practice. Brazil has set mandatory
Canada, regulatory requirements are currently aligned with U.S. regulations; however, under the Canadian Motor fleet safety targets and
Vehicle
penalties
Safety Act,are
theapplied if these
Minister levels are
of Transport hasnot
broadmaintained,
powers towhileordera manufacturers
tax reduction may be available
to submit a notice forofover-performance.
defect or non- In
Canada, regulatory requirements are currently aligned with U.S. regulations; however, under
compliance when the Minister considers it to be in the interest of safety. In 2021, Canada started preliminary the Canadian Motor Vehicle
Safety Act, theon
consultations Minister
severalofnew Transport
proposedhasregulations,
broad powers to order
including manufacturers
Administrative to submit
Monetary a notice(“AMPs”)
Penalties of defect and
or non-
Analysis of
compliance when the Minister considers it to be in the interest of safety. In 2021, Canada
Technical Information for Vehicles and Equipment (“ACTIVE”) regulations. Final regulations for AMPs took effect instarted preliminary
consultations
October [Link] new proposed
regulations regulations,
for ACTIVE including
are expected Administrative
to be Monetary
released in 2024 Penalties
and will (“AMPs”)
likely contain andreporting
some Analysis of
Technical
requirements that are unique to Canada. In China, new standards regulating Intelligent and Connected Vehicles, in
Information for Vehicles and Equipment (“ACTIVE”) regulations. Final regulations for AMPs took effect vehicle
October 2023. software
cybersecurity, Draft regulations
updates, for
andACTIVE are expected
Data Storage SystemtoforbeAutomated
released inDriving
2024 and will likelywhich
(“DSSAD”), contain
aresome
morereporting
requirements
comprehensive that areUN-ECE
than unique to Canada. In China,
requirements, new standards
are expected regulating
to take effect Intelligent
in 2026, and Connected
and in China, Malaysia,Vehicles,
and Southvehicle
cybersecurity, software updates, and Data Storage System for Automated Driving (“DSSAD”),
Korea, mandatory e-Call requirements are being drafted. E-Call became mandatory in the UAE for new vehicles starting which are more
comprehensive
with the 2021 modelthan year,
UN-ECE and,requirements, are expected
following an update to take
to its next effect ine-Call
generation 2026,regulations,
and in China, willMalaysia,
be required andinSouth
Saudi
Korea, mandatory e-Call requirements
Arabia beginning with the 2027 model year. are being drafted. E-Call became mandatory in the UAE for new vehicles starting
with the 2021 model year, and, following an update to its next generation e-Call regulations, will be required in Saudi
Arabia beginning with the 2027 model year.

13

13

199174_Ford_2023_AR_1OK.indd 17 2/9/24 2:53 PM

 Item 1. Business (Continued)

ItemNew
1. Business (Continued)
Car Assessment Programs. Organizations around the world rate and compare motor vehicles in NCAPs to
provide consumers and businesses with additional information about the safety of new vehicles. NCAPs use crash tests
and New
otherCar Assessment
evaluations are differentOrganizations
that Programs. around the
than what is required world rate and
by applicable compareand
regulations, motor
usevehicles
stars to in NCAPs
rate to
vehicle
provide consumers and businesses with additional information about the safety of new vehicles. NCAPs
safety, with five stars awarded for the highest rating and one for the lowest. Achieving high NCAP ratings, which may use crash tests
vary
and other evaluations that are different than what is required by applicable regulations, and use stars
by country or region, can add complexity and cost to vehicles. Similarly, environmental rating systems exist in various to rate vehicle
safety,
regions,with five
e.g., starsNCAP
Green awarded for the highest
in Europe. rating
In China, and one
C-NCAP hasfor
a the lowest.
stringent Achieving
rating high
structure to NCAP ratings,
decrease which may
the number vary
of five-
by country or region, can add complexity and cost to vehicles. Similarly, environmental rating systems
star ratings. In Southeast Asia, an updated NCAP test and rating protocol is similarly forecast to be effective beginning inexist in various
regions,
2026, and e.g., Green NCAP
is expected to putingreater
[Link]
In China,onC-NCAP has aofstringent
assessment rating structure
driver assistance to decrease
technologies. Thesetheprotocols
number of five-
impose
star
additional requirements relating to testing, evaluation, and mandatory safety features, and compliance with them (or anyin
ratings. In Southeast Asia, an updated NCAP test and rating protocol is similarly forecast to be effective beginning
2026, and isupdates
subsequent expected toto put greater
them) may beemphasis
costly. on assessment of driver assistance technologies. These protocols impose
additional requirements relating to testing, evaluation, and mandatory safety features, and compliance with them (or any
subsequent
HUMAN CAPITAL updatesRESOURCES
to them) may be costly.

HUMAN CAPITAL
People Strategy RESOURCES
and Governance

People
We Strategy and Governance
strive to create an employee experience that enables an inclusive environment of excellence, focus, and
collaboration among team members, allowing us to deliver short- and long-term business success. Ford maintains an
We strive
Executive to create
People Forum anconsisting
employeeofexperience
the CEO andthattop
enables an inclusive
leadership environment
team that of excellence,
meets monthly focus,focus
with a specific and on
collaboration
people and organizational topics that will enable and accelerate delivery of our Ford+ plan. Key topic areas includean
among team members, allowing us to deliver short- and long-term business success. Ford maintains
Executive People
Compensation Forum consisting
& Retention; of Equity,
Diversity, the CEOandand top leadership
Inclusion (“DEI”); team that meets
Organization monthly
Design; withPlanning
Talent a specific
& focus on
Development;
people and
and Culture. organizational topics that will enable and accelerate delivery of our Ford+ plan. Key topic areas include
Compensation & Retention; Diversity, Equity, and Inclusion (“DEI”); Organization Design; Talent Planning & Development;
and Our
Culture.
Board of Directors and Board committees provide important oversight on certain human capital matters, including
items discussed at the Executive People Forum. The Compensation, Talent and Culture Committee maintains
Our Boardtoofreview,
responsibility Directors and Board
discuss, committees
and set provide important
strategic direction for variousoversight on certain
people-related humanstrategies,
business capital matters, including
including:
items discussed
compensation andat benefit
the Executive People
programs; Forum. succession
leadership The Compensation,
planning; Talent
culture;and
DEI;Culture Committee
and talent maintains
development programs.
responsibility
The to review,
Sustainability, discuss,
Innovation andand set strategic
Policy Committee direction for various
is responsible for people-related
discussing andbusiness strategies, including:
advising management on
compensation
maintaining andand benefit programs;
improving leadership
sustainability succession
strategies, planning; culture;
the implementation DEI;
of which and talent
creates valuedevelopment programs.
consistent with the long-
The
termSustainability,
preservation and Innovation and Policy
enhancement Committeevalue
of shareholder is responsible
and socialforwellbeing,
discussing and advising
including humanmanagement on
rights, working
maintaining andresponsible
conditions, and improving sustainability strategies,
sourcing. Collective the implementation
recommendations of Board
to the which creates value consistent
and its committees with
are an the long-
important part
term preservation and enhancement of shareholder value and social wellbeing, including human rights,
of how we proactively manage our human capital and create an employee experience that allows employees and our working
conditions,
organizationand responsible sourcing. Collective recommendations to the Board and its committees are an important part
to thrive.
of how we proactively manage our human capital and create an employee experience that allows employees and our
organization to thrive.
Employee Health and Safety

Employee
NothingHealth
is moreand Safety than the health, safety and wellbeing of our employees and we consistently strive to
important
achieve world-class levels of safety through the application of sound policies and best practices. We maintain a robust
Nothing
safety cultureisdesigned
more important thanworkplace
to reduce the health, safety supported
injuries, and wellbeing of our employees
by effective and wereporting,
communication, consistently
andstrive to
external
achieve world-class
benchmarking. levels of safety through the application of sound policies and best practices. We maintain a robust
safety culture designed to reduce workplace injuries, supported by effective communication, reporting, and external
benchmarking.
We verify compliance with regulatory requirements as well as our internal safety standards. To prevent recurrence of
workplace injuries, regular updates are provided to Company management on key safety issues, including safety key
We verifyindicators
performance compliance with regulatory
(“KPI”), significantrequirements
incidents, andashigh
wellpotential
as our internal safety standards.
near misses. To prevent
Our safety team recurrence in
also participates of
workplace injuries, regular updates are provided to Company management on key safety issues, including
multi-industry benchmarking groups, within and outside the automotive sector, to share safety best practices and safety key
performance
collaborate onindicators
common (“KPI”), significant
health and incidents, and high potential near misses. Our safety team also participates in
safety concerns.
multi-industry benchmarking groups, within and outside the automotive sector, to share safety best practices and
collaborate
Our Safety on common health and safety concerns.
Record

OurAnySafety
lossRecord
of life or serious injury in the workplace is unacceptable and deeply regretted. Unfortunately, there was one
employee fatality incident in 2023. Robust corrective actions have been implemented to prevent recurrence and reduce
risk Any loss
to our of life or serious
employees injury in the
and contractors workplace
working is unacceptable
on site. and
We continue to deeply regretted.
encourage Unfortunately,
accurate and there was
detailed reporting of one
employee
safety fatality
issues incident
to reduce in and
risk 2023. Robust
improve corrective
workplace actions have been implemented to prevent recurrence and reduce
safety.
risk to our employees and contractors working on site. We continue to encourage accurate and detailed reporting of
safety issues to reduce risk and improve workplace safety.

14

14

199174_Ford_2023_AR_1OK.indd 18 2/9/24 2:53 PM

 Item 1. Business (Continued)

Item 1. Business
Diversity, Equity,(Continued)
and Inclusion

Diversity, Equity,
At Ford, and Inclusion
we believe that creating and sustaining a culture of diversity, equity, and inclusion for all our employees is
foundational to both achieving our Ford+ plan and treating employees with dignity and respect. Ford offers 10 global
At Ford,
Employee we believe
Resource that creating
Groups (“ERGs”)and
thatsustaining
representavarious
culture dimensions
of diversity, of
equity, and inclusion
our employee for all our
population, employees
including race,is
foundational to both achieving our Ford+ plan and treating employees with dignity and respect. Ford offers 10
ethnicity, gender, religion, sexual orientation and gender identity, disability, and generation with chapters throughout the global
Employee
world. OurResource
ERGs areGroups (“ERGs”)
instrumental that represent
in providing various
a voice to our dimensions of our
globally diverse employee
workforce aspopulation, including
well as sharing race,
valuable
ethnicity, gender, religion, sexual orientation and gender identity,
insights into the development of products, services, and experiences. disability, and generation with chapters throughout the
world. Our ERGs are instrumental in providing a voice to our globally diverse workforce as well as sharing valuable
insights
Fordinto the development
empowers leaders toofdevelop
products,
DEIservices, and experiences.
action plans specific to the unique needs and culture of each function and
region. From an enterprise perspective, we have taken several concrete steps to further these efforts, including
Ford empowers
embedding DEI into leaders to develop
our corporate DEIand
strategy action plans specific
governance, to the unique
highlighting DEI inneeds and culture
the expected of eachthat
behaviors function and
support
region. From an enterprise perspective, we have taken several concrete steps to further these efforts,
Ford’s operating system, and forming an enterprise DEI Council composed of leaders to drive integration across including
embedding
employees, DEI into our
suppliers, corporate
dealers, andstrategy and governance,
customers. highlighting
This holistic DEI strategyDEI in theaexpected
includes behaviors
strong focus thatthroughout
on equity support the
Ford’s operating system, and forming an enterprise DEI Council composed of leaders to drive integration
employee experience, monitoring the diversity within both internal and external talent pipelines, and DEI education. across
employees, suppliers, dealers, and customers. This holistic DEI strategy includes a strong focus on equity throughout the
employee experience,
Our diversity monitoring
statistics include the
the diversity
followingwithin
as of both internal
December and
31, external
2023: 27.9%talent pipelines,
of our salariedand DEI education.
employees worldwide
identify as females; 25.5% of our total salaried and hourly employees in the United States identify as female; and 36.7% of
Our diversity
our total statistics
salaried and hourlyinclude the following
employees as of December
in the United 31, 2023:
States identify 27.9% of our salaried employees worldwide
as a minority.
identify as females; 25.5% of our total salaried and hourly employees in the United States identify as female; and 36.7% of
our totalAttraction,
Talent salaried and hourly and
Growth, employees in the
Capability United States identify as a minority.
Assessment

Talent Attraction,
Talent attractionGrowth,
at Ford and Capability
is evolving Assessment
with the transformation of our business. We are sourcing and attracting
candidates from multiple industries and regions of the world. We continue to recruit talent from traditional industries, such
Talent attraction
as manufacturing andatconsulting,
Ford is evolving with been
and have the transformation of our business.
successful in attracting Wenon-traditional
talent from are sourcing and attracting
industries, specifically
candidates
the fromindustry.
technology multiple This
industries and regions
is important as weofbuild
the our
world. We continue
expertise to recruit
in growth talentas
areas such from traditional
software, industries, and
electrification, such
as manufacturing
integrated and consulting, and have been successful in attracting talent from non-traditional industries, specifically
services.
the technology industry. This is important as we build our expertise in growth areas such as software, electrification, and
integrated
From aservices.
capability perspective, we leverage best practices in assessments and talent management to strengthen our
current capabilities and future pipeline while reinforcing a culture of excellence, focus, and collaboration. The
From a capability
performance perspective,
management processwe leverage best
is reviewed practices
regularly in assessments
to ensure we set clearand talent management
expectations, measure to strengthen our
individual
current capabilities and future pipeline while reinforcing a culture of excellence, focus, and collaboration.
performance, and reward appropriately. Our process includes a semi-annual review of each individual’s performance to The
performance
objectives and management
demonstrationprocess is reviewed
of expected regularly
behaviors to ensure we
of excellence, set and
focus, clearcollaboration.
expectations, measure individual
performance, and reward appropriately. Our process includes a semi-annual review of each individual’s performance to
objectives
Finally,and
the demonstration
extent to whichofour
expected
People behaviors
Leaders areof excellence,
equipped tofocus, andtransformation
drive our collaboration. plays a vital role in our
strategy, and we are committed to helping our leaders strengthen their capabilities with dedicated traditional and non-
Finally,learning
traditional the extent to which ourOur
opportunities. People Leaders
leadership are equipped
strategy to drive
equips our our with
leaders transformation playsto
the capabilities a deliver
vital role in our
business
strategy, and we are committed to helping our leaders strengthen
results and grow the talent needed to meet our organizational needs. their capabilities with dedicated traditional and non-
traditional learning opportunities. Our leadership strategy equips our leaders with the capabilities to deliver business
results
Employeeand Wellbeing
grow the talent needed to meet our organizational needs.
Initiatives

Employee Wellbeing
Our global, holisticInitiatives
approach to wellbeing encompasses the financial, social, mental/emotional, physical, and
professional needs of our employees. Foundational to our wellbeing philosophy is providing a broad array of resources
and Our global,
solutions toholistic
educate approach to wellbeing
employees, encompasses
build capability, and meettheindividual
financial, and
social, mental/emotional,
organizational wellbeingphysical,
needs and
and goals.
professional needs of our employees. Foundational to our wellbeing philosophy is providing a broad
Wellbeing is an integral part of our total rewards strategy as we work to address business and employee challenges array of resources
and solutions
through to educateapproach
a multi-channel employees, thatbuild capability,
provides and meet
our diverse individualand
populations andglobal
organizational wellbeing
regions flexibility andneeds and
choice to goals.
meet
Wellbeing is an integral
their specific needs. part of our total rewards strategy as we work to address business and employee challenges
through a multi-channel approach that provides our diverse populations and global regions flexibility and choice to meet
theirWe
specific needs.
use data-driven insights gathered through surveys, focus groups, and claims data to understand employee needs
and prioritize our wellbeing efforts. We provide global wellbeing programs, such as Employee Assistance Programs and
We use data-driven
mindfulness insights
sessions, among gathered
other [Link] surveys,
In addition, focus groups,
we provide and claims
employees data to understand
with experiences, employee
self-guided needs
tools, and
and prioritize
social our wellbeing
connection efforts.
opportunities, We provide
as well as accessglobal wellbeing
to the programs,
professional such
support andasresources
Employeethey
Assistance Programs
need to achieve and
their
mindfulness
own sense ofsessions, among
wellbeing. We areother things. In
committed to addition, weenvironment
creating an provide employees with experiences,
where employees self-guided
and People tools,
Leaders careandfor
socialother
each connection opportunities,
as we deliver Ford+. as well as access to the professional support and resources they need to achieve their
own sense of wellbeing. We are committed to creating an environment where employees and People Leaders care for
each other as we deliver Ford+.

15

15

199174_Ford_2023_AR_1OK.indd 19 2/9/24 2:53 PM

 Item 1. Business (Continued)

Item 1. Business
Employee (Continued)
Sentiment Strategy

Employee
We gatherSentiment
feedback Strategy
from our employees through a variety of channels throughout the year. Our approach is
designed to capture sentiment and make it actionable for managers, leadership, and for the teams designing the tools,
We gather
processes, andfeedback fromimpact
policies that our employees through
the employee a variety We
experience. of channels
use a mixthroughout
of annualthe
andyear. Our approach
real-time is
surveys designed to
designed to capture sentiment and make it actionable for managers, leadership, and for the teams designing
understand employee sentiment in areas such as: people leader effectiveness, job satisfaction, DEI, wellbeing, overall the tools,
processes,
satisfaction,and policies
strategy andthat impact the
execution, andemployee experience.
Ford Operating System We use a mix of annual and real-time surveys designed to
behaviors.
understand employee sentiment in areas such as: people leader effectiveness, job satisfaction, DEI, wellbeing, overall
satisfaction,
A critical strategy
element and execution,sentiment
of measuring and Ford isOperating
ensuringSystem
the databehaviors.
gets to those who are best positioned to use it to drive
improvements in the employee experience. We design dashboards and tools for managers to view the results from their
A critical
teams, element
help them of measuring
to generate sentiment
meaningful is ensuring
insights, the data
and convert gets
those to those
insights who
into are best
guided positioned
actions. to use
We share theitresults
to drive
improvements in the employee experience. We design dashboards and tools for managers to view the results
with senior executives to identify broader trends and themes and to inform larger strategic decisions across the Company. from their
teams, help them to generate meaningful insights, and convert those insights into guided actions. We share the results
with senior executives
Employment Data to identify broader trends and themes and to inform larger strategic decisions across the Company.

Employment Data number of individuals employed by us and entities that we consolidated as of December 31 was as
The approximate
follows (in thousands):
The approximate number of individuals employed by us and entities that we consolidated as of December 31 was as
2022 2023
follows (in thousands):
United States 84 87
2022 2023
Rest of World 84 85
United States 84 87
Company excluding Ford Credit 168 172
Rest of World 84 85
Ford Credit 5 5
Company excluding Ford Credit 168 172
Total Company 173 177
Ford Credit 5 5
Total Company 173
Substantially all of the hourly employees in our Ford Blue, Ford Model e, and Ford Pro operations are represented 177
by
unions and covered by collective bargaining agreements. In the United States, approximately 99% of these unionized
Substantially
hourly employeesallareofrepresented
the hourly employees in our Ford
by the International Blue, United
Union, Ford Model e, and Ford
Automobile, Pro operations
Aerospace are represented
and Agricultural Implementby
unions and covered by collective bargaining agreements. In the United States, approximately 99% of these unionized
Workers of America (“UAW” or “United Auto Workers”). At December 31, 2023, approximately 59,000 hourly employees in
hourly employees
the United are represented
States were representedbybythe
theInternational
UAW. Union, United Automobile, Aerospace and Agricultural Implement
Workers of America (“UAW” or “United Auto Workers”). At December 31, 2023, approximately 59,000 hourly employees in
the United States were represented by the UAW.

16

16

199174_Ford_2023_AR_1OK.indd 20 2/9/24 2:53 PM

 ITEM 1A. Risk Factors.

We have listed below the material risk factors applicable to us grouped into the following categories: Operational
Risks; Macroeconomic, Market, and Strategic Risks; Financial Risks; and Legal and Regulatory Risks.

Operational Risks

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. Our products contain
components that we source globally from suppliers who, in turn, source components from their suppliers. If there is a
shortage of a key component in our supply chain or a supplier is unable to deliver a component to us in accordance with
our specifications, because of a production issue, limited availability of materials, shipping problems, restrictions on
transactions with certain countries or companies, or other reason, and the component cannot be easily sourced from a
different supplier, or we are unable to obtain a component on a timely basis, the shortage may disrupt our operations or
increase our costs of production.

For the production of our electric vehicles, we are dependent on the supply of batteries and the raw materials (e.g.,
lithium, cobalt, nickel, graphite, and manganese) used by our suppliers to produce those batteries. As we increase our
production of electric vehicles, we expect our need for such materials to increase significantly. At the same time, other
companies are increasing their production of electric vehicles, which will further increase the demand for such raw
materials. As a result, we may be unable to acquire raw materials needed for electric vehicle production in sufficient
amounts that are responsibly sourced or at reasonable prices. As described below under “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” as well as in the
Liquidity and Capital Resources section in Item 7 below, we have entered into and we may, in the future, enter into offtake
agreements and other long-term purchase contracts that obligate us, subject to certain conditions such as quality or
minimum output, to purchase a certain percentage or minimum amount of output from certain raw materials suppliers. In
the event the supplier under those agreements or any of our or our suppliers’ raw material supply contracts is unable to
deliver sufficient quantities of raw materials needed for our or our suppliers’ production operations, e.g., if a mine does not
produce at expected levels, or the raw materials do not otherwise satisfy our requirements, and we or our suppliers are
unable to find an alternative resource with sufficient quantities, at reasonable prices, responsibly sourced (e.g., in
compliance with the Uyghur Forced Labor Prevention Act and similar regulations and standards), and in a timely manner,
it could impact our ability to produce electric vehicles.

A shortage of, or our inability to acquire or find adequate suppliers of, key components or raw materials as a result of
disruptions in the supply chain, capacity constraints, limited availability, competition for those items within the automotive
industry and other sectors, or otherwise can cause a significant disruption to our production schedule and have a
substantial adverse effect on our financial condition or results of operations. Further, as a result of lower-than-anticipated
industrywide electric vehicle adoption rates or otherwise, suppliers of such raw materials or components may become
distressed.

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. We have announced plans to significantly increase our electric
vehicle production volumes; however, our ability to produce higher volumes of electric vehicles is dependent upon the
availability of raw materials and other components necessary for the production of batteries, e.g., lithium, cobalt, nickel,
graphite, and manganese, among others. As described above under “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 our access to such raw materials, we have entered into and we may, in the future, enter into
offtake agreements and other long-term purchase contracts. Such agreements obligate us, subject to certain conditions
such as quality or minimum output, to purchase a certain percentage or minimum amount of output from raw material
suppliers over an agreed upon period of time pursuant to an agreed upon purchase price mechanism that is typically
based upon the market price of the material at the time of delivery.

17

199174_Ford_2023_AR_1OK.indd 21 2/9/24 2:53 PM

 Item 1A. Risk Factors (Continued)

ItemUnlike
1A. Risk ourFactors
historical(Continued)
arrangements with suppliers, under multi-year offtake agreements and other long-term purchase
contracts, the risks associated with lower-than-expected electric vehicle production volumes or changes in battery
Unlike our
technology thathistorical
reduce the arrangements
need for certain with raw
suppliers,
materials,under multi-year
batteries, offtake
or their agreements
components areandborneother bylong-term
Ford rather purchase
than
contracts, the risks associated with lower-than-expected electric vehicle production
our suppliers. In the event we do not purchase the materials or components pursuant to the terms of these agreements, volumes or changes in battery
technology that reduce
we may be obligated to the need forthe
reimburse certain
supplierrawfor materials, batteries,
costs it incurs. Weorhavetheirincurred
components and we aremayborne by Fordtorather
continue incur than
such
our suppliers. In the event we do not purchase the materials or components
charges. This may be the case even if the supplier finds another purchaser, as we may be responsible for the costs of pursuant to the terms of these agreements,
we maythe
finding be new
obligated to reimburse
purchaser as well as theanysupplier for costs
lost revenue it incurs. We
attributable have
to the incurred and
replacement we maypaying
purchaser continue to incur
a lower such
price than
charges. This may be the case even if the supplier finds another purchaser, as we may be responsible for the costs of
required under the pricing mechanism in our agreement.
finding the new purchaser as well as any lost revenue attributable to the replacement purchaser paying a lower price than
required under the pricing mechanism in our agreement.
As a result of the competition for and limited availability of the raw materials needed for our electric vehicle business,
the costs of such materials are difficult to accurately forecast as they may fluctuate during the term of the offtake
As a result of the competition for and limited availability of the raw materials needed for our electric vehicle business,
agreements and other long-term purchase contracts based on market conditions. Accordingly, we may be subject to
the costs of such materials are difficult to accurately forecast as they may fluctuate during the term of the offtake
increases in the prices we pay for those raw materials, and our ability to recoup such costs through increased pricing to
agreements and other long-term purchase contracts based on market conditions. Accordingly, we may be subject to
our customers may be limited. As a result, our margins, results of operations, financial condition, and reputation may be
increases in the prices we pay for those raw materials, and our ability to recoup such costs through increased pricing to
adversely impacted by commitments we make pursuant to offtake agreements and other long-term purchase contracts.
our customers may be limited. As a result, our margins, results of operations, financial condition, and reputation may be
adversely impacted by commitments we make pursuant to offtake agreements and other long-term purchase contracts.
Ford’s long-term competitiveness depends on the successful execution of Ford+. We previously announced
our plan
Ford’s for long-term
growth andcompetitiveness
value creation – Ford+. depends Ford+
on theis focused
successful on delivering
execution distinctive
of Ford+. andWe increasingly
previouslyelectricannounced
products plus “Always-On” customer relationships and user experiences.
our plan for growth and value creation – Ford+. Ford+ is focused on delivering distinctive and increasingly Our Ford+ plan is designed to leverage
electricour
foundational
products plusstrengths
“Always-On” to build new capabilities
customer relationships – enriching
and usercustomer
experiences. experiences
Our Ford+ andplan deepening
is designed loyalty. As we our
to leverage
undertake
foundational strengths to build new capabilities – enriching customer experiences and deepening loyalty. As we model,
this transformation of our business, we must integrate our strategic initiatives into a cohesive business
and balance
undertake this competing priorities,
transformation of ouror business,
we will notwe bemustsuccessful.
integrate Toour facilitate thisinitiatives
strategic transformation, we are making
into a cohesive business substantial
model,
investments, recruiting new talent, and optimizing our business model, management
and balance competing priorities, or we will not be successful. To facilitate this transformation, we are making substantial system, and organization.
Accordingly,
investments, maintaining
recruiting new discipline
talent, andin our capital allocation
optimizing our business continues
model, to management
be important, system,as a strong and core business and a
organization.
balance sheet that provides the flexibility to invest in these new growth opportunities
Accordingly, maintaining discipline in our capital allocation continues to be important, as a strong core business is critical to the success of our
andFord+a
plan. If we are unable to optimize our capital allocation among vehicles, services,
balance sheet that provides the flexibility to invest in these new growth opportunities is critical to the success of our technology, and other calls on capital,
Ford+
make
plan. Ifsufficient progress
we are unable to to become
optimize ourcompetitive on costamong
capital allocation and quality, or we
vehicles, are otherwise
services, technology,not successful
and otherincalls executing
on capital,
Ford+ (or are delayed
make sufficient progress forto reasons
become outside of our on
competitive control),
cost and we quality,
may notorbe weable
areto realize the
otherwise notfull benefits of
successful in our plan, which
executing
could
Ford+have(or are andelayed
adversefor effect on our
reasons financial
outside condition
of our control), or weresults
mayofnot operations.
be able to Furthermore,
realize the fullifbenefits
we fail toofmake our plan,progress
which
on ourhave
could plan an at the pace effect
adverse that shareholders
on our financial expect, it mayorlead
condition to an
results ofincrease
operations. in shareholder
Furthermore, activism,
if we fail which
to makemayprogress
disrupt
the conduct
on our plan at of the
our pace
business and divert management’s
that shareholders expect, it may attention
lead to and resources.
an increase in shareholder activism, which may disrupt
the conduct of our business and divert management’s attention and resources.
Ford’s vehicles could be affected by defects that result in recall campaigns, increased warranty costs, or
delays
Ford’sin new modelcould
vehicles launches, and the
be affected bytime it takes
defects thatto improve
result the quality
in recall campaigns, of ourincreased
vehicles and services
warranty costs,could or
continue
delays in to new havemodelan adverse
launches, effect
andon theourtime business.
it takes to Government
improve the safety standards
quality require manufacturers
of our vehicles and servicestocould remedy
defects
continue related
to have to vehicle
an adversesafetyeffect
through on safety recall campaigns,
our business. Government and asafety
manufacturer
standardsisrequire obligated to recall vehicles
manufacturers if it
to remedy
defects related
determines thatto thevehicle
vehicles safety through
do not comply safety
withrecall
a safetycampaigns,
[Link] Wea may
manufacturer is obligated
also be obligated to recalldefects
to remedy vehicles or if it
determinesrecall
potentially that theourvehicles
vehiclesdo due nottocomply
defective with a safety standard.
components providedWe to usmaybyalso be obligated
our suppliers, to remedy
arising from theirdefects
qualityor issues
potentially
or otherwise. recall our vehicles
NHTSA’s due to defective
enforcement strategy has components
resulted in provided
significant to us bypenalties
civil our suppliers, beingarising
levied fromand the theirusequality issues
of consent
or otherwise. NHTSA’s enforcement strategy has resulted in significant civil
orders requiring direct oversight by NHTSA of certain manufacturers’ safety processes, a trend that could continue. penalties being levied and the use of consent
orders
Shouldrequiring direct oversight
we or government safetyby NHTSA of
regulators certain manufacturers’
determine that a safety orsafety other processes, a trend that could
defect or a noncompliance continue.
exists with respect
Should
to certain of our vehicles prior to the start of production, the launch of such vehicle could be delayed until suchwith
we or government safety regulators determine that a safety or other defect or a noncompliance exists respect
defect is
to certain of our vehicles prior to the start of production, the launch of such vehicle
remedied. The cost of recall and customer satisfaction actions to remedy defects in vehicles that have been sold could could be delayed until such defect is be
remedied. The
substantial, cost of recall
particularly if the and
actionscustomer
relate to satisfaction
global platformsactionsor toinvolve
remedydefects
defectsthat in vehicles that have
are identified years been
aftersold could be
production.
substantial,
For example, particularly
NHTSA and if the
theactions
automotive relateindustry
to global areplatforms
currentlyorengaged
involve defects
in a study thatofaretheidentified
safety of years after production.
approximately
Formillion
56 example, Takata NHTSA and theairbag
desiccated automotive
inflatorsindustry
in the are currently
United [Link]
Of these, in aapproximately
study of the safety three and of approximately
a half million of the
56 millionare
inflators Takata
in ourdesiccated
vehicles. In airbag inflators
addition, NHTSA in the is United
consideringStates. Of these,
action relatedapproximately three and
to 52 million vehicles a half million
containing of the
inflators
inflators
from ARC are in our vehicles.
Automotive and DelphiIn addition,
AutomotiveNHTSA is considering
in the United States. action Fordrelated
has 2.5to 52 million
million vehicles
vehicles containing
within inflators
this population.
from ARC
Should Automotive
NHTSA and that
determine DelphitheseAutomotive
inflators in the United
contain a safetyStates.
defect, FordFordhasand2.5other
million vehicles within
manufacturers thispotentially
could [Link]
Should
significantNHTSA determine
incremental recallthat theseFurther,
costs. inflatorstocontain
the extent a safety
recalldefect, Ford andsatisfaction
and customer other manufacturers
actions relate could to potentially
defective face
significant
components incremental
we receiverecall from costs.
suppliers, Further, to theto
our ability extent
recover recall
fromand thecustomer
supplierssatisfaction
may be limited actions relate
by the to defective
suppliers’ financial
components
condition. We accrue the estimated cost of both base warranty coverages and field service actions at the time afinancial
we receive from suppliers, our ability to recover from the suppliers may be limited by the suppliers’ vehicle is
condition.
sold, and we Wereevaluate
accrue thethe estimated
adequacy cost of both
of our base on
accruals warranty
a regular coverages
basis. In and field service
addition, from timeactions at the
to time, wetimeissue a vehicle is
sold, and we
extended reevaluate
warranties at ourtheexpense,
adequacythe of estimated
our accruals costonofa which
regular is basis.
accrued In at
addition,
the timefrom time to time,
of issuance. Forwe issue
additional
extended warranties at our expense, the estimated cost of which is accrued at
information regarding warranty and field service action costs, including our process for establishing our reserves, see the time of issuance. For additional
information regarding
“Critical Accounting warranty in
Estimates” and field
Item 7 service
and Note action
25 ofcosts,
the Notesincluding
to theour processStatements.
Financial for establishing our reserves,
If warranty costs are see
“Critical Accounting Estimates” in Item 7 and Note 25 of the Notes to the Financial Statements. If warranty costs are
greater than anticipated as a result of increased vehicle and component complexity, the adoption of new technologies, the
greater than anticipated as a result of increased vehicle and component complexity, the adoption of new technologies, the
time it takes to improve the quality of our products and services (or if such efforts are unsuccessful), or otherwise
time it takes to improve the quality of our products and services (or if such efforts are unsuccessful), or otherwise
(including as a result of higher repair costs driven by inflation or other economic factors), such costs could continue to
(including as a result of higher repair costs driven by inflation or other economic factors), such costs could continue to
have an adverse effect on our financial condition or results of operations. Furthermore, launch delays, recall actions, and
have an adverse effect on our financial condition or results of operations. Furthermore, launch delays, recall actions, and

18
18

199174_Ford_2023_AR_1OK_r1.indd 22 2/13/24 8:06 PM

 Item 1A. Risk Factors (Continued)

Item 1A. Risk

increased Factors
warranty (Continued)
costs have adversely affected and could continue to adversely affect our reputation or the public
perception and market acceptance of our products and services as discussed below under “Ford’s new and existing
increased
products and warranty
digital,costs have and
software, adversely
physicalaffected andare
services could continue
subject to adversely
to market affect
acceptance andourface
reputation or the
significant public
competition
perception and market acceptance of our products and services as discussed below under “Ford’s new
from existing and new entrants in the automotive and digital and software services industries, and its reputation may be and existing
products
harmed ifandit is digital,
unablesoftware,
to achieveand
thephysical services
initiatives are subject toInmarket
it has announced.” acceptance
an effort and
to improve face significant
quality, competition
we have slowed down
from
and may continue to slow down launches, which may result in lost sales, revenue, and profits and could have anmay
existing and new entrants in the automotive and digital and software services industries, and its reputation be
adverse
harmed if it is unable to achieve the initiatives it has announced.” In an effort to improve quality, we have slowed
effect on our financial condition or results of operations. In addition, as a result of vehicles on hold for quality control, our down
and may continue
inventory levels may to slow down launches, which may result in lost sales, revenue, and profits and could have an adverse
be higher.
effect on our financial condition or results of operations. In addition, as a result of vehicles on hold for quality control, our
inventory
Ford maylevelsnotmay be higher.
realize the anticipated benefits of existing or pending strategic alliances, joint ventures,
acquisitions, divestitures, or business strategies. We have invested in, formed strategic alliances with, and
Ford may
announced not realize
or formed joint the anticipated
ventures benefitsofof
with a number existing orand
companies, pending
we may strategic
expand thosealliances, joint ventures,
relationships or enter into
acquisitions, divestitures, or business strategies. We have invested in,
similar relationships with additional companies. These initiatives typically involve enormous complexity, formed strategic alliances with,
mayand require a
announced
significant amountor formed joint ventures
of capital, and may with a number
involve of companies,
a lengthy regulatoryand we may
approval expandAs
process. those relationships
a result, we may not or enter
be ableintoto
similar relationships with additional companies. These initiatives typically involve enormous
complete anticipated transactions, the anticipated benefits of these transactions may not be realized, or the benefits may complexity, may require a
significant
be delayed. For example, we may not successfully integrate an alliance or joint venture with our operations, including to
amount of capital, and may involve a lengthy regulatory approval process. As a result, we may not be able the
complete
implementationanticipated
of ourtransactions,
controls, systems, the anticipated
procedures, benefits of these or
and policies, transactions
unforeseenmay not be or
expenses realized, or may
liabilities the benefits
arise that may
be
were delayed. For example,
not discovered duringwe due may not successfully
diligence prior to anintegrate
investment an or
alliance or joint
entry into venture alliance,
a strategic with our or operations, including
a misalignment of the
implementation of our controls, systems, procedures, and policies, or unforeseen
interests may develop between us and the other party. Further, to the extent we share ownership, control, or expenses or liabilities may arise that
were not discovered
management duringparty
with another due diligence prior to an
in a joint venture, ourinvestment or entry into
ability to influence a strategic
the joint venture alliance,
may beor a misalignment
limited, and we may of be
interests may develop between us and the other party. Further, to the extent we
unable to prevent misconduct or implement our compliance or internal control systems. In order to secure critical share ownership, control, or
management
materials with another
for production party in vehicles,
of electric a joint venture,
we have ourentered
ability to influence
into and may, theinjoint
the venture may into
future, enter be limited,
offtakeand we may be
agreements
unable
and to prevent
other long-term misconduct
purchase or implement
contracts withour
rawcompliance or internal
materials suppliers control
and makesystems.
investments In order to secure
in certain critical and
raw material
materials
battery for production
suppliers; however, of electric
we mayvehicles, we the
not realize have entered into
anticipated and may,
benefits in the
of these future,and
actions enterourinto offtake
efforts agreements
to have such
and other long-term
suppliers, particularlypurchase
those in contracts
less developedwith raw materials
markets, suppliers
adopt Ford’s and make investments
sustainability and otherin certain raw
standards maymaterial
be and
battery suppliers;
unsuccessful, which however,
could havewe may not realize
an adverse the anticipated
impact benefits In
on our reputation. of addition,
these actions and our effortsof
the implementation toahave
new suchor different
suppliers,strategy
business particularlymaythose
lead into less developedofmarkets,
the disruption our existingadopt Ford’s sustainability
business and other
operations, including standardsmanagement
distracting may be from
unsuccessful,
current whichFor
operations. could have anour
example, adverse
effortsimpact on our
to evaluate andreputation.
implementInalternative
addition, the implementation
distribution modelsof anda new or different
channels for
business
our products strategy may leadfrom
and services to the disruption
those we have of traditionally
our existing usedbusiness
may operations,
be challenged including
or maydistracting
not succeed management
or be as from
current
successful operations. For example,
as our historical our effortsExternal
arrangements. to evaluate andmay
factors implement alternative
also impact distribution
the success of ourmodels and channels
initiatives. For example, for
our products and services from those we have traditionally used may be challenged
our business and strategy are susceptible to tensions in U.S.-China relations and the rapid development of the Chinese or may not succeed or be as
successful
electric vehicle as our historical
industry, witharrangements.
domestic Chinese External factorsexporting
producers may alsotoimpact
some thekeysuccess
markets of in our
whichinitiatives.
we operate. For example,
In
our business and strategy are susceptible to tensions in U.S.-China relations and
addition, as we transition to producing a higher percentage of electric vehicles, if industrywide adoption rates the rapid development of the Chineseto
continue
electric
be lowervehicle industry, with
than anticipated, wedomestic
may takeChineseactions toproducers
better match exporting to some
the pace key markets
of electric vehicleinadoption,
which wesuch operate.
as notInfully
addition, as we transition to producing a higher percentage of electric vehicles, if
utilizing or reducing the capacity of our existing or future plants, reducing production hours or shifts, and we mayindustrywide adoption rates continue
become to
be lower than anticipated, we may take actions to better match the pace of electric
subject to claims by suppliers as a result. Results of operations from new activities may be lower than our existing vehicle adoption, such as not fully
utilizing
activities, orand,
reducing the capacity
if a strategy of our existing
is unsuccessful, or future
we may plants, our
not recoup reducing production
investments, whichhours
mayorbe shifts, and weinmay
significant, thatbecome
strategy.
subject to claims by suppliers as a result. Results of operations from new activities
Moreover, we may continue to have financial exposure following a strategic divestiture or cessation of operations in a may be lower than our existing
activities, and, if to
market. Failure a strategy
successfullyis unsuccessful, we may
and timely realize thenot recoup our
anticipated investments,
benefits which may be
of the transactions or significant, in that strategy.
strategies described
Moreover, we may continue to have financial exposure following
herein could have an adverse effect on our financial condition or results of operations. a strategic divestiture or cessation of operations in a
market. Failure to successfully and timely realize the anticipated benefits of the transactions or strategies described
hereinFordcould
may have
not an adverse
realize the effect on our benefits
anticipated financial condition or results
of restructuring of operations.
actions and such actions may cause Ford to
incur significant charges, disrupt our operations, or harm our reputation. We continually review and evaluate our
Ford to
business mayfindnot realize thetoanticipated
opportunities benefits ofmore
make our operations restructuring
efficient andactions
reduceand such
costs. In actions
doing so,may causetaken
we have Fordand
to
incur significant charges, disrupt our operations, or harm our reputation. We continually review
may in the future take restructuring actions, such as strategic divestitures or ceasing of operations in a market, particularlyand evaluate our
business to find opportunities to make our operations more efficient and reduce costs. In doing so, we
for those businesses where a path to sustained profitability is not feasible in light of the capital allocation requirements or have taken and
may in the
for other future take
reasons. Ourrestructuring actions, such
plans for implementing as actions
such strategicmaydivestitures or ceasing
be accelerated of operations
by shifting industryindynamics
a market,andparticularly
new
for
entrants to our industries with which we must compete. These actions may include employee separations, a reduced or
those businesses where a path to sustained profitability is not feasible in light of the capital allocation requirements
for other (e.g.,
footprint reasons.
plantOur plans or
closures forsmaller
implementing suchatactions
operations existing may be accelerated
plants or plants that byare
shifting
not yetindustry dynamics
on-line), and new
or operating our
entrants to our industries with which we must compete. These actions may include employee separations,
plants at less than full capacity (e.g., reducing shifts). Such restructuring actions have caused us and may in the future a reduced
footprint
cause us(e.g., plant
to incur closurescosts;
significant or smaller
recordoperations at existing
impairments or otherplants or plants
charges; subjectthatusare
to not yet on-line),
potential claims or operating
from our
employees,
plants at less
suppliers, than full
dealers, othercapacity (e.g., reducing
counterparties, shifts). Such
or governmental restructuring
authorities actions
(including have caused
a reduction us and may
or clawback in the future
of incentives);
cause us
disrupt ourtooperations;
incur significant costs;
distract record impairments
management from currentor other charges;
operations; subject
or harm ourusreputation.
to potentialFurther,
claims we
frommayemployees,
not realize
suppliers,
the expecteddealers, other
benefits counterparties,
of such restructuringor governmental authorities cost
actions (e.g., anticipated (including
savings),a reduction or clawback
such benefits may beofdelayed,
incentives);
or
disrupt our
market operations;
dynamics distract
or other management
factors from current
may have evolved such operations;
that we cannot or harm
obtain our
thereputation. Further,results
original intended we may of not realize
an action.
the expected benefits of such restructuring actions (e.g., anticipated cost savings), such benefits may be delayed, or
market dynamics or other factors may have evolved such that we cannot obtain the original intended results of an action.

19

19

199174_Ford_2023_AR_1OK_r1.indd 23 2/13/24 8:06 PM

 Item 1A. Risk Factors (Continued)

ItemOperational
1A. Risk Factors (Continued)
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
andOperational
dealers. Weinformation systems,
rely on information securitynetworks
technology systems,and vehicles, and services
information could be in-vehicle
systems, including affected by cybersecurity
systems and
incidents,
mobile devices, some of which are managed by suppliers, to process, transmit, and store electronic informationsuppliers
ransomware attacks, and other disruptions and impact Ford and Ford Credit as well as their that is
and dealers.
important to the We rely on information
operation of our business, technology networks
our vehicles, and and
theinformation
services we systems, including
offer. Despite in-vehicle
devoting systems
significant and
resources
mobile devices, some of which are managed by suppliers, to process, transmit, and store
to our cybersecurity program, we are at risk for interruptions, outages, and compromises of: (i) operational information electronic information that is
important to the operation of our business, our vehicles, and the services we offer.
systems (including business, financial, accounting, product development, consumer receivables, data processing, or Despite devoting significant resources
to our cybersecurity
manufacturing program,
processes); (ii) we are security
facility at risk forsystems;
interruptions,
and/oroutages, and compromises
(iii) in-vehicle systems or mobile of: (i) operational
devices, whetherinformation
caused
systems
by a ransomware or other cybersecurity incident, security breach, or other reason (e.g., a natural disaster, fire, actsorof
(including business, financial, accounting, product development, consumer receivables, data processing,
manufacturing
terrorism or war, processes); (ii) facility security
or an overburdened systems;
infrastructure and/orSuch
system). (iii) in-vehicle
incidents systems or mobile
could materially devices,
disrupt whether caused
operational
by a ransomware or other cybersecurity incident, security breach, or other reason
information systems; result in loss or unwilling publication of trade secrets or other proprietary or competitively (e.g., a natural disaster, fire, sensitive
acts of
terrorism or war, or an overburdened infrastructure system). Such incidents could materially
information; compromise the privacy of personal information of consumers, employees, or others; jeopardize the security disrupt operational
information systems;
of our facilities; affect result in loss or unwilling
the performance publication
of in-vehicle systems of trade secrets
or services weoroffer;
otherand/or
proprietary
impactorthe competitively
safety of our sensitive
vehicles.
information; compromise the privacy of personal information of consumers, employees,
This risk exposure rises as we continue to develop and produce vehicles with increased connectivity. Moreover, we, or others; jeopardize the security
our
of our facilities; affect the performance of in-vehicle systems or services we offer; and/or
suppliers, and our dealers have been the target of cybersecurity incidents and such threats are continuing and evolving, impact the safety of our vehicles.
This
whichrisk
mayexposure rises as we continue
cause cybersecurity incidentstotodevelop
be more and produce
difficult vehicles
to detect with increased
for periods of [Link].
Our networks Moreover,
and in-vehiclewe, our
suppliers, and our dealers have been the target of cybersecurity incidents and such
systems, sharing similar architectures, could also be impacted by, or a cybersecurity incident may result from, the threats are continuing and evolving,
which may cause
negligence cybersecurity
or misconduct incidents
of insiders to be more who
or third-parties difficult
have to access
detect for periods
to our of time.
networks andOur networks
systems. Weand in-vehicle
employ
systems, sharing similar architectures, could also be impacted by, or a cybersecurity
capabilities, processes, and other security measures we believe are designed to detect, reduce, and mitigate the incident may result from, therisk of
negligence or misconduct of insiders or third-parties who have access to our networks
cybersecurity incidents, and have requirements for our suppliers to do the same; however, we may not be aware of all and systems. We employ
capabilities,
vulnerabilities processes,
or might not andaccurately
other securityassess measures
the riskswe of believe
incidents, areand
designed to detect, reduce,
such preventative measures and cannot
mitigateprovide
the risk of
cybersecurity
absolute security incidents,
and may andnothave requirements
be sufficient in allfor our suppliersortomitigate
circumstances do the same; however,
all potential weincluding
risks, may not potential
be awareproduction
of all
vulnerabilities
disruption or the or loss
mightornot accurately
disclosure assess the
of sensitive risks of incidents,
information. Moreover, andasuch preventative
cybersecurity measures
incident could cannot
harm our provide
reputation,
absolute security and
cause customers may
to lose notin
trust beour
sufficient
securityinmeasures,
all circumstances or mitigate
and/or subject us toallregulatory
potential risks,
actions including potential
or litigation, which production
may
disruption or the
result in fines, loss or disclosure
penalties, judgments,ofor sensitive information.
injunctions, Moreover, aincident
and a cybersecurity cybersecurity
involving incident
us or could
one ofharm our reputation,
our suppliers could
cause
impactcustomers
our production, to lose trust inoperations,
internal our security measures,
business and/orresults
strategy, subject ofus to regulatory
operations, actions
financial or litigation,
condition, or ourwhich
abilitymay
to
result
deliverinproducts
fines, penalties, judgments,
and services or injunctions, and a cybersecurity incident involving us or one of our suppliers could
to our customers.
impact our production, internal operations, business strategy, results of operations, financial condition, or our ability to
deliver products
Ford’s and services
production, as well to our customers.
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
Ford’s
effects production,
of climate as well
change, as Ford’s
financial suppliers’
distress, production,
production and/or
difficulties, the ability
capacity to deliver
limitations, orproducts to
other factors. A work
consumers
stoppage or other limitation on production could occur at Ford’s facilities, at a facility in its supply chain, or at adverse
could be disrupted by labor issues, public health issues, natural or man-made disasters, one of its
effects
logisticsof climate for
providers change, financial
any number distress,including
of reasons, productionas a difficulties,
result of labor capacity
issues, limitations,
including shortages availableA work
or otheroffactors.
stoppage or other limitation on production could occur at Ford’s facilities, at a facility
employees, disputes under existing collective bargaining agreements with labor unions or in connection with in its supply chain, or at negotiation
one of its of
logistics providers for any number of reasons, including as a result of labor issues, including
new collective bargaining agreements, absenteeism, public health issues (e.g., COVID), stay-at-home orders, or in shortages of available
employees,
response to disputes
potential under existingactions
restructuring collective bargaining
(e.g., agreements
plant closures); with labor
as a result unionsfinancial
of supplier or in connection with
distress or negotiation of
other
new collective bargaining agreements, absenteeism, public health issues (e.g., COVID),
production constraints, such as limited quantities of components or raw materials, quality issues, capacity limitations, stay-at-home orders, or in or
response to potential restructuring actions (e.g., plant closures); as a result of supplier financial
other difficulties; as a result of a natural disaster (including climate-related physical risk); social unrest; cybersecurity distress or other
production
incidents; orconstraints, such as A
for other reasons. limited quantities
suspension of components
or substantial or raw of
curtailment materials, quality issues,
our manufacturing capacity
operations limitations,
could have a or
other difficulties; as a result of a natural disaster (including climate-related physical risk);
significant adverse effect on our financial condition and results of operations, as was the case in 2020, when, consistentsocial unrest; cybersecurity
incidents;
with actions or taken
for other reasons. A suspension
by governmental authorities,orwe
substantial
idled ourcurtailment of our around
plants in regions manufacturing
the world. operations could of
The duration have
a a
significant adverse effect on our financial condition and results of operations, as was
suspension of manufacturing operations and a return to our full production schedule will vary. Our Ford Blue, the case in 2020, when, consistent
with
Fordactions
Model e, taken
and by governmental
Ford Pro operations authorities,
generally wedoidled our plants
not realize in regions
revenue whilearound the world. The
our manufacturing durationare
operations of a
suspension of manufacturing operations and a return to our full production schedule will
suspended, but we continue to incur operating and non-operating expenses, resulting in a deterioration of our cash flow. vary. Our Ford Blue,
Ford Model e,
Accordingly, and
any Ford Profuture
significant operations generally
disruption to ourdoproduction
not realizeschedule,
revenue while our manufacturing
regionally or globally, whether operations are of our
as a result
suspended, but we continue to incur operating and non-operating expenses, resulting
own or a supplier’s suspension of operations, could have a substantial adverse effect on our financial condition, in a deterioration of our cash flow.
liquidity,
Accordingly, any significant future disruption to our production schedule, regionally
and results of operations. Moreover, our supply and distribution chains may be disrupted by supplier or dealer or globally, whether as a result of our
own or a supplier’s suspension of operations, could have a substantial adverse
bankruptcies or their permanent discontinuation of operations triggered by a shutdown of operations. effect on our financial condition, liquidity,
and results of operations. Moreover, our supply and distribution chains may be disrupted by supplier or dealer
bankruptcies
The limited or availability
their permanent discontinuation
of components, labor of operations
shortages, triggered
public healthbyemergencies,
a shutdown of andoperations.
supplier operating issues has
led to intermittent interruptions in our supply chain and an inconsistent production schedule at our facilities. This has
The limited
exacerbated theavailability
disruption of
to components,
our suppliers’labor shortages,
operations, public
which, health
in turn, hasemergencies,
led to higher and supplier
costs operatingshortfalls.
and production issues has
led
As atoresult
intermittent interruptions
of this disrupted in our supply
production chainwe
schedule, and an inconsistent
have received andproduction
continue to schedule
receive at our facilities.
claims This has
from our supply base
exacerbated the disruption
for reimbursement of costs to our suppliers’
beyond operations,
our original which, Upon
agreed terms. in turn,receipt,
has ledwe
to evaluate
higher costs
thoseand production
claims, and, inshortfalls.
certain
As a result of this
circumstances, wedisrupted
have madeproduction
payments schedule, we have and
to our suppliers, received and continue
this trend to receive claims from our supply base
may continue.
for reimbursement of costs beyond our original agreed terms. Upon receipt, we evaluate those claims, and, in certain
circumstances, we have made payments to our suppliers, and this trend may continue.

20

20

199174_Ford_2023_AR_1OK.indd 24 2/9/24 2:53 PM

 Item 1A. Risk Factors (Continued)

ItemGiven
1A. Risk
the Factors
worldwide (Continued)
scope of our supply chain and operations, we and our suppliers face a risk of disruption or
operating inefficiencies that may increase costs due to the adverse physical effects of climate change, which are predicted
Given the
to increase theworldwide
frequencyscope of our supply
and severity chainand
of weather andother
operations,
natural we and our
events, e.g.,suppliers
wildfires,face a risk of
extended disruption
droughts, andor
operating inefficiencies that may increase costs due to the adverse physical effects of climate change, which
extreme temperatures. In addition, in the event a weather-related event, strike, international conflict, or other occurrence are predicted
to increase the frequency and severity of weather and other natural events, e.g., wildfires, extended droughts,
limits the ability of freight carriers to deliver components and other materials from suppliers to us or logistics providers to and
extreme
transporttemperatures.
our vehicles forInan addition,
extendedin the event
period of a weather-related
time, it may increaseevent,
our strike, international
costs and conflict, orimpact
delay or otherwise other occurrence
both our
limits the ability of freight carriers to deliver components and
production operations and customers’ ability to receive our vehicles. other materials from suppliers to us or logistics providers to
transport our vehicles for an extended period of time, it may increase our costs and delay or otherwise impact both our
production operations and
Many components used customers’ abilityare
in our vehicles to receive
availableouronly
vehicles.
from a single or limited number of suppliers and, therefore,
cannot be re-sourced quickly or inexpensively to another supplier (due to long lead times, new contractual commitments
that Many
may becomponents
required byused in our
another vehicles
supplier are available
before ramping uponlytofrom a single
provide or limited number
the components of suppliers
or materials, etc.). and,
Suchtherefore,
suppliers
cannot be re-sourced quickly or inexpensively to another supplier (due to long lead times,
also could threaten to disrupt our production as leverage in negotiations. In addition, when we undertake a model new contractual commitments
that may be required
changeover, bydowntime
significant another supplier before
at one or moreramping up to provide
of our production the components
facilities or materials,
may be required, and ouretc.).
abilitySuch suppliers
to return to
also could threaten to disrupt our production as leverage in negotiations. In addition, when we
full production may be delayed if we experience production difficulties at one of our facilities or a supplier’s [Link] a model
changeover,
Moreover, assignificant downtime at one
vehicles, components, and or more
their of our production
integration become more facilities may be
complex, werequired,
may faceand an our ability to
increased return
risk of a to
full production may be delayed if we experience production difficulties at one of our facilities or
delay in production of new vehicles. Regardless of the cause, our ability to recoup lost production volume may be limited.a supplier’s facility.
Moreover,
Accordingly,asavehicles, components,
significant disruption toand ourtheir integration
production become
schedule more
could havecomplex, we may
a substantial face aneffect
adverse increased
on ourrisk of a
financial
delay
condition or results of operations and may impact our strategy to comply with fuel economy standards as discussedlimited.
in production of new vehicles. Regardless of the cause, our ability to recoup lost production volume may be below
Accordingly,
under “Ford may a significant
need to disruption
substantially to our production
modify its productschedule
plans andcouldfacilities
have a to substantial
comply with adverse
safety,effect on our fuel
emissions, financial
condition
economy,or results of operations
autonomous and may impact
driving technology, our strategy
environmental, and to comply
other with fuel economy standards as discussed below
regulations.”
under “Ford may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel
economy,
Failureautonomous
to develop driving technology,
and deploy secureenvironmental,
digital services andthat
other regulations.”
appeal to customers could have a negative impact
on Ford’s business. A growing part of our business involves connectivity, digital and physical services, and integrated
Failure to develop and deploy secure digital services that appeal to customers could have a negative impact
software services, and we are devoting significant resources to develop this business. If we fail to generate sufficient
on
demand forbusiness.
Ford’s A growing
our integrated software part of digital
and our business
servicesinvolves connectivity,
or if customers do notdigital
opt toand physical
activate theservices,
modemsand integrated
in our vehicles,
software services, and we are devoting significant resources to develop this business. If we fail to
which would hinder our ability to offer and sell such services, we may not grow revenue in line with the costs we are generate sufficient
demand
investingforor our integrated
achieve software
profitability andincreasingly
on our digital services or if customers products.
digitally-connected do not opt Forto activate
additionalthediscussion
modems inon our vehicles,
the market
which would hinder our ability to offer and sell such services, we may not grow revenue in line
acceptance of our services, see below under “Ford’s new and existing products and digital, software, and physical with the costs we are
investing
services areor achieve profitability
subject to on our increasingly
market acceptance and face digitally-connected products.
significant competition For additional
from existing and new discussion onthe
entrants in the market
acceptance of our services, see below under “Ford’s new and existing products and digital, software,
automotive and digital and software services industries, and its reputation may be harmed if it is unable to achieve the and physical
services
initiativesare subject
it has to market acceptance and face significant competition from existing and new entrants in the
announced.”
automotive and digital and software services industries, and its reputation may be harmed if it is unable to achieve the
initiatives it has announced.”
We contract with third parties to offer digital content to customers and license technologies for use in our software and
digital services. This includes the right to sell, or offer subscriptions to, third-party content, as well as the right to
We contract
incorporate withcontent
specific third parties to offer
into our digital content
own services; however,to customers andoflicense
continuation these technologies for use and
third-party licensing in our software and
other
digital services. This includes the right to sell, or offer subscriptions to, third-party content, as
arrangements, or their renewal on commercially reasonable terms, is not guaranteed or may be unavailable. Moreover, well as the right to
incorporate specific content into our own services; however, continuation of these third-party licensing
while we seek to grow our share of this business, third parties may be less inclined to continue developing or licensing and other
arrangements, or their
software for Ford’s renewal
products on commercially
or permit the Company reasonable terms,
to distribute is not
their guaranteed
content, or suchorproviders
may be unavailable. Moreover,
may offer competing
while we seek
products to grow to
and services ourthe
share of thisof
detriment business, third parties
our business. mayunable
If we are be lessto inclined to continue
offer integrated developing
software or licensing
applications and
software
digital for Ford’s
services products orterms,
on competitive permititthemayCompany to distribute
reduce customer their content,
demand or such
or increase providers
our costs may offer
to provide such competing
applications
products
and and services
services, which wetomay the bedetriment
unable of to our
pass business. If we are Alternatively,
on to customers. unable to offer weintegrated
may havesoftware
to developapplications
or licenseand new
digital services
content on competitive
or technology to provide terms, it may
digital reduce
services, andcustomer
there candemand or increasewe
be no assurance our costsbe
would toable
provide such applications
to develop or license
and services,
such which
content or we mayatbe
technology a unable
reasonableto pass
costonortoincustomers. Alternatively,
a timely manner, either ofwe maycould
which have have
to develop or license
a negative impact new
on
content
our or technology
financial condition,toresults
provide of digital services,
operations, and there can be no assurance we would be able to develop or license
or reputation.
such content or technology at a reasonable cost or in a timely manner, either of which could have a negative impact on
our financial condition,
Sophisticated results
software of operations,
integration may haveor reputation.
issues that can unexpectedly interfere with the intended operation of
hardware or other software products and services. In addition, the services we offer can have quality issues and may,
fromSophisticated software integration
time to time, experience outages, may have
service issues thatorcan
slowdowns, unexpectedly
errors. interfere
As a result, with the intended
these services operation
may not always of
perform
hardware or other software products and services. In addition, the services we offer can have
as anticipated and may not meet customer expectations. There can be no assurance we will be able to detect and quality issues and may,
from time
remedy alltoissues
time, experience
and defectsoutages, service slowdowns,
in the hardware, software, and or services
errors. Asweaoffer,
result,
orthese servicesdeliver
successfully may not always perform
over-the-air (“OTA”)
as anticipated and may not meet customer expectations. There can be no assurance we will
updates. Failure to do so on a timely basis could result in widespread technical and performance issues affectingbe able to detect andour
remedy
productsall
and issues and defects
services. in the hardware,
For additional discussionsoftware, and services
on the risks associatedwewith
offer, or successfully
defects deliver
and quality over-the-air
issues, see above(“OTA”)
under
updates.
“Ford’s vehicles could be affected by defects that result in recall campaigns, increased warranty costs, or delays inour
Failure to do so on a timely basis could result in widespread technical and performance issues affecting new
products and services.
model launches, and theFortimeadditional discussion
it takes to improve the on the risksofassociated
quality our vehicleswith
anddefects andcould
services quality issues,tosee
continue above
have an under
“Ford’s vehicles could be
adverse effect on our business.”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.”

21

21

199174_Ford_2023_AR_1OK.indd 25 2/9/24 2:53 PM

 Item 1A. Risk Factors (Continued)

ItemThe
1A. actions
Risk Factors
of end(Continued)
users are generally beyond our control and some users may engage in fraudulent or abusive
activities that involve our digital services. These include unauthorized use of accounts through stolen credentials, failure
The
to pay foractions of end
services users are
accessed, generally
or other beyond
activities thatour control
violate our and
termssome users may
of service. engage
While in fraudulent
we have or abusive
implemented security
activities that involve our digital services. These include unauthorized use of accounts through stolen
measures intended to prevent unauthorized access to our digital services and related information systems, malicious credentials, failure
to pay for services accessed, or other activities that violate our terms of service. While we have implemented
entities have and will continue to attempt to gain unauthorized access to them. If our efforts to detect such violations or security
measures
our actionsintended
to control tothese
prevent unauthorized
types of fraud and access
abusetoare
ournot
digital services
effective and related
or timely, it may information systems,
have an adverse malicious
effect on our
entities have and will continue to attempt to gain unauthorized access to them. If our efforts to detect such
financial condition, results of operations, or reputation. For further information, see above under “Operational information violations or
our actions to control these types of fraud and abuse are not effective or timely, it may have an adverse
systems, security systems, vehicles, and services could be affected by cybersecurity incidents, ransomware attacks, and effect on our
financial condition,
other disruptions andresults of operations,
impact Ford and Fordor reputation. Foras
Credit as well further information,
their suppliers andsee above under “Operational information
dealers.”
systems, security systems, vehicles, and services could be affected by cybersecurity incidents, ransomware attacks, and
otherFord’s
disruptions
abilityand impact Ford
to maintain and Ford Credit
a competitive costas well as their
structure suppliers
could and dealers.”
be affected by labor or other constraints. The
vast majority of the hourly employees in our manufacturing operations in the United States and Canada are represented
Ford’sand
by unions ability to maintain
covered a competitive
by collective bargainingcost structureThese
agreements. couldagreements
be affectedprovide
by labor or other constraints.
guaranteed wage and benefitThe
vast majority of the hourly employees in our manufacturing operations in the United States and Canada
levels throughout the contract term and some degree of income security, subject to certain conditions. With the ratification are represented
by unions
of our newand covered
contracts bythe
with collective bargaining
International agreements.
Union, These agreements
United Automobile, Aerospace and provide guaranteed
Agricultural wage and
Implement benefit
Workers of
levels
America (“UAW”) in the United States and Unifor in Canada in 2023, we expect to have a significant increase in ratification
throughout the contract term and some degree of income security, subject to certain conditions. With the labor
of our through
costs new contracts
the life with thecontracts,
of the International
and Union, United
if we are unable Automobile, Aerospace
to offset those costs, itand Agricultural
could Implementadverse
have a significant Workers of
effect
America (“UAW”) in the United States and Unifor in Canada in 2023, we expect to have a significant
on our business. Further, these agreements may restrict our ability to close plants and divest businesses. Some of our increase in labor
costs through
competitors dothe
notlife of the
have suchcontracts, and
collective if we are agreements
bargaining unable to offsetand those
are notcosts, it could
subject to thehave
samea significant adverse
constraints. effect
A substantial
on our business. Further, these agreements may restrict our ability to close plants and divest
number of our employees in other regions are represented by unions or government councils, and legislation or custombusinesses. Some of our
competitors do not have such collective bargaining agreements and are not subject to the same
promoting retention of manufacturing or other employment in the state, country, or region may constrain as a practical constraints. A substantial
numberour
matter of our employees
ability to sell or in other
close regions are represented
manufacturing by unions
or other facilities or government
or increase the cost councils, and legislation or custom
of doing so.
promoting retention of manufacturing or other employment in the state, country, or region may constrain as a practical
matter our ability
Ford’s abilitytotosell or close
attract, manufacturing
develop, or other
grow, and rewardfacilities
talentorisincrease theits
critical to cost of doing
success [Link]. Our
and
success depends on our ability to continue to attract, develop, grow, and reward talented and diverse employees with
Ford’s
domain abilityintoengineering,
expertise attract, develop,
software,grow, and reward
technology talent digital
(including is critical to its success
capabilities and competitiveness.
and connectivity), Our
integrated services,
successchain,
supply depends on our and
marketing, ability to continue
finance, among to other
attract, develop,
areas. Whilegrow,
we and
havereward talented and
been successful diverse employees
in attracting with
talent in recent
domainas
years, expertise
with anyincompany,
engineering, software,
the ability technology
to continue (including
to attract talentdigital capabilities
is important, and connectivity),
particularly integrated
in growth areas services,
vital to our
supply
successchain,
such marketing,
as software,and finance, among
electrification, and other [Link].
integrated While we have been for
Competition successful in attracting
such talent is intense,talent
which in has
recent
led to
years, as with
an increase in any company, the
compensation ability toacontinue
throughout tight laborto market,
attract talent
and, is important, may
accordingly, particularly
increase in costs
growthforareas vital to our
companies. In
success
addition tosuch as software,
attracting talent,electrification,
we must also and integrated
retain the talentservices.
needed to Competition
deliver our for such talent
business is intense,
objectives. Whilewhich has led to
compensation
an
considerations remain important, current and potential employees are increasingly placing a premium on various In
increase in compensation throughout a tight labor market, and, accordingly, may increase costs for companies.
addition to attracting
intangibles, talent, we
such as working formust also retain
companies with the talent
a clear neededand
purpose to deliver
strong our
brandbusiness objectives.
reputation, flexible While compensation
work arrangements,
considerations remain important, current and potential employees are increasingly placing a premium
and other considerations, such as embracing sustainability and diversity, equity, and inclusion initiatives. If we are not on various
intangibles,
perceived assuch as working
an employer of for companies
choice, we maywithbe a clear purpose
unable to recruitand strong
the best brandFurther,
talent. reputation,
if weflexible work arrangements,
lose existing employees
and other considerations, such as embracing sustainability and diversity, equity, and
with needed skills or we are unable to develop existing employees, particularly with the introduction of newinclusion initiatives. If technologies
we are not
perceived as an
and our focus onemployer of choice,
operational efficiency weandmayquality,
be unable to recruit
it could have athe best talent.
substantial Further,
adverse if we
effect onlose
our existing
business. employees
with needed skills or we are unable to develop existing employees, particularly with the introduction of new technologies
and our focus on operational
Macroeconomic, Market, and efficiency
Strategic andRisks
quality, it could have a substantial adverse effect on our business.

Macroeconomic,
Ford’s new and Market, andproducts
existing Strategicand Risks
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
Ford’sservices
software new andindustries,
existing products and digital,
and its reputation software,
may be harmedand ifphysical services
it is unable are subject
to achieve to marketit has
the initiatives
acceptance and face significant competition from existing and new entrants
announced. Although we conduct extensive market research before launching new or refreshed vehicles in the automotive and digital and
and introducing
software services industries, and its reputation may be harmed if it is unable to achieve the initiatives
new services, many factors both within and outside our control affect the success of new or existing products and services it has
announced. Although
in the marketplace, andweweconduct
may notextensive
be able tomarket research
accurately before
predict launching
or identify new ortrends
emerging refreshed vehicles and
or preferences introducing
or the
new
success of new products or services in the market. It takes years to design and develop a new vehicle or change services
services, many factors both within and outside our control affect the success of new or existing products and an
in the marketplace,
existing and wecustomers’
vehicle. Because may not bepreferences
able to accurately
may changepredictquickly,
or identify emerging
our new trends or
and existing preferences
products may notor the
generate
success of new products
sales in sufficient or services
quantities in the
and at costs lowmarket.
enoughIttotakes years to design
be profitable and recoupand develop
investment a new vehicle
costs. or change
Offering vehiclesan and
existing vehicle. Because customers’ preferences may change quickly, our new and existing products
services that customers want and value can mitigate the risks of increasing price competition and declining demand, but may not generate
sales in sufficient
products quantities
and services andperceived
that are at costs low enough
to be to be profitable
less desirable (whether and in recoup
terms ofinvestment costs.
price, quality, Offering
styling, vehicles
safety, overalland
services
value, that
fuel customers
efficiency, want and
or other value can
attributes) can mitigate the these
exacerbate risks of increasing
risks. price competition
For example, and declining
if we are unable demand,
to differentiate ourbut
products and
products and services
services from
that are perceived
those to be less desirable
of our competitors, develop (whether
innovative innew
terms of price,and
products quality, styling,
services, safety, overall
or sufficiently tailor
value,
our fuel efficiency,
products or other
and services attributes) in
to customers can exacerbate
other markets,these
thererisks.
could For example, ifdemand
be insufficient we are unable
for our to differentiate
products and our
products and
services, whichservices from an
could have those of ourimpact
adverse competitors,
on our develop
financialinnovative
condition or new products
results and services, or sufficiently tailor
of operations.
our products and services to customers in other markets, there could be insufficient demand for our products and
services, which could have an adverse impact on our financial condition or results of operations.

22

22

199174_Ford_2023_AR_1OK.indd 26 2/9/24 2:54 PM

 Item 1A. Risk Factors (Continued)

ItemWith
1A. Risk Factors
increased (Continued)
consumer interconnectedness through the internet, social media, and other media, mere allegations
relating to quality, safety, fuel efficiency, sustainability, corporate social responsibility, or other key attributes can negatively
With
impact ourincreased
reputationconsumer
or market interconnectedness
acceptance of our through
productsthe or internet,
services,social media,such
even where and other media,prove
allegations meretoallegations
be
relating to quality, safety, fuel efficiency, sustainability, corporate social responsibility,
inaccurate or unfounded. Further, our ability to successfully grow through capacity expansion and investments or other key attributes can in negatively
the
impact our reputation or market acceptance of our products or services, even where such
areas of electrification, connectivity, digital and physical services, and software services depends on many factors, allegations prove to be
inaccurate or [Link],
including advancements technology,our ability to successfully
regulatory grow through development
changes, infrastructure capacity expansion
(e.g., aand investments
widespread in the
vehicle
areas of electrification, connectivity, digital and physical services, and software services depends on
charging network), and other factors that are difficult to predict, that may significantly affect the future of electric vehicles, many factors,
including
autonomous advancements
technologies, in digital
technology, regulatory
and physical changes,
services, andinfrastructure development
software services. (e.g., a widespread
The automotive, software, and vehicle
digital
charging network), and other factors that are difficult to predict, that may significantly
service businesses are very competitive and are undergoing rapid changes. Traditional competitors are expandingaffect the future of electric vehicles,
their
autonomous technologies, digital and physical services, and software services. The automotive,
offerings, and new types of competitors (particularly in our areas of strength, e.g., pick-up trucks, utilities, and commercial software, and digital
service
vehicles)businesses are verysuperior
that may possess competitive and are may
technology, undergoing rapid changes.
have business Traditional
models with certaincompetitors
aspects thatare areexpanding their
more efficient,
offerings, and new types of competitors (particularly in our areas of strength, e.g., pick-up trucks,
and are not subject to the same level of fixed costs as us, are entering the market. For example, Chinese electric vehicle utilities, and commercial
vehicles)
producersthat aremay possess
exporting theirsuperior
products technology,
to some key may have business
markets in which models with certain
we operate. aspects
This level that are more
of competition efficient,
necessitates
and
that we invest in and integrate emerging technologies into our business and increases the importance of our abilityvehicle
are not subject to the same level of fixed costs as us, are entering the market. For example, Chinese electric to
producers
anticipate, are exporting
develop, their products
and deliver productsto and
some key markets
services in which we
that customers operate.
desire This level
on a timely basis,of in
competition
quantities necessitates
in line with
that we invest
demand, with thein and integrate
quality emerging
they expect, andtechnologies
at costs lowinto our business
enough and increases
to be profitable. Moreover,the importance
if we do not of our customer
meet ability to
anticipate, develop, and deliver products and services that customers desire on a timely
expectations for quickly and effectively addressing and remedying issues that may develop with or that improve basis, in quantities in line
ourwith
demand, with the quality they expect, and at costs low enough to be profitable. Moreover,
products and services, e.g., successfully delivering OTA updates, it would have an adverse effect on our business. if we do not meet customer
expectations for quickly and effectively addressing and remedying issues that may develop with or that improve our
products and announced
We have services, e.g., oursuccessfully delivering
intent to continue makingOTAmulti-billion
updates, it dollar
wouldinvestments
have an adverse effect on our
in electrification andbusiness.
software
services. Our plans include offering electrified versions of many of our vehicles, including the F-150 Lightning and E-
We have
Transit. If theannounced our intent to
market for electrified continue
vehicles making
does multi-billion
not develop at thedollar investments
rate we in electrification
expect, even if the regulatoryand framework
software
services. Our
encourages plansadoption
a rapid include offering electrified
of electrified versions
vehicles, thereofismany of our perception
a negative vehicles, including the F-150
of our vehicles Lightning
or about andvehicles
electric E-
Transit.
in If the
general, we market for electrified
are unable vehiclesindoes
to or are delayed not develop
developing at the ratenew
or embracing we technologies
expect, even orif the regulatory
processes, or framework
if consumers
encourages
prefer a rapid adoption
our competitors’ of electrified
vehicles, there couldvehicles, there is impact
be an adverse a negative perception
on our financialofcondition
our vehicles or about
or results electric vehicles
of operations.
in general,
Further, as we are unable
discussed below to or are delayed
under “Ford may in need
developing or embracing
to substantially newitstechnologies
modify product plansor and
processes,
facilitiesortoifcomply
consumers
with
prefer our
safety, competitors’
emissions, vehicles, there
fuel economy, could bedriving
autonomous an adverse impactenvironmental,
technology, on our financialandcondition or results of lower
other regulations,” operations.
than
Further,
planned as discussed
market below of
acceptance under “Ford may
our vehicles mayneed to substantially
impact our strategymodify its product
to comply plans
with fuel and facilities
economy to comply with
standards.
safety, emissions, fuel economy, autonomous driving technology, environmental, and other regulations,” lower than
planned
Fordmarket acceptance
is addressing of ouron
its impact vehicles
climatemay impact
change our strategy
aligned with the to comply
United with fuel
Nations economyConvention
Framework standards. on Climate
Change (Paris Agreement) by working to reduce our carbon footprint over time across our vehicles, operations, and
Ford
supply is addressing
chain. We haveits impact oninterim
announced climateemissions
change aligned
targetswith the United
approved by the Nations
Science Framework Convention
Based Targets on(SBTi)
initiative Climate and
Change (Paris Agreement) by working to reduce our carbon footprint over time across our
made other statements about similar initiatives, e.g., our expected electric vehicle volumes in future years. Achievement vehicles, operations, and
supply
of thesechain. We have
initiatives announced
will require interim
significant emissions and
investments targets
the approved by theof
implementation Science Based Targets
new processes; initiative
however, there(SBTi)
is no and
made other statements about similar initiatives, e.g., our expected electric vehicle volumes
assurance that the desired outcomes will be achieved. To the extent we are unable to achieve these initiatives or our in future years. Achievement
of these initiatives
transition will require
to electrification significant
is slower investments
than expected, and harm
it may the implementation
our reputation of ornew
we mayprocesses; however,
not otherwise therethe
receive is no
assurance that the desired outcomes will be achieved. To the extent we are unable to
expected return on the investment. For example, we are exposed to reputational risk if we do not reduce vehicle CO achieve these initiatives or our2
transition to electrification is slower than expected, it may harm our reputation or we may
emissions in line with our targets or in compliance with applicable regulations. Further, our customers, investors, and not otherwise receive the
expected
other return on evaluate
stakeholders the investment.
how wellFor weexample, we are exposed
are progressing to reputational
on our announced riskgoals
climate if weand
do not reduce vehicle
aspirations, and if COwe 2are
emissions in line with our targets or in compliance with applicable regulations. Further, our customers,
not on track to achieve those goals and aspirations on a timely basis, or if the expectations of our customers and investors investors, and
other
change and we do not adequately address their expectations, our reputation could be impacted, and customers may are
stakeholders evaluate how well we are progressing on our announced climate goals and aspirations, and if we
not on track
choose to achieve
to purchase thethose
productsgoals
and and aspirations
services on a timely
of, investors maybasis,
choose or iftothe expectations
invest of our customers
in, and suppliers and vendors andmay investors
change and we do not adequately address their expectations, our reputation could be
choose to do business with other companies. Other parties may object to the positions we have taken and may, in the impacted, and customers may
choose to purchase
future, take the products
on environmental, and or
social, services of, investors
other issues, may
or in the choose
event to investour
we change in, position
and suppliers
on suchand vendors
issues, maymay
which
choose to do business with other companies. Other parties may object to the positions we
result in a loss of customers, a boycott of our products or services, or other actions that may impact not only our brand have taken and may, in the
future, take on environmental, social, or other issues, or in the event we change
and reputation but also our results of operations, financial condition, and the price of our Common Stock. our position on such issues, which may
result in a loss of customers, a boycott of our products or services, or other actions that may impact not only our brand
and Moreover,
reputation new but also our results
offerings, of operations,
including financial
those related condition,
to electric andand
vehicles the autonomous
price of our Common Stock.
driving technologies, may
present technological challenges that could be costly to implement and overcome and may subject us to customer claims
Moreover,
if they new offerings,
do not operate includingInthose
as anticipated. related
addition, to electric
since vehicles and
new technologies areautonomous drivingacceptance,
subject to market technologies, may
a malfunction
present technological
involving challenges
any manufacturer’s that couldvehicle
autonomous be costly
maytonegatively
implementimpact
and overcome and may
the perception subject us tovehicles
of autonomous customer claims
and
if they do not vehicle
autonomous operatetechnologies
as anticipated.
andInerode
addition, since trust.
customer new technologies are subject to market acceptance, a malfunction
involving any manufacturer’s autonomous vehicle may negatively impact the perception of autonomous vehicles and
autonomous vehicle technologies and erode customer trust.

23

23

199174_Ford_2023_AR_1OK.indd 27 2/9/24 2:54 PM

 Item 1A. Risk Factors (Continued)

ItemFord’s
1A. Risk Factors
results are(Continued)
dependent on sales of larger, more profitable vehicles, particularly in the United States. A
shift in consumer preferences away from larger, more profitable vehicles with internal combustion engines (including
Ford’s
trucks results to
and utilities) are dependent
electric onvehicles
or other sales ofinlarger, more that
our portfolio profitable
may bevehicles, particularly
less profitable in theinUnited
could result States.
an adverse A
effect
shift in consumer preferences away from larger, more profitable vehicles with internal combustion engines
on our financial condition or results of operations. If demand for electric vehicles grows at a rate greater than our ability to (including
trucks
increase and utilities)
our to electric
production or other
capacity vehicles
for those in ourlower
vehicles, portfolio
marketthatshare
may be less
and profitable
revenue, couldasresult
as well in and
facility an adverse effect
other asset-
on our financial condition or results of operations. If demand for electric vehicles grows at a rate
related charges (e.g., accelerated depreciation) associated with the production of internal combustion vehicles, may greater than our ability to
increase our production capacity for those vehicles, lower market share and revenue, as well
result. In addition, government regulations aimed at reducing emissions and increasing fuel efficiency (e.g., ZEV as facility and other asset-
related
mandates charges
and low (e.g., accelerated
emission zones)depreciation) associated
and other factors with the production
that accelerate of internal
the transition combustion
to electric vehicles,
vehicles may may the
increase
result. In addition, government regulations aimed at reducing emissions
cost of vehicles by more than the perceived benefit to consumers and dampen margins. and increasing fuel efficiency (e.g., ZEV
mandates and low emission zones) and other factors that accelerate the transition to electric vehicles may increase the
costWith
of vehicles
a globalby footprint
more thanand the supply
perceived benefit
chain, to consumers
Ford’s results and andoperations
dampen margins.
could be adversely affected by
economic or geopolitical developments, including protectionist trade policies such as tariffs, or other events.
With of
Because a global footprint and supply
the interconnectedness of thechain,
global Ford’s
economy, results and operations
the challenges could beaadversely
of a pandemic, affected
financial crisis, by
economic
economic or geopolitical developments, including protectionist trade policies such as tariffs,
downturn or recession, natural disaster, war, geopolitical crises, or other significant events in one area of the world can or other events.
Because of the interconnectedness
have an immediate of theimpact
and material adverse global on
economy,
marketsthe challenges
around of a pandemic,
the world. Changes ina international
financial crisis, economic
trade policy can
downturn or recession, natural disaster, war, geopolitical crises, or other significant events in one
also have a substantial adverse effect on our financial condition, results of operations, or our business in general. area of the world Steps
can
have an immediate and material adverse impact on markets around the world. Changes in international
taken by governments to apply or consider applying tariffs on automobiles, parts, and other products and materials have trade policy can
also have a substantial adverse effect on our financial condition, results of operations, or our business
the potential to disrupt existing supply chains, impose additional costs on our business, and could lead to other countries in general. Steps
taken by governments
attempting to retaliate byto imposing
apply or consider applying
tariffs, which wouldtariffs
make onour
automobiles,
products moreparts,expensive
and otherfor products and materials
customers, have
and, in turn,
the potential to disrupt existing supply chains, impose additional costs on our business, and could
could make our products less competitive. In particular, China presents unique risks to U.S. automakers due to the strainlead to other countries
attempting to retaliate
in U.S.-China relations,byChina’s
imposing tariffs,
unique which would
regulatory make our
landscape, theproducts more expensive
level of integration with keyforcomponents
customers, and, inglobal
in our turn,
could make
supply chain,our
andproducts
the rapidless [Link] In
development theparticular,
Chinese China
electricpresents unique risks
vehicle industry, withto U.S. automakers
Chinese due to the strain
electric vehicle
in U.S.-China relations,
manufacturers exportingChina’s unique to
their products regulatory
some key landscape,
markets inthe levelwe
which of operate.
integration with key components in our global
supply chain, and the rapid development of the Chinese electric vehicle industry, with Chinese electric vehicle
manufacturers exporting
With operations their products
in various markets to withsome key economic
volatile markets inorwhich we environments
political operate. and our global supply chain and
utilization of transportation routes and logistics providers around the world, we are exposed to heightened risks as a result
With operations
of economic, in various
geopolitical, markets
or other withThis
events. volatile
couldeconomic or political environments
include governmental andnationalization)
takeover (i.e., our global supply chain and
of our
utilization of transportation
manufacturing routes andproperty,
facilities or intellectual logistics restrictive
providers around
exchangetheorworld,
importwecontrols,
are exposed to heightened
disruption risksas
of operations asaaresult
result
of
of economic, geopolitical,
systemic political or otherinstability,
or economic events. This couldofinclude
outbreak war orgovernmental takeover (i.e.,
expansion of hostilities (suchnationalization)
as the ongoingofconflicts
our
manufacturing
between Russia facilities or intellectual
and Ukraine and betweenproperty, restrictive
Israel exchange
and Hamas, or import
heightened controls,
tensions disruption
in the Red Sea, of and
operations astensions
potential a result
of systemic political or economic instability, outbreak of war or expansion of hostilities (such as the ongoing
in the South China Sea), and acts of terrorism, each of which could impact our supply chain as well as our operations and conflicts
between Russia and
have a substantial Ukraine
adverse and on
effect between Israel and
our financial Hamas,
condition heightened
or results tensions inFurther,
of operations. the RedtheSea, and
U.S. potential tensions
government, other
in the South China Sea), and acts of terrorism, each of which could impact our supply chain
governments, and international organizations could impose additional sanctions or export controls that could as well as our operations
restrict usand
have a substantial
from doing business adverse
directlyeffect on our financial
or indirectly in or withcondition or resultsorofparties,
certain countries operations.
whichFurther, the U.S.
could include government, other
affiliates.
governments, and international organizations could impose additional sanctions or export controls that could restrict us
fromIndustry
doing business directly can
sales volume or indirectly
be volatilein orand
withcould
certain countries
decline or parties,
if there which could
is a financial include
crisis, affiliates.
recession, public health
emergency, or significant geopolitical event. Because we, like other manufacturers, have a higher proportion of fixed
Industry
structural sales
costs, volume
relatively canchanges
small be volatile and could
in industry salesdecline
volumeif can
there is aafinancial
have crisis,
substantial effectrecession,
on our cash public health
flow and
emergency, or significant geopolitical event. Because we, like other manufacturers, have a higher
results of operations. Vehicle sales are affected by overall economic and market conditions, consumer behavior, andproportion of fixed
structural costs, relatively small changes in industry sales volume can have a substantial effect on our cash flow
developing trends such as shared vehicle ownership and ridesharing services. If industry vehicle sales were to decline to and
results of operations.
levels significantly Vehicle
below sales areassumption,
our planning affected by the
overall economic
decline and market
could have conditions,
a substantial consumer
adverse behavior,
effect on and
our financial
developing trends such as shared vehicle ownership and ridesharing services. If industry
condition, results of operations, and cash flow. For a discussion of economic trends, see Item 7. vehicle sales were to decline to
levels significantly below our planning assumption, the decline could have a substantial adverse effect on our financial
condition, results
Ford may of increased
face operations,price
and cash flow. Foror
competition a discussion
a reduction ofin
economic
demandtrends,
for its see Item [Link] from industry
products
excess capacity, currency fluctuations, competitive actions, or other factors, particularly for electric vehicles.
The Ford
globalmay face increased
automotive industry price competition
is intensely or a reduction
competitive, in demand
with installed for itscapacity
manufacturing products resulting
generally from industry
exceeding current
excess capacity, currency fluctuations, competitive actions, or other factors, particularly
demand. Historically, industry overcapacity has resulted in many manufacturers offering marketing incentives for electric vehicles.
on vehicles
The
in anglobal automotive
attempt to maintain industry is intensely
and grow competitive,
market share; with installed
these incentives manufacturing
historically capacityagenerally
have included exceeding
combination current
of subsidized
demand. Historically, industry overcapacity has resulted in many manufacturers offering marketing incentives
financing or leasing programs, price rebates, and other incentives. As a result, we are not necessarily able to set our on vehicles
in an attempt
prices to offsettohigher
maintain and grow
marketing market share;
incentives, these or
commodity incentives historically
other cost increases,have included
tariffs, or the aimpact
combination of subsidized
of adverse currency
financing or leasing
fluctuations. This riskprograms,
includes price rebates, andforeign
cost advantages other incentives.
competitorsAs maya result, we are not
have because necessarily
of their weakerable
home to market
set our
prices to offset
currencies, which higher
may,marketing incentives,
in turn, enable those commodity
competitorsortoother
offer cost
theirincreases,
products attariffs,
loweror the impact
prices. of adverse
Further, currency
higher inventory
fluctuations.
levels This riskpressure
put downward includeson cost advantages
pricing, foreign
which may havecompetitors
an adverse may have
effect onbecause of their
our financial weakerand
condition home market
results of
currencies, which may, in turn, enable those competitors to offer their products at lower prices. Further, higher inventory
operations.
levels put downward pressure on pricing, which may have an adverse effect on our financial condition and results of
operations.

24

24

199174_Ford_2023_AR_1OK.indd 28 2/9/24 2:54 PM

 Item 1A. Risk Factors (Continued)

ItemAlthough
1A. Risk we Factors (Continued)
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
Although we
our spending, continue and/or
production, to invest in our launches
product electric vehicle
to better strategy,
match we thehavepaceobserved
of electriclower-than-anticipated
vehicle adoption. As aindustrywide result of the
electric vehicle adoption rates and near-term pricing pressures,
lower-than-anticipated adoption rates, near-term pricing pressures, and other factors, we have which has led us and may in the future lead
accrued and may us tocontinue
adjust
our spending, production, and/or product launches to better match the pace of
to incur charges, which could be substantial, related to payments to our electric vehicle-related suppliers (battery, rawelectric vehicle adoption. As a result of the
lower-than-anticipated adoption rates, near-term pricing pressures, and other factors,
material, or otherwise), inventory adjustments, or other matters. Battery costs remain high, which is detrimental to electric we have accrued and may continue
to incur charges,
vehicles reachingwhich pricingcould
parity bewith
substantial,
ICE vehicles relatedandtofurther
payments to our electric
exacerbates vehicle-related
the pricing pressures suppliers
on electric (battery,
vehicles. raw
material, or otherwise), inventory adjustments, or other matters. Battery costs remain
Furthermore, as we invest in battery production, including the construction of battery plants, if we are unable to operate high, which is detrimental to electric
vehicles reaching pricing parity with ICE vehicles and further exacerbates the pricing
those plants at their expected capacity because electric vehicle adoption rates remain lower-than-anticipated or otherwise, pressures on electric vehicles.
Furthermore, as we invest in battery production, including the construction of battery plants, if we are unable to operate
we may be unable to recoup the investments we have made.
those plants at their expected capacity because electric vehicle adoption rates remain lower-than-anticipated or otherwise,
we may be unable to recoup the investments we have made.
As electric vehicle adoption rates increase, the risk of excess capacity, particularly for internal combustion engine
trucks and utilities, may be exacerbated. This excess capacity may further increase price competition in that segment of
As electric vehicle adoption rates increase, the risk of excess capacity, particularly for internal combustion engine
the market, which could have a substantial adverse effect on our financial condition or results of operations.
trucks and utilities, may be exacerbated. This excess capacity may further increase price competition in that segment of
the market, which could have a substantial adverse effect on our financial condition or results of operations.
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
Inflationary pressure and fluctuations in commodity and energy prices, foreign currency exchange rates,
significant effect on results. We and our suppliers are exposed to inflationary pressure and a variety of market risks,
interest rates, and market value of Ford or Ford Credit’s investments, including marketable securities, can have a
including the effects of changes in commodity and energy prices, foreign currency exchange rates, and interest rates. We
significant effect on results. We and our suppliers are exposed to inflationary pressure and a variety of market risks,
monitor and attempt to manage these exposures as an integral part of our overall risk management program, which
including the effects of changes in commodity and energy prices, foreign currency exchange rates, and interest rates. We
recognizes
monitor andthe unpredictability
attempt to manageofthese markets and seeks
exposures as an to integral
reduce potentially
part of our adverse
overall riskeffects on our business.
management program,Changes which in
commodity and energy prices (from tariffs and the actions taken by Russia
recognizes the unpredictability of markets and seeks to reduce potentially adverse effects on our business. Changes in Ukraine, as discussed above under “Withina
global footprint and supply chain, Ford’s results and operations could be adversely
commodity and energy prices (from tariffs and the actions taken by Russia in Ukraine, as discussed above under “With a affected by economic or geopolitical
developments,
global footprint including
and supply protectionist
chain, Ford’s trade policies
results andsuch as tariffs,
operations could or other or otherwise),
events,”affected
be adversely by economic currency or exchange
geopolitical
rates, and interest rates cannot always be predicted, hedged, or offset with price
developments, including protectionist trade policies such as tariffs, or other events,” or otherwise), currency exchange increases to eliminate earnings volatility.
As a result, significant changes in commodity and energy prices, foreign currency
rates, and interest rates cannot always be predicted, hedged, or offset with price increases to eliminate earnings [Link] rates, or interest rates as well
as increased material, freight, logistics, and similar costs could have a substantial
As a result, significant changes in commodity and energy prices, foreign currency exchange rates, or interest rates as well adverse effect on our financial condition
or
as results
increased of operations. See Item
material, freight, 7 andand
logistics, Item 7A forcosts
similar additional
could discussion of currency,
have a substantial commodity
adverse effect on andourenergy
financial price, and
condition
interest rate risks. These market forces have caused us to incur higher material
or results of operations. See Item 7 and Item 7A for additional discussion of currency, commodity and energy price, and costs, which may continue, and our
warranty
interest rate costs haveThese
risks. increased,
marketinforces
part, due have to caused
inflationaryus tocostincurpressures at our dealers.
higher material Moreover,
costs, which due to inflationary
may continue, and our
pressure, some of our suppliers have submitted claims to us for reimbursement
warranty costs have increased, in part, due to inflationary cost pressures at our dealers. Moreover, due of costs beyond our original agreed terms.
to inflationary
Upon receipt, we evaluate those claims, and, in certain circumstances, we
pressure, some of our suppliers have submitted claims to us for reimbursement of costs beyond our original agreed have made payments to our suppliers, and this
terms.
trend may continue. Further, interest rates have increased significantly as central
Upon receipt, we evaluate those claims, and, in certain circumstances, we have made payments to our suppliers, and this banks in developed countries attempt to
subdue inflation while government deficits and debt remain at high levels in many
trend may continue. Further, interest rates have increased significantly as central banks in developed countries attempt to global markets. Accordingly, the
eventual implications
subdue inflation whileof higher government
government deficits and deficits
debtand remain debt,attighter
high levels monetary
in many policy, andmarkets.
global potentially higher long-term
Accordingly, the
interest rates may drive a higher cost of capital for the business. At Ford
eventual implications of higher government deficits and debt, tighter monetary policy, and potentially higher Credit, rising interest rates may impact
long-termFord
Credit’s abilitymay
interest rates to source
drive afunding
higher and costoffer financing
of capital for theat competitive
business. Atrates, Ford which
Credit,couldrisingreduce
interest itsrates
financing [Link]
may impact In
addition, our results
Credit’s ability are impacted
to source funding and by offer
fluctuations
financing in the market value
at competitive of our
rates, whichinvestments,
could reduce withits unrealized
financinggains margin. andIn losses
that couldour
addition, be results
materialarein impacted
any period. by fluctuations in the market value of our investments, with unrealized gains and losses
that could be material in any period.
Financial Risks
Financial Risks
Ford and Ford Credit’s access to debt, securitization, or derivative markets around the world at competitive
rates or in
Ford sufficient
and amounts
Ford Credit’s couldtobe
access affected
debt, by credit rating
securitization, downgrades,
or derivative markets market
around volatility,
the world market disruption,
at competitive
regulatory requirements,
rates or in sufficient amounts or other
could factors. Ford and
be affected Ford Credit’s
by credit ability to obtainmarket
rating downgrades, unsecured funding
volatility, at a reasonable
market disruption,
cost is dependent
regulatory on their credit
requirements, or otherratings or their
factors. Fordperceived
and Ford creditworthiness.
Credit’s ability toFurther, Ford Credit’s
obtain unsecured abilityat
funding toaobtain
reasonable
securitized
cost is dependentfundingon under
theirits committed
credit ratings asset-backed
or their perceived liquidity programs and Further,
creditworthiness. certain other
Ford asset-backed
Credit’s abilitysecuritization
to obtain
transactions
securitized fundingis subject
underto having a sufficient
its committed amount ofliquidity
asset-backed assets eligible
programs forand
these programs,
certain other as well as Fordsecuritization
asset-backed Credit’s ability
transactions
to is subjectcredit
obtain appropriate to having
ratings a sufficient
for those amount
transactions of assets
and, eligible
for certain for these
committed programs, as well
programs, as Ford Credit’s
derivatives to manage ability
the
to obtainrate
interest appropriate
risk. Over credit
time,ratings for those transactions
and particularly in the event and, for certain
of credit committed programs,
rating downgrades, derivatives
market volatility, marketto manage the
disruption,
interest
or other rate [Link]
factors, Over time,may
Credit and reduce
particularly in the event
the amount of credit rating
of receivables downgrades,
it purchases market because
or originates volatility, of market
funding disruption,
or other factors,
constraints. Ford Credit
In addition, Fordmay Creditreduce
may the amount
reduce of receivables
the amount it purchases
of receivables or originates
it purchases becauseifof
or originates funding
there is a
[Link]
significant In addition,
in the Ford
demand Creditfor may reduce
the types of the amountit of
securities receivables
offers it purchases
or Ford Credit or originates
is unable if there is ato
to obtain derivatives
significant
manage thedecline
interestin rate
the demand for the types
risk associated with its ofsecuritization
securities it offers or Ford Credit
transactions. is unable
A significant to obtain
reduction in derivatives
the amounttoof
manage the Ford
receivables interest ratepurchases
Credit risk associated with its would
or originates securitization transactions.
significantly reduce itsAongoingsignificant reduction
results in the amount
of operations and could of
receivables
adversely Fordits
affect Credit
abilitypurchases
to supportorthe originates
sale of Fordwould significantly reduce its ongoing results of operations and could
vehicles.
adversely affect its ability to support the sale of Ford vehicles.
To the extent interest rates remain relatively high, they may have an adverse effect on borrowing costs for Ford Credit,
To the
making extent
it more interest rates
expensive to fundremain relatively high,
our operations they may
or leading have rates
to higher an adverse
charged effect oncustomers
to our borrowing ifcosts these forcosts
FordareCredit,
making it
passed on. more expensive to fund our operations or leading to higher rates charged to our customers if these costs are
passed on.
25
25

199174_Ford_2023_AR_1OK_r1.indd 29 2/13/24 8:07 PM

 Item 1A. Risk Factors (Continued)

ItemThe
1A. impact
Risk Factors (Continued)incentives on Ford’s business could be significant, and Ford’s receipt of
of government
government incentives could be subject to reduction, termination, or clawback. We receive economic benefits from
The impact
national, state, andof government incentives
local governments on Ford’s
in various regionsbusiness
of the worldcould be form
in the significant, and Ford’s
of incentives receipt
designed of
to encourage
manufacturers to establish, maintain, or increase investment, workforce, or production. These incentives may take from
government incentives could be subject to reduction, termination, or clawback. We receive economic benefits
national, state, including
various forms, and localgrants,
governments in variousorregions
loan subsidies, of the world
tax abatements in the form
or credits. Theofimpact
incentives designed
of these to encourage
incentives can be
manufacturers
significant in a particular market during a reporting period. A decrease in, expiration without renewal of, ormay
to establish, maintain, or increase investment, workforce, or production. These incentives take
other cessation
various forms, including grants, loan subsidies, or tax abatements or credits. The impact of these incentives
or clawback of government incentives for any of our operations, as a result of administrative decision or otherwise, can becould
significant in a particular market during a reporting period. A decrease in,
have a substantial adverse impact on our financial condition or results of operations. expiration without renewal of, or other cessation
or clawback of government incentives for any of our operations, as a result of administrative decision or otherwise, could
haveFora substantial adverse
example, until 2021,impact onour
most of ourmanufacturing
financial condition or results
facilities of operations.
in South America were located in Brazil, where the state
or federal governments historically offered significant incentives to manufacturers to encourage capital investment,
For example,
increase until 2021,
manufacturing most ofand
production, our create
manufacturing
jobs. Asfacilities
a result,in South
the America of
performance were
ourlocated in Brazil, where
South American the state
operations had
or federal governments historically offered significant incentives to manufacturers to encourage capital
been impacted favorably by government incentives to a substantial extent. The federal government in Brazil has leviedinvestment,
increase manufacturing
assessments against usproduction,
concerning and create jobs.
the federal As a result,
incentives the performance
we previously received, of
andourthe
South
StateAmerican operations
of São Paulo has had
been impacted favorably by government incentives to a substantial extent. The federal government in Brazil
challenged the grant to us of tax incentives by the State of Bahia. See Note 2 of the Notes to the Financial Statements has levied for
assessments against us concerning the federal incentives we previously received, and the State of
discussion of our accounting for government incentives, and “Item 3. Legal Proceedings” for a discussion of tax São Paulo has
challenged
proceedingsthe
in grant
Brazil to usthe
and of tax incentives
potential by the State
requirement ofto
for us Bahia. See Note 2 of the Notes to the Financial Statements for
post collateral.
discussion of our accounting for government incentives, and “Item 3. Legal Proceedings” for a discussion of tax
proceedings
The [Link]
Brazil and the potential
Reduction requirement
Act (“IRA”) foramong
provides, us to post
othercollateral.
things, financial incentives in the form of tax credits to
grow the domestic supply chain and domestic manufacturing base for electric vehicles, plug-in hybrid vehicles (PHEVs),
and The
otherU.S. Inflation
“clean” Reduction
vehicles. Act likewise
The law (“IRA”) provides,
incentivizesamong other things,
the purchase financial
of clean incentives
vehicles and the in infrastructure
the form of taxtocredits
fuel to
grow the
them. domestic
These supplychange
incentives chain and
overdomestic
time andmanufacturing base until
will remain in effect for electric vehicles,2032,
approximately plug-in hybrid
unless vehiclesby(PHEVs),
modified Congress.
and other
The IRA’s “clean”
incentivesvehicles. The and
are having law likewise incentivizes
are expected to havethe purchase
material of clean
impacts vehicles
on the and the
automotive infrastructure
industry and [Link] fuel
The IRA
them. These
authorizes taxincentives
credits to change over time
manufacturers for and will remain
the domestic in effect until
production approximately
of batteries 2032,components
and battery unless modified by Congress.
for EVs and
The IRA’s
PHEVs, incentives
and areishaving
this credit andtoare
expected expected
improve to have material
the financial impacts
performance on the automotive
of domestic industry and Ford.
battery manufacturers, The the
including IRA
authorizes
new tax credits
operations at our to manufacturers
upcoming facility for the domestic
in Michigan productionSK’s
and BlueOval of batteries
facilitiesand battery components
in Kentucky and [Link] EVs and the
Further,
PHEVs,ofand
degree this credit
success is expected
of some to improvestrategies
of our investment the financial performance
depends upon IRA of domestic
tax credit battery manufacturers,
eligibility and for those including
credits to the
new operations
continue to remainat our upcoming
available facility
through theincurrently
Michigancontemplated
and BlueOvalexpiration.
SK’s facilities in Kentucky and Tennessee. Further, the
degree of success of some of our investment strategies depends upon IRA tax credit eligibility and for those credits to
continue
The to
IRA remain available through
also authorizes thefor
tax credits currently contemplated
purchasers expiration.
of qualified commercial and retail clean vehicles. Ford expects
that most commercial customers that purchase an EV or PHEV will be eligible for the commercial clean vehicle credit,
The IRA
although also authorizes
it is unclear tax how
at this time credits for purchasers
many commercialof qualified
vehicle commercial
purchasers will and
haveretail clean vehicles.
the underlying Ford
federal tax expects
liability that
that
is necessary to actually monetize this credit. When paired with the IRA’s tax credit for the construction of certaincredit,
most commercial customers that purchase an EV or PHEV will be eligible for the commercial clean vehicle electric
although it is unclear
vehicle charging at this timeFord
infrastructure, howexpects
many commercial vehicle
the commercial purchasers
clean will have
vehicle credit the underlying
will influence federalfleets,
commercial tax liability that
is necessary tofleets,
governmental actually
andmonetize this credit.
other vehicle Wheninpaired
purchasers with the IRA’s
their evaluation of a tax credit for
transition from theinternal
construction of certain
combustion electric
engine
vehicle charging infrastructure,
vehicles to EVs and PHEVs. Ford expects the commercial clean vehicle credit will influence commercial fleets,
governmental fleets, and other vehicle purchasers in their evaluation of a transition from internal combustion engine
vehicles to EVs
To claim theand PHEVs.
retail tax credit, the IRA establishes numerous and complex prerequisites, including that the vehicle must
be assembled in North America; the vehicle must be under specified limitations on manufacturer suggested retail price
To claim
(“MSRP”); the retailincome
purchaser tax credit, the IRA starting
limitations; establishes numerous
in 2024, and complex
any vehicle prerequisites,
that contains “battery including
components” that that
the vehicle
were must
be assembled in North America; the vehicle must be under specified limitations on manufacturer suggested
“manufactured or assembled” by a “foreign entity of concern” will be ineligible; and, starting in 2025, any vehicle that retail price
(“MSRP”); purchaser income limitations; starting in 2024, any vehicle that contains “battery components”
contains battery materials that were “extracted, processed, or recycled” by a “foreign entity of concern” will be ineligible. A that were
“manufactured
“Critical Mineralsor Credit”
assembled” by a “foreign
is available entity
for those of concern”
vehicles will abespecified
that have ineligible; and, starting
percentage in 2025,
of critical any vehicle
minerals that
that are
contains
“extracted or produced” in the United States, in a country with which the United States has a Free Trade Agreement, or A
battery materials that were “extracted, processed, or recycled” by a “foreign entity of concern” will be ineligible.
“Critical Minerals in
that is “recycled” Credit”
NorthisAmerica.
availableAfor those vehicles
“Battery Componentsthat have
Credit” a specified
is availablepercentage
for those of criticalthat
vehicles minerals
have that are
a specified
“extracted or produced” in the United States, in a country with which the United States
percentage of “value” of its battery “components” that are “manufactured or assembled” in North America. has a Free Trade Agreement, or
that is “recycled” in North America. A “Battery Components Credit” is available for those vehicles that have a specified
percentage
Althoughofwe“value” of its expect
ultimately battery the
“components” thatFord
IRA to benefit are “manufactured
and the automotive or assembled”
industry iningeneral,
North America.
the availability of such
benefits will depend on the further development and improvement of the U.S. battery supply, sufficient access to raw
Although
materials wethe
within ultimately
scope ofexpect the and
the IRA, IRA the
to benefit
terms ofFordtheand the automotive
regulations industry(and
and guidance in general, the availability
the limitations therein) of
thesuch
U.S.
benefits will depend
government issues toonimplement
the furtherthe
development
IRA, which and improvement
will ultimately of the U.S.
determine whichbattery supply,
vehicles sufficient
qualify access and
for incentives to rawthe
materialsthereof.
amount within the scope of the
Automakers thatIRA, and
better the terms
optimize of the regulations
eligibility and guidance
for their vehicles, (and the
as compared limitations
to their therein)
competition, the
will U.S.a
have
government advantage.
competitive issues to implement the IRA, which will ultimately determine which vehicles qualify for incentives and the
amount thereof. Automakers that better optimize eligibility for their vehicles, as compared to their competition, will have a
competitive advantage.

26

26

199174_Ford_2023_AR_1OK_r1.indd 30 2/13/24 8:07 PM

 Item 1A. Risk Factors (Continued)

ItemFord
1A. Risk Factors
Credit could(Continued)
experience higher-than-expected credit losses, lower-than-anticipated residual values, or
higher-than-expected return volumes for leased vehicles. Credit risk is the possibility of loss from a customer’s or
Fordfailure
dealer’s Credittocould
make experience higher-than-expected
payments according to contract terms. credit losses,
Credit lower-than-anticipated
risk (which is heavily dependent residual values, or
upon economic
higher-than-expected return volumes for leased vehicles. Credit risk is the possibility
factors including unemployment, consumer debt service burden, personal income growth, dealer profitability, and used of loss from a customer’s or car
dealer’s failure to make payments according to contract terms. Credit risk (which is heavily
prices) has a significant impact on Ford Credit’s business. The level of credit losses Ford Credit may experience coulddependent upon economic
factors
exceed including unemployment,
its expectations consumer
and adversely affectdebt service burden,
its financial conditionpersonal
or resultsincome growth, dealer
of operations. profitability,
In addition, and used car
Ford Credit
prices) has a significant impact on Ford Credit’s business. The level of credit losses Ford
projects expected residual values (including residual value support payments from Ford) and return volumes for the Credit may experience could
exceed its expectations and adversely affect its financial condition or results of operations. In
vehicles it leases. Actual proceeds realized by Ford Credit upon the sale of returned leased vehicles at lease terminationaddition, Ford Credit
projects expected
may be lower thanresidual
the amount values (including
projected, residual
which wouldvalue
reducesupport
Ford payments from on
Credit’s return Ford)
the and
leasereturn volumesAmong
transaction. for the the
vehicles it leases. Actual proceeds realized by Ford Credit upon the sale of returned leased
factors that can affect the value of returned lease vehicles are the volume and mix of vehicles returned industry-wide, vehicles at lease termination
may
economic conditions, marketing programs, and quality or perceived quality, safety, fuel efficiency, or reliability of the the
be lower than the amount projected, which would reduce Ford Credit’s return on the lease transaction. Among
factors that
vehicles, or can affectinthe
changes value of returned
propulsion technologyleaseandvehicles are the volume
related legislative and mix
changes. of vehicles
Actual returnedmay
return volumes industry-wide,
be influenced
economic conditions, marketing programs, and quality or perceived quality, safety, fuel efficiency,
by these factors, as well as by contractual lease-end values relative to auction values. If auction values decrease or reliability of the
vehicles, or changes in propulsion technology and related legislative changes. Actual return
significantly in the future, return volumes could exceed Ford Credit’s expectations. Each of these factors, alone volumes may be influenced
or in
by these factors, as well as by contractual lease-end values relative to auction values. If auction
combination, has the potential to adversely affect Ford Credit’s results of operations if actual results were to differ values decrease
significantly
significantly in theFord
from future, returnprojections.
Credit’s volumes could Seeexceed
“CriticalFord Credit’s Estimates”
Accounting expectations. Each
in Item 7 of
forthese factors,
additional alone or in
discussion.
combination, has the potential to adversely affect Ford Credit’s results of operations if actual results were to differ
significantly
Economic fromandFord Credit’s projections.
demographic experience Seefor “Critical
pension Accounting
and OPEB Estimates” in Item
plans (e.g., 7 for additional
discount rates ordiscussion.
investment
returns) could be worse than Ford has assumed. The measurement of our obligations, costs, and liabilities associated
withEconomic and demographic
benefits pursuant to our pensionexperience
and OPEBfor pension
plans andthat
requires OPEB plans (e.g.,
we estimate the discount ratesofor
present value investment
projected future
returns) could be worse than Ford has assumed. The measurement of our obligations, costs, and
payments to all participants. We use many assumptions in calculating these estimates, including assumptions related liabilities associated
to
with benefits
discount pursuant
rates, to our
investment pension
returns on and OPEB plans
designated requiresand
plan assets, thatdemographic
we estimateexperience
the present(e.g.,
valuemortality
of projected
and future
retirement
payments
rates). Wetogenerally
all participants.
remeasure We these
use many assumptions
estimates at each in calculating
year end and these estimates,
recognize including
any gains assumptions
or losses associated related
with to
discount rates,
changes to our investment
plan assetsreturns on designated
and liabilities plan
in the year assets, and
incurred. demographic
To the experience
extent actual (e.g.,
results are lessmortality
favorableand thanretirement
our
rates). We generally
assumptions, we mayremeasure
recognize a these estimates atloss
remeasurement eachinyear end andwhich
our results, recognize
couldany gains or losses
be substantial. Forassociated
additional with
changes to our
information plan assets
regarding and liabilitiessee
our assumptions, in the year Accounting
“Critical incurred. ToEstimates”
the extentin
actual
Item results are less
7 and Note 17 offavorable
the Notes than our
to the
assumptions,
Financial we may recognize a remeasurement loss in our results, which could be substantial. For additional
Statements.
information regarding our assumptions, see “Critical Accounting Estimates” in Item 7 and Note 17 of the Notes to the
Financial Statements.
Pension and other postretirement liabilities could adversely affect Ford’s liquidity and financial condition.
We have defined benefit retirement plans in the United States that cover many of our hourly and salaried employees. We
alsoPension and other
provide pension postretirement
benefits to [Link]
employees could
and adversely affect Ford’s
retirees, primarily liquidity
in Europe. and financial
In addition, we sponsorcondition.
plans to
We have defined benefit retirement plans in the United States that cover many of our hourly and salaried
provide OPEB for retired employees (primarily health care and life insurance benefits). See Note 17 of the Notes to the employees. We
also provide pension benefits to non-U.S. employees and retirees, primarily in Europe. In addition, we
Financial Statements for more information about these plans. These benefit plans impose significant liabilities on us and sponsor plans to
provide OPEBus
could require fortoretired
make employees (primarily
additional cash health care
contributions, whichandcould
life insurance
impair ourbenefits).
liquidity. See
If ourNote
cash17 of the
flows andNotes to the
capital
Financial Statements for more information about these plans. These benefit plans impose significant
resources are insufficient to meet any pension or OPEB obligations, we could be forced to reduce or delay investments liabilities on us and
could require us to make additional cash contributions, which could impair our liquidity. If our
and capital expenditures, suspend dividend payments, seek additional capital, or restructure or refinance our cash flows and capital
resources are insufficient to meet any pension or OPEB obligations, we could be forced to reduce or delay investments
indebtedness.
and capital expenditures, suspend dividend payments, seek additional capital, or restructure or refinance our
indebtedness.

27

27

199174_Ford_2023_AR_1OK.indd 31 2/9/24 2:54 PM

 Item 1A. Risk Factors (Continued)

Item 1A.
Legal andRisk Factors (Continued)
Regulatory Risks

LegalFordandand
Regulatory Risks
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
Ford and
otherwise. We Ford
spendCredit could experience
substantial resources tounusual or significant
comply with governmental litigation,
safety governmental
regulations, mobile investigations,
and stationary or
adverse publicity arising out of alleged defects in products, services, perceived environmental
source emissions regulations, consumer and automotive financial regulations, and other standards, but we cannot ensure impacts, or
otherwise.
that employees We orspend
othersubstantial
individualsresources to comply
affiliated with us will with governmental
not violate such lawssafety regulations, In
or regulations. mobile and as
addition, stationary
discussed
source emissions regulations, consumer and automotive financial regulations, and other standards,
below under “Ford may need to substantially modify its product plans and facilities to comply with safety, emissions, but we cannot ensure
fuel
that employees or other individuals affiliated with us will not violate such laws or regulations. In addition, as discussed
economy, autonomous driving technology, environmental, and other regulations” and “Ford Credit could be subject to new
below under “Ford may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel
or increased credit regulations, consumer protection regulations, or other regulations,” regulatory standards and
economy, autonomous driving technology, environmental, and other regulations” and “Ford Credit could be subject to new
interpretations may change on short notice and impact our compliance status. Government investigations against Ford or
or increased credit regulations, consumer protection regulations, or other regulations,” regulatory standards and
Ford Credit could result in fines, penalties, orders, or other resolutions that could have an adverse impact on our financial
interpretations may change on short notice and impact our compliance status. Government investigations against Ford or
condition, results of operations, or the operation of our business. Moreover, compliance with governmental standards
Ford Credit could result in fines, penalties, orders, or other resolutions that could have an adverse impact on our financial
does not necessarily prevent individual or class action lawsuits, which can entail significant cost and risk. In certain
condition, results of operations, or the operation of our business. Moreover, compliance with governmental standards
circumstances, courts may permit civil actions even where our vehicles, services, and financial products comply with
does not necessarily prevent individual or class action lawsuits, which can entail significant cost and risk. In certain
federal and/or other applicable law. Furthermore, simply responding to actual or threatened litigation or government
circumstances, courts may permit civil actions even where our vehicles, services, and financial products comply with
investigations
federal and/or of our applicable
other compliancelaw. withFurthermore,
regulatory standards, whether related
simply responding to our
to actual products, services,
or threatened litigation or or government
business or
commercial relationships, requires significant expenditures of time and other resources. Litigation
investigations of our compliance with regulatory standards, whether related to our products, services, or business also is inherentlyor
uncertain, and we have in the past experienced and could in the future experience significant adverse
commercial relationships, requires significant expenditures of time and other resources. Litigation also is inherently results, including
compensatory
uncertain, and and punitive
we have damage
in the awards, a disgorgement
past experienced and could in theof profits
future or revenue, or
experience injunctive
significant relief, any
adverse of which
results, could
including
have an adverse
compensatory andeffect on our
punitive financial
damage condition,
awards, results of operations,
a disgorgement of profits ororrevenue,
our business in general,
or injunctive particularly
relief, with could
any of which larger
jury
haveverdicts becoming
an adverse effect more
on ourprevalent. In addition,
financial condition, adverse
results publicity surrounding
of operations, an allegation,
or our business in general, litigation, or investigation,
particularly with larger
even if there becoming
jury verdicts is no meritmore
to theprevalent.
matter, may cause significant
In addition, adverse reputational harm or create
publicity surrounding a negative
an allegation, public or
litigation, perception of
investigation,
our products and services, which could have a significant adverse effect on our sales.
even if there is no merit to the matter, may cause significant reputational harm or create a negative public perception of
our products and services, which could have a significant adverse effect on our sales.
Ford may need to substantially modify its product plans and facilities to comply with safety, emissions, fuel
economy,
Ford may autonomous driving technology,
need to substantially modify its environmental,
product plansand andother regulations.
facilities to comply The
with automotive industry is fuel
safety, emissions,
subject to regulations worldwide that govern product characteristics and
economy, autonomous driving technology, environmental, and other regulations. The automotive industry that differ by global region, country, and is
sometimes within national boundaries. Regulators have enacted and are proposing
subject to regulations worldwide that govern product characteristics and that differ by global region, country, and standards to address concerns
regarding
sometimesthe environment
within (including concerns
national boundaries. Regulatorsabout global
have climate
enacted and change and air quality),
are proposing standards vehicle safety,concerns
to address and energy
independence, and the regulatory landscape can change on short notice. These regulations
regarding the environment (including concerns about global climate change and air quality), vehicle safety, and energy vary, but generally require
that over time motor
independence, and the vehicles and engines
regulatory landscape emitcanless air pollution,
change on shortincluding
notice. TheseGHG emissions,
regulationsoxides of nitrogen,
vary, but generally require
hydrocarbons, carbon
that over time motor monoxide,
vehicles and and particulate
engines emit less matter, and there
air pollution, are associated
including increasedoxides
GHG emissions, reporting requirements.
of nitrogen,
Similarly, we are
hydrocarbons, making
carbon substantial
monoxide, andinvestments in our facilities
particulate matter, and there andarerevising our processes
associated increasedtoreporting
not onlyrequirements.
comply with
applicable
Similarly, we regulations
are making butsubstantial
also to make our operations
investments in ourmore efficient
facilities and sustainable.
and revising our processes As our to suppliers make similar
not only comply with
investments, any higher
applicable regulations butcosts
alsomay be passed
to make on to [Link]
our operations In the Unitedand
efficient States, legal andAs
sustainable. policy
our debates
supplierson environmental
make similar
regulations
investments,are anycontinuing,
higher costs withmay
a primary
be passedtrendon toward
to [Link] GHG States,
In the United emissions legalandand increasing
policy debatesvehicleonelectrification.
environmental
regulations
Recently, are continuing,
different with a primary trend
federal administrations towardsought
have either reducing GHG standards
to make emissions more and increasing
strict or tovehicle
make themelectrification.
less strict,
Recently,
with different federal
one administration administrations
often replacing thehave either sought
regulations enacted to by
make
the standards
last. Various morethirdstrict or toroutinely
parties make them less
seek strict,
judicial
with one
review ofadministration often replacing
these federal regulatory the regulations
and deregulatory enacted
efforts. by the last.
In parallel, Various
California third parties
continues to enactroutinely seek judicial
increasingly strict
review of these
emissions federal
standards and regulatory and deregulatory
requirements efforts. In
for ZEVs (standards thatparallel, California
some other statescontinues to enact
are adopting), andincreasingly
those actions strict
are
emissions
also standards
the subject andchallenges.
of legal requirements for ZEVs
Court rulings(standards
regarding that some other
regulatory actions states are adopting),
by federal, California, andandthose actions
other stateare
also the subject
regulators createofuncertainty
legal [Link] the Court rulings
potential regarding regulatory actions
for applicable standards by to
federal,
change California,
quickly. and other state
In addition, many
regulators create uncertainty and the potential for applicable regulatory standards
governments regulate local product content or impose import requirements with the aim of creating jobs, protecting to change quickly. In addition, many
governments regulate local product content
domestic producers, and influencing the balance of [Link] impose import requirements with the aim of creating jobs, protecting
domestic producers, and influencing the balance of payments.
We regularly refine our product cycle plan to improve the fuel economy of our internal combustion vehicles and to
offerWe regularly
more refinechoices,
propulsion our product
suchcycle plan and
as hybrid to improve
electrified the vehicles,
fuel economy of our internal
that generate lower combustion
GHG emissions. vehicles and to
Electrification
offer more propulsion choices, such as hybrid and electrified vehicles, that generate
is our core strategy to comply with current and anticipated environmental laws and regulations in major markets. lower GHG emissions. Electrification
is our corethere
However, strategy to comply
are limits to ourwith current
ability and anticipated
to reduce emissionsenvironmental
and increase fuel lawseconomy
and regulations
over given in major markets.
time frames and many
However,
factors thatthere
couldare limitsortoimpede
delay our ability
our to reduce
plans. Thoseemissions
factorsand increase
primarily relatefueltoeconomy
the cost and overeffectiveness
given time frames and many
of available
factors that could
technologies; delay or
consumer impede our
acceptance ofplans. Those factors
new technologies andprimarily relate
their costs; to the cost
changes and effectiveness
in vehicle mix (as describedof available
in more
technologies;
detail above underconsumer
“Ford’s acceptance of new technologies
new and existing products andand theirsoftware,
digital, costs; changes in vehicle
and physical mix (as
services aredescribed
subject to in more
market
detail above under “Ford’s new and existing products and digital, software, and physical
acceptance and face significant competition from existing and new entrants in the automotive and digital and software services are subject to market
acceptance and faceand
services industries, significant competition
its reputation may befrom harmedexisting and
if it is new entrants
unable to achieve in the
the automotive
initiatives it and digital and software
has announced”); the
appropriateness (or lack thereof) of certain technologies for use in particular vehicles; the widespread availabilitythe
services industries, and its reputation may be harmed if it is unable to achieve the initiatives it has announced”); (or lack
appropriateness (or lack
thereof) of supporting thereof) of certain
infrastructure for newtechnologies
technologies,for use in particular
including charging vehicles;
for electric the widespread
vehicles; availability(or
the availability (orlack
lack
thereof) of supporting infrastructure for new technologies, including charging for electric vehicles; the availability (or lack
thereof) of the raw materials and component supply to make affordable batteries and other elements of electric vehicles;
thereof) of the raw materials and component supply to make affordable batteries and other elements of electric vehicles;
and the human, engineering, and financial resources necessary to deploy new technologies across a wide range of
and the human, engineering, and financial resources necessary to deploy new technologies across a wide range of
products and powertrains in a short time. If fuel prices are relatively low and market conditions or the consumer attributes
products and powertrains in a short time. If fuel prices are relatively low and market conditions or the consumer attributes
28
28

199174_Ford_2023_AR_1OK_r1.indd 32 2/13/24 8:08 PM

 Item 1A. Risk Factors (Continued)

Item
of our1A. Risk Factors
vehicles (Continued)
do not lead consumers to purchase electric vehicles and other highly fuel-efficient vehicles in sufficient
numbers, it may be difficult to meet applicable environmental standards. Moreover, the rates of EV growth, production
of our vehicles
disruptions, stop doships,
not lead
supplyconsumers to purchase
chain limitations, electric vehicles and
lower-than-planned market other highly fuel-efficient
acceptance vehicles
of our vehicles, in sufficient
and/or other
numbers, it may be difficult to meet applicable environmental standards.
circumstances may cause us to modify product plans, or, in some cases, purchase credits, which we have done, Moreover, the rates of EV growth, production
in order
disruptions,
to comply with stop ships, supply
emissions chain fuel
standards, limitations,
economy lower-than-planned
standards, or ZEVmarket acceptance
requirements, of our
which could vehicles,
have anand/oradverse othereffect
circumstances
on our financialmay causeand
condition us to modify
results of product
operations plans,
andor, in some
cause cases, purchase
reputational harm. credits, which we have done, in order
to comply with emissions standards, fuel economy standards, or ZEV requirements, which could have an adverse effect
on our financialscrutiny
Increased condition and results emission
of automaker of operations and cause
compliance reputational
by regulators [Link] world has led to new regulations,
around
more stringent enforcement programs, additional field actions, demands for reporting on the field performance of
Increased
emissions scrutiny of
components andautomaker emission
higher scrutiny compliance
of field data, and bydelays
regulators around the
in regulatory world hasThe
approvals. led cost
to new regulations,
to comply with
more stringent enforcement programs, additional field actions, demands
government regulations concerning new vehicle standards and in-use vehicle requirements, including field service for reporting on the field performance of
emissions components Additional
actions, is substantial. and higherregulations,
scrutiny of fieldchangesdata,inand delays in
regulatory regulatory approvals.
interpretations, or changes Theincost to comply
consumer with
preferences
government regulations concerning new vehicle standards and in-use vehicle
that affect vehicle mix, as well as any non-compliance with applicable laws and regulations, could have a substantial requirements, including field service
actions,
adverse is substantial.
impact Additional
on our financial regulations,
condition changes
or results in regulatory
of operations. Ininterpretations,
addition, a number or changes in consumer
of governments, as wellpreferences
as non-
that affect vehicle mix, as well as any non-compliance with applicable laws
governmental organizations, publicly assess vehicles to their own protocols. Any negative perception regarding the and regulations, could have a substantial
adverse
performance impact on our
of our financial
vehicles condition
subjected or results
to such testsof operations.
could reduce future In addition,
sales. aCourt
number of governments,
decisions arising outasofwell as non-
consumer
governmental organizations, publicly assess vehicles to their own protocols. Any
and investor litigation could give rise to de facto changes in the interpretation of existing emission laws and regulations, negative perception regarding the
performance
thereby imposing of our vehicles
new burdens subjected to such testsFor
on manufacturers. could
more reduce
discussionfuture of sales. Court decisions
the impact of standards arising
on ouroutglobal
of consumer
business,
and investor litigation could give rise to de facto
see the “Governmental Standards” discussion in “Item 1. Business” above. changes in the interpretation of existing emission laws and regulations,
thereby imposing new burdens on manufacturers. For more discussion of the impact of standards on our global business,
see Wethe “Governmental
and other companies Standards”continuediscussion
to develop in “Item 1. Business”
autonomous vehicle [Link] driver assist technologies, and the U.S. and
foreign governments are continuing to develop the regulatory framework that will govern autonomous vehicles and related
We and other
technologies. companies are
Manufacturers continue
facingtoincreased
develop autonomous
scrutiny fromvehicle regulators and at driver assistand
the state technologies,
federal level and onthe U.S. misuse
system and
foreign
by governments
customers, featureare continuingand
capabilities, to develop
whetherthe regulatory
advertising forframework
this technology that will governfalse
contains autonomous
or misleadingvehicles and related
information.
technologies.
Some states are Manufacturers
developing their are facing increased that
own regulations scrutiny
impact from theregulators
testing and at design
the state of and federal level
autonomous on system
vehicles. This misuse
by customers,
patchwork featurewithout
approach capabilities,
federaland whether
guidance mayadvertising
subject Ford for this technologycompliance
to additional contains false or misleading
costs. In addition,information.
the demand
Some
for thesestates are developing
services by consumers theirisown regulations
fluctuating as thethattechnology
impact theistesting rolled and out indesign
variousof stages
autonomous and withvehicles. This
mixed industry
patchwork approach without federal guidance may subject Ford to additional compliance costs. In addition, the demand
results.
for these services by consumers is fluctuating as the technology is rolled out in various stages and with mixed industry
results.
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
Ford and
safeguard theirFord Credit information.
personal could be affected We are by subject
the continued
to laws, development
rules, guidelines of from
moreprivacy
stringent andprivacy, data use,
other regulators, and
data protection, and artificial intelligence laws and regulations as
regulations in the United States and other countries (such as the European Union’s and the U.K.’s General Data well as consumers’ heightened expectations to
safeguard their personal information. We are subject to laws, rules, guidelines
Protection Regulations and the California Consumer Privacy Act) relating to the collection, use, cross-border data transfer, from privacy and other regulators, and
regulations
and securityinofthe United information
personal States and other countriesemployees,
of consumers, (such as theorEuropean Union’s laws
others, including and the
thatU.K.’s GeneralusData
may require to notify
Protection Regulations and the California Consumer Privacy Act) relating
regulators and affected individuals of a data security incident. Existing and newly developed laws and regulations to the collection, use, cross-border data transfer,
may
and security of personal information of consumers, employees, or others,
contain broad definitions of personal information, are subject to change and uncertain interpretations by courts and including laws that may require us to notify
regulators
regulators,and andaffected
may be individuals
inconsistentoffrom a data security
state to stateincident.
or country Existing and newly
to country. developed
Accordingly, laws andwith
complying regulations
such laws may
and
contain broad definitions of personal information, are subject to change and
regulations may lead to a decline in consumer engagement or cause us to incur substantial costs to modify our operations uncertain interpretations by courts and
regulators,
or businessand may beMoreover,
practices. inconsistent from state
regulatory to state
actions or country
seeking to impose to country. Accordingly,
significant financialcomplying
penalties for with such laws and
noncompliance
regulations
and/or legal actions (including pursuant to laws providing for private rights of action by consumers) could beour
may lead to a decline in consumer engagement or cause us to incur substantial costs to modify operations
brought
or business practices. Moreover, regulatory actions seeking to impose significant
against us in the event of a data compromise, misuse of consumer information, or perceived or actual non-compliance financial penalties for noncompliance
and/or
with data legal actions (including
protection, privacy, orpursuant
artificial to laws providing
intelligence for privateThe
requirements. rights of action
rapid evolutionby consumers)
and increased could be brought
adoption of artificial
against us in the event of a data compromise, misuse of consumer information,
intelligence technologies may intensify these risks. Further, any unauthorized release of personal information could harm or perceived or actual non-compliance
with data protection,
our reputation, disruptprivacy, or artificial
our business, cause intelligence
us to expend requirements.
significantThe rapid evolution
resources, and leadand to aincreased adoptionconfidence
loss of consumer of artificial
intelligence
resulting in an adverse impact on our business and/or consumers deciding to withhold or withdraw consent for our harm
technologies may intensify these risks. Further, any unauthorized release of personal information could
our reputation,
collection or use disrupt our business, cause us to expend significant resources, and lead to a loss of consumer confidence
of data.
resulting in an adverse impact on our business and/or consumers deciding to withhold or withdraw consent for our
collection or use could
Ford Credit of [Link] subject to new or increased credit regulations, consumer protection regulations, or
other regulations. As a finance company, Ford Credit is highly regulated by governmental authorities in the locations in
whichFord Credit could
it operates, whichbe can subject
imposetosignificant
new or increased
additionalcredit regulations,
costs and/or consumer
restrictions protectionInregulations,
on its business. the United States, or
other
for regulations.
example, As a finance
Ford Credit’s operationscompany, Ford Credit
are subject is highly
to regulation andregulated
supervision by governmental
under variousauthorities in theand
federal, state, locations
local in
whichincluding
laws, it operates, thewhich
federalcan impose significant
Truth-in-Lending Act,additional
Consumercosts Leasing and/or Act,restrictions
Equal Credit on Opportunity
its [Link], In the
andUnited States,
Fair Credit
for example,
Reporting Act. Ford Credit’s operations are subject to regulation and supervision under various federal, state, and local
laws, including the federal Truth-in-Lending Act, Consumer Leasing Act, Equal Credit Opportunity Act, and Fair Credit
Reporting Act.

29

29

199174_Ford_2023_AR_1OK_r1.indd 33 2/13/24 8:08 PM

 Item 1A. Risk Factors (Continued)

ItemThe
1A. Dodd-Frank
Risk FactorsAct (Continued)
directs federal agencies to adopt rules to regulate the finance industry and the capital markets
and gives the Consumer Financial Protection Bureau (“CFPB”) broad rule-making and enforcement authority for a wide
The
range of Dodd-Frank Act directs
consumer financial federallaws
protection agencies to adoptconsumer
that regulate rules to regulate
financethe finance industry
businesses, such asand theCredit’s
Ford capital automotive
markets
and gives the Consumer Financial Protection Bureau (“CFPB”) broad rule-making and enforcement authority
financing business. Exercise of these powers by the CFPB may increase the costs of, impose additional restrictions for a wide
on,
range of consumer financial protection laws that regulate consumer finance businesses, such as Ford Credit’s
or otherwise adversely affect companies in the automotive finance business. The CFPB has authority to supervise and automotive
financing
examine thebusiness. Exercise automotive
largest nonbank of these powers
financeby companies,
the CFPB may increase
such as Fordthe costsfor
Credit, of,compliance
impose additional restrictions
with consumer on,
financial
or otherwise
protection [Link] affect companies in the automotive finance business. The CFPB has authority to supervise and
examine the largest nonbank automotive finance companies, such as Ford Credit, for compliance with consumer financial
protection
Failurelaws.
to comply with applicable laws and regulations could subject Ford Credit to regulatory enforcement actions,
including consent orders or similar orders where Ford Credit may be required to revise practices, remunerate customers,
Failure
or pay [Link]
comply with applicable
enforcement laws and
action against regulations
Ford could
Credit could subject
harm FordFord Credit
Credit’s to regulatory
reputation enforcement
or lead actions,
to further litigation.
including consent orders or similar orders where Ford Credit may be required to revise practices, remunerate customers,
or pay1B.
ITEM fines. An enforcement
Unresolved action against Ford Credit could harm Ford Credit’s reputation or lead to further litigation.
Staff Comments.

ITEM 1B. Unresolved Staff Comments.

None.

None.

30

30

199174_Ford_2023_AR_1OK.indd 34 2/9/24 2:54 PM

 ITEM 1C. Cybersecurity.

While no organization can eliminate cybersecurity risk entirely, we devote significant resources to our security
program that we believe is reasonably designed to mitigate our cybersecurity and information technology risk. Our efforts
focus on protecting and enhancing the security of our information systems, software, networks, and other assets. These
efforts are designed to protect against, and mitigate the effects of, among other things, cybersecurity incidents where
unauthorized parties attempt to access confidential, sensitive, or personal information; potentially hold such information for
ransom; destroy data; disrupt or degrade service or our operations; sabotage systems; or otherwise cause harm to the
Company, our customers, suppliers, or dealers, or other key stakeholders. We employ capabilities, processes, and other
security measures we believe are designed to reduce and mitigate these risks, and have requirements for our suppliers to
do the same. Despite having thorough due diligence, onboarding, and cybersecurity assessment processes in place for
our suppliers, the responsibility ultimately rests with our suppliers to establish and uphold their respective cybersecurity
programs. Our ability to monitor the cybersecurity practices of our suppliers is limited and there can be no assurance that
we can prevent or mitigate the risk of any compromise or failure in the information systems, software, networks, and other
assets owned or controlled by our suppliers. When we become aware that a supplier’s cybersecurity has been
compromised, we attempt to mitigate the risk to the Company, including, if appropriate and feasible, by terminating the
supplier’s connection to our information systems. Notwithstanding our efforts to mitigate any such risk, there can be no
assurance that the compromise or failure of supplier information systems, technology assets, or cybersecurity programs
would not have an adverse effect on the security of the Company’s information systems.

In an effort to effectively prevent, detect, and respond to cybersecurity threats, we employ a multi-layered
cybersecurity risk management program supervised by our Chief Information Security Officer, whose team is responsible
for leading enterprise-wide cybersecurity strategy, policy, architecture, and processes. This responsibility includes
identifying, considering, and assessing potentially material cybersecurity incidents on an ongoing basis, establishing
processes designed to prevent and monitor potential cybersecurity risks, implementing mitigation and remedial measures,
and maintaining our cybersecurity program. To do so, our program leverages both internal and external techniques and
expertise. Internally, among other things, we perform penetration tests, internal tests/code reviews, and simulations using
cybersecurity professionals (often referred to as “white hat hackers” or a “Red Team”), to assess vulnerabilities in our
information systems and evaluate our cyber defense capabilities. We also perform phishing and social engineering
simulations with, and provide cybersecurity training for, personnel with Company email and access to Company assets.
On a monthly basis, we disseminate security awareness newsletters to employees to highlight emerging or urgent
cybersecurity threats and best practices. Externally, we monitor notifications from the U.S. Computer Emergency
Readiness Team (“CERT”) and various Information Sharing and Analysis Centers (each an “ISAC”); review customer,
media, and third-party cybersecurity reports; and offer bounties to responsible third-parties who notify us of vulnerabilities
they are able to detect in our cyber defenses (commonly referred to as a “Bug Bounty”). Our capabilities, processes, and
other security measures also include, without limitation:
• Security Information and Event Management (“SIEM”) software, which provides a threat detection, compliance,
and security incident management system;
• Endpoint Detection and Response (“EDR”) software, which monitors for malicious activities on external-facing
endpoints (e.g., Windows workstations, servers, MAC clients, and Linux endpoints);
• Cloud monitoring, running on primary public and private cloud environments; and
• Disaster recovery and incident response plans, including a ransomware response plan.

We invest in enhancing our cybersecurity capabilities and strengthening our partnerships with appropriate business
partners, service partners, and government and law enforcement agencies to understand the range of cybersecurity risks
in the operating environment, enhance defenses, and improve resiliency against cybersecurity threats. Additionally, we
are a member of the Financial Services and Information Technology ISACs and both a founding member and board
member of the Automotive ISAC. Our membership with these industry cybersecurity groups assists in our efforts to
protect the Company against both enterprise and in-vehicle security risks.

The Company’s global cybersecurity incident response is overseen by our Chief Information Security Officer. Our
Chief Information Security Officer has served in that role for over 6 years and has over a decade of engineering and
operations expertise with cybersecurity technologies and services. Our Chief Information Security Officer reports to our
Chief Enterprise Technology Officer who has spent over two decades leading digital and technology organizations at both
enterprise software companies and Fortune 50 enterprises. Our Chief Enterprise Technology Officer reports directly to the
Chief Executive Officer.

31

199174_Ford_2023_AR_1OK.indd 35 2/9/24 2:54 PM

 ITEM 1C. Cybersecurity (Continued)

ITEM 1C. Cybersecurity

When a cybersecurity(Continued)
threat or incident is identified, our policy is to review and triage the threat or incident, and to
then manage it to conclusion in accordance with our cybersecurity incident response processes. When a cybersecurity
When
incident is a cybersecurity
determined to bethreat or incident
significant, is identified,byour
it is addressed policy is to review
management and triage
committees using the threat orthat
processes incident,
leverageand to
then manage it to conclusion in accordance with our cybersecurity incident response processes. When
subject-matter expertise from across the Company. Further, we may engage third-party advisors, from time to time, as a cybersecurity
incident is determined
part of our to be significant,
incident management it is addressed
processes. by management
All cybersecurity incidents committees using as
that are identified processes thathaving
reasonably leverage the
subject-matter expertise from across the Company. Further, we may engage third-party advisors, from
potential to be highly significant to the Company are brought to the attention of both the Chief Enterprise Technology time to time, as
part of our
Officer andincident
Generalmanagement
Counsel by theprocesses. All cybersecurity
Chief Information Security incidents
Officer asthat
partare identified
of our as reasonably
cybersecurity incidenthaving the
response
potential
[Link] be highly significant to the Company are brought to the attention of both the Chief Enterprise Technology
Officer and General Counsel by the Chief Information Security Officer as part of our cybersecurity incident response
processes.
Cybersecurity risk management is an integral part of our overall enterprise risk management program. As part of its
enterprise risk management efforts, the Board meets with senior management, including the executive leadership team, to
Cybersecurity
assess and respond risktomanagement
critical businessis an integral
risks. part enterprise
Critical of our overall enterprise
risks risk management
are assessed program. As
by senior management part of and
annually its
enterprise
discussed with the Board. Once identified, each of the risks we view as most significant is assigned an executive risk to
risk management efforts, the Board meets with senior management, including the executive leadership team,
assess
owner whoand isrespond
responsibleto critical business
to oversee riskrisks. Critical enterprise
assessment, develop and risks are assessed
implement by senior
mitigation plans,management
and provide annually
regular and
discussed with the Board. Once identified, each of the risks we view as most significant is
updates to the Board (and/or Board committee assigned to the risk). Cybersecurity threats have been and continue assigned an executive risk
to be
owner who is responsible to oversee risk assessment, develop and implement mitigation plans, and
identified as one of the Company’s top risks, with our Chief Enterprise Technology Officer and Chief Information Security provide regular
updates to the Board
Officer assigned as the (and/or Board
executive committee
risk owners. assigned
The Boardtohas the delegated
risk). Cybersecurity threats haveforbeen
primary responsibility and continue
the oversight of to be
identified as one of the Company’s top risks, with our Chief Enterprise Technology Officer and Chief
cybersecurity and information technology risks, and the Company’s preparedness for these risks, to the Audit Committee. Information Security
Officer assigned as the executive risk owners. The Board has delegated primary responsibility for the oversight of
cybersecurity
As part of and information
its oversight technology risks,
responsibilities, and the
the Audit Company’s
Committee preparedness
receives for these
regular updates onrisks, to the Audit Committee.
our cybersecurity practices
as well as cybersecurity and information technology risks from our Chief Information Security Officer. These regular
As part
updates of itstopics
include oversight responsibilities,
related to cybersecuritythe Audit Committee
practices, receives
cyber risks, andregular updates onprocesses,
risk management our cybersecurity
such aspractices
updates
as our
to wellcybersecurity
as cybersecurity and information
programs technology
and mitigation risksand
strategies, from our cybersecurity
other Chief Information Security Officer.
developments. Thesetoregular
In addition these
updatesupdates,
regular include topics
as partrelated
of our to cybersecurity
incident responsepractices, cyber
processes, therisks,
Chiefand risk management
Enterprise Technologyprocesses,
Officer, in such as updates
collaboration with
to our
the cybersecurity
Chief Informationprograms and mitigation
Security Officer strategies,
and General and provides
Counsel, other cybersecurity
updates ondevelopments. In addition
certain cybersecurity to these
incidents to the
regular updates, as
Audit Committee part
and, in of our cases,
some incidenttheresponse
Board. processes, the Chief Enterprise
The Audit Committee reviews andTechnology Officer,
provides input in and
into collaboration
oversight with
of
the Chief Information Security Officer and General Counsel, provides updates on certain cybersecurity
our cybersecurity processes, and in the event Ford determines it has experienced a material cybersecurity incident, incidents to the
the
Audit
Audit Committee
Committee and, in some
is notified cases,
about the Board.
the incident The Audit
in advance of Committee reviews
filing a Current andon
Report provides input into and oversight of
Form 8-K.
our cybersecurity processes, and in the event Ford determines it has experienced a material cybersecurity incident, the
AuditInCommittee
2023, we did is notified about
not identify thecybersecurity
any incident in advance of filing
threats that havea Current Report
materially on Form
affected or are8-K.
reasonably likely to
materially affect our business strategy, results of operations, or financial condition. However, despite the capabilities,
In 2023,and
processes, we other
did not identifymeasures
security any cybersecurity
we employ threats
that wethatbelieve
have materially affected
are designed or arereduce,
to detect, reasonably likely to the risk
and mitigate
materially affect our business strategy, results of operations, or financial condition. However,
of cybersecurity incidents, we may not be aware of all vulnerabilities or might not accurately assess the risks despite the capabilities,
of incidents,
processes, and other security measures we employ that we believe are designed to detect, reduce,
and such preventative measures cannot provide absolute security and may not be sufficient in all circumstances or and mitigate the risk
of cybersecurity incidents, we may not be aware of all vulnerabilities or might not accurately assess
mitigate all potential risks. Moreover, we, our suppliers, and our dealers have been the target of cybersecurity incidents the risks of incidents,
and
and such
such preventative measuresand
threats are continuing cannot provide
evolving, absolute
which security
may cause and may notincidents
cybersecurity be sufficient
to beinmore
all circumstances
difficult to detector for
mitigate all potential risks. Moreover, we, our suppliers, and our dealers have been the target
periods of time. Our networks and in-vehicle systems, sharing similar architectures, could also be impacted by, or a of cybersecurity incidents
and such threats
cybersecurity are continuing
incident may resultand evolving,
from, which may
the negligence cause cybersecurity
or misconduct incidents
of insiders or third to be more
parties whodifficult to detect
have access for
to our
periods of time. Our networks and in-vehicle systems, sharing similar architectures, could also be
networks and systems. A cybersecurity incident could harm our reputation, cause customers to lose trust in our security impacted by, or a
cybersecurity
measures, and/or incident mayus
subject result from, theactions
to regulatory negligence or misconduct
or litigation, of insiders
which may orfines,
result in third parties
penalties,whojudgments,
have access or to our
networks
injunctions, and a cybersecurity incident involving us or one of our suppliers could impact our business strategy, security
and systems. A cybersecurity incident could harm our reputation, cause customers to lose trust in our results of
measures,
operations,and/or subject
financial us to or
condition, regulatory actions For
our reputation. or litigation,
additionalwhich may result
information, seein“Operational
fines, penalties, judgments,
information or
systems,
injunctions, and a vehicles,
security systems, cybersecurity incident involving
and services us or onebyofcybersecurity
could be affected our suppliersincidents,
could impact our business
ransomware strategy,
attacks, results of
and other
operations, financial condition, or our reputation. For additional information, see
disruptions and impact Ford and Ford Credit as well as their suppliers and dealers” on page 20. “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” on page 20.

32

32

199174_Ford_2023_AR_1OK.indd 36 2/9/24 2:54 PM

 ITEM 2. Properties.

Our principal properties include manufacturing and assembly facilities, distribution centers, warehouses, sales or
administrative offices, and testing, prototype, and operations space.

We own substantially all of our U.S. manufacturing and assembly facilities. Our facilities are situated in various
sections of the country and include assembly plants, engine plants, casting plants, metal stamping plants, transmission
plants, and other component plants. Most of our distribution centers are leased (we own approximately 32% of the total
square footage and lease the balance). The majority of the warehouses that we operate are leased, although many of our
manufacturing and assembly facilities contain some warehousing space. Substantially all of our sales offices are leased
space. Approximately 85% of the total square footage of our testing, prototype, and operations space is owned by us.

In addition, we maintain and operate manufacturing plants, assembly facilities, parts distribution centers, and
engineering centers outside of the United States. We own substantially all of our non-U.S. manufacturing plants,
assembly facilities, and engineering centers. The majority of our parts distribution centers outside of the United States are
either leased or provided by vendors under service contracts.

We and the entities that we consolidated as of December 31, 2023 use over 300 operations facilities globally,
including testing and prototype, across 24 countries, and 41 manufacturing and assembly plants, which includes plants
that are operated by us or our consolidated joint venture that support our Ford Blue, Ford Model e, and Ford Pro
segments.

We have one significant consolidated joint venture, which is in our Ford Blue segment:

• Ford Vietnam Limited — a joint venture between Ford (75% partner) and Diesel Song Cong One Member Limited
Liability Company (a subsidiary of the Vietnam Engine and Agricultural Machinery Corporation, which in turn is
majority owned (87.43%) by the State of Vietnam represented by the Ministry of Industry and Trade)
(25% partner). Ford Vietnam Limited assembles and distributes a variety of Ford passenger and commercial
vehicle models. The joint venture operates one plant in Vietnam.

In addition to the plants that we operate directly or that are operated by our consolidated joint venture, additional
plants that support our Ford Blue, Ford Model e, and Ford Pro segments are operated by unconsolidated joint ventures of
which we are a partner. The most significant of those unconsolidated joint ventures are as follows:

• AutoAlliance (Thailand) Co., Ltd. (“AAT”) — a 50/50 joint venture between Ford and Mazda that owns and
operates a manufacturing plant in Rayong, Thailand. AAT produces Ford and Mazda products for domestic and
export sales.

• BlueOval SK, LLC — a 50/50 joint venture among Ford, SK On Co., Ltd., and SK Battery America, Inc. (a wholly
owned subsidiary of SK On) that will build and operate electric vehicle battery plants in Tennessee and Kentucky
to supply batteries to Ford and Ford affiliates.

• Changan Ford Automobile Corporation, Ltd. (“CAF”) — a 50/50 joint venture between Ford and Chongqing
Changan Automobile Co., Ltd. (“Changan”). CAF operates four assembly plants, an engine plant, and a
transmission plant in China where it produces and distributes a variety of Ford passenger vehicle models.

• Ford Otomotiv Sanayi Anonim Sirketi (“Ford Otosan”) — a joint venture in Türkiye among Ford (41% partner), the
Koc Group of Türkiye (41% partner), and public investors (18%) that is the sole supplier to us of the Transit,
Transit Custom, and Transit Courier commercial vehicles and the Puma for Europe and the sole distributor of Ford
vehicles in Türkiye. Ford Otosan also manufactures Ford heavy trucks for markets in Europe, the Middle East,
and Africa. The joint venture owns three plants, a parts distribution depot, and a research and development
center in Türkiye, and a combined vehicle and engine plant in Romania.

• JMC — a publicly-traded company in China with Ford (32% shareholder) and Nanchang Jiangling Investment Co.,
Ltd. (41% shareholder) as its controlling shareholders. Nanchang Jiangling Investment Co., Ltd. is a 50/50 joint
venture between Changan and Jiangling Motors Company Group. The public investors in JMC own 27% of its
total outstanding shares. JMC assembles Ford Transit, a series of Ford SUVs, Ford engines, and non-Ford
vehicles and engines for distribution in China and in other export markets. JMC operates two assembly plants
and one engine plant in Nanchang.

33

199174_Ford_2023_AR_1OK.indd 37 2/9/24 2:54 PM

 Item 2. Properties (Continued)
Item 2. Properties (Continued)
ItemThe2. Properties (Continued)
facilities described above are, in the opinion of management, suitable and adequate for the manufacture and
The facilities
assembly of our and described
our joint above are, in
ventures’ the opinion of management, suitable and adequate for the manufacture and
products.
The facilities
assembly of our and described
our joint above are, in
ventures’ the opinion of management, suitable and adequate for the manufacture and
products.
assembly of our and our joint ventures’ products.
The furniture, equipment, and other physical property owned by our Ford Credit operations are not material in relation
to theThe furniture, total
operations’ equipment,
[Link] other physical property owned by our Ford Credit operations are not material in relation
to theThe furniture, total
operations’ equipment,
[Link] other physical property owned by our Ford Credit operations are not material in relation
to the operations’
ITEM 3. Legal [Link] assets.
ITEM 3. Legal Proceedings.
ITEM 3. Legal Proceedings.
The litigation process is subject to many uncertainties, and the outcome of individual matters is not predictable with
The litigation process is subject to many uncertainties, and the outcome of individual matters is not predictable with
assurance. See Note 25 of the Notes to the Financial Statements for a discussion of loss contingencies. Following is a
The litigation
assurance. process
See Note 25 of is the
subject
Notes to to
many uncertainties,
the Financial and thefor
Statements outcome of individual
a discussion of lossmatters is not predictable
contingencies. Followingwith
is a
discussion of our significant pending legal proceedings:
assurance.
discussion ofSee ourNote 25 of the
significant Noteslegal
pending to the Financial Statements for a discussion of loss contingencies. Following is a
proceedings:
discussion of our significant pending legal proceedings:
PRODUCT LIABILITY MATTERS
PRODUCT LIABILITY MATTERS
PRODUCT LIABILITY MATTERS
We are a defendant in numerous actions in state and federal courts within and outside of the United States alleging
We are a defendant in numerous actions in state and federal courts within and outside of the United States alleging
damages
We are
damages from
from injuries
injuries resulting
a defendant in numerous
resulting from
from (or aggravated
actions
(or in stateby)
aggravated andalleged
by) federaldefects
alleged in
in our
our vehicles.
courts within
defects and outside
vehicles. In many
In of actions,
the United
many no
no monetary
actions,States alleging
monetary
amount
damages
amount of
offromdamages is
injuries
damages specified
resulting from
is specified or the
or the(or specific amount
aggravated
specific amount alleged
by)alleged is the jurisdictional
allegedisdefects minimum.
in our vehicles.
the jurisdictional Our
In many
minimum. experience
Our actions,
experience with
no monetary
with
litigation
amount
litigationofalleging
damages
alleging a
a specific
is specified
specific amount
amount of
of damages
or the suggests
specific amount
damages suggests that
that such
alleged is theamounts,
such on
on average,
jurisdictional
amounts, minimum.
average, bear
bear little
Our relation
relation to
experience
little the
the actual
towith actual
amount of
litigationof
amount damages,
alleging
damages, if any,
a specific that
if any, amount we
that we of will pay in
willdamages resolving
suggests
pay in resolving such matters.
thatmatters.
such such amounts, on average, bear little relation to the actual
amount of damages, if any, that we will pay in resolving such matters.
In
In addition
addition to to pending
pending actions,
actions, we we assess
assess thethe likelihood
likelihood of
of incidents
incidents that
that likely
likely have
have occurred
occurred but but not
not yet
yet been
been reported
reported
to
to us. We
We also
In addition
us. also totake into
into consideration
pending
take actions, we assess
consideration specific matters
specificthe that
that have
likelihood
matters been
been raised
of incidents
have as
as claims
that likely
raised but
but have
have occurred
claims have butnot yet
yet proceeded
not not to
yet been reported
proceeded to
litigation.
to Individual
us. WeIndividual
litigation. product
also take product liability
into consideration matters that
specific
liability matters have
thatmatters more than
that have
have more a remote
than abeen risk
raised
remote riskasof loss
ofclaims and
loss and such
butsuch loss
haveloss would
not would likely
yet proceeded be
likely be to
significant
litigation. ifif the
the matter
significant Individual is
is resolved
product
matter unfavorably
liability
resolved matters that
unfavorably to
to us would
have
us be
more
would described
be than herein.
a remote
described risk Currently
herein. of loss and
Currently there
such
there are no
no such
areloss wouldmatters
such to
to report.
likely be
matters report.
significant if the matter is resolved unfavorably to us would be described herein. Currently there are no such matters to report.

Below
Below is is a a product
product liability
liability matter
matter currently
currently pending
pending against
against Ford:
Ford:
Below is a product liability matter currently pending against Ford:
Hill v. Ford. Plaintiffs in this product liability action pending in Georgia state court allege that the roof of a 2002 Ford
F-250Hillinvolved
v. [Link]
a rollover in accident wasliability
this product defectivelyaction designed.
pending in During
Georgia the state
first trial
court in allege
2018, the thatjudge declared
the roof of a 2002 a mistrial,
Ford
ruled
F-250that Ford’sinattorneys
involved a rolloverhad violated
accident was pre-trial
defectivelyrulings while presenting
designed. During the evidence,
first trialand sanctioned
in 2018, the judgeForddeclared
by prohibiting
a mistrial,
Ford
ruled from introducing
that Ford’s any evidence
attorneys had violated at the second
pre-trial trial to
rulings show
while that the roof
presenting design and
evidence, of the F-250 was
sanctioned not by
Ford defective.
prohibiting During
the
Fordsecond trial in August
from introducing any 2022,evidence a jury
at found
the secondthat PeptrialBoys (thethat
to show party thethat
roofsold
designthe tires
of the onF-250
the vehicle
was not involved
[Link] theDuring
rollover
the second accident)
trial in was
Augustresponsible
2022, a jury for 30%
foundofthatthe Pep
damages, and party
Boys (the Ford,thatas asold
directtheresult
tires onof the
the sanctions order prohibiting
vehicle involved in the
Ford from
rollover presenting
accident) wasits defense, was
responsible responsible
for 30% for 70% ofand
of the damages, theFord,
damages, resulting
as a direct resultin of
$16.8 million in damages
the sanctions being
order prohibiting
apportioned
Ford from presentingto Ford. The jury subsequently
its defense, was responsible awarded for punitive
70% of the damages
damages, against Ford in $16.8
resulting the amountmillionofin$1.7 [Link]
damages We
apportioned
filed post-trialtomotions
Ford. The seekingjury subsequently
a new trial, and awarded punitive 14,
on September damages
2023, the against
trial Ford
court in the amount
denied of $1.7motions.
our post-trial billion. We On
filed post-trial
October 13, 2023,motions Fordseeking a new of
filed a notice trial, and on
appeal withSeptember
the Georgia 14,Court
2023,ofthe trial court
Appeals. Wedenied
believeour thepost-trial motions.
law supports our On
October that
position 13, 2023,
Ford isFord filed to
entitled a notice
a new of appeal
trial with the with the to
right Georgia
presentCourt of Appeals.
evidence We believe the law supports our
in its defense.
position that Ford is entitled to a new trial with the right to present evidence in its defense.
ASBESTOS MATTERS
ASBESTOS MATTERS
Asbestos was used in some brakes, clutches, and other automotive components from the early 1900s. Along with
otherAsbestos
other vehicle was used in some
vehicle manufacturers,
manufacturers, we brakes,
we have
have clutches,
been
been the andof
the target
target other
of automotive
asbestos
asbestos components
litigation
litigation and,
and, as as a from the
a result,
result, areearly
are a 1900s. Along
a defendant
defendant in with
in various
various
other
actionsvehicle
for manufacturers,
injuries claimed to we
havehave been
resulted the
from target
allegedof asbestos
exposure litigation
to Ford and,
parts
actions for injuries claimed to have resulted from alleged exposure to Ford parts and other products containing asbestos. as
and a result,
other are
productsa defendant
containing in various
asbestos.
actions
Plaintiffsfor
Plaintiffs in injuries
in these claimed injury
these personal
personal to have
injury resulted
cases
cases allege
allege from alleged
various
various exposure
health
health problems
problems to Ford
as aparts
as a resultand
result of other products
of asbestos
asbestos containing
exposure,
exposure, either asbestos.
either from
from
Plaintiffs
component in these
parts personal
found in injury
older cases
vehicles, allege various
insulation or health
other problems
asbestos as a
products
component parts found in older vehicles, insulation or other asbestos products in our facilities, or asbestos aboardresultin of
our asbestos
facilities, exposure,
or asbestos either
aboardfromour
our
component
former maritimeparts found
fleet. Wein older
believe vehicles,
that we insulation
are targetedor other
more asbestos
aggressively products
former maritime fleet. We believe that we are targeted more aggressively in asbestos suits because many previouslyin in
asbestosour facilities,
suits or
because asbestos
many aboard
previouslyour
former
targeted maritime
companies fleet. We
have believe
filed for that we
bankruptcy are targeted
or emerged more
fromaggressively
bankruptcy
targeted companies have filed for bankruptcy or emerged from bankruptcy relieved of liability for such claims. in asbestos
relieved of suits
liabilitybecause
for such many
[Link]
targeted companies have filed for bankruptcy or emerged from bankruptcy relieved of liability for such claims.
Most of
Most of the
the asbestos
asbestos litigation
litigation we we face
face involves
involves individuals
individuals who who claim
claim toto have
have worked
worked on on thethe brakes
brakes of of our
our vehicles.
vehicles.
We Most
We are
are of the asbestos
prepared
prepared to defend
to defend litigation
these we face
these cases
cases and
and involves
believeindividuals
believe that the
that who claim
the scientific
scientific to have
evidence
evidence workedour
confirms
confirms on the
our brakes of our
long-standing
long-standing vehicles.
position
position that
that
We
thereare prepared
no increased to defend
risk of these cases
asbestos-related and believe
disease that
as the
a scientific
result of evidence
there is no increased risk of asbestos-related disease as a result of exposure to the type of asbestos formerly used in
is exposure to confirms
the type our
of long-standing
asbestos formerly position
used that
in the
the
there
brakes is no
on increased
our vehicles. risk of
The asbestos-related
extent of our disease
financial as
exposurea result
to of exposure
asbestos to
litigation
brakes on our vehicles. The extent of our financial exposure to asbestos litigation remains very difficult to estimate and the type
remains of asbestos
very formerly
difficult to used
estimate in
and the
brakes
could on
include our vehicles.
both The
compensatory extentandof our financial
punitive damage exposure
awards. to asbestos
The litigation
majority
could include both compensatory and punitive damage awards. The majority of our asbestos cases do not specify a dollar of our remains
asbestos very difficult
cases do to
not estimate
specify and
a dollar
could
amount
amount include
for both compensatory
for damages;
damages; in
in many
many of andother
of the
the punitive
other cases
cases damage
the awards.
the dollar
dollar amount
amount The majorityis
specified
specified isofthe
ourjurisdictional
the asbestos cases
jurisdictional do notand
minimum,
minimum, specify
and the a dollar
the vast
vast
amount
majority for damages;
of these cases ininvolve
many ofmultiple
the other cases the dollar
defendants. Some amount
of thesespecified
cases may is thealsojurisdictional
involve multiple minimum, andand
plaintiffs, the wevastmay
majority of these cases involve multiple defendants. Some of these cases may also involve multiple plaintiffs, and we may
majority
be unable of to
these cases
tell from the involve
pleadings multiple
which defendants.
plaintiffs are Some
makingof these
claims cases mayusalso
against (as involve
opposed multiple
to otherplaintiffs, and we may
defendants).
be unable to tell from the pleadings which plaintiffs are making claims against us (as opposed to other defendants).
be unable
Annual to telland
payout from the pleadings
defense costs may which plaintiffs
become are making
significant in theclaims
[Link] us (as for
Our accrual opposed
asbestos to other
mattersdefendants).
includes
Annual payout and defense costs may become significant in the future. Our accrual for asbestos matters includes
Annual
probable payout
lossesand for defense
both asserted costs and
may unasserted
become significant
claims. in the future. Our accrual for asbestos matters includes
probable losses for both asserted and unasserted claims.
probable losses for both asserted and unasserted claims.
34
34
34

199174_Ford_2023_AR_1OK_r1.indd 38 2/28/24 7:21 AM

 Item 3. Legal Proceedings (Continued)

Item 3. Legal Proceedings

CONSUMER MATTERS (Continued)

CONSUMER
We provide MATTERS
warranties on the vehicles we sell. Warranties are offered for specific periods of time and/or mileage and
vary depending upon the type of product and the geographic location of its sale. Pursuant to these warranties, we will
Wereplace,
repair, provide or
warranties on the
adjust parts on avehicles
vehicle wethatsell. Warranties
are defective in are offered for specific
factory-supplied periods
materials of time and/or
or workmanship mileage
during the and
vary depending upon the type of product and the geographic location of its sale. Pursuant to these
specified warranty period. We are a defendant in numerous actions in state and federal courts alleging breach of warranty warranties, we will
repair, replace, or adjust parts on a vehicle that are defective in factory-supplied materials or workmanship
and claiming damages based on state and federal consumer protection laws. Remedies under these statutes may include during the
specified warranty period.
vehicle repurchase, We are a
civil penalties, defendant
and paymentinby numerous actions
Ford of the in state
plaintiff’s and federal
attorneys’ fees. courts
In some alleging
cases,breach of warranty
plaintiffs also
and
include an allegation of fraud. Remedies for a fraud claim may include contract rescission, vehicle repurchase, andinclude
claiming damages based on state and federal consumer protection laws. Remedies under these statutes may
vehicle
punitiverepurchase,
damages. civil penalties, and payment by Ford of the plaintiff’s attorneys’ fees. In some cases, plaintiffs also
include an allegation of fraud. Remedies for a fraud claim may include contract rescission, vehicle repurchase, and
punitive
The damages.
cost of these litigation matters is included in our warranty costs. We accrue obligations for warranty costs at the
time of sale using a patterned estimation model that includes historical information regarding the nature, frequency, and
The cost
average cost of
of these
claimslitigation
for eachmatters
vehicle is included
line by model in our warranty
year. costs. We
We reevaluate theaccrue obligations
adequacy for warranty
of our accruals on acosts
regular at the
time
[Link] sale using a patterned estimation model that includes historical information regarding the nature, frequency, and
average cost of claims for each vehicle line by model year. We reevaluate the adequacy of our accruals on a regular
basis.
We are currently a defendant in a significant number of litigation matters relating to the performance of vehicles,
including those equipped with DPS6 transmissions.
We are currently a defendant in a significant number of litigation matters relating to the performance of vehicles,
including
ENVIRONMENTALthose equipped
MATTERSwith DPS6 transmissions.

ENVIRONMENTAL
We have received MATTERS
notices under various federal and state environmental laws that we (along with others) are or may
be a potentially responsible party for the costs associated with remediating numerous hazardous substance storage,
We have
recycling, receivedsites
or disposal notices understates
in many various federal
and, andinstances,
in some state environmental
for natural laws that we
resource (along with
damages. We others)
also may arehave
or may
be a potentially
been a generator responsible
of hazardousparty for the costs
substances at aassociated
number ofwith
otherremediating
sites. The numerous
amount of hazardous
any such costssubstance storage,
or damages for
recycling,
which or disposal
we may be heldsites in many could
responsible statesbeand, in some instances,
significant. for natural resource
Any legal proceeding damages.
arising under We also
any federal, mayorhave
state, local
been a generator
provisions of hazardous
that have been enactedsubstances at aregulating
or adopted number of other
the sites. The
discharge amount into
of materials of any
thesuch costs or damages
environment or primarilyforfor
which
the we may
purpose of be held responsible
protecting could beinsignificant.
the environment, which (i) a Any legal proceeding
governmental arising
authority underand
is a party, any(ii)
federal, state,there
we believe or local
is the
provisions that
possibility of have been
monetary enacted
sanctions or adopted
(exclusive regulating
of interest andthe discharge
costs) of materials
in excess into theisenvironment
of $1,000,000 or primarily for
described herein.
the purpose of protecting the environment, in which (i) a governmental authority is a party, and (ii) we believe there is the
possibility
On June of monetary
16, 2022, sanctions (exclusive
the New Jersey of interest
Department of and costs) in excess
Environmental of $1,000,000
Protection (“NJDEP”)isfiled
described herein.
a complaint in the
Superior Court of New Jersey (Bergen County) seeking natural resource damages and other claims related to the
On June
Ringwood 16, 2022, the
Mines/Landfill New
Site Jersey
located in Department
Ringwood, Newof Environmental Protection
Jersey. On February 21,(“NJDEP”)
2023, the filed
courta denied
complaint
our in the to
motion
Superior Court of New Jersey (Bergen County) seeking
dismiss. We continue to defend against the NJDEP’s allegations. natural resource damages and other claims related to the
Ringwood Mines/Landfill Site located in Ringwood, New Jersey. On February 21, 2023, the court denied our motion to
dismiss. We continue to defend against the NJDEP’s allegations.
CLASS ACTIONS

CLASS ACTIONS
In light of the fact that few of the purported class actions filed against us in the past have been certified by the courts
as class actions, in general we list those actions that (i) have been certified as a class action by a court of competent
In light (and
jurisdiction of theany
factadditional
that few of the purported
purported class class
actionsactions filed allegations
that raise against us substantially
in the past have been
similar to certified by the
an existing andcourts
as class actions, in general we list those actions that (i) have been certified as a class action by a court
certified class), and (ii) have more than a remote risk of loss, and such loss would likely be significant if the action is of competent
jurisdiction (and any additional
resolved unfavorably purported
to us. At this class
time, we actions
have no suchthatclass
raiseactions
allegations
filed substantially
against us. similar to an existing and
certified class), and (ii) have more than a remote risk of loss, and such loss would likely be significant if the action is
resolved unfavorably to us. At this time, we have no such class actions filed against us.
OTHER MATTERS

OTHER MATTERS
Brazilian Tax Matters. 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
Brazilian
federal Tax Matters.
tax incentives One Brazilian
Ford Brazil receivedstate (São
for its Paulo) and
operations in thetheBrazilian
Brazilianstate
federal tax authority
of Bahia. The São currently have
Paulo assessment is
outstanding substantial tax assessments against Ford Motor Company Brasil Ltda. (“Ford
part of a broader conflict among various states in Brazil. The federal legislature enacted laws designed to encourageBrazil”) related to state and the
federaltotax
states endincentives Fordand
that conflict, Brazil received
in 2017 for its operations
the states reached aninagreement
the Brazilian on state of Bahia.
a framework forThe São Paulo
resolution. Ford assessment
Brazil is
part of a broader
continues to pursueconflict among various
a resolution under thestates in Brazil.
framework andThe federal
expects thelegislature
amount ofenacted laws designed
any remaining to encourage
assessments by the the
states to
states to be
endresolved
that conflict,
underandthatinframework.
2017 the states The reached an agreement
federal assessments onoutside
are a framework for resolution.
the scope Ford Brazil
of the legislation.
continues to pursue a resolution under the framework and expects the amount of any remaining assessments by the
states
All to
of be
theresolved
outstandingunder that framework.
assessments have Thebeenfederal assessments
appealed are outside
to the relevant the scope
administrative of the
court legislation.
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
All of required
not been the outstanding assessments
to post any [Link]
If webeen appealedtotopost
are required the collateral,
relevant administrative
which could be court of eachofjurisdiction.
in excess $1 billion, weTo
proceedit with
expect to beanin appeal
the form within the assets,
of fixed judicial surety
court system,
bonds, an appellant
and/or lettersmay be required
of credit, but weto post
may becollateral.
required to Topost
date, we have
cash
not been required
collateral. Although to the
postultimate
any collateral.
resolutionIf we are required
of these mattersto post
may collateral,
take whichwe
many years, could be in excess
consider of $1risk
our overall billion, weto
of loss
expect
be [Link] 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.
35

35

199174_Ford_2023_AR_1OK_r1.indd 39 2/13/24 8:09 PM

 Item 3. Legal Proceedings (Continued)

ItemTransit
3. Legal Proceedings
Connect Customs(Continued)
Penalty Notice. U.S. Customs and Border Protection (“CBP”) ruled in 2013 that Transit
Connects imported as passenger wagons and later converted into cargo vans are subject to the 25% duty applicable to
cargoTransit Connect
vehicles, ratherCustoms
than thePenalty Notice.
2.5% duty U.S. Customs
applicable and Border
to passenger Protection
vehicles. We filed(“CBP”) ruledin
a challenge inthe
2013
[Link] Transit
Court of
Connects
International Trade (“CIT”), and CIT ruled in our favor in 2017. CBP subsequently filed a notice of appeal to the U.S. to
imported as passenger wagons and later converted into cargo vans are subject to the 25% duty applicable
cargo
Court ofvehicles,
Appealsrather than
for the the 2.5%
Federal dutywhich
Circuit, applicable to favor
ruled in passenger
of [Link]. Wethe
Following filed a challenge
U.S. SupremeinCourt’s
the U.S. Court
denial of of
our
International Trade (“CIT”), and CIT ruled in our favor in 2017. CBP subsequently filed a notice of appeal
petition for a writ of certiorari in 2020, we paid the increased duties for certain prior imports, plus interest, and disclosed to the U.S.
Court
that CBPof Appeals for the
might assert a Federal
claim forCircuit, which
penalties. ruled in favorCBP
Subsequently, of CBP. Following
issued thenotice
a penalty U.S. Supreme
to us dated Court’s denial
July 22, of and
2021, our on
petition for a writ of certiorari in 2020, we paid the increased duties for certain prior imports, plus
November 18, 2021, CBP assessed against us a monetary penalty of $1.3 billion and additional duties of $181 million, interest, and disclosed
that
plus CBP mightWe
interest. assert a claim fordefending
are vigorously [Link]
Subsequently,
actions and CBP issuedpayment
contesting a penaltyofnotice to us dated
the penalty and the July 22, 2021,
additional and on
duties.
November 18, 2021, CBP assessed against us a monetary penalty of $1.3 billion and additional duties of $181 million,
plusEuropean
interest. We are vigorously
Commission defending
and U.K. our actions
Competition and contesting
and Markets Authoritypayment
Matter. ofOntheMarch
penalty15,and
2022,thethe
additional
European duties.
Commission (the “Commission”) and the U.K. Competition and Markets Authority (the “CMA”) conducted unannounced
European
inspections Commission
at the premises and [Link]
of, and Competition and Markets
formal requests Authority to,
for information Matter.
severalOncompanies
March 15, and
2022, the European
associations active in
Commission (the “Commission”) and the U.K. Competition and Markets Authority (the
the automotive sector, including Ford. The inspections and requests for information concern possible collusion “CMA”) conducted unannounced
in relation
inspections at thetreatment,
to the collection, premises andof, and sent formal
recovery requests
of end-of-life for and
cars information to, several
vans (“ELVs”). Wecompanies
understandand thatassociations
the scope ofactive
the in
the automotive sector, including Ford. The inspections and requests for information concern
investigations includes determining whether manufacturers and importers of passenger cars and vans agreed to an possible collusion in relation
to the collection, treatment, and recovery of end-of-life cars and vans (“ELVs”). We understand
approach to (i) the compensation of ELV collection, treatment, and recovery companies, and (ii) the use of data relating tothat the scope of the
investigations
the recyclability includes determining
or recoverability whether
of ELVs manufacturers
in marketing and importers
materials, and whether of passenger
such conductcarsviolates
and vans agreedcompetition
relevant to an
approach to (i) the compensation of ELV collection, treatment, and recovery companies, and (ii)
laws. If a violation is found, a broad range of remedies is potentially available to the Commission and/or CMA, including the use of data relating to
the recyclability or recoverability of ELVs in marketing materials, and whether such conduct violates relevant
imposing a fine and/or the prohibition or restriction of certain business practices. Given that this investigation is in its early competition
laws.
stages,If ita is
violation
difficult is
tofound,
predictathe
broad range or
outcome of what
remedies is potentially
remedies, available
if any, may to the Commission
be imposed. and/or CMA,
We are cooperating with including
the
imposing a fine
Commission andand/or
the CMAthe prohibition or restriction
as they complete of certain business practices. Given that this investigation is in its early
their investigations.
stages, it is difficult to predict the outcome or what remedies, if any, may be imposed. We are cooperating with the
Commission
ITEM 4. Mineand the CMA
Safety as they complete their investigations.
Disclosures.

ITEM 4. applicable.
Not Mine Safety Disclosures.

Not applicable.

36

36

199174_Ford_2023_AR_1OK.indd 40 2/9/24 2:54 PM

 ITEM 4A. Information About Our Executive Officers.

Our executive officers are as follows, along with each executive officer’s position and age at February 1, 2024:
Position
Position
Name
Name Position
Position Held
Held Since
Since Age
Age
William Clay
William Clay Ford,
Ford, Jr.
Jr. (a)
(a) Executive Chair
Executive Chair and
and Chair
Chair of
of the
the Board
Board September 2006
September 2006 66
66
James
James D.
D. Farley,
Farley, Jr.
Jr. (b)
(b) President
President and
and Chief
Chief Executive
Executive Officer
Officer October
October 2020
2020 61
61
John
John Lawler
Lawler Chief
Chief Financial
Financial Officer
Officer October
October 2020
2020 57
57
Ashwani (“Kumar”)
Ashwani (“Kumar”) Galhotra
Galhotra Chief Operating
Chief Operating Officer
Officer October 2023
October 2023 58
58
Michael Amend
Michael Amend Chief Enterprise
Chief Enterprise Technology
Technology Officer
Officer September 2021
September 2021 46
46
Theodore
Theodore Cannis
Cannis CEO,
CEO, Ford
Ford Pro
Pro and
and Ford
Ford Customer
Customer Service
Service Division
Division September
September 2023
2023 57
57
Steven P.
Steven P. Croley
Croley Chief Policy
Chief Policy Officer
Officer and
and General
General Counsel
Counsel July 2021
July 2021 58
58
J. Doug
J. Doug Field
Field Chief EV,
Chief EV, Digital,
Digital, and
and Design
Design Officer
Officer October 2023
October 2023 58
58
Andrew
Andrew Frick
Frick President,
President, Ford
Ford Blue
Blue October
October 2023
2023 50
50
Marin
Marin Gjaja
Gjaja Chief
Chief Operating
Operating Officer,
Officer, Ford
Ford Model
Model e
e September
September 2023
2023 54
54
Peter C.
Peter C. Stern
Stern President, Integrated
President, Integrated Services
Services August 2023
August 2023 52
52
Jennifer Waldo
Jennifer Waldo Chief People
Chief People and
and Employee
Employee Experience
Experience Officer
Officer May 2022
May 2022 47
47
Shengpo
Shengpo (“Sam”)
(“Sam”) Wu
Wu President
President and
and Chief
Chief Executive
Executive Officer,
Officer, Ford
Ford of
of China
China March
March 2023
2023 57
57
Cathy
Cathy O’Callaghan
O’Callaghan Controller
Controller June
June 2018
2018 55
55
__________
__________
(a) Also
(a) Also a
a Director,
Director, Chair
Chair of
of the
the Office
Office of
of the
the Chair
Chair and
and Chief
Chief Executive,
Executive, Chair
Chair of
of the
the Finance
Finance Committee,
Committee, and
and aa member
member of
of the
the Sustainability,
Sustainability,
Innovation
Innovation and
and Policy
Policy Committee
Committee of of the
the Board
Board of
of Directors.
Directors. Mr.
Mr. Ford’s
Ford’s daughter,
daughter, Alexandra
Alexandra Ford
Ford English,
English, is
is a
a member
member of
of the
the Board
Board of
of Directors.
Directors.
(b) Also
(b) Also a
a Director
Director and
and member
member ofof the
the Office
Office of
of the
the Chair
Chair and
and Chief
Chief Executive.
Executive.

Except as noted below, each of the officers listed above has been employed by Ford or its subsidiaries in one or more
capacities during the past five years.

Prior to joining Ford:

• Michael Amend was President, Online, at Lowe’s from 2018 to 2021. From 2015 to 2018, Mr. Amend served as
Executive Vice President, Omnichannel, at JCPenney.

• Steven Croley was a partner in the Washington, D.C., office of Latham & Watkins from 2017 to 2021. From 2014
to 2017, Mr. Croley served as General Counsel for the U.S. Department of Energy.

• J. Doug Field was Vice President, Special Projects Group, at Apple from 2018 to 2021. From 2013 to 2018, Mr.
Field served as Tesla’s Senior Vice President of Engineering.

• Marin Gjaja was Senior Partner and Managing Director at Boston Consulting Group (“BCG”). He had been at
BCG since 1996.

• Peter C. Stern was Vice President, Services at Apple from 2016 to 2023.

• Jennifer Waldo was Vice President, People Business Partners at Apple from 2019 to 2022. From 2015 to 2019,
Ms. Waldo was Chief Human Resources Officer at GE Digital.

• Shengpo “Sam” Wu was Executive Vice President and President, Whirlpool Asia from 2019 until he retired from
that position in 2022. He served in an advisory role and as the Vice-Chairman of Whirlpool China Co., Ltd. from
2022 to 2023. Mr. Wu joined Whirlpool Corporation in 2017 as President, Whirlpool Asia and a member of the
company’s Executive Committee.

Under our by-laws, executive officers are elected by the Board of Directors at an annual meeting of the Board held for
this purpose or by a resolution to fill a vacancy. Each officer is elected to hold office until a successor is chosen or as
otherwise provided in the by-laws.

37

199174_Ford_2023_AR_1OK.indd 41 2/9/24 2:54 PM

 PART II.

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.

Market for Registrant’s Stock

Our Common Stock is listed on the New York Stock Exchange in the United States under the symbol F. As of
February 2, 2024, stockholders of record of Ford included approximately 100,089 holders of Common Stock and 3 holders
of Class B Stock. We believe that the number of beneficial owners is substantially greater than the number of record
holders because a large portion of our Common Stock is held in “street name” by brokers.

Stock Performance Graph

The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material” or
“filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange
Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or
the Exchange Act.

The following graph compares the cumulative total shareholder return on our Common Stock with the total return on
the S&P 500 Index and the Dow Jones Automobiles & Parts Titans 30 Index for the five year period ended
December 31, 2023. It shows the growth of a $100 investment on December 31, 2018, including the reinvestment of all
dividends.

COMPARISON OF CUMULATIVE FIVE-YEAR TOTAL RETURN

$300

$280

$260

$240

$220

$200

$180

$160

$140

$120

$100
12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023

Ford Motor Company S&P 500 Dow Jones Titans 30

Base Period Years Ending

Company/Index 2018 2019 2020 2021 2022 2023
Ford Motor Company 100 130 125 296 171 198
S&P 500 100 131 156 200 164 207
Dow Jones Automobiles & Parts Titans 30 100 114 172 215 146 194

38

199174_Ford_2023_AR_1OK.indd 42 2/9/24 2:54 PM

 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
(Continued)
Item 5. Purchases
Issuer Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
of Equity Securities
(Continued)
Issuer Purchases
In the of Equity
fourth quarter Securities
of 2023, we completed a modest anti-dilutive share repurchase program to offset the dilutive
effect of share-based compensation granted during 2023. The program authorized repurchases of up to 51 million shares
In the
of Ford fourth quarter
Common Stock. of
As2023,
shownweincompleted a modest
the rightmost columnanti-dilutive
of the tableshare repurchase
below, we do notprogram
intend totomake
offsetany
thefurther
dilutive
effect
purchases under this program because its anti-dilutive purpose was fulfilled after purchasing only 31 million [Link]
of share-based compensation granted during 2023. The program authorized repurchases of up to 51 million
of Ford Common Stock. As shown in the rightmost column of the table below, we do not intend to make any further
purchases under this program because its anti-dilutive purpose was fulfilled after purchasing only 31 million shares.
Total Number of Maximum Number
Shares (or Approximate
Purchased as Dollar Value) of
Total
Part ofNumber of
Publicly- Maximum
Shares thatNumber
May
Total Number Shares
Announced (or Approximate
Yet Be Purchased
of Shares Average Price Purchased
Plans or as Dollar Value)
Under the Plansof
Period Purchased Paid per Share PartPrograms
of Publicly- Shares that May
or Programs
Total Number Announced Yet Be Purchased
October 1, 2023 through October 31, 2023 of Shares — $Average Price— Plans or — Under the Plans —
Period Purchased Paid per Share Programs or Programs
November 1, 2023 through November 30, 2023 6,713,291 10.25 6,713,291 44,286,709
October 1, 2023 through October 31, 2023 — $ — — —
December 1, 2023 through December 31, 2023 24,286,709 10.95 24,286,709 20,000,000 (a)
November 1, 2023 through November 30, 2023 6,713,291 10.25 6,713,291 44,286,709
Total / Average 31,000,000 $ 10.80 31,000,000
December 1, 2023 through December 31, 2023 24,286,709 10.95 24,286,709 20,000,000 (a)
__________
(a)Total
The / Average
share repurchase program announced November 20, 2023 authorized 31,000,000
repurchases$ of up to 5110.80
million shares31,000,000
of Ford Common Stock.
Although we have repurchased 31 million shares and the program was authorized for up to 51 million, we do not intend to make any further
__________
(a) purchases under this program
The share repurchase programbecause its anti-dilutive
announced November 20, purpose
2023 has been fulfilled.
authorized repurchases of up to 51 million shares of Ford Common Stock.
Although we have repurchased 31 million shares and the program was authorized for up to 51 million, we do not intend to make any further
purchases
In December under 2023,
this program because
our Board ofitsDirectors
anti-dilutiveapproved
purpose has
a been
modestfulfilled.
anti-dilutive share repurchase program to offset the
dilutive effect of share-based compensation expected to be granted during 2024. The program authorizes repurchases of
up toIn53
December 2023,of
million shares our Board
Ford of Directors
Common [Link] a modest
The Company mayanti-dilutive
repurchaseshare sharesrepurchase
of Common program
Stock to offset
from timethe
to
dilutive
time effectopen
through of share-based compensation
market purchases, expected
in privately to be granted
negotiated duringor
transactions, 2024. Themeans,
by other programincluding
authorizes repurchases
through the use ofof
up to 53plans
trading million shares to
intended of satisfy
Ford Common [Link]
the conditions Rule Company
10b5-1(c)may repurchase
under sharesExchange
the Securities of Common Act Stock from
of 1934, astime to
amended,
time
in through open
accordance with market purchases,
applicable securitiesin laws
privately
and negotiated transactions,
other restrictions. or by and
The timing othertotal
means, including
amount through the
of repurchases use of
of Ford
trading plans
Common Stockintended to satisfy
under this program the will
conditions
dependof Rulebusiness,
upon 10b5-1(c)economic,
under theand Securities
market Exchange
conditions,Act of 1934, legal,
corporate, as amended,
and
in accordance
regulatory with applicable
requirements, securities
prevailing stocklaws andtrading
prices, other restrictions.
volume, andThe othertiming and total amount
considerations. of repurchases
The share repurchaseof Ford
Commonmay
program Stock beunder this program
suspended will depend
or discontinued upon
at any business,
time, economic,
and does and market
not obligate conditions,
the Company corporate,
to acquire legal, and
any amount of
regulatoryStock.
Common requirements, prevailing
To the extent stock prices,
the Company trading
elects volume,
to make and other
purchases under considerations. The share
the share repurchase repurchase
program, the
program
Companymay be suspended
expects orexisting
to utilize its discontinued at any
cash and cashtime, and doestonot
equivalents obligate
fund the Company to acquire any amount of
such repurchases.
Common Stock. To the extent the Company elects to make purchases under the share repurchase program, the
Company
Dividendsexpects to utilize its existing cash and cash equivalents to fund such repurchases.

Dividends
The table below shows the dividends we paid per share of Common and Class B Stock for each quarterly period in
2022 and 2023:
The table below shows the dividends we paid per share of Common and Class B Stock for each quarterly period in
2022 2023
2022 and 2023:
First Second Third Fourth First Second Third Fourth
Quarter Quarter 2022 Quarter Quarter Quarter(a) Quarter 2023 Quarter Quarter
Dividends per share of Ford First Second Third Fourth First Second Third Fourth
(a)
Common and Class B Stock $ Quarter
0.10 $ Quarter
0.10 $ Quarter
0.15 $ Quarter
0.15 $ Quarter
0.80 $ Quarter
0.15 $ Quarter
0.15 $ Quarter
0.15
Dividends per share of Ford
__________
(a)Common andquarter
In the first Class BofStock $ addition
2023, in 0.10 $
to a regular 0.10 $ of $0.15
dividend 0.15 $
per share, we0.15
paid a$supplemental
0.80 dividend
$ 0.15 $ per share.
of $0.65 0.15 $ 0.15
__________
(a) On
In theFebruary
first quarter6,of2024, we
2023, in declared
addition a regular
to a regular dividend
dividend of $0.15of $0.15
per share,per share
we paid and a supplemental
a supplemental per dividend
dividend of $0.65 of $0.18
per share.
share.
On February 6, 2024, we declared a regular dividend of $0.15 per share and a supplemental dividend of $0.18 per
share.
Subject to legally available funds, we intend to continue to pay a regular quarterly cash dividend on our outstanding
Common Stock and Class B Stock. The declaration and payment of future dividends is at the sole discretion of our Board
Subject after
of Directors to legally available
taking funds,various
into account we intend to continue
factors, to our
including payfinancial
a regularcondition,
quarterly operating
cash dividend on available
results, our outstanding
cash,
Common Stock and Class B Stock.
and current and anticipated cash [Link] declaration and payment of future dividends is at the sole discretion of our Board
of Directors after taking into account various factors, including our financial condition, operating results, available cash,
and
ITEMcurrent and anticipated cash needs.
6. [Reserved.]

ITEM 6. [Reserved.]

39

39

199174_Ford_2023_AR_1OK.indd 43 2/9/24 2:54 PM

 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Key Trends and Economic Factors Affecting Ford and the Automotive Industry

Production and Supply Chain. Although we saw improvements in our supply chain throughout 2023, including easing
of the semiconductor shortage, we continue to face some production issues due to, among other things, labor shortages
at our suppliers. Moreover, we have received and continue to receive claims from our supply base related to inflationary
pressure and production disruption. Upon receipt, we evaluate those claims, and, in certain circumstances, in order to
ensure continuity of supply and mitigate the impact on our production, have made payments to our suppliers, sometimes
under duress. We continue to reevaluate our supply base and sourcing decisions and may in the future incur charges to
improve flexibility and cost competitiveness.

Currency Exchange Rate Volatility. Globally, central banks have begun shifting from tightening policy by raising
interest rates to holding rates steady or, in some markets, beginning to cut rates. As they do, they need to carefully
balance the risk that inflation remains elevated against the heightened financial and economic risks associated with high
interest rates. This is notable for many emerging markets, which may also face increased exposure to commodity prices
and political instability, contributing to unpredictable movements in the value of their exchange rates. In addition to direct
impacts on the financial flows of global automotive companies, currency movements can also impact pricing of vehicles
exported to overseas markets. In most markets, exchange rates are market-determined, and all are impacted by many
different macroeconomic and policy factors, and thus likely to remain volatile. However, in some markets, exchange rates
are heavily influenced or controlled by governments.

Pricing Pressure. Despite vehicle pricing remaining elevated over the last year due to strong demand, supply
shortages, and inflationary costs, we have already observed moderation in the rate of new and used vehicle price
increases as auto production recovers from the semiconductor shortage, but it is unclear whether prices will decline fully
to pre-COVID-19 pandemic levels. Over the long term, intense competition and excess capacity are likely to put
downward pressure on inflation-adjusted prices for similarly-contented vehicles and contribute to a challenging pricing
environment for the automotive industry in most major markets.

Electric Vehicle Market. Although we continue to invest in our electric vehicle strategy, we have observed lower-than-
anticipated industrywide electric vehicle adoption rates and near-term pricing pressures, which has led us and may in the
future lead us to adjust our spending, production, and/or product launches to better match the pace of electric vehicle
adoption. As a result of the lower-than-anticipated adoption rates, near-term pricing pressures, and other factors, we
recorded about $0.7 billion of charges in 2023 and may continue to incur charges, which could be substantial, related to
payments to our electric vehicle-related suppliers (battery, raw material, or otherwise), inventory adjustments, or other
matters. See Item 1A. Risk Factors for additional discussion of the risks related to lower-than-anticipated electric vehicle
volumes and our planned transition to a greater mix of electric vehicles.

Commodity and Energy Prices. Prices for commodities remain volatile. In some cases, spot prices for various
commodities have recently diverged somewhat, as anticipated weakening in global industrial activity mitigates price
increases for base metals such as steel and aluminum, while precious metals (e.g., palladium), and raw materials that are
used in batteries for electric vehicles (e.g., lithium, cobalt, nickel, graphite, and manganese, among other materials, for
batteries) remain elevated. The net impact on us and our suppliers has been higher material costs overall. To help
ensure supply of raw materials for critical components (e.g., batteries), we, like others in the industry, have entered into
multi-year sourcing agreements and may enter into additional agreements. Similar dynamics are impacting energy
markets, with Europe particularly exposed to the risk of both higher prices and constraints on supply of natural gas due to
the ongoing conflict in Ukraine. Such shortages may impact facilities operated by us or our suppliers, which could have
an impact on us in Europe and other regions. In the long term, the outcome of de-carbonization and electrification of the
vehicle fleet may depress oil demand, but the global energy transition will also contribute to ongoing volatility of oil and
other energy prices.

Vehicle Profitability. Our financial results depend on the profitability of the vehicles we sell, which may vary
significantly by vehicle line. In general, larger vehicles tend to command higher prices and be more profitable than smaller
vehicles. For example, in Ford Blue, our larger, more profitable vehicles had an average contribution margin that was
139% of our total average contribution margin across all vehicles, whereas our smaller vehicles had significantly lower
contribution margins. In addition, government regulations aimed at reducing emissions and increasing fuel efficiency
(e.g., ZEV mandates and low emission zones), and other factors that accelerate the transition to electrified vehicles, may
increase the cost of vehicles by more than the perceived benefit to consumers and dampen margins.

40

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemTrade
7. Management’s
Policy. To theDiscussion and Analysis
extent governments of Financial
in various Condition
regions and or
implement Results of Operations
intensify (Continued)
barriers to imports, such as
erecting tariff or non-tariff barriers or manipulating their currency, and provide advantages to local exporters selling into the
Trade
global Policy. Tothere
marketplace, the extent
can begovernments
a significant in variousimpact
negative regionsonimplement or intensify
manufacturers basedbarriers
in otherto imports,While
markets. such as
we
erecting
believe the long-term trend will support the growth of free trade, we will continue to monitor and address the selling
tariff or non-tariff barriers or manipulating their currency, and provide advantages to local exporters into the
developing
global marketplace, there can be a significant negative impact on manufacturers
role that geopolitical, climate, and labor concerns are playing in trade relations. based in other markets. While we
believe the long-term trend will support the growth of free trade, we will continue to monitor and address the developing
role Inflation
that geopolitical, climate,
and Interest andWe
Rates. labor concerns
continue arenear-term
to see playing in impacts
trade relations.
on our business due to inflation, including ongoing
global price pressures in the wake of geopolitical volatility, driving up energy prices, freight premiums, and other operating
costsInflation
above and
normalInterest
[Link]. We headline
Although continue inflation
to see near-term impacts
in the United Stateson and
our business due to inflation,
Europe appears includingasongoing
to have peaked,
global price pressures in the wake of geopolitical volatility, driving up energy prices, freight premiums,
gasoline and natural gas prices recede from the latest spike, core inflation (excluding food and energy prices) and other operating
remains
costs above normal rates. Although headline inflation in the United States and Europe appears
elevated and is a source of continued cost pressure on businesses and households. Interest rates have increased to have peaked, as
gasoline and natural gas prices recede from the latest spike, core inflation (excluding food and energy prices)
significantly as central banks in developed countries attempt to subdue inflation while government deficits and debt remain remains
elevated and is
at high levels in amany
source of continued
global markets. cost pressurethe
Accordingly, on eventual
businesses and households.
implications of higherInterest rates deficits
government have increased
and debt,
significantly
tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital forand
as central banks in developed countries attempt to subdue inflation while government deficits the debt remain
business.
at high levels in many global markets. Accordingly, the eventual implications of higher government deficits
At Ford Credit, rising interest rates may impact its ability to source funding and offer financing at competitive rates, which and debt,
tighter monetary
could reduce policy, and
its financing potentially higher long-term interest rates may drive a higher cost of capital for the business.
margin.
At Ford Credit, rising interest rates may impact its ability to source funding and offer financing at competitive rates, which
could
Revenuereduce its financing margin.

Revenue
Company excluding Ford Credit revenue is generated primarily by sales of vehicles, parts, accessories, and services
from our Ford Blue, Ford Model e, and Ford Pro segments. Revenue is recorded when control is transferred to our
Company
customers excluding
(generally, ourFord Credit
dealers andrevenue is generated
distributors). For theprimarily
majorityby of sales
sales,ofthis
vehicles,
occurs parts,
when accessories,
products are and services
shipped from
frommanufacturing
our our Ford Blue,facilities.
Ford Model e, and we
However, Ford Pro asegments.
defer portion of theRevenue is recorded
consideration whenwhen
received control is transferred
there to our
is a separate future or
customers (generally,
stand-ready performanceour obligation,
dealers andsuchdistributors).
as extendedForservice
the majority of sales,
contracts this occurs
or ongoing vehiclewhen products are
connectivity. shippedrelated
Revenue from
ourextended
to manufacturing
servicefacilities.
contractsHowever, we defer
is recognized overathe
portion
term ofof the
the consideration
agreement in received
proportionwhen
to thethere
costsis we
a separate
expect tofuture
incurorin
stand-ready
satisfying theperformance obligation,
contract obligations; such as
revenue extended
related service
to other futurecontracts or ongoing
or stand-ready vehicle connectivity.
performance obligations Revenue related
is generally
to extendedon
recognized service contractsbasis
a straight-line is recognized over the
over the period in term
whichofservices
the agreement in proportion
are expected to the costsVehicles
to be performed. we expect toto
sold incur
dailyin
satisfying
rental the contractwith
car companies obligations; revenue
an obligation related to other
to repurchase at anfuture
agreed orupon
stand-ready
amount,performance
exercisable at obligations
the optionisofgenerally
the
recognized
customer, areon accounted
a straight-line basis
for as over the
operating periodwith
leases, in which
leaseservices
revenueare expectedover
recognized to be
theperformed.
term of theVehicles sold to daily
lease. Proceeds
rental car companies with an obligation to repurchase at an agreed upon amount, exercisable
from the sale of vehicles at auction are recognized in revenue upon transfer of control of the vehicle to the buyer. at the option of the
customer, are accounted for as operating leases, with lease revenue recognized over the term of the lease. Proceeds
fromMost
the sale of vehicles
of the vehicles sold
at auction
by us are recognized
to our dealers andin revenue upon
distributors transfer
are financedof control of the by
at wholesale vehicle
Ford to the buyer.
Credit. Upon Ford
Credit originating the wholesale receivable related to a dealer’s purchase of a vehicle, Ford Credit pays cash to the
MostFord
relevant of the vehicles
entity sold byofusthe
in payment to dealer’s
our dealers and distributors
obligation are financed
for the purchase price at
of wholesale
the [Link]
Forddealer
Credit. Upon
then Ford
pays the
Credit originating the wholesale receivable related to a dealer’s purchase of a vehicle,
wholesale finance receivable to Ford Credit when it sells the vehicle to a retail customer. Ford Credit pays cash to the
relevant Ford entity in payment of the dealer’s obligation for the purchase price of the vehicle. The dealer then pays the
wholesale
Our Fordfinance receivable
Credit segment to Ford Credit
revenue when it primarily
is generated sells the vehicle to a retail
from interest customer.
on finance receivables and revenue from
operating leases. Revenue from interest on finance receivables is recognized over the term of the receivable using the
Our method
interest Ford Credit
and segment revenue
includes the is generated
amortization primarily
of certain fromorigination
deferred interest oncosts.
financeRevenue
receivables
fromand revenue
operating from is
leases
operating leases. Revenue from interest on finance receivables
recognized on a straight-line basis over the term of the lease. is recognized over the term of the receivable using the
interest method and includes the amortization of certain deferred origination costs. Revenue from operating leases is
recognized on a straight-line
Transactions between Ford basis overand
Credit theour
term of the
other lease. occur in the ordinary course of business. For example, we
segments
offer special retail financing and lease incentives to dealers’ customers who choose to finance or lease our vehicles from
FordTransactions
Credit. The between Ford incentives
cost for these Credit and isour other segments
included occur of
in our estimate in the ordinary
variable course of business.
consideration at the dateForthe example,
related we
offer special retail financing and lease incentives to dealers’ customers who choose to finance or lease
vehicle sales to our dealers are recorded. In order to compensate Ford Credit for the lower interest or lease payments our vehicles from
Ford Credit. The cost for these incentives is included in our estimate of variable consideration at the date
offered to the retail customer, we pay the discounted value of the incentive directly to Ford Credit when it originates the the related
vehicle sales or
retail finance to lease
our dealers arewith
contract recorded. In order
the dealer’s to compensate
customer. Fordrecognizes
Ford Credit Credit for thethe lower interest
incentive or lease
amount over payments
the life of
offered to the retail customer, we pay the discounted value of the incentive directly to Ford Credit
retail finance contracts as an element of financing revenue and over the life of lease contracts as a reduction when it originates
to the
retail finance or lease contract with the dealer’s customer. Ford Credit recognizes the incentive amount
depreciation. See Note 1 of the Notes to the Financial Statements for a more detailed discussion of transactions between over the life of
retail finance contracts as an
Ford Credit and our other segments. element of financing revenue and over the life of lease contracts as a reduction to
depreciation. See Note 1 of the Notes to the Financial Statements for a more detailed discussion of transactions between
Ford Credit and our other segments.

41

41

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item [Link]
Costs Management’s
Expenses Discussion and Analysis of Financial Condition and Results of Operations (Continued)

CostsOurand Expenses
income statement classifies our Company excluding Ford Credit total costs and expenses into two categories:
(i) cost of sales, and (ii) selling, administrative, and other expenses. We include within cost of sales those costs related to
Our income statement
the development, production, classifies our Company
and distribution of ourexcluding
vehicles, Ford
parts,Credit total costs
accessories, andand expenses
services. into two categories:
Specifically, we include in
(i) cost of sales, and (ii) selling, administrative, and other expenses. We include within cost
cost of sales each of the following: material costs (including commodity costs); freight costs; warranty, of sales those costs related
including productto
the development, production, and distribution of our vehicles, parts, accessories, and services. Specifically,
recall costs; labor and other costs related to the development and production of our vehicles and connectivity, parts, we include in
cost of sales each of the following: material costs (including commodity costs); freight costs; warranty,
accessories, and services; depreciation and amortization; and other associated costs. We include within selling, including product
recall costs; labor
administrative, andand
otherother costs related
expenses to the
labor and development
other and production
costs not directly related to ofthe
ourdevelopment
vehicles and and
connectivity,
production parts,
of our
accessories, and services; depreciation and amortization; and other associated costs. We
vehicles, parts, accessories, and services, including such expenses as advertising and sales promotion [Link] within selling,
administrative, and other expenses labor and other costs not directly related to the development and production of our
vehicles,
Certainparts, accessories,
of our costs, suchand as services, including
material costs, such expenses
generally as with
vary directly advertising
changes and
in sales
volumepromotion
and mix costs.
of production. In
our industry, production volume often varies significantly from quarter to quarter and year to year. Quarterly production
Certain
volumes of our costs,
experience such as
seasonal material
shifts costs,the
throughout generally vary directly
year (including peakwith changes
retail in volume
sales seasons and
and themix of production.
impact In
on production
our industry, production volume often varies significantly from quarter to quarter and year to year. Quarterly
of model changeover and new product launches). Annual production volumes are heavily impacted by external economic production
volumes experience
factors, including theseasonal shifts throughout
pace of economic the factors
growth and year (including
such as peak retail salesofseasons
the availability consumer and the impact
credit onofproduction
and cost fuel.
of model changeover and new product launches). Annual production volumes are heavily impacted by external economic
factors,
As aincluding the
result, we pace ofthe
analyze economic growth
profit impact of and factors
certain cost such as the
changes availability
holding of consumer
constant credit
present-year and cost
volume andof fuel.
mix and
currency exchange, in order to evaluate our cost trends absent the impact of varying production and currency exchange
As aWe
levels. result, we analyze
analyze thechanges
these cost profit impact
in theoffollowing
certain cost changes holding constant present-year volume and mix and
categories:
currency exchange, in order to evaluate our cost trends absent the impact of varying production and currency exchange
levels.
• We analyze these
Contribution Costscost changes
– these costsintypically
the following categories:
vary with production volume. These costs include material (including
commodity), warranty, and freight and duty costs.
• Contribution Costs – these costs typically vary with production volume. These costs include material (including
• commodity),
Structural warranty,
Costs and
– these freight
costs and duty
typically costs.
do not have a directly proportionate relationship to production volume.
These costs include manufacturing; vehicle and software engineering; spending-related; advertising and sales
• Structural Costs
promotion; – these costs
administrative, typicallytechnology,
information do not haveand
a directly
selling;proportionate relationship
and pension and to production volume.
OPEB costs.
These costs include manufacturing; vehicle and software engineering; spending-related; advertising and sales
promotion;
While administrative,
contribution information
costs generally technology,
vary directly and selling;
in proportion and pension
to production andelements
volume, OPEB costs.
within our structural costs
category are impacted to differing degrees by changes in production volume. We also have varying degrees of discretion
whenWhile contribution
it comes costs the
to controlling generally vary
different directly within
elements in proportion to production
our structural costs. volume, elements
For example, within ourand
depreciation structural costs
amortization
category are impacted to differing degrees by changes in production volume. We also have varying degrees
expense largely is associated with prior capital spending decisions. On the other hand, while labor costs do not vary of discretion
when it comes
directly to controlling
with production the manufacturing
volume, different elements
laborwithin
costsour
maystructural [Link]
be impacted example,
changes depreciation
in volume, and amortization
for example when we
expense
increase overtime, add a production shift, or add personnel to support volume increases. Other structuraldo
largely is associated with prior capital spending decisions. On the other hand, while labor costs not vary
costs, such as
directly withor
advertising production
engineeringvolume,
costs,manufacturing laborhave
do not necessarily costsamay be impacted
directly by changes
proportionate in volume,
relationship for example
to production [Link] we
Our
increase overtime, add a production shift, or add personnel to support volume increases. Other structural
structural costs generally are within our discretion, although to varying degrees, and can be adjusted over time in costs, such as
advertising
response toor engineering
external costs, do not necessarily have a directly proportionate relationship to production volume. Our
factors.
structural costs generally are within our discretion, although to varying degrees, and can be adjusted over time in
response to external
We consider factors.
certain structural costs to be a direct investment in future growth and revenue. For example, structural
costs are necessary to grow our business and improve profitability, invest in new products and technologies, respond to
We consider
increasing certain
industry salesstructural costs
volume, and to be
grow oura market
direct investment
share. in future growth and revenue. For example, structural
costs are necessary to grow our business and improve profitability, invest in new products and technologies, respond to
increasing
Cost ofindustry sales
sales and volume,
Selling, and grow our
administrative, andmarket
other share.
expenses for full year 2023 were $161.3 billion. Company
excluding Ford Credit’s total material and commodity costs make up the largest portion of these costs and expenses,
Cost by
followed of sales and costs.
structural Selling,Although
administrative,
materialand other
costs areexpenses forabsolute
our largest full year cost,
2023our
were $161.3can
margins billion. Company
be affected
excluding Ford Credit’s total material and commodity
significantly by changes in any category of costs. costs make up the largest portion of these costs and expenses,
followed by structural costs. Although material costs are our largest absolute cost, our margins can be affected
significantly by changes in any category of costs.

42

42

199174_Ford_2023_AR_1OK.indd 46 2/9/24 2:55 PM

 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
RESULTS Discussion
OF OPERATIONS and Analysis of Financial Condition and Results of Operations (Continued)
- 2023

RESULTS
The netOF OPERATIONS
income attributable- 2023
to Ford Motor Company was $4,347 million in 2023. Company adjusted EBIT was
$10,416 million.
The net income attributable to Ford Motor Company was $4,347 million in 2023. Company adjusted EBIT was
$10,416 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 26 of the Notes to the Financial Statements. We report special items
Net income/(loss)
separately includes
to allow investors certain items
analyzing (“special
our results items”)certain
to identify that areinfrequent
excluded significant
from Company
itemsadjusted
that theyEBIT. These
may wish to
items are discussed in more detail in Note 26 of the Notes to the Financial Statements. We report special items
exclude when considering the trend of ongoing operating results. Our pre-tax and tax special items were as follows (in
separately
millions): 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
2022 2023
millions):
Restructuring (by Geography)
2022 2023
China $ (380) $ (958)
Restructuring (by Geography)
Europe (151) (978)
China $ (380) $ (958)
Ford Credit - Brazil (155) —
Europe (151) (978)
Other (a) (436) (87)
Ford Credit - Brazil (155) —
Subtotal Restructuring $ (1,122) $ (2,023)
Other (a) (436) (87)
Other Items
Subtotal Restructuring $ (1,122) $ (2,023)
Gain/(loss) on Rivian investment $ (7,377) $ (31)
Other Items
AV strategy including Argo impairment (2,812) —
Gain/(loss) on Rivian investment $ (7,377) $ (31)
Transit Connect customs matter — (396)
AV strategy including Argo impairment (2,812) —
Russia suspension of operations/asset write-off (158) —
Transit Connect customs matter — (396)
Patent matters related to prior calendar years (124) 8
Russia suspension of operations/asset write-off (158) —
EV program dispute — (143)
Patent matters related to prior calendar years (124) 8
Other (including gains/(losses) on investments) (170) (165)
EV program dispute — (143)
Subtotal Other Items $ (10,641) $ (727)
Other (including gains/(losses) on investments) (170) (165)
Pension and OPEB Gain/(Loss)
Subtotal Other Items $ (10,641) $ (727)
Pension and OPEB remeasurement $ 29 $ (2,058)
Pension and OPEB Gain/(Loss)
Pension settlements and curtailments (438) (339)
Pension and OPEB remeasurement $ 29 $ (2,058)
Subtotal Pension and OPEB Gain/(Loss) $ (409) $ (2,397)
Pension settlements and curtailments (438) (339)
Total EBIT Special Items $ (12,172) $ (5,147)
Subtotal Pension and OPEB Gain/(Loss) $ (409) $ (2,397)
Total EBIT Special Items $ (12,172) $ (5,147)
Provision for/(Benefit from) tax special items (b) $ (2,573) $ (1,273)
__________
Provision
(a) 2022 for/(Benefit
includes $298from) tax special
million related items (b)
to restructuring $
charges in India and $198 million in North America. 2023 includes $28(2,573) $
million related to (1,273)
restructuring
__________ charges in India and $41 million in North America.
(b)
(a) Includes related
2022 includes tax million
$298 effect on special
related to items and taxcharges
restructuring special items.
in India and $198 million in North America. 2023 includes $28 million related to
restructuring charges in India and $41 million in North America.
(b) We
Includes related tax
recorded effect
$5.1 on special
billion items and
of pre-tax tax special
special itemitems.
charges in 2023, driven primarily by pension and OPEB
remeasurement, restructuring actions in Europe and China, and the Transit Connect customs matter.
We recorded $5.1 billion of pre-tax special item charges in 2023, driven primarily by pension and OPEB
remeasurement,
In Note 26 of restructuring
the Notes to actions in Europe
the Financial and China,
Statements, and items
special the Transit Connectas
are reflected customs matter.
a separate reconciling item, as
opposed to being allocated among our segments. This reflects the fact that management excludes these items from its
In Note
review 26 of thesegment
of operating Notes toresults
the Financial Statements,
for purposes specialsegment
of measuring items areprofitability
reflected as a allocating
and separate reconciling
resources. 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.

43

43

199174_Ford_2023_AR_1OK.indd 47 2/9/24 2:55 PM

 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
COMPANY Discussion and Analysis of Financial Condition and Results of Operations (Continued)
KEY METRICS

COMPANY KEY
The table METRICS
below shows our full year 2023 key metrics for the Company compared to a year ago.
2022 2023 H / (L)
The table below shows our full year 2023 key metrics for the Company compared to a year ago.
GAAP Financial Measures
2022 2023 H / (L)
Cash Flows from Operating Activities ($B) $ 6.9 $ 14.9 $ 8.1
GAAP Financial Measures
Revenue ($M) 158,057 176,191 11 %
Cash Flows from Operating Activities ($B) $ 6.9 $ 14.9 $ 8.1
Net Income/(Loss) ($M) (1,981) 4,347 6,328
Revenue ($M) 158,057 176,191 11 %
Net Income/(Loss) Margin (%) (1.3)% 2.5 % 3.7 ppts
Net Income/(Loss) ($M) (1,981) 4,347 6,328
EPS (Diluted) $ (0.49) $ 1.08 $ 1.57
Net Income/(Loss) Margin (%) (1.3)% 2.5 % 3.7 ppts
EPS (Diluted) $ (0.49) $ 1.08 $ 1.57
Non-GAAP Financial Measures (a)
Company Adj. Free Cash Flow ($B) $ 9.1 $ 6.8 $ (2.3)
Non-GAAP Financial Measures (a)
Company Adj. EBIT ($M) 10,415 10,416 1
Company Adj. Free Cash Flow ($B) $ 9.1 $ 6.8 $ (2.3)
Company Adj. EBIT Margin (%) 6.6 % 5.9 % (0.7) ppts
Company Adj. EBIT ($M) 10,415 10,416 1
Adjusted EPS (Diluted) $ 1.88 $ 2.01 $ 0.13
Company Adj. EBIT Margin (%) 6.6 % 5.9 % (0.7) ppts
Adjusted ROIC (Trailing Four Quarters) 11.2 % 13.9 % 2.7 ppts
Adjusted EPS (Diluted) $ 1.88 $ 2.01 $ 0.13
__________
Adjusted
(a) ROIC (Trailing
See Non-GAAP Four Quarters)
Financial Measure Reconciliations section for reconciliation to GAAP. 11.2 % 13.9 % 2.7 ppts
__________
(a) In
See2023,
Non-GAAP Financialearnings
our diluted per share ofsection
Measure Reconciliations Common for reconciliation
and [Link]
was $1.08 and our diluted adjusted earnings
per share was $2.01.
In 2023, our diluted earnings per share of Common and Class B Stock was $1.08 and our diluted adjusted earnings
per share was $2.01. margin was 2.5% in 2023, up from negative 1.3% a year ago. Company adjusted EBIT margin was
Net income/(loss)
5.9% in 2023, down from 6.6% a year ago.
Net income/(loss) margin was 2.5% in 2023, up from negative 1.3% a year ago. Company adjusted EBIT margin was
5.9%The
in 2023, down from
table below 6.6%
shows our afull
year ago.
year 2023 net income/(loss) attributable to Ford and Company adjusted EBIT by
segment (in millions).
The table below shows our full year 2023 net income/(loss) attributable to Ford and Company adjusted EBIT by
2022 2023 H / (L)
segment (in millions).
Ford Blue $ 6,847 $ 7,462 $ 615
2022 2023 H / (L)
Ford Model e (2,133) (4,701) (2,568)
Ford Blue $ 6,847 $ 7,462 $ 615
Ford Pro 3,222 7,222 4,000
Ford Model e (2,133) (4,701) (2,568)
Ford Next (926) (138) 788
Ford Pro 3,222 7,222 4,000
Ford Credit 2,657 1,331 (1,326)
Ford Next (926) (138) 788
Corporate Other 748 (760) (1,508)
Ford Credit 2,657 1,331 (1,326)
Company Adjusted EBIT (a) 10,415 10,416 1
Corporate Other 748 (760) (1,508)
Interest on Debt (1,259) (1,302) (43)
Company Adjusted EBIT (a) 10,415 10,416 1
Special Items (12,172) (5,147) 7,025
Interest on Debt (1,259) (1,302) (43)
Taxes / Noncontrolling Interests 1,035 380 (655)
Special Items (12,172) (5,147) 7,025
Net Income/(Loss) $ (1,981) $ 4,347 $ 6,328
Taxes / Noncontrolling Interests 1,035 380 (655)
__________
(a)NetSee
Income/(Loss)
Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP. $ (1,981) $ 4,347 $ 6,328
__________
(a) See
TheNon-GAAP Financialincrease
year-over-year Measure Reconciliations
of $6.3 billion section
in netforincome/(loss)
reconciliation to GAAP.
in 2023
was primarily driven by the non-recurrences of
the mark-to-market net loss on our Rivian investment and the impairment on our Argo investment (both of which were
The year-over-year
included in special itemsincrease
in 2022),ofpartially
$6.3 billion in by
offset netaincome/(loss) in 2023remeasurement
pension and OPEB was primarily driven by the
loss and non-recurrences
higher charges for of
the mark-to-market net loss on our Rivian investment and the impairment on our Argo investment (both of
restructuring actions in Europe and China. The flat year-over-year Company adjusted EBIT primarily reflects higher which wereFord
included in special items in 2022), partially offset by a pension and OPEB remeasurement loss and higher charges
Pro and Ford Blue EBIT and a lower EBIT loss in Ford Next. Offsets included higher EBIT losses in Ford Model e, lower for
restructuring
past actions in
service pension Europe
and OPEBand China.
income The flat year-over-year
in Corporate Company
Other, and lower adjusted
Ford Credit [Link] primarily reflects higher Ford
Pro and Ford Blue EBIT and a lower EBIT loss in Ford Next. Offsets included higher EBIT losses in Ford Model e, lower
past service pension and OPEB income in Corporate Other, and lower Ford Credit EBT.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemThe
7. Management’s
tables below and Discussion and Analysis
on the following pagesof Financial
provide full Condition
year 2023and
key Results
metrics of
andOperations (Continued)
the change in full year 2023 EBIT
compared with full year 2022 by causal factor for each of our Ford Blue, Ford Model e, and Ford Pro segments. For a
The tables
description belowcausal
of these and on the following
factors, pages provide
see Definitions full year 2023
and Information key metrics
Regarding and the
Ford Blue, change
Ford Modeline,full yearPro
Ford 2023 EBIT
Causal
compared
Factors. with full year 2022 by causal factor for each of our Ford Blue, Ford Model e, and Ford Pro segments. For a
description of these causal factors, see Definitions and Information Regarding Ford Blue, Ford Model e, Ford Pro Causal
Factors.
Ford Blue Segment
2022 2023 H / (L)
Ford Blue Segment
Key Metrics
2022 2023 H / (L)
Wholesale Units (000) (a) 2,834 2,920 86
Key Metrics
Revenue ($M) $ 94,762 $ 101,934 $ 7,172
Wholesale Units (000) (a) 2,834 2,920 86
EBIT ($M) 6,847 7,462 615
Revenue ($M) $ 94,762 $ 101,934 $ 7,172
EBIT Margin (%) 7.2% 7.3% 0.1 ppts
EBIT ($M) 6,847 7,462 615
__________
EBITIncludes
(a) Margin (%) 7.2% affiliates (about
Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated 7.3% 0.12022
484,000 units in ppts
and 455,000 units in 2023)
__________
(a) Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 484,000 units in 2022
and 455,000 units in 2023)
Change in EBIT by Causal Factor (in millions)
2022 Full Year EBIT $ 6,847
Change in EBIT by Causal Factor (in millions)
Volume / Mix 2,544
2022 Full Year EBIT $ 6,847
Net Pricing 235
Volume / Mix 2,544
Cost (1,558)
Net Pricing 235
Exchange (462)
Cost (1,558)
Other (144)
Exchange (462)
2023 Full Year EBIT 7,462
Other (144)
2023 Full Year EBIT 7,462
In 2023, Ford Blue’s wholesales increased 3% from a year ago, primarily reflecting an improvement in production-
related supply constraints, offset partially by ceasing production of EcoSport and Fiesta small vehicles and production
In 2023,
losses duringFord Blue’sstrike.
the UAW wholesales increased
Full year 3% fromincreased
2023 revenue a year ago,
8%,primarily
driven byreflecting an improvement
higher wholesales, in production-
favorable mix, and
related supply constraints, offset partially by ceasing
higher net pricing, offset partially by weaker currencies. production of EcoSport and Fiesta small vehicles and production
losses during the UAW strike. Full year 2023 revenue increased 8%, driven by higher wholesales, favorable mix, and
higher
FordnetBlue’s
pricing, offset
2023 full partially
year EBIT by was
weaker$7.5currencies.
billion, an increase of $615 million from a year ago, with an EBIT margin of
7.3%. The EBIT improvement was driven primarily by favorable mix, lower commodity costs, higher wholesales and net
FordPartial
pricing. Blue’s offsets
2023 full year EBIT
primarily washigher
include $7.5 billion,
warrantyan increase of $615inflationary
costs (reflecting million fromcost
a year ago, with
pressures andanincreased
EBIT margin
fieldof
7.3%. The EBIT improvement was driven primarily by favorable mix, lower commodity costs, higher wholesales
service actions), higher material costs related to new products, higher structural costs and supplemental compensation and net
pricing. Partial offsets primarily include higher warranty costs (reflecting inflationary
(including the impact of the new UAW collective bargaining agreement), and weaker [Link] pressures and increased field
service actions), higher material costs related to new products, higher structural costs and supplemental compensation
(including the impact of the new UAW collective bargaining agreement), and weaker currencies.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7.
Ford Management’s
Model e SegmentDiscussion and Analysis of Financial Condition and Results of Operations (Continued)
2022 2023 H / (L)
Ford Model e Segment
Key Metrics
2022 2023 H / (L)
Wholesale Units (000) 96 116 20
Key Metrics
Revenue ($M) $ 5,253 $ 5,897 $ 644
Wholesale Units (000) 96 116 20
EBIT ($M) (2,133) (4,701) (2,568)
Revenue ($M) $ 5,253 $ 5,897 $ 644
EBIT Margin (%) (40.6)% (79.7)% (39.1) ppts
EBIT ($M) (2,133) (4,701) (2,568)
EBIT Margin (%) (40.6)% (79.7)% (39.1) ppts
Change in EBIT by Causal Factor (in millions)
2022 Full Year EBIT $ (2,133)
Change in EBIT by Causal Factor (in millions)
Volume / Mix (32)
2022 Full Year EBIT $ (2,133)
Net Pricing (1,005)
Volume / Mix (32)
Cost (1,765)
Net Pricing (1,005)
Exchange 84
Cost (1,765)
Other 150
Exchange 84
2023 Full Year EBIT $ (4,701)
Other 150
2023 Full Year EBIT $ (4,701)
In 2023, Ford Model e’s wholesales increased 20% from a year ago, primarily reflecting higher production of F-150
Lightning. Full year 2023 revenue increased 12%, driven by higher wholesales, offset partially by lower net pricing.
In 2023, Ford Model e’s wholesales increased 20% from a year ago, primarily reflecting higher production of F-150
Lightning. Full year
Ford Model 2023full
e’s 2023 revenue increased
year EBIT 12%,
loss was driven
$4.7 by a
billion, higher wholesales,
$2.6 billion higheroffset partially
loss than by ago,
a year lowerwith
net an
pricing.
EBIT
margin of negative 79.7%. The EBIT deterioration was primarily driven by lower net pricing, higher material cost
Ford Model
(including e’s 2023 full
volume-related year EBIT
obligations forloss was $4.7
batteries billion,
of about a $2.6
$310 billion
million, higher loss
inflationary than
cost a year ago,
increases, andwith an EBIT
higher launch-
margin supplier
related of negative 79.7%.
costs), Thevolume/capacity-related
higher EBIT deterioration wasmanufacturing
primarily drivenand by spending-related
lower net pricing, costs,
higherhigher
material cost costs,
warranty
(including
and highervolume-related obligations
engineering costs forprograms,
for future batteries of about
offset $310 million,
partially by lowerinflationary
commoditycost increases,
costs and higher
and stronger launch-
currencies.
related supplier costs), higher volume/capacity-related manufacturing and spending-related costs, higher warranty costs,
and higher
Ford engineering costs for future programs, offset partially by lower commodity costs and stronger currencies.
Pro Segment
2022 2023 H / (L)
Ford Pro Segment
Key Metrics
2022 2023 H / (L)
Wholesale Units (000) (a) 1,301 1,377 76
Key Metrics
Revenue ($M) $ 48,939 $ 58,058 $ 9,119
Wholesale Units (000) (a) 1,301 1,377 76
EBIT ($M) 3,222 7,222 4,000
Revenue ($M) $ 48,939 $ 58,058 $ 9,119
EBIT Margin (%) 6.6% 12.4% 5.9 ppts
EBIT ($M) 3,222 7,222 4,000
__________
EBITIncludes
(a) Margin (%)
Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye 6.6% 12.4%
(about 76,000 units 5.9 ppts
in 2022 and 90,000 units
in 2023).
__________
(a) Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 76,000 units in 2022 and 90,000 units
in 2023).
Change in EBIT by Causal Factor (in millions)
2022 Full Year EBIT $ 3,222
Change in EBIT by Causal Factor (in millions)
Volume / Mix (331)
2022 Full Year EBIT $ 3,222
Net Pricing 7,067
Volume / Mix (331)
Cost (2,353)
Net Pricing 7,067
Exchange 27
Cost (2,353)
Other (410)
Exchange 27
2023 Full Year EBIT $ 7,222
Other (410)
2023 Full Year EBIT $ 7,222
In 2023, Ford Pro’s wholesales increased 6% from a year ago, primarily reflecting an improvement in production-
related supply constraints, offset partially by production losses during the UAW strike. Full year 2023 revenue increased
19%,Indriven
2023, by
Ford Pro’snet
higher wholesales increased
pricing and 6% from
wholesales, offseta partially
year ago, byprimarily reflecting
unfavorable mix. an improvement in production-
related supply constraints, offset partially by production losses during the UAW strike. Full year 2023 revenue increased
19%,Ford
driven by 2023
Pro’s higher net
full pricing
year EBITand
waswholesales,
$7.2 billion,offset partiallyofby$4.0
an increase unfavorable mix.
billion from a year ago, with an EBIT margin of
12.4%. The EBIT improvement was driven by higher net pricing, lower commodity costs, and higher wholesales. Partial
Ford
offsets Pro’s 2023
primarily full higher
include year EBIT was $7.2
material costsbillion, anto
(related increase of $4.0
inflationary costbillion from anew
pressures, yearproducts,
ago, withand
an EBIT
aboutmargin of
$80 million
12.4%. The EBIT improvement was driven by higher net pricing, lower commodity costs, and higher wholesales.
of volume-related obligations for batteries), higher warranty costs (reflecting inflationary cost pressures and increased field Partial
offsets
service primarily
actions), include higher
and higher materialcosts
structural costs(including
(related to inflationary cost
volume-related) andpressures, new products,
supplemental and about
compensation $80 million
(including the
of volume-related obligations for batteries), higher
impact of the new UAW collective bargaining agreement). warranty costs (reflecting inflationary cost pressures and increased field
service actions), and higher structural costs (including volume-related) and supplemental compensation (including the
impact of the new UAW collective bargaining agreement).

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
Definitions Discussion
and Information andFord
Regarding Analysis
Blue,ofFord
Financial
ModelCondition andPro
e, and Ford Results of Factors
Causal Operations (Continued)

Definitions and we
In general, Information
measureRegarding Ford change
year-over-year Blue, Ford Model
in Ford e, and
Blue, Ford
Ford Proe,Causal
Model Factors
and Ford Pro segment EBIT using the
causal factors listed below, with net pricing and cost variances calculated at present-year volume and mix and exchange:
In general, we measure year-over-year change in Ford Blue, Ford Model e, and Ford Pro segment EBIT using the
causal
• Marketfactors listed(exclude
Factors below, with
the net pricing
impact and cost variances
of unconsolidated calculated
affiliate at present-year
wholesale units): volume and mix and exchange:
◦ Volume and Mix – primarily measures EBIT variance from changes in wholesale unit volumes (at prior-year
• Market Factors
average (exclude the
contribution impact
margin perof unconsolidated
unit) affiliateinwholesale
driven by changes units): market share, and dealer stocks, as
industry volume,
◦ Volume and Mix – primarily measures EBIT variance from changes
well as the EBIT variance resulting from changes in product mix, including in wholesale unit volumes
mix among (at prior-year
vehicle lines and mix of trim
average contribution margin per unit)
levels and options within a vehicle line driven by changes in industry volume, market share, and dealer stocks, as
◦ well as the EBIT
Net Pricing variance
– primarily resulting
measures fromvariance
EBIT changesdriven
in product mix, including
by changes mix among
in wholesale vehicle
unit prices lines and
to dealers mix of trim
and
levels and options within a vehicle line
marketing incentive programs such as rebate programs, low-rate financing offers, special lease offers, and stock
◦ Net Pricing –on
adjustments primarily
dealer measures
inventory 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
• Cost:vary with volume, such as material costs (including commodity and component costs), warranty expense, and
◦ Contribution Costs
freight and duty – primarily measures EBIT variance driven by per-unit changes in cost categories that typically
costs
vary with volume, such
◦ Structural Costs – primarily as material
measures costs (including
EBIT variancecommodity and component
driven by absolute changecosts),
in costwarranty
categoriesexpense, and do
that typically
freight and duty costs
not have a directly proportionate relationship to production volume. Structural costs include the following cost
categories:Costs – primarily measures EBIT variance driven by absolute change in cost categories that typically do
◦ Structural
▪not have a directly proportionate
Manufacturing, relationship to- consists
Including Volume-Related production volume.
primarily of Structural costs and
costs for hourly include the following
salaried cost
manufacturing
categories:
personnel, plant overhead (such as utilities and taxes), and new product launch expense. These costs could
▪ beManufacturing, Including
affected by volume operating pattern- consists
forVolume-Related primarily
actions such of costs line-speed,
as overtime, for hourly and andsalaried manufacturing
shift schedules
personnel, plant
▪ Engineering and overhead
Connectivity(such as utilities
– consists and taxes),
primarily andfor
of costs new product
vehicle andlaunch
softwareexpense. These
engineering costs could
personnel,
be affectedmaterials,
prototype by volume for operating
testing, pattern
and outside actions such
engineering andas overtime,
software line-speed, and shift schedules
services
▪▪ Spending-Related
Engineering and Connectivity – consists
– consists primarily of primarily of costs
depreciation and for vehicle and
amortization of software engineering
our manufacturing andpersonnel,
engineering
prototype
assets, butmaterials, testing,
also includes andretirements
asset outside engineering and software
and operating leases services
▪▪ Spending-Related
Advertising and Sales – consists primarily
Promotions of depreciation
– includes costs for and amortization
advertising, of our programs,
marketing manufacturing
brand and engineering
promotions,
assets, but also includes asset retirements and
customer mailings and promotional events, and auto shows operating leases
▪▪ Administrative,
Advertising andInformation
Sales Promotions – includes
Technology, costs for
and Selling advertising,
– includes marketing
primarily costsprograms,
for salariedbrand promotions,
personnel and
customer mailings and promotional events, and auto shows
purchased services related to our staff activities, information technology, and selling functions
▪▪ Administrative,
Pension and OPEB Information Technology,
– consists primarily ofand Selling
past – includes
service pensionprimarily
costs andcosts
otherforpostretirement
salaried personnel and
employee
purchased
benefit costsservices related to our staff activities, information technology, and selling functions
▪ Pension and OPEB – consists primarily of past service pension costs and other postretirement employee
• Exchange benefit costs measures EBIT variance driven by one or more of the following: (i) transactions denominated in
– primarily
currencies other than the functional currencies of the relevant entities, (ii) effects of converting functional currency
• Exchange – primarily
income to U.S. dollars,measures EBIT
(iii) effects variance driven
of remeasuring by oneassets
monetary or moreandofliabilities
the following:
of the (i) transactions
relevant entitiesdenominated
in currenciesin
currencies other than the functional currencies of the relevant entities, (ii)
other than their functional currency, or (iv) results of our foreign currency hedging 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
Other than their functional
– includes a variety currency, or (iv)asresults
of items, such of our
parts and foreignearnings,
services currency royalties,
hedging government incentives, and
compensation-related changes
• Other – includes a variety of items, such as parts and services earnings, royalties, government incentives, and
compensation-related
In addition, definitions changes
and calculations used in this report include:

• In addition, definitions
Wholesales and Revenueand –calculations
wholesale unitusedvolumes
in this report include:
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
• Wholesales and Revenue
to other manufacturers, – wholesale
units distributedunit
by volumes include
Ford for other all Ford and Lincoln
manufacturers, badged
and local brandunits
units(whether
producedproduced by
by our China
Ford or by an unconsolidated affiliate) that are sold to dealerships or others, units manufactured by Ford
joint venture, Jiangling Motors Corporation, Ltd. (“JMC”), that are sold to dealerships or others. Vehicles sold to daily that are sold
to other
rental carmanufacturers,
companies that units
are distributed
subject to abyguaranteed
Ford for other manufacturers,
repurchase and local
option (i.e., rentalbrand units produced
repurchase), as well by
as our China
other
joint venture,
sales Jiangling
of finished Motors
vehicles Corporation,
for which Ltd. (“JMC”),
the recognition that are
of revenue sold to dealerships
is deferred or others. also
(e.g., consignments), Vehicles sold to daily
are included in
rental car companies
wholesale thatRevenue
unit volumes. are subject to certain
from a guaranteed
vehicles repurchase
in wholesaleoption
unit(i.e., rental(specifically,
volumes repurchase), as well
Ford badgedas other
vehicles
sales of finished
produced vehicles by
and distributed for our
which the recognition
unconsolidated of revenue
affiliates, is deferred
as well as JMC (e.g.,
brandconsignments),
vehicles) are not also are included
included in our in
wholesale unit volumes. Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles
revenue
produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our
• revenue
Industry Volume and Market Share – based, in part, on estimated vehicle registrations; includes medium and heavy
duty trucks
• Industry Volume and Market Share – based, in part, on estimated vehicle registrations; includes medium and heavy
• duty
SAAR trucks
– seasonally adjusted annual rate

• SAAR – seasonally adjusted annual rate

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7.
Ford Management’s
Next Segment Discussion and Analysis of Financial Condition and Results of Operations (Continued)

FordThe Next Segment

Ford Next segment (formerly Mobility) primarily includes expenses and investments for emerging business
initiatives aimed at creating value for Ford in vehicle-adjacent market segments.
The Ford Next segment (formerly Mobility) primarily includes expenses and investments for emerging business
initiatives
In thisaimed at creating
segment, our 2023value
EBITforloss
Ford in vehicle-adjacent
was market
$138 million, a $788 segments.
million improvement from a year ago. Ford Next has
evolved from primarily investing in the development of autonomous vehicle capabilities to focus exclusively on incubating
In this segment, our 2023 EBIT loss was $138 million, a $788 million improvement from a year ago. Ford Next has
and launching new businesses creating strategic value for Ford.
evolved from primarily investing in the development of autonomous vehicle capabilities to focus exclusively on incubating
and launching new businesses creating strategic value for Ford.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7.
Ford Management’s
Credit Segment Discussion and Analysis of Financial Condition and Results of Operations (Continued)

FordThe
Credit Segment
tables below provide full year 2023 key metrics and the change in full year 2023 EBT compared with full year
2022 by causal factor for the Ford Credit segment. For a description of these causal factors, see Definitions and
The tables
Information below provide
Regarding full year
Ford Credit 2023Factors.
Causal key metrics and the change in full year 2023 EBT compared with full year
2022 by causal factor for the Ford Credit segment. For a description of these causal factors, see Definitions and
2022 2023 H / (L)
Information Regarding Ford Credit Causal Factors.
GAAP Financial Measures
2022 2023 H / (L)
Total Net Receivables ($B) $ 122 $ 133 $ 11
GAAP Financial Measures
Loss-to-Receivables (bps) (a) 14 35 21
Total Net Receivables ($B) $ 122 $ 133 $ 11
Auction Values (b) $ 32,410 $ 30,005 (7)%
Loss-to-Receivables (bps) (a) 14 35 21
EBT ($M) 2,657 1,331 $ (1,326)
Auction Values (b) $ 32,410 $ 30,005 (7)%
ROE (%) 16 % 11 % (5) ppts
EBT ($M) 2,657 1,331 $ (1,326)
ROE (%) 16 % 11 % (5) ppts
Other Balance Sheet Metrics
Debt ($B) $ 119 $ 129 9%
Other Balance Sheet Metrics
Net Liquidity ($B) 21 26 22 %
Debt ($B) $ 119 $ 129 9%
Financial Statement Leverage (to 1) 10 9.7 (0.3)
Net Liquidity ($B) 21 26 22 %
__________
Financial
(a) Statement
U.S. retail Leverage
financing only. (to 1) 10 9.7 (0.3)
(b) U.S.
__________ 36-month off-lease auction values at full year 2023 mix.
(a) U.S. retail financing only.
(b) U.S. in
Change 36-month
EBT by off-lease auction(in
Causal Factor values at full year 2023 mix.
millions)
2022 Full Year EBT $ 2,657
Change in EBT by Causal Factor (in millions)
Volume / Mix 153
2022 Full Year EBT $ 2,657
Financing Margin (493)
Volume / Mix 153
Credit Loss (239)
Financing Margin (493)
Lease Residual (466)
Credit Loss (239)
Exchange 18
Lease Residual (466)
Other (299)
Exchange 18
2023 Full Year EBT $ 1,331
Other (299)
2023 Full Year EBT $ 1,331
Total net receivables at December 31, 2023 were 9% higher than a year ago, primarily reflecting higher consumer and
non-consumer financing and currency exchange rates, partially offset by fewer operating leases. Ford Credit’s loss
Totalcontinue
metrics net receivables at December
to normalize 31, 2023
from historic lows. were
Ford9% higher
Credit’s than
U.S. a year ago,
36-month primarily
auction reflecting
values higher
for off-lease consumer
vehicles and
were
non-consumer
down 7% from a financing andWe
year ago. currency exchange
are planning rates,
for full yearpartially offset by
2024 auction fewertooperating
values decreaseleases. Ford
as vehicle Credit’s loss
availability continues
metrics
to continue to normalize from historic lows. Ford Credit’s U.S. 36-month auction values for off-lease vehicles were
improve.
down 7% from a year ago. We are planning for full year 2024 auction values to decrease as vehicle availability continues
to improve.
Ford Credit’s 2023 EBT of $1,331 million was $1,326 million lower than a year ago, reflecting lower financing margin,
non-recurrence of supplemental depreciation and credit loss reserve releases, lower lease residual performance,
Ford Credit’s
unfavorable 2023 market
derivative EBT of valuation,
$1,331 million was $1,326
and higher credit million
[Link] than a year ago, reflecting lower financing margin,
non-recurrence of supplemental depreciation and credit loss reserve releases, lower lease residual performance,
unfavorable derivative market valuation, and higher credit losses.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
Definitions Discussion
and Information andFord
Regarding Analysis ofCausal
Credit Financial Condition and Results of Operations (Continued)
Factors

Definitions and we
In general, Information
measureRegarding Ford changes
year-over-year Credit Causal Factors
in Ford Credit’s EBT using the causal factors listed below:

• In general,
Volume andwe measure year-over-year changes in Ford Credit’s EBT using the causal factors listed below:
Mix:
◦ Volume primarily measures changes in net financing margin driven by changes in average net receivables
• Volume and Mix:
excluding the allowance for credit losses at prior period financing margin yield (defined below in financing margin)
◦ Volume primarily
at prior period measures
exchange changes
rates. Volume in net financing
changes are margin
primarilydriven
drivenbyby
changes in average
the volume of new net
andreceivables
used vehicles sold
excluding the allowance for credit losses at prior period financing margin yield (defined
and leased, the extent to which Ford Credit purchases retail financing and operating lease contracts, below in financing margin)
the extent to
at prior period exchange rates. Volume changes are primarily driven by the volume of new
which Ford Credit provides wholesale financing, the sales price of the vehicles financed, the level of dealer and used vehicles sold
and leased, Ford-sponsored
inventories, the extent to which Fordfinancing
special Credit purchases
programsretail financing
available and operating
exclusively throughlease
Ford contracts,
Credit, and the extent to
the
which Ford Credit provides wholesale
availability of cost-effective funding financing, the sales price of the vehicles financed, the level of dealer
◦ inventories,
Mix primarilyFord-sponsored
measures changes special financing
in net financing programs
margin available
driven by exclusively through changes
period-over-period Ford Credit, and
in the the
composition
availability of cost-effective funding
of Ford Credit’s average net receivables excluding the allowance for credit losses by product within each region
◦ Mix primarily measures changes in net financing margin driven by period-over-period changes in the composition
• of FordMargin:
Financing Credit’s average net receivables excluding the allowance for credit losses by product within each region
◦ Financing margin variance is the period-over-period change in financing margin yield multiplied by the present
• Financing
period Margin:
average net receivables excluding the allowance for credit losses at prior period exchange rates. This
◦ Financing
calculationmargin variance
is performed is the
at the period-over-period
product change
and country level andinthen
financing margin Financing
aggregated. yield multiplied
marginbyyield
the present
equals
period average net receivables excluding the allowance for credit losses at prior period exchange
revenue, less interest expense and scheduled depreciation for the period, divided by average net receivables rates. This
calculation is performed at the product and country level
excluding the allowance for credit losses for the same period and then aggregated. Financing margin yield equals
revenue, less
◦ Financing interest
margin expense
changes and scheduled
are driven by changes depreciation
in revenueforandtheinterest
period, expense.
divided byChanges
average net receivables
in revenue are
excludingdriven
primarily the allowance for credit
by the level losses
of market for the
interest same
rates, period
cost assumptions in pricing, mix of business, and competitive
◦ environment.
Financing margin changes
Changes are driven
in interest by changes
expense in revenue
are primarily and
driven byinterest expense.
the level of marketChanges in revenue
interest rates, are
borrowing
primarily driven
spreads, by the levelmanagement
and asset-liability 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,
Credit Loss: and asset-liability management
◦ Credit loss is the change in the provision for credit losses at prior period exchange rates. For analysis purposes,
• Credit Loss:
management splits the provision for credit losses into net charge-offs and the change in the allowance for credit
◦ Credit
losses loss is the change in the provision for credit losses at prior period exchange rates. For analysis purposes,
◦ management
Net charge-offsplits the provision
changes for credit
are primarily drivenlosses
by theinto net charge-offs
number and the severity
of repossessions, change in
perthe allowance forand
repossession, credit
losses
recoveries. Changes in the allowance for credit losses are primarily driven by changes in historical trends in
◦ Net charge-off
credit losses andchanges are primarily
recoveries, changesdriven
in theby the numberand
composition of repossessions, severity
size of Ford Credit’s per repossession,
present and in
portfolio, changes
recoveries.
trends in historical used vehicle values, and changes in forward looking macroeconomic conditions. For in
Changes in the allowance for credit losses are primarily driven by changes in historical trends
credit losses
additional and recoveries,
information, refer tochanges in the
the “Critical composition
Accounting and size- Allowance
Estimates of Ford Credit’s present
for Credit portfolio,
Losses” sectionchanges in7
of Item
trends in historical used vehicle values, and changes in forward looking macroeconomic conditions. For
• additional
Lease information, refer to the “Critical Accounting Estimates - Allowance for Credit Losses” section of Item 7
Residual:
◦ Lease residual measures changes to residual performance at prior period exchange rates. For analysis
• Lease Residual:
purposes, management splits residual performance primarily into residual gains and losses, and the change in
◦ Lease residual
accumulated measures changes
supplemental to residual performance at prior period exchange rates. For analysis
depreciation
purposes, management splits residual
◦ Residual gain and loss changes are primarilyperformance
driven primarily into residual
by the number gainsreturned
of vehicles and losses, andCredit
to Ford the change in
and sold,
accumulated supplemental depreciation
and the difference between the auction value and the depreciated value (which includes both base and
◦ Residual gainsupplemental
accumulated and loss changes are primarily
depreciation) driven
of the by the
vehicles number
sold. of vehicles
Changes returned to
in accumulated Ford Credit and sold,
supplemental
and
depreciation are primarily driven by changes in Ford Credit’s estimate of the expected auctionbase
the difference between the auction value and the depreciated value (which includes both valueand
at the end of
accumulated supplemental depreciation) of the vehicles sold. Changes in accumulated supplemental
the lease term, and changes in Ford Credit’s estimate of the number of vehicles that will be returned to it and sold.
depreciation
Depreciation are primarilysubject
on vehicles driven by changes in
to operating Ford Credit’s
leases includesestimate of the expected
early termination auction
losses on valueleases
operating at the end
due of
to
the
customer default events. For additional information, refer to the “Critical Accounting Estimates - Accumulated sold.
lease term, and changes in Ford Credit’s estimate of the number of vehicles that will be returned to it and
Depreciation
Depreciation onon vehicles
Vehicles subject
Subjectto tooperating
Operatingleases
Leases”includes
sectionearly termination
of Item 7 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
Exchange:
◦ Reflects changes in EBT driven by the effects of converting functional currency income to U.S. dollars
• 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
• Other:
period exchange rates
◦◦ Changes
Primarily includes operating
in operating expenses,
expenses other revenue,
are primarily driven byinsurance expenses,costs,
salaried personnel and other income/(loss)
facilities costs, and at prior
costs
period exchange
associated rates
with the origination and servicing of customer contracts
◦◦ Changes
In general,inother
operating expenseschanges
income/(loss) are primarily driven by
are primarily salaried
driven personnel
by changes in costs, facilities
earnings related costs, and costs
to market valuation
associated with the origination and servicing of customer contracts
adjustments to derivatives (primarily related to movements in interest rates) and other miscellaneous items
◦ 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
50

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

[Link],
Management’s Discussion
the following and Analysis
definitions of Financial
and calculations Condition
apply and Results
to Ford Credit of Operations
when used (Continued)
in this Report:

• In addition,
Cash the following
(as shown definitions
in the Funding and calculations
Structure apply
and Liquidity to Ford
tables) Credit
– Cash, when
cash used in this
equivalents, Report: securities, and
marketable
restricted cash, excluding amounts related to insurance activities
• Cash (as shown in the Funding Structure and Liquidity tables) – Cash, cash equivalents, marketable securities, and
• restricted cash, excluding
Debt (as shown in the Keyamounts related
Metrics and to insurance
Leverage tables)activities
– 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
• Debt (as shown in
enhancements. the Credit
Ford Key Metrics andright
holds the Leverage tables)
to receive the–excess
Debt on Ford
cash Credit’s
flows balancetosheets.
not needed pay theIncludes debtby,
debt issued
issued in securitizations and payable only out of collections on the underlying securitized assets and
and other obligations of, the securitization entities that are parties to those securitization transactions related
enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by,
• and otherBefore
Earnings obligations
Taxesof,(“EBT”)
the securitization entities
– Reflects Ford that are
Credit’s parties
income to those
before securitization
income taxes transactions

•• Earnings Before Taxes

Loss-to-Receivables (“EBT”)
(“LTR”) – Reflects
Ratio FordisCredit’s
– LTR ratio income
calculated before
using income taxes
net charge-offs divided by average finance
receivables, excluding unearned interest supplements and the allowance for credit losses
• Loss-to-Receivables (“LTR”) Ratio – LTR ratio is calculated using net charge-offs divided by average finance
• receivables, excluding
Return on Equity unearned
(“ROE”) interest
(as shown supplements
in the Key Metricsand the–allowance
table) for credit
Reflects return lossescalculated by annualizing net
on equity
income for the period and dividing by monthly average equity for the period
• Return on Equity (“ROE”) (as shown in the Key Metrics table) – Reflects return on equity calculated by annualizing net
• income for theand
Securitization period and dividing
Restricted Cashby
(asmonthly
shown average equity table)
in the Liquidity for the–period
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
• Securitization and Restricted
local governmental (as shown
Cashreserve
and regulatory in the Liquidity
requirements table)held
and cash – Securitization cashofiscertain
under the terms held forcontractual
the benefit of the
securitization investors (for example, a reserve fund). Restricted cash primarily includes cash held to meet certain
agreements
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
• Securitizations (as shown in the Public Term Funding Plan table) – Public securitization transactions, Rule 144A
• offerings
Term sponsored by
Asset-Backed Ford Credit,
Securities and widely
(as shown in thedistributed offeringstable)
Funding Structure by Ford Credit Canada
– Obligations issued in securitization
transactions that are payable only out of collections on the underlying securitized assets and related enhancements
• Term Asset-Backed Securities (as shown in the Funding Structure table) – Obligations issued in securitization
• transactions that are payable
Total Net Receivables onlyinout
(as shown theofKey
collections
Metrics on the –underlying
table) securitized
Includes finance assets and
receivables related
(retail enhancements
financing and
wholesale) sold for legal purposes and net investment in operating leases included in securitization transactions that
• Total
do notNet Receivables
satisfy (as shown
the requirements forinaccounting
the Key Metrics table) – Includes
sale treatment. finance receivables
These receivables (retail financing
and operating leases areand
reported
wholesale)
on Ford Credit’s balance sheets and are available only for payment of the debt issued by, and other transactions
sold for legal purposes and net investment in operating leases included in securitization that
obligations of, the
do not satisfy the requirements for accounting sale treatment. These receivables and operating leases are
securitization entities that are parties to those securitization transactions; they are not available to pay the otherreported
on Ford Credit’s
obligations balance
of Ford Creditsheets and areofavailable
or the claims only for
Ford Credit’s payment
other of the debt issued by, and other obligations of, the
creditors
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

51

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
Corporate Other 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
Corporate
portfolio) Otherand
and gains primarily
lossesincludes
from ourcorporate
cash, cashgovernance
equivalents,expenses, past service
and marketable pension
securities and OPEB
(excluding income
gains and on
and losses
expense, interest income (excluding Ford Credit interest income and interest earned on our extended
investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany service contract
portfolio) and gains governance
lending. Corporate and losses from our cash,
expenses are cash equivalents,
primarily and marketable
administrative, delivering securities
benefit on(excluding gains
behalf of the andenterprise,
global losses on
investments in equity securities), and foreign exchange derivatives gains and losses associated with
that are not allocated to operating segments. These include expenses related to setting and directing global policy, intercompany
lending.
providingCorporate
oversight andgovernance expenses
stewardship, are primarily
and promoting the administrative, delivering
Company’s interests. Forbenefit on2023,
full year behalfCorporate
of the global enterprise,
Other had a
that are not allocated to operating segments. These include expenses related to setting and directing
$760 million EBIT loss, compared with $748 million of positive EBIT in 2022. The EBIT deterioration was driven by lowerglobal policy,
providing oversight
past service pensionandandstewardship,
OPEB income, andpartially
promoting the by
offset Company’s interests.
higher Company For full year
excluding Ford 2023,
CreditCorporate Other had a
interest income,
$760 million EBIT loss, compared
reflecting higher interest rates. with $748 million of positive EBIT in 2022. The EBIT deterioration was driven by lower
past service pension and OPEB income, partially offset by higher Company excluding Ford Credit interest income,
reflecting
Interest onhigher
Debtinterest rates.

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

Taxes
Our Provision for/(Benefit from) income taxes for full year 2023 was a $362 million benefit, resulting in an effective tax
rate of negative 9.1%. This includes benefits arising from U.S. research tax credits and legal entity restructuring within our
Ouroperations
leasing and China. from) income taxes for full year 2023 was a $362 million benefit, resulting in an effective tax
Provision for/(Benefit
rate of negative 9.1%. This includes benefits arising from U.S. research tax credits and legal entity restructuring within our
leasing
Ouroperations andadjusted
full year 2023 China. effective tax rate, which excludes special items, was 10.0%.

Our full year 2023

We regularly adjusted
review effective taxstructure
our organizational rate, whichandexcludes
income taxspecial items,
elections forwas 10.0%.
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
We regularly
changes review our
to our structure, as organizational structure
well as any changes and income
in income tax elections
tax laws for affiliates
in the countries in non-U.S.
that we and U.S.
operate, could tax
cause
jurisdictions, which may result in changes in affiliates that are included in or
increases or decreases to our deferred tax balances and related valuation allowances. 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.

52

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
RESULTS Discussion
OF OPERATIONS and Analysis of Financial Condition and Results of Operations (Continued)
- 2022

RESULTS
The netOF OPERATIONS
loss attributable to- Ford
2022Motor Company was $1,981 million in 2022. Company adjusted EBIT was
$10,415 million.
The net loss attributable to Ford Motor Company was $1,981 million in 2022. Company adjusted EBIT was
$10,415 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 26 of the Notes to the Financial Statements. We report special items
Net income/(loss)
separately includes
to allow investors certain items
analyzing (“special
our results items”)certain
to identify that areinfrequent
excluded significant
from Company
itemsadjusted
that theyEBIT. These
may wish to
items are discussed in more detail in Note 26 of the Notes to the Financial Statements. We report special items
exclude when considering the trend of ongoing operating results. Our pre-tax and tax special items were as follows (in
separately
millions): 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
2021 2022
millions):
Global Redesign
2021 2022
Europe $ (530) $ (151)
Global Redesign
India (468) (298)
Europe $ (530) $ (151)
South America (803) 53
India (468) (298)
China (including Taiwan) 150 (380)
South America (803) 53
North America (72) (198)
China (including Taiwan) 150 (380)
Other 3 7
North America (72) (198)
Subtotal Global Redesign $ (1,720) $ (967)
Other 3 7
Other Items
Subtotal Global Redesign $ (1,720) $ (967)
Gain/(loss) on Rivian investment $ 9,096 $ (7,377)
Other Items
Debt extinguishment premium (1,692) (135)
Gain/(loss) on Rivian investment $ 9,096 $ (7,377)
AV strategy including Argo impairment — (2,812)
Debt extinguishment premium (1,692) (135)
Ford Credit – Brazil restructuring 14 (155)
AV strategy including Argo impairment — (2,812)
Russia suspension of operations/asset write-off — (158)
Ford Credit – Brazil restructuring 14 (155)
Patent matters related to prior calendar years — (124)
Russia suspension of operations/asset write-off — (158)
Other 82 (35)
Patent matters related to prior calendar years — (124)
Subtotal Other Items $ 7,500 $ (10,796)
Other 82 (35)
Pension and OPEB Gain/(Loss)
Subtotal Other Items $ 7,500 $ (10,796)
Pension and OPEB remeasurement $ 3,873 $ 29
Pension and OPEB Gain/(Loss)
Pension settlements and curtailments (70) (438)
Pension and OPEB remeasurement $ 3,873 $ 29
Subtotal Pension and OPEB Gain/(Loss) $ 3,803 $ (409)
Pension settlements and curtailments (70) (438)
Total EBIT Special Items $ 9,583 $ (12,172)
Subtotal Pension and OPEB Gain/(Loss) $ 3,803 $ (409)
Total EBIT Special Items $ 9,583 $ (12,172)
Cash effect of Global Redesign (incl. separations) $ (1,935) $ (377)

Cash effect of Global Redesign (incl. separations) $ (1,935) $ (377)

Provision for/(Benefit from) tax special items (a) $ (1,924) $ (2,573)
__________
Provision
(a) for/(Benefit
Includes from)
related tax tax on
effect special items
special (a)and tax special items.
items $ (1,924) $ (2,573)
__________
(a) Includes
For full related tax effect
year 2022, weonrecorded
special items and tax
$12.2 special
billion of items.
pre-tax
special item charges, driven by a $7.4 billion mark-to-market
net loss on our Rivian investment and a $2.7 billion impairment on our Argo investment.
For full year 2022, we recorded $12.2 billion of pre-tax special item charges, driven by a $7.4 billion mark-to-market
net loss on our
In Note Rivian
26 of investment
the Notes to the and a $2.7Statements,
Financial billion impairment
specialon our are
items Argoreflected
investment.
as a separate reconciling item, as
opposed to being allocated among our segments. This reflects the fact that management excludes these items from its
In Note
review 26 of thesegment
of operating Notes toresults
the Financial Statements,
for purposes specialsegment
of measuring items areprofitability
reflected as a allocating
and separate reconciling
resources. 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.

53

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
COMPANY Discussion and Analysis of Financial Condition and Results of Operations (Continued)
KEY METRICS

COMPANY KEY
The table METRICS
below shows our full year 2022 key metrics for the Company compared with full year 2021.
2021 2022 H / (L)
The table below shows our full year 2022 key metrics for the Company compared with full year 2021.
GAAP Financial Measures
2021 2022 H / (L)
Cash Flows from Operating Activities ($B) $ 15.8 $ 6.9 $ (8.9)
GAAP Financial Measures
Revenue ($M) 136,341 158,057 16 %
Cash Flows from Operating Activities ($B) $ 15.8 $ 6.9 $ (8.9)
Net Income/(Loss) ($M) 17,937 (1,981) $ (19,918)
Revenue ($M) 136,341 158,057 16 %
Net Income/(Loss) Margin (%) 13.2 % (1.3)% (14.4) ppts
Net Income/(Loss) ($M) 17,937 (1,981) $ (19,918)
EPS (Diluted) $ 4.45 $ (0.49) $ (4.94)
Net Income/(Loss) Margin (%) 13.2 % (1.3)% (14.4) ppts
EPS (Diluted) $ 4.45 $ (0.49) $ (4.94)
Non-GAAP Financial Measures (a)
Company Adj. Free Cash Flow ($B) $ 4.6 $ 9.1 $ 4.5
Non-GAAP Financial Measures (a)
Company Adj. EBIT ($M) 10,000 10,415 415
Company Adj. Free Cash Flow ($B) $ 4.6 $ 9.1 $ 4.5
Company Adj. EBIT Margin (%) 7.3 % 6.6 % (0.7) ppts
Company Adj. EBIT ($M) 10,000 10,415 415
Adjusted EPS (Diluted) $ 1.59 $ 1.88 $ 0.29
Company Adj. EBIT Margin (%) 7.3 % 6.6 % (0.7) ppts
Adjusted ROIC (Trailing Four Quarters) 9.8 % 11.2 % 1.4 ppts
Adjusted EPS (Diluted) $ 1.59 $ 1.88 $ 0.29
__________
Adjusted
(a) ROIC (Trailing
See Non-GAAP Four Quarters)
Financial Measure Reconciliations section for reconciliation to GAAP. 9.8 % 11.2 % 1.4 ppts
__________
(a) In
See2022,
Non-GAAP Financialearnings
our diluted per share ofsection
Measure Reconciliations Common for reconciliation
and [Link]
was a loss of $0.49 and our diluted adjusted
earnings per share was $1.88.
In 2022, our diluted earnings per share of Common and Class B Stock was a loss of $0.49 and our diluted adjusted
earnings per share was
Net income/(loss) $[Link] negative 1.3% in 2022, down from 13.2% in 2021. Company adjusted EBIT margin
margin
was 6.6% in 2022, down from 7.3% in 2021.
Net income/(loss) margin was negative 1.3% in 2022, down from 13.2% in 2021. Company adjusted EBIT margin
wasThe
6.6% in 2022,
table belowdown from
shows our7.3% in 2021.
full year 2022 net income/(loss) attributable to Ford and Company adjusted EBIT by
segment (in millions).
The table below shows our full year 2022 net income/(loss) attributable to Ford and Company adjusted EBIT by
2021 2022 H / (L)
segment (in millions).
Ford Blue $ 3,293 $ 6,847 $ 3,554
2021 2022 H / (L)
Ford Model e (892) (2,133) (1,241)
Ford Blue $ 3,293 $ 6,847 $ 3,554
Ford Pro 2,665 3,222 557
Ford Model e (892) (2,133) (1,241)
Ford Next (1,030) (926) 104
Ford Pro 2,665 3,222 557
Ford Credit 4,717 2,657 (2,060)
Ford Next (1,030) (926) 104
Corporate Other 1,247 748 (499)
Ford Credit 4,717 2,657 (2,060)
Company Adjusted EBIT (a) 10,000 10,415 415
Corporate Other 1,247 748 (499)
Interest on Debt (1,803) (1,259) 544
Company Adjusted EBIT (a) 10,000 10,415 415
Special Items 9,583 (12,172) (21,755)
Interest on Debt (1,803) (1,259) 544
Taxes / Noncontrolling Interests 157 1,035 878
Special Items 9,583 (12,172) (21,755)
Net Income/(Loss) $ 17,937 $ (1,981) $ (19,918)
Taxes / Noncontrolling Interests 157 1,035 878
__________
Net Income/(Loss)
(a) See Non-GAAP Financial Measure Reconciliations section for reconciliation to GAAP. $ 17,937 $ (1,981) $ (19,918)
__________
(a) See
TheNon-GAAP Financialdecrease
year-over-year Measure Reconciliations section
of $19.9 billion in for
netreconciliation
income/(loss)to GAAP.
in 2022 includes the effect of special items, including
the mark-to-market net loss on our Rivian investment and the impairment on our Argo investment. The year-over-year
The year-over-year
increase of $415 million decrease of $19.9
in Company billion
adjusted in net
EBIT income/(loss)
primarily in 2022Ford
reflects higher includes
Blue the
andeffect of special
Ford Pro items,partially
EBIT, offset including
the mark-to-market net loss on our Rivian investment and the impairment on our Argo investment. The year-over-year
by lower Ford Credit EBT, higher EBIT losses in Ford Model e, and lower past service pension and OPEB income in
increase
CorporateofOther.
$415 million in Company adjusted EBIT primarily reflects higher Ford Blue and Ford Pro EBIT, offset partially
by lower Ford Credit EBT, higher EBIT losses in Ford Model e, and lower past service pension and OPEB income in
Corporate Other.

54

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7.
Ford Management’s
Blue Segment Discussion and Analysis of Financial Condition and Results of Operations (Continued)

FordThe
Blue Segment
tables below and on the following pages provide full year 2022 key metrics and the change in full year 2022 EBIT
compared with full year 2021 by causal factor for each of our Ford Blue, Ford Model e, and Ford Pro segments. For a
The tables
description belowcausal
of these and on the following
factors, pages provide
see Definitions full year 2022
and Information key metrics
Regarding and the
Ford Blue, change
Ford Modeline,full
andyear 2022
Ford ProEBIT
compared
Causal with full year 2021 by causal factor for each of our Ford Blue, Ford Model e, and Ford Pro segments. For a
Factors.
description of these causal factors, see Definitions and Information Regarding Ford Blue, Ford Model e, and Ford Pro
Causal Factors.
2021 2022 H / (L)
Key Metrics
2021 2022 H / (L)
Wholesale Units (000) (a) 2,694 2,834 140
Key Metrics
Revenue ($M) $ 80,377 $ 94,762 $ 14,385
Wholesale Units (000) (a) 2,694 2,834 140
EBIT ($M) 3,293 6,847 3,554
Revenue ($M) $ 80,377 $ 94,762 $ 14,385
EBIT Margin (%) 4.1% 7.2% 3.1 ppts
EBIT ($M) 3,293 6,847 3,554
__________
EBIT Margin (%) 4.1% 7.2% 3.1 ppts
(a) Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 633,000 units in 2021
and 484,000 units in 2022).
__________
(a) Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 633,000 units in 2021
and 484,000
Change units
in EBIT by in 2022).
Causal Factor (in millions)
2021 Full Year EBIT $ 3,293
Change in EBIT by Causal Factor (in millions)
Volume / Mix 3,323
2021 Full Year EBIT $ 3,293
Net Pricing 6,181
Volume / Mix 3,323
Cost (5,329)
Net Pricing 6,181
Exchange (229)
Cost (5,329)
Other (392)
Exchange (229)
2022 Full Year EBIT $ 6,847
Other (392)
2022 Full Year EBIT $ 6,847
In 2022, Ford Blue’s wholesales increased 5% from 2021, primarily reflecting an improvement in production-related
supply constraints and a full year of Bronco and Maverick production, offset partially by our India restructuring, suspension
In joint
of our 2022,venture
Ford Blue’s wholesales
in Russia, increased 5%restrictions
and COVID-related from 2021,inprimarily reflecting
China. Full an improvement
year 2022 in production-related
revenue increased 18%, driven by
supply constraints and a full year of Bronco and Maverick production,
higher net pricing and wholesales, offset partially by weaker currencies. offset partially by our India restructuring, suspension
of our joint venture in Russia, and COVID-related restrictions in China. Full year 2022 revenue increased 18%, driven by
higher
FordnetBlue’s
pricing
fulland wholesales,
year 2022 EBIToffset partially
was $6.8 by weaker
billion, currencies.
an increase of $3.6 billion from 2021, with an EBIT margin of 7.2%.
The EBIT improvement was driven by higher net pricing and higher wholesales, offset partially by inflationary increases on
Ford Blue’s
commodity, full year
material, and2022 EBIT
freight washigher
costs, $6.8 billion,
warrantyan costs,
increase of $3.6
higher billion costs,
structural from 2021, with an currencies.
and weaker EBIT margin of 7.2%.
The EBIT improvement was driven by higher net pricing and higher wholesales, offset partially by inflationary increases on
commodity, material, and freight costs, higher warranty costs, higher structural costs, and weaker currencies.

55

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7.
Ford Management’s
Model e SegmentDiscussion and Analysis of Financial Condition and Results of Operations (Continued)
2021 2022 H / (L)
Ford Model e Segment
Key Metrics
2021 2022 H / (L)
Wholesale Units (000) 61 96 35
Key Metrics
Revenue ($M) $ 3,098 $ 5,253 $ 2,155
Wholesale Units (000) 61 96 35
EBIT ($M) (892) (2,133) (1,241)
Revenue ($M) $ 3,098 $ 5,253 $ 2,155
EBIT Margin (%) (28.8)% (40.6)% (11.8) ppts
EBIT ($M) (892) (2,133) (1,241)
EBIT Margin (%) (28.8)% (40.6)% (11.8) ppts
Change in EBIT by Causal Factor (in millions)
2021 Full Year EBIT $ (892)
Change in EBIT by Causal Factor (in millions)
Volume / Mix —
2021 Full Year EBIT $ (892)
Net Pricing 418
Volume / Mix —
Cost (1,553)
Net Pricing 418
Exchange (94)
Cost (1,553)
Other (12)
Exchange (94)
2022 Full Year EBIT $ (2,133)
Other (12)
2022 Full Year EBIT $ (2,133)
In 2022, Ford Model e’s wholesales increased 58% from 2021, primarily reflecting the launch of the F-150 Lightning
and incremental Mach-E production. Full year 2022 revenue increased 70%, driven by higher wholesales and net pricing.
In 2022, Ford Model e’s wholesales increased 58% from 2021, primarily reflecting the launch of the F-150 Lightning
and Model
incremental
e’s fullMach-E
year 2022 EBIT lossFull
production. wasyear
$2.12022 revenue
billion, a $1.2increased 70%,
billion higher driven
loss thanby
in higher wholesales
2021, with an EBITand net pricing.
margin of
negative 40.6%. The lower EBIT was primarily driven by inflationary increases on commodity, material, and freight costs,
Model
higher e’s fullcosts
structural year (including
2022 EBIThigher
loss was $2.1 billion,
engineering costa for
$1.2 billion
future higher loss
programs), than
and in 2021, with
unfavorable [Link]
EBIT margin
offsets of
negative 40.6%. The lower EBIT was primarily
included higher net pricing and wholesales. driven by inflationary increases on commodity, material, and freight costs,
higher structural costs (including higher engineering cost for future programs), and unfavorable mix. Partial offsets
included
Ford Prohigher
Segmentnet pricing and wholesales.
2021 2022 H / (L)
Ford Pro Segment
Key Metrics
2021 2022 H / (L)
Wholesale Units (000) (a) 1,187 1,301 114
Key Metrics
Revenue ($M) $ 42,649 $ 48,939 $ 6,290
Wholesale Units (000) (a) 1,187 1,301 114
EBIT ($M) 2,665 3,222 557
Revenue ($M) $ 42,649 $ 48,939 $ 6,290
EBIT Margin (%) 6.2 % 6.6 % 0.3 ppts
EBIT ($M) 2,665 3,222 557
__________
EBIT Margin (%) 6.2 % 6.6 % 0.3 ppts
(a) Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 61,000 units in 2021 and 76,000 units
in 2022).
__________
(a) Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 61,000 units in 2021 and 76,000 units
in 2022).
Change in EBIT by Causal Factor (in millions)
2021 Full Year EBIT $ 2,665
Change in EBIT by Causal Factor (in millions)
Volume / Mix 1,016
2021 Full Year EBIT $ 2,665
Net Pricing 4,267
Volume / Mix 1,016
Cost (4,547)
Net Pricing 4,267
Exchange (156)
Cost (4,547)
Other (23)
Exchange (156)
2022 Full Year EBIT $ 3,222
Other (23)
2022 Full Year EBIT $ 3,222
In 2022, Ford Pro’s wholesales increased 10% from 2021, primarily reflecting an improvement in production-related
supply constraints. Full year 2022 revenue increased 15%, driven by higher net pricing and wholesales, offset partially by
In 2022,
weaker Ford Pro’s wholesales increased 10% from 2021, primarily reflecting an improvement in production-related
currencies.
supply constraints. Full year 2022 revenue increased 15%, driven by higher net pricing and wholesales, offset partially by
weaker
Fordcurrencies.
Pro’s full year 2022 EBIT was $3.2 billion, an increase of $557 million from 2021, with an EBIT margin of 6.6%.
The EBIT improvement was driven by higher net pricing and wholesales, offset partially by inflationary increases on
Ford Pro’s
commodity, full year
material, and2022 EBIT
freight was higher
costs, $3.2 billion, an increase
structural of $557
costs, and million from
unfavorable mix. 2021, with an EBIT margin of 6.6%.
The EBIT improvement was driven by higher net pricing and wholesales, offset partially by inflationary increases on
commodity, material, and freight costs, higher structural costs, and unfavorable mix.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7.
Ford Management’s
Next Segment Discussion and Analysis of Financial Condition and Results of Operations (Continued)

FordInNext Segment
our Ford Next segment (formerly Mobility), our 2022 EBIT loss improved $104 million from 2021. The $926 million
EBIT loss reflected our strategic investments in our autonomous vehicle capabilities and support of our mobility initiatives.
In our Ford Next segment (formerly Mobility), our 2022 EBIT loss improved $104 million from 2021. The $926 million
EBIT
Ford loss reflected
Credit Segmentour strategic investments in our autonomous vehicle capabilities and support of our mobility initiatives.

FordThe
Credit Segment
tables below provide full year 2022 key metrics and the change in full year 2022 EBT compared with full year
2021 by causal factor for the Ford Credit segment.
The tables below provide full year 2022 key metrics and the change in full year 2022 EBT compared with full year
2021 2022 H / (L)
2021 by causal factor for the Ford Credit segment.
GAAP Financial Measures
2021 2022 H / (L)
Total Net Receivables ($B) $ 118 $ 122 $ 5
GAAP Financial Measures
Loss-to-Receivables (bps) (a) 6 14 8
Total Net Receivables ($B) $ 118 $ 122 $ 5
Auction Values (b) $ 30,785 $ 32,410 5%
Loss-to-Receivables (bps) (a) 6 14 8
EBT ($M) 4,717 2,657 $ (2,060)
Auction Values (b) $ 30,785 $ 32,410 5%
ROE (%) 32 % 16 % (16) ppts
EBT ($M) 4,717 2,657 $ (2,060)
ROE (%) 32 % 16 % (16) ppts
Other Balance Sheet Metrics
Debt ($B) $ 118 $ 119 1%
Other Balance Sheet Metrics
Net Liquidity ($B) 32 21 (34)%
Debt ($B) $ 118 $ 119 1%
Financial Statement Leverage (to 1) 9.5 10 0.5
Net Liquidity ($B) 32 21 (34)%
__________
Financial Statement
(a) U.S. retail Leverage
financing only. (to 1) 9.5 10 0.5
(b) U.S.
__________ 36-month off-lease auction values at full year 2023 mix.
(a) U.S. retail financing only.
(b) U.S. 36-month off-lease auction values at full year 2023 mix.
Change in EBT by Causal Factor (in millions)
2021 Full Year EBT $ 4,717
Change in EBT by Causal Factor (in millions)
Volume / Mix (218)
2021 Full Year EBT $ 4,717
Financing Margin (600)
Volume / Mix (218)
Credit Loss (348)
Financing Margin (600)
Lease Residual (907)
Credit Loss (348)
Exchange (25)
Lease Residual (907)
Other 38
Exchange (25)
2022 Full Year EBT $ 2,657
Other 38
2022 Full Year EBT $ 2,657
Total net receivables at December 31, 2022 were 3% higher than at December 31, 2021, primarily reflecting higher
non-consumer financing, offset partially by fewer operating leases, lower consumer financing, and currency exchange
Total
rates. netCredit’s
Ford receivables at December
loss metrics 31, healthy
reflected 2022 wereand3% higher
stable than at credit
consumer December 31, 2021,
conditions primarily
and strong reflecting
auction higher
values. Ford
non-consumer
Credit’s financing,
U.S. 36-month offset values
auction partiallyfor
byoff-lease
fewer operating
vehiclesleases,
were uplower consumer
5% from 2021, financing, and currency
reflecting strong demand exchange
for used
rates. Ford
vehicles, Credit’sthe
including loss metrics
impact reflected
of lower newhealthy
vehicleand stable consumer
production due to thecredit conditionsshortage.
semiconductor and strong auction values. Ford
Credit’s U.S. 36-month auction values for off-lease vehicles were up 5% from 2021, reflecting strong demand for used
vehicles, including2022
Ford Credit’s the impact
EBT ofof lower million
$2,657 new vehicle production
was $2,060 due
million to the
lower semiconductor
than shortage.
2021, reflecting lower credit loss and lease
residual reserve releases, lower financing margin, and lower lease return rates.
Ford Credit’s 2022 EBT of $2,657 million was $2,060 million lower than 2021, reflecting lower credit loss and lease
residual reserve releases, lower financing margin, and lower lease return rates.

57

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
Corporate Other Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Corporate
For full Other
year 2022, Corporate Other EBIT was $748 million, compared with EBIT of $1,247 million in 2021. The
deterioration was driven by lower past service pension and OPEB income.
For full year 2022, Corporate Other EBIT was $748 million, compared with EBIT of $1,247 million in 2021. The
deterioration was driven by lower past service pension and OPEB income.
Interest on Debt

Interest on year
Our full Debt2022 interest expense on Company debt excluding Ford Credit was $1,259 million, $544 million lower
than in 2021, primarily explained by U.S. debt restructuring actions taken in the fourth quarter of 2021 and during 2022.
Our full year 2022 interest expense on Company debt excluding Ford Credit was $1,259 million, $544 million lower
than
Taxesin 2021, primarily explained by U.S. debt restructuring actions taken in the fourth quarter of 2021 and during 2022.

Taxes
Our Provision for/(Benefit from) income taxes for full year 2022 was a $864 million benefit, resulting in an effective tax
rate of 28.6%. This includes benefits arising from the reversal of U.S. valuation allowances, primarily as a result of
Our Provision
planning actions. for/(Benefit from) income taxes for full year 2022 was a $864 million benefit, resulting in an effective tax
rate of 28.6%. This includes benefits arising from the reversal of U.S. valuation allowances, primarily as a result of
planning actions.
Our full year 2022 adjusted effective tax rate, which excludes special items, was 18.7%.

Our full year 2022 adjusted effective tax rate, which excludes special items, was 18.7%.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
LIQUIDITY AND CAPITALDiscussion and Analysis of Financial Condition and Results of Operations (Continued)
RESOURCES

LIQUIDITY AND CAPITAL

At December 31, 2023, RESOURCES
total balance sheet cash, cash equivalents, marketable securities, and restricted cash,
including Ford Credit and entities held for sale, was $40.4 billion.
At December 31, 2023, total balance sheet cash, cash equivalents, marketable securities, and restricted cash,
including Ford Credit
We consider andbalance
our key entities held
sheetfor sale, was
metrics $40.4
to be: billion. cash, which includes cash equivalents, marketable
(i) Company
securities, and restricted cash, including cash held for sale, excluding Ford Credit’s cash, cash equivalents, marketable
We consider
securities, our key cash;
and restricted balance
andsheet metrics toliquidity,
(ii) Company be: (i) Company cash,Company
which includes which includes
cash, cash equivalents,
less restricted marketable
cash, and total
securities, and restricted cash, including cash held for sale, excluding Ford Credit’s cash,
available committed credit lines, excluding Ford Credit’s total available committed credit [Link] equivalents, marketable
securities, and restricted cash; and (ii) Company liquidity, which includes Company cash, less restricted cash, and total
available
Companycommitted
excludingcredit
Fordlines, excluding Ford Credit’s total available committed credit lines.
Credit
December 31, December 31,
Company excluding Ford Credit 2022 2023
Balance Sheets ($B) December 31, December 31,
2022 2023
Company Cash $ 32.3 $ 28.8
Balance Sheets ($B)
Liquidity 48.0 46.4
Company Cash $ 32.3 $ 28.8
Debt (19.9) (19.9)
Liquidity 48.0 46.4
Cash Net of Debt 12.3 8.9
Debt (19.9) (19.9)
Cash Net of Debt 12.3 8.9
Pension Funded Status ($B)
Funded Plans $ 4.1 $ 2.1
Pension Funded Status ($B)
Unfunded Plans (4.3) (4.4)
Funded Plans $ 4.1 $ 2.1
Total Global Pension $ (0.2) $ (2.3)
Unfunded Plans (4.3) (4.4)
Total Global Pension $ (0.2) $ (2.3)
Total Funded Status OPEB $ (4.5) $ (4.7)

Total Funded Status OPEB $ (4.5) $ (4.7)

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 December 31, 2023, we had Company cash of $28.8 billion
liquidity ofOur
and Liquidity. keybillion.
$46.4 priorityAtisDecember
to maintain31,
a strong balance
2023, about sheet
90% to withstand
of Company potential
cash was heldstress scenarios, while
by consolidated having
entities
resources available to invest
domiciled in the United States. in and grow our business. At December 31, 2023, we had Company cash of $28.8 billion
and liquidity of $46.4 billion. At December 31, 2023, about 90% of Company cash was held by consolidated entities
domiciled
To be in the United
prepared States.
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
whenTowebewill
prepared
be abovefor an economic
or below downturn
this amount and
due to:other stresscash
(i) future scenarios, we target ansuch
flow expectations, ongoing
as forCompany cashinbalance
investments future
at or above $20
opportunities, billioninvestments,
capital plus significant
debtadditional liquidity
maturities, pension above our Company
contributions, cash [Link],
or restructuring We expect to(ii)
have periods
short-term
when we
timing will be above
differences, and or
(iii)below this in
changes amount due economic
the global to: (i) future cash flow environment.
or operating expectations, such as for investments in future
opportunities, capital investments, debt maturities, pension contributions, or restructuring requirements, (ii) short-term
timing
Ourdifferences,
Company cash and (iii) changes inprimarily
investments the global economic
include or operatingof
U.S. Department environment.
Treasury obligations, federal agency securities,
bank time deposits with investment-grade institutions, investment-grade corporate securities, investment-grade
Our Company
commercial paper, cash investments
and debt primarily
obligations include
of a select [Link]
group of Treasury obligations,
non-U.S. governments, federal agency
non-U.S. governmental securities,
agencies, and
bank time deposits
supranational with investment-grade
institutions. institutions,
The average maturity investment-grade
of these investments is corporate securities,
approximately investment-grade
one year and adjusted based on
commercial
market paper,and
conditions andliquidity
debt obligations
needs. Weof amonitor
select group of non-U.S.
our Company cashgovernments, non-U.S.
levels and average governmental
maturity on a dailyagencies,
basis. 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.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemMaterial
7. Management’s DiscussionOur
Cash Requirements. andmaterial
Analysiscash
of Financial Condition
requirements and Results of Operations (Continued)
include:

Material
• CapitalCash Requirements.
expenditures Our material
(for additional cash requirements
information, include:in Company Cash” section below) and other
see the “Changes
payments for engineering, software, product development, and implementation of our plans for electric vehicles
• Capital expenditures (for additional information, see the “Changes in Company Cash” section below) and other
• payments
Purchase offorraw
engineering, software,
materials and productto
components development, and implementation
support the manufacturing of our
and sale plans for(including
of vehicles electric vehicles
electric
vehicles), parts, and accessories (for additional information, see the Aggregate Contractual Obligations table and
• the
Purchase of raw materials
accompanying andof
description components to support
our “Purchase the manufacturing
obligations” below) and sale of vehicles (including electric
vehicles), parts, and accessories (for additional information, see the Aggregate Contractual Obligations table and
the accompanying
• Marketing incentivedescription
payments to of dealers
our “Purchase obligations” below)

• Marketing
Payments incentive payments
for warranty toservice
and field dealersactions (for additional information, see Note 25 of the Notes to the
Financial Statements)
• Payments for warranty and field service actions (for additional information, see Note 25 of the Notes to the
• Financial
Debt Statements)
repayments (for additional information, see the Aggregate Contractual Obligations table below and Note 19
of the Notes the Financial Statements)
• Debt repayments (for additional information, see the Aggregate Contractual Obligations table below and Note 19
• of the Notes the
Discretionary andFinancial Statements)
mandatory payments to our global pension plans (for additional information, see the Aggregate
Contractual Obligations table below, the “Changes in Company Cash” section below, and Note 17 of the Notes to
• Discretionary
the and mandatory payments to our global pension plans (for additional information, see the Aggregate
Financial Statements)
Contractual Obligations table below, the “Changes in Company Cash” section below, and Note 17 of the Notes to
• the Financial
Employee Statements)
wages, benefits, and incentives

• Employee wages,
Operating lease benefits,(for
payments andadditional
incentivesinformation, see the Aggregate Contractual Obligations table below and
Note 18 of the Notes to the Financial Statements)
• Operating lease payments (for additional information, see the Aggregate Contractual Obligations table below and
• Note 18
Cash of therelated
effects Notesto
tothe
therestructuring
Financial Statements)
of our business

• Cash effects
Strategic related toand
acquisitions theinvestments
restructuringtoofgrow
our business
our business, including electrification

• Strategic
Subject acquisitions
to approval by ourand investments
Board to grow
of Directors, our business,
shareholder including
distributions electrification
in the form of dividend payments and/or a
share repurchase program (including share repurchases to offset the anti-dilutive effect of increased shared-based
Subject to approval
compensation) by our
may require theBoard of Directors,
expenditure shareholder
of a material amount distributions
of cash. Wein the form
target of dividenddistributions
shareholder payments and/or
of 40%a to
shareofrepurchase
50% program
adjusted free (including
cash flow. sharewe
Moreover, repurchases to offset
may be subject the anti-dilutive
to additional materialeffect
cashof requirements
increased shared-based
that are contingent
compensation)
upon may require
the occurrence theevents,
of certain expenditure of a material
e.g., legal amountuncertain
contingencies, of cash. tax
We positions,
target shareholder
and otherdistributions
matters. of 40% to
50% of adjusted free cash flow. Moreover, we may be subject to additional material cash requirements that are contingent
uponWe
theare
occurrence of certain
party to many events,obligations
contractual e.g., legal involving
contingencies, uncertaintotax
commitments makepositions,
paymentsandto other
thirdmatters.
parties, and, as noted
above, such commitments require a material amount of cash. Most of these are debt obligations incurred by our Ford
Wesegment.
Credit are party In
to addition,
many contractual
as part ofobligations
our normalinvolving
businesscommitments
practices, wetoenter
make payments
into contractstowith
thirdsuppliers
parties, and, as noted
for purchases
above,
of certain raw materials, components, and services to facilitate adequate supply of these materials and services. Ford
such commitments require a material amount of cash. Most of these are debt obligations incurred by our These
Credit [Link]
arrangements, In addition, as partofftake
multi-year of our commitments,
normal business maypractices, we enter
contain fixed into contracts
or minimum withpurchase
quantity suppliersrequirements.
for purchases
of certain raw
“Purchase materials,incomponents,
obligations” the Aggregate and services toObligations
Contractual facilitate adequate
table belowsupply
are of these as
defined materials and services.
off-balance These
sheet agreements
arrangements, including multi-year offtake commitments, may contain fixed or minimum quantity purchase
to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant requirements.
“Purchase obligations”
terms; however, in the Aggregate
as we purchase Contractual
raw materials Obligations table
and components beyond below are defined
the minimum as off-balance
amounts requiredsheet
by the agreements
“Purchase
to purchase goods or services that are enforceable and legally binding on the Company and that specify all
obligations,” our material cash requirements for these items are higher than what is reflected in the Aggregate Contractual significant
terms; however,
Obligations [Link]
we additional
purchase information
raw materials onand
the components
timing of thesebeyond the minimum
payments amounts
and the impact onrequired by the
our working “Purchase
capital, see
obligations,” our material cash requirements
the “Changes in Company Cash” section below. for these items are higher than what is reflected in the Aggregate Contractual
Obligations table. For additional information on the timing of these payments and the impact on our working capital, see
the “Changes in Company Cash” section below.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemThe
7. Management’s Discussionour
table below summarizes and Analysis contractual
aggregate of Financialobligations
Condition and
as ofResults of Operations
December (Continued)
31, 2023 (in millions):
Payments Due by Period
The table below summarizes our aggregate contractual obligations as of December 31, 2023 (in millions):
2024 2025 - 2026 2027 - 2028 Thereafter Total
Payments Due by Period
Company excluding Ford Credit
2024 2025 - 2026 2027 - 2028 Thereafter Total
On-balance sheet
Company excluding Ford Credit
Long-term debt (a) $ 85 $ 4,999 $ 1,523 $ 12,667 $ 19,274
On-balance sheet
Interest payments relating to long-term debt (b) 962 1,786 1,520 9,509 13,777
Long-term debt (a) $ 85 $ 4,999 $ 1,523 $ 12,667 $ 19,274
Finance leases (c) 67 183 144 498 892
Interest payments relating to long-term debt (b) 962 1,786 1,520 9,509 13,777
Operating leases (d) 543 783 431 335 2,092
Finance leases (c) 67 183 144 498 892
Pension funding (e) 195 397 402 — 994
Operating leases (d) 543 783 431 335 2,092
Off-balance sheet
Pension funding (e) 195 397 402 — 994
Purchase obligations (f) 1,579 2,470 860 692 5,601
Off-balance sheet
Total Company excluding Ford Credit 3,431 10,618 4,880 23,701 42,630
Purchase obligations (f) 1,579 2,470 860 692 5,601
Ford Credit
Total Company excluding Ford Credit 3,431 10,618 4,880 23,701 42,630
On-balance sheet
Ford Credit
Long-term debt (a) 30,606 53,650 18,756 9,103 112,115
On-balance sheet
Interest payments relating to long-term debt (b) 4,709 5,163 2,135 992 12,999
Long-term debt (a) 30,606 53,650 18,756 9,103 112,115
Operating leases 15 20 9 — 44
Interest payments relating to long-term debt (b) 4,709 5,163 2,135 992 12,999
Off-balance sheet
Operating leases 15 20 9 — 44
Purchase obligations 12 45 58 — 115
Off-balance sheet
Total Ford Credit 35,342 58,878 20,958 10,095 125,273
Purchase obligations 12 45 58 — 115
Total Company $ 38,773 $ 69,496 $ 25,838 $ 33,796 $ 167,903
Total Ford Credit 35,342 58,878 20,958 10,095 125,273
__________
(a) Total Company
Excludes unamortized debt discounts/premiums, unamortized $ 38,773 $
debt issuance 69,496
costs, and fair$value adjustments.
25,838 $ 33,796 $ 167,903
(b) Long-term
__________ debt may have fixed or variable interest rates. For long-term debt with variable-rate interest, we estimate the future interest payments
(a) based on unamortized
Excludes projected marketdebt interest rates for various
discounts/premiums, floating-rate
unamortized benchmarks
debt received
issuance costs, andfrom third parties.
fair value adjustments.
(c)
(b) Includes
Long-term interest payments
debt may of $254
have fixed million. interest rates. For long-term debt with variable-rate interest, we estimate the future interest payments
or variable
(d) Excludes
based on approximately
projected market $449 million
interest in future
rates lease payments
for various floating-rateforbenchmarks
various operating leases
received fromcommencing
third [Link] a future period.
(e)
(c) Amounts represent
Includes interest our estimate
payments of contractually
of $254 million. obligated contributions to the Ford-Werke plan. See Note 17 of the Notes to the Financial
(d) Statements for further information
Excludes approximately $449 millionregarding
in futureour expected
lease pension
payments contributions.
for various operating leases commencing in a future period.
(f)
(e) Purchase obligations
Amounts represent under
our existing
estimate offtake agreements
of contractually obligatedforcontributions
scarce raw materials are not included
to the Ford-Werke plan. Seein the table
Note 17above. As of to
of the Notes December 31, 2023, our
the Financial
estimated
Statementsexpenditures for the maximum
for further information regardingquantity that we are
our expected committed
pension to purchase under these offtake agreements through 2035, subject to
contributions.
(f) certain
Purchaseconditions, consist
obligations underofexisting
approximately $4.5 billion offor
offtake agreements purchase
scarce rawobligations
materialsand
areapproximately
not included in $8the
billion
tableofabove.
contingent
As ofpurchase
December obligations
31, 2023, our
based on our
estimated present forecast.
expenditures However, quantity
for the maximum our forecast could
that we arefluctuate
committed fromto period to period
purchase under based on market
these offtake prices, which
agreements could
through result
2035, in significant
subject to
increases
certain conditions, consist of approximately $4.5 billion of purchase obligations and approximately $8 billion of contingent purchase obligations In
or decreases in our estimate. The actual price paid for these materials will be recorded on our balance sheet at the time of purchase.
addition,
based onas ourmarket
presentconditions
[Link],
However,we our
mayforecast
enter into additional
could fluctuateofftake
from agreements withbased
period to period raw material
on marketsuppliers
prices,orwhich
seek could
to renegotiate
result in existing
significant
agreements. For additional
increases or decreases in ourinformation,
estimate. see
The the discussion
actual of for
price paid ourthese
offtake agreements
materials below
will be on page
recorded 62. balance sheet at the time of purchase. In
on our
addition, as market conditions dictate, we may enter into additional offtake agreements with raw material suppliers or seek to renegotiate existing
We plan to For
agreements. utilize our liquidity
additional (assee
information, described above)
the discussion of ourand ouragreements
offtake cash flows from
below on business
page 62. operations to fund our material
cash requirements.
We plan to utilize our liquidity (as described above) and our cash flows from business operations to fund our material
cashChanges
requirements.
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,
Changesand
depreciation in Company Cash. In managing
tooling amortization, changesour business,
in working we classify
capital, changes
Ford Credit in Company
distributions, cash on
interest intodebt,
operating and
cash taxes,
non-operating items. Operating items include: Company adjusted EBIT excluding Ford Credit EBT, capital spending,
and all other and timing differences (including timing differences between accrual-based EBIT and associated cash flows).
depreciation
Non-operating and tooling
items amortization,
include: changes
restructuring in changes
costs, working capital, Ford Credit
in Company distributions,
debt excluding Fordinterest
Credit, on debt, cashto
contributions taxes,
and all other and timing differences (including timing differences between accrual-based EBIT and associated
funded pension plans, shareholder distributions, and other items (including gains and losses on investments in equity cash flows).
Non-operating items include: restructuring costs, changes in Company debt excluding Ford Credit,
securities, acquisitions and divestitures, equity investments, and other transactions with 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).

61

61

199174_Ford_2023_AR_1OK.indd 65 2/9/24 2:55 PM

 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemWith
7. Management’s
respect to “Changes Discussion and Analysis
in working capital,”ofinFinancial Condition
general, the Company andexcluding
Results ofFordOperations (Continued)
Credit carries relatively low
trade receivables compared with our trade payables because the majority of our wholesales are financed (primarily by
FordWith
Credit) respect to “Changes
immediately uponinthe working
sale ofcapital,”
vehiclesintogeneral,
dealers,the Company
which excluding
generally occursFord Credit
shortly aftercarries relatively low
being produced. In
trade receivables compared with our trade payables because the majority
contrast, our trade payables are based primarily on industry-standard production supplier payment terms ofof our wholesales are financed (primarily
about by
Ford Credit)
45 days. As immediately
a result, our upon the sale
cash flow of vehicles
deteriorates to dealers,volumes
if wholesale which generally
(and the occurs shortly after
corresponding beingdecrease
revenue) produced. In
while
contrast, our trade payables are based primarily on industry-standard production
trade payables continue to become due. Conversely, our cash flow improves if wholesale volumes (and the supplier payment terms of about
45 days. As a result,
corresponding revenue) ourincrease
cash flow deteriorates
while new trade if wholesale
payables are volumes (andnot
generally thedue
corresponding
for about 45revenue)
days. For decrease
example, while
the
trade payables continue to become due. Conversely, our cash flow improves if
suspension of production at most of our assembly plants and lower industry volumes due to COVID-19 in early 2020 wholesale volumes (and the
corresponding
resulted in an initial revenue) increase of
deterioration while
our new
cashtrade
flow, payables are generallyresumption
while the subsequent not due forofabout 45 days. For
manufacturing example,
operations the
and
suspension of production at most of our assembly plants and lower industry volumes
return to pre-COVID-19 production levels at most of our assembly plants resulted in a subsequent improvement of our due to COVID-19 in early 2020
resulted
cash flow. in an
Even initial deterioration
in normal economic of our cash flow,however,
conditions, while thethese
subsequent
workingresumption of manufacturing
capital balances generally are operations
subject toand
return
seasonal changes that can impact cash flow. For example, we typically experience cash flow timing differences of our
to pre-COVID-19 production levels at most of our assembly plants resulted in a subsequent improvement
cash flow. Even
associated in normal economic
with inventories and payables conditions,
due to however,
our annualtheseshutdownworking capitalwhen
periods balances generally
production, andare subjectinventories
therefore to
seasonal changes that can impact cash flow. For example, we typically experience
and wholesale volumes, are usually at their lowest levels, while payables continue to come due and be paid. The net cash flow timing differences
associated
impact of this with inventories
typically resultsandin payables
cash outflowsdue to ourchanges
from annual shutdown periods
in our working whenbalances
capital production, andthese
during therefore inventories
shutdown
and wholesale
periods. 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 December 31, 2023 was higher than at December 31, 2022, primarily reflecting
higher in-transit inventory.
Our finished product inventory at December 31, 2023 was higher than at December 31, 2022, primarily reflecting
higher in-transit inventory.
In response to, or in anticipation of, supplier disruptions, we may stockpile certain components or raw materials to
help prevent disruption in our production of vehicles. Such actions could have a short-term adverse impact on our cash
and In response
increase ourto, or in anticipation
inventory. Moreover, of,insupplier
order todisruptions,
secure criticalwe may stockpile
materials certain components
for production of electric or raw materials
vehicles, we have to
help prevent disruption in our production of vehicles. Such actions could have a short-term
entered into and we may, in the future, enter into offtake agreements with raw material suppliers and make investments in adverse impact on our cash
and increase
certain our inventory.
raw material and batteryMoreover, in order
suppliers, to secure
including critical materials
contributing for production
up to a maximum of $6.6ofbillion
electric vehicles,
in capital to we have SK,
BlueOval
entered
LLC over a five-year period ending in 2026. Our actual capital outlay could vary significantly based on the final project in
into and we may, in the future, enter into offtake agreements with raw material suppliers and make investments
certain
costs and rawpotential
materialfinancing
and battery suppliers, including
opportunities. contributing
Such investments up tohave
could a maximum of $6.6
an additional billion impact
adverse in capital ontoourBlueOval
cash in SK,
the
LLC over
near-term. 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
The
by the terms of theover
counterparty offtake agreements
an agreed upon we have
period ofentered into,
time. The and those
purchase we mechanism
price may enter into in the in
included future, vary by
the offtake
transaction, though they generally obligate us to purchase a certain percentage or minimum amount
agreement is typically based on the market price of the material at the time of delivery. The terms also may include of output produced
by the counterparty over an agreed upon period of time. The purchase price mechanism included in the
conditions to our obligation to purchase the materials, such as quality or minimum output. Subject to satisfaction of those offtake
agreement is typically
conditions, we based onto
will be obligated the market price
purchase of the material
the materials at thedetermined
at the cost time of delivery.
by the The termsprice
purchase also may include
mechanism.
conditions to our obligation to purchase the materials, such as quality or minimum output. Subject
Based on the offtake agreements we have entered into thus far, the earliest date by which we could be obligated to to satisfaction of those
conditions, we will be obligated to purchase the materials at the cost determined
purchase any output, subject to satisfaction of the applicable conditions, will be in 2024. by the purchase price mechanism.
Based on the offtake agreements we have entered into thus far, the earliest date by which we could be obligated to
purchase
Unlikeany
ouroutput, subject
historical to satisfaction
arrangements of the applicable
with suppliers, conditions,offtake
under multi-year will beagreements,
in 2024. the risks associated with
lower-than-expected electric vehicle production volumes or changes in battery technology that reduce the need for certain
raw Unlike
materialsourare
historical
borne byarrangements
Ford rather with
thansuppliers, underAccordingly,
our suppliers. multi-year offtake agreements,
in the event thepurchase
we do not risks associated with
the materials
lower-than-expected
pursuant to the termselectric
of thesevehicle production
agreements volumes
and we or changes
are unable in battery
to restructure antechnology
agreementthat reduce
or an the need
alternate for certain
purchaser is
raw materials
unable are borne
to be found, Fordby Ford rather
retains than our
its obligation forsuppliers.
the cost ofAccordingly, in the For
those materials. event we do not
additional purchaseofthe
discussion thematerials
risks related
pursuant to the
to our offtake terms of these
agreements and agreements andpurchase
other long-term we are unable to restructure
contracts, see “Iteman [Link] or an alternate purchaser is
Risk Factors.”
unable to be found, Ford retains its obligation for the cost of those materials. For additional discussion of the risks related
to our offtake institutions
Financial agreementsparticipate
and other inlong-term
a supplypurchase contracts,
chain finance seeprogram
(“SCF”) “Item 1A. Risk
that Factors.”
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
Financial institutions
non-recourse basis in order participate in aearlier
to be paid supply chain
than ourfinance
payment (“SCF”)
terms program
provide. that
Ourenables
suppliers’ourvoluntary
suppliers, at their of
inclusion sole
discretion, to sell their Ford receivables (i.e., our payment obligations to the suppliers) to the financial
invoices in the SCF program has no bearing on our payment terms, the amounts we pay, or our liquidity. We have no institutions on a
non-recourse basis in order to be paid earlier than our payment terms provide. Our suppliers’ voluntary
economic interest in a supplier’s decision to participate in the SCF program, and we do not provide any guarantees in inclusion of
invoices
connectionin the
withSCF
it. Asprogram has no31,
of December bearing
2023,on our
the payment terms,
outstanding amounttheofamounts we pay, or
Ford receivables oursuppliers
that liquidity. elected
We have to no
sell to
economic interest in a supplier’s decision to participate in the SCF program, and we do not
the SCF financial institutions was $220 million. The amount settled through the SCF program during 2023 was provide any guarantees in
connection
$1.8 billion. with it. As of December 31, 2023, the outstanding amount of Ford receivables that suppliers elected to sell to
the SCF financial institutions was $220 million. The amount settled through the SCF program during 2023 was
$1.8 billion.

62

62

199174_Ford_2023_AR_1OK.indd 66 2/9/24 2:55 PM

 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemChanges
7. Management’s Discussion
in Company and Analysis
cash excluding of Financial
Ford Credit Condition below
are summarized and Results of Operations (Continued)
(in billions):
December 31, December 31, December 31,
Changes in Company cash excluding Ford Credit are summarized below (in billions):
2021 2022 2023
Company Excluding Ford Credit December 31, December 31, December 31,
2021 2022 2023
Company Adjusted EBIT excluding Ford Credit (a) $ 5.3 $ 7.8 $ 9.1
Company Excluding Ford Credit
Company Adjusted EBIT excluding Ford Credit (a) $ 5.3 $ 7.8 $ 9.1
Capital spending $ (6.2) $ (6.5) $ (8.2)
Depreciation and tooling amortization 5.1 5.2 5.3
Capital spending $ (6.2) $ (6.5) $ (8.2)
Net spending $ (1.1) $ (1.3) $ (2.9)
Depreciation and tooling amortization 5.1 5.2 5.3
Net spending $ (1.1) $ (1.3) $ (2.9)
Receivables $ (0.2) $ (1.0) $ (1.0)
Inventory (1.8) (2.5) (1.2)
Receivables $ (0.2) $ (1.0) $ (1.0)
Trade Payables 0.3 3.7 (0.2)
Inventory (1.8) (2.5) (1.2)
Changes in working capital $ (1.7) $ 0.2 $ (2.4)
Trade Payables 0.3 3.7 (0.2)
Changes in working capital $ (1.7) $ 0.2 $ (2.4)
Ford Credit distributions $ 7.5 $ 2.1 $ —
Interest on debt and cash taxes (2.3) (1.7) (2.2)
Ford Credit distributions $ 7.5 $ 2.1 $ —
All other and timing differences (3.1) 1.9 5.2
Interest on debt and cash taxes (2.3) (1.7) (2.2)
Company adjusted free cash flow (a) $ 4.6 $ 9.1 $ 6.8
All other and timing differences (3.1) 1.9 5.2
Company adjusted free cash flow (a) $ 4.6 $ 9.1 $ 6.8
Restructuring $ (1.9) $ (0.4) $ (0.9)
Changes in debt (3.7) (0.4) (0.2)
Restructuring $ (1.9) $ (0.4) $ (0.9)
Funded pension contributions (0.8) (0.6) (0.6)
Changes in debt (3.7) (0.4) (0.2)
Shareholder distributions (0.4) (2.5) (5.3)
Funded pension contributions (0.8) (0.6) (0.6)
All other (b) 7.9 (9.5) (3.2)
Shareholder distributions (0.4) (2.5) (5.3)
Change in cash $ 5.7 $ (4.3) $ (3.4)
All other (b) 7.9 (9.5) (3.2)
__________
(a)Change in cash Financial Measure Reconciliations section for reconciliation to GAAP.
See Non-GAAP $ 5.7 $ (4.3) $ (3.4)
(b) 2021
__________ includes our investment in Rivian of $10.6 billion and cash premium paid of $(1.6) billion associated with repurchasing and redeeming
$7.6 Non-GAAP
(a) See billion of higher-coupon debt. 2022
Financial Measure includes a section
Reconciliations $7.4 billion loss on our Rivian
for reconciliation investment. 2023 includes $2.6 billion of capital contributions to
to GAAP.
(b) BlueOval SK, LLC.
2021 includes our investment in Rivian of $10.6 billion and cash premium paid of $(1.6) billion associated with repurchasing and redeeming
Note:$7.6
Numbers
billion may not sum due debt.
of higher-coupon to rounding.
2022 includes a $7.4 billion loss on our Rivian investment. 2023 includes $2.6 billion of capital contributions to
BlueOval SK, LLC.
Note:Our full year
Numbers may 2023
not sumNet
duecash provided by/(used in) operating activities was positive $14.9 billion, an increase of
to rounding.
$8.1 billion from a year ago (see page 78 for additional information). The year-over-year increase was primarily driven by
Ournet
higher fullincome.
year 2023 Net cash provided by/(used in) operating activities was positive $14.9 billion, an increase of
$8.1 billion from a year ago (see page 78 for additional information). The year-over-year increase was primarily driven by
higher net income.
Company adjusted free cash flow was $6.8 billion, $2.3 billion lower than a year ago. An improvement in Company
adjusted EBIT excluding Ford Credit and timing differences were more than offset by the non-repeat of working capital
Company adjusted
improvements and Fordfree cash
Credit flow was $6.8
distributions, billion,
as well as $2.3 billion
higher lower
capital than a year ago. An improvement in Company
spending.
adjusted EBIT excluding Ford Credit and timing differences were more than offset by the non-repeat of working capital
improvements and Ford
Capital spending wasCredit
$8.2 distributions, as$1.6
billion in 2023, wellbillion
as higher capital
higher thanspending.
a year ago, and is expected to be in the range of
$8 billion to $9.5 billion in 2024.
Capital spending was $8.2 billion in 2023, $1.6 billion higher than a year ago, and is expected to be in the range of
$8 billion to $9.5
The full year billion in [Link] impact was $2.4 billion negative, driven by an increase in inventory and
2023 working
receivables. All other and timing differences were positive $5.2 billion. Timing differences include differences between
The full year
accrual-based EBIT2023
andworking capital impact
the associated was $2.4
cash flows (e.g.,billion negative,
marketing drivenand
incentive by an increase
warranty in inventory
payments and JV equity
to dealers,
receivables. All other and timing differences were positive $5.2 billion.
income, compensation payments, and pension and OPEB income or expense). 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).
Shareholder distributions (including cash dividends and anti-dilutive share repurchases) were $5.3 billion in 2023. On
February 6, 2024, we declared a regular dividend of $0.15 per share and a supplemental dividend of $0.18 per share.
Shareholder distributions (including cash dividends and anti-dilutive share repurchases) were $5.3 billion in 2023. On
February 6, 2024, we declared a regular dividend of $0.15 per share and a supplemental dividend of $0.18 per share.

63

63

199174_Ford_2023_AR_1OK.indd 67 2/9/24 2:55 PM

 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemAvailable
7. Management’s Discussion
Credit Lines. and Analysis
Total Company of Financial
committed credit Condition and Results
lines, excluding of Operations
Ford Credit, at December(Continued)
31, 2023 were
$19.4 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit
Available
facility, CreditofLines.
$1.8 billion Total Company
our 364-day revolving committed credit
credit facility, andlines, excluding
$2.2 billion Fordcredit
of local Credit, at December
facilities. 31, 2023
At December 31,were
2023,
$19.4 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving
the utilized portion of the corporate credit facility was $18 million, representing amounts utilized for letters of credit. In credit
facility,
addition, $1.8
$1.8billion ofof
billion our 364-day revolving
committed Companycreditcreditfacility, and $2.2 billion
lines, excluding of localwas
Ford Credit, credit facilities.
utilized underAtlocal
December 31, 2023,
credit facilities for
the utilized portion of the corporate
our affiliates as of December 31, 2023. credit facility was $18 million, representing amounts utilized for letters of credit. In
addition, $1.8 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for
our affiliates
Lenders as of December
under 31, 2023.
our corporate credit facility have $3.4 billion of commitments maturing on April 26, 2026 and
$10.1 billion of commitments maturing on April 26, 2028. Lenders under our supplemental revolving credit facility have
$0.1Lenders
billion ofunder our corporate
commitments credit
maturing onfacility have $3.4
September billionand
29, 2024 of commitments
$1.9 billion of maturing on April
commitments 26, 2026
maturing and 26, 2026.
on April
$10.1 billion
Lenders of commitments
under maturingcredit
our 364-day revolving on April 26, 2028.
facility Lenders
have $1.8 billionunder our supplemental
of commitments revolving
maturing on Aprilcredit facility have
24, 2024.
$0.1 billion of commitments maturing on September 29, 2024 and $1.9 billion of commitments maturing on April 26, 2026.
Lenders under our
On August 364-day
17, 2023, werevolving credit
entered into facility
a new have $1.8
364-day billioncredit
revolving of commitments
facility, with maturing
$4 billionon
of April 24, [Link]
commitments
on August 15, 2024. At the time we entered into this credit facility, it provided additional working capital flexibility to
On August
manage through17, 2023, we entered
uncertainties into a new
in the present 364-day revolving
environment, includingcredit facility,labor
a potential with $4 billion of With
disruption. commitments maturing
the ratification of the
on August
new 15, [Link]
UAW contract, At the time
credit we entered
facility into this credit
was terminated facility, it provided
as of November 24, [Link] working capital flexibility to
manage through uncertainties in the present environment, including a potential labor disruption. With the ratification of the
newThe
UAW contract, supplemental,
corporate, this credit facility
andwas terminated
364-day credit as of November
agreements 24, 2023.
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
Thetocorporate,
related supplemental,
global manufacturing and 364-day
facility greenhousecredit
gasagreements
emissions,include certain
renewable sustainability-linked
electricity consumption, targets,
and Fordpursuant
Europe to
which the applicable margin and facility fees may be adjusted if Ford achieves, or fails to achieve, the
CO2 tailpipe emissions. Ford outperformed the 2022 targets for all three of the sustainability-linked metrics, whichspecified targets
related to impacted
favorably global manufacturing facilityingreenhouse
pricing beginning gas emissions,
the third quarter of 2023. renewable electricity consumption, and Ford Europe
CO2 tailpipe emissions. Ford outperformed the 2022 targets for all three of the sustainability-linked metrics, which
favorably impactedcredit
The corporate pricing beginning
facility in the third
is unsecured andquarter
free of of 2023. adverse change conditions to borrowing, restrictive
material
financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and minimum net worth
The corporate
requirements), andcredit
creditfacility
rating is unsecured
triggers and free
that could limitofour
material
ability adverse
to obtainchange
fundingconditions to borrowing,
or trigger early repayment. restrictive
The
financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and
corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4 billion in aggregate minimum net worth of
requirements),
domestic cash, and cashcredit rating triggers
equivalents, that could
and loaned limit our ability
and marketable to obtain
securities funding
and/or or trigger
availability earlythe
under repayment. The
corporate credit
corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4
facility, supplemental revolving credit facility, and 364-day revolving credit facility. The terms and conditions of the billion in aggregate of
domestic cash, cash equivalents, and loaned and marketable securities and/or availability under the
supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility. Ford Credit has been corporate credit
facility,
designatedsupplemental revolving
as a subsidiary credit under
borrower facility,the
and 364-day credit
corporate revolving credit
facility andfacility. The terms
the 364-day and conditions
revolving of the
credit facility.
supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility. Ford Credit has been
designated
Each ofas thea corporate
subsidiarycredit
borrower under
facility, the corporate
supplemental credit facility
revolving and theand
credit facility, 364-day
364-dayrevolving
revolving credit facility.
credit facility include a
covenant that requires us to provide guarantees from certain of our subsidiaries in the event that our senior, unsecured,
Each of
long-term thedoes
debt corporate credit facility,
not maintain at leastsupplemental revolving
two investment grade credit
ratingsfacility, and 364-day
from Fitch, Moody’s, revolving
and S&P. credit
On facility include a
covenant that requires us to provide guarantees from certain of our subsidiaries in the event that
October 30, 2023, following the upgrade by S&P of our senior, unsecured, long-term debt credit rating to BBB-, our senior, unsecured,
the
long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P. On
unsecured guarantees provided by the following subsidiaries to the lenders under the credit facilities were released: Ford
October
Component30, Sales,
2023, following
LLC; Ford the upgrade Holdings
European by S&P ofInc.;
ourFord
senior, unsecured,
Global long-term
Technologies, LLC;debt credit
Ford rating LLC
Holdings to BBB-, the
(the parent
unsecuredofguarantees
company provided
Ford Credit); by the following
Ford International subsidiaries
Capital LLC; FordtoMexico
the lenders under
Holdings theFord
LLC; creditMotor
facilities wereCompany;
Service released: Ford
Ford
Component
Next Sales,
LLC; Ford LLC; Company,
Trading Ford European Holdings
LLC; and Ford Inc.; Ford Global
Van Dyke Technologies,
Investment Fund, [Link]; Ford Holdings LLC (the parent
company of Ford Credit); Ford International Capital LLC; Ford Mexico Holdings LLC; Ford Motor Service Company; Ford
NextDebt.
LLC; As
Ford Trading
shown Company,
in Note LLC;
19 of the and Ford
Notes to theVan Dyke Investment
Financial Statements,Fund, Inc.
at December 31, 2023, Company debt excluding
Ford Credit was $19.9 billion, unchanged from December 31, 2022.
Debt. As shown in Note 19 of the Notes to the Financial Statements, at December 31, 2023, Company debt excluding
FordLeverage.
Credit wasWe
$19.9 billion,Company
manage unchanged from
debt December
(excluding 31,
Ford [Link] with a leverage framework that targets
Credit)
investment grade credit ratings through a normal business cycle. The leverage framework includes a ratio of total
Leverage.
Company We manage
debt (excluding Company
Ford Credit),debt (excludingpension
underfunded Ford Credit) levels
liabilities, with a leverage
operating framework
leases, and that targets divided
other adjustments,
investment
by Company adjusted EBIT (excluding Ford Credit EBT), and further adjusted to exclude depreciation ratio
grade credit ratings through a normal business cycle. The leverage framework includes a of total
and tooling
Company debt (excluding Ford Credit),
amortization (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’s leverageFord
is Credit).
calculated as a separate business as described in the “Liquidity - Ford Credit Segment”
section of Item 7. Ford Credit is self-funding and its debt, which is used to fund its operations, is separate from our
Ford Credit’s
Company leverageFord
debt excluding is calculated
Credit. as a separate business as described in the “Liquidity - Ford Credit Segment”
section of Item 7. Ford Credit is self-funding and its debt, which is used to fund its operations, is separate from our
Company debt excluding Ford Credit.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7.
Ford Management’s
Credit Segment Discussion and Analysis of Financial Condition and Results of Operations (Continued)

FordFord
Credit Segment
Credit remains well capitalized with a strong balance sheet and funding diversified across platforms and
markets. Ford Credit continues to have robust access to the capital markets, and ended 2023 with $25.7 billion of
Fordup
liquidity, Credit
$4.6remains well2022.
billion from capitalized with a strong balance sheet and funding diversified across platforms and
markets. Ford Credit continues to have robust access to the capital markets, and ended 2023 with $25.7 billion of
liquidity, up $4.6 billion
Key elements from
of Ford 2022. funding strategy include:
Credit’s

Key elementsstrong
• Maintain of Ford Credit’s
liquidity funding
and fundingstrategy include:
diversity
• Prudently access public markets
•• Maintain
Continue strong liquidity
to leverage anddeposit
retail funding diversity
funding in Europe
•• Prudently access public markets
Flexibility to increase ABS mix as needed; preserving assets and committed capacity
•• Continue to leverage
Target financial retailleverage
statement deposit funding
of 9:1 toin10:1
Europe
•• Flexibility to increase ABS mix as
Maintain self-liquidating balance sheetneeded; preserving assets and committed capacity
• Target financial statement leverage of 9:1 to 10:1
•FordMaintain
Credit’s self-liquidating
liquidity profile balance
continuessheet
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
Ford to
continue Credit’s liquidity
meet its profile
financial continues
obligations to be diverse,
through economic robust, and focused on maintaining liquidity levels that meet its
cycles.
business and funding requirements. Ford Credit regularly stress tests its balance sheet and liquidity to ensure that it can
continue to meet
Funding its financial
Sources. obligations
Ford Credit’s through
funding economic
sources cycles.
include primarily unsecured debt and securitization transactions
(including other structured financings). Ford Credit issues both short-term and long-term debt that is held by both
Fundingand
institutional Sources. Ford Credit’s
retail investors, with funding
long-termsources includeanprimarily
debt having original unsecured
maturity of debt
moreandthansecuritization
12 months. transactions
Ford Credit
(including aother
sponsors numberstructured financings).
of securitization Ford Credit
programs issues
that can both short-term
be structured and long-term
to provide debt that
both short-term andislong-term
held by both
funding
institutional
through and retailinvestors
institutional investors, with
and long-term
other financialdebt having an
institutions in original maturity
the United Statesofand
more than 12 months.
international capital Ford Credit
markets.
sponsors a number of securitization programs that can be structured to provide both short-term and long-term funding
through
Fordinstitutional investors
Credit obtains and other
unsecured financial
funding institutions
from the in the United
sale of demand notesStates
under and international
its Ford capital markets.
Interest Advantage program and
through the retail deposit programs at FCE Bank plc (“FCE”) and Ford Bank GmbH (“Ford Bank”). At December 31, 2023,
Ford Credit
the principal obtains
amount unsecured
outstanding offunding from the
Ford Interest sale of demand
Advantage notes may
notes, which under beits Ford Interest
redeemed Advantage
at any program
time at the and
option of
through the thereof
the holders retail deposit programs
without at FCE
restriction, Bankand
and FCE plc Ford
(“FCE”)
Bank and Ford Bank
deposits wasGmbH (“Ford Bank”).
$17.2 billion. At December
Ford Credit maintains31, 2023,
multiple
the principal
sources amount
of readily outstanding
available of Ford
liquidity Interest
to fund Advantage
the payment of itsnotes, which short-term
unsecured may be redeemed at any time at the option of
debt obligations.
the holders thereof without restriction, and FCE and Ford Bank deposits was $17.2 billion. Ford Credit maintains multiple
sources
The of readily table
following available
showsliquidity
fundingto fund the Credit’s
for Ford paymentnetof its unsecured
receivables (inshort-term
billions): debt obligations.
December 31, December 31, December 31,
The following table shows funding for Ford Credit’s net receivables (in billions):2021 2022 2023
Funding Structure December 31, December 31, December 31,
2021 2022 2023
Term unsecured debt $ 59.4 $ 48.3 $ 54.1
Funding Structure
Term asset-backed securities 45.4 56.4 58.0
Term unsecured debt $ 59.4 $ 48.3 $ 54.1
Retail Deposits / Ford Interest Advantage 12.9 14.3 17.2
Term asset-backed securities 45.4 56.4 58.0
Other (0.1) 2.7 1.4
Retail Deposits / Ford Interest Advantage 12.9 14.3 17.2
Equity 12.4 11.9 13.4
Other (0.1) 2.7 1.4
Adjustments for cash (12.5) (11.3) (10.9)
Equity 12.4 11.9 13.4
Total Net Receivables $ 117.5 $ 122.3 $ 133.2
Adjustments for cash (12.5) (11.3) (10.9)
Total Net Receivables $ 117.5 $ 122.3 $ 133.2
Securitized Funding as Percent of Total Debt 38.5% 47.4% 44.9%

Securitized Funding as Percent of Total Debt 38.5% 47.4% 44.9%

Net receivables of $133.2 billion at December 31, 2023 were funded primarily with term unsecured debt and term
asset-backed securities. Securitized funding as a percent of total debt was 44.9% as of December 31, 2023.
Net receivables of $133.2 billion at December 31, 2023 were funded primarily with term unsecured debt and term
asset-backed securities. Securitized funding as a percent of total debt was 44.9% as of December 31, 2023.

65

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemPublic
7. Management’s
Term FundingDiscussion
Plan. Theand Analysis
following of Financial
table shows FordCondition
Credit’sand Resultsfor
issuances of full
Operations (Continued)
year 2021, 2022, and 2023, and
its planned issuances for full year 2024, excluding short-term funding programs (in billions):
Public Term Funding Plan. The following table shows Ford Credit’s issuances for full year 2021, 2022, and 2023, and
2021 2022 2023 2024
its planned issuances for full year 2024, excluding short-term funding programs (in
Actual billions):
Actual Actual Forecast
2021 2022 2023 2024
Actual Actual Actual Forecast
Unsecured $ 5 $ 6 $ 14 $ 14 - 17
Securitizations 9 10 14 13 - 16
Unsecured $ 5 $ 6 $ 14 $ 14 - 17
Total public $ 14 $ 16 $ 28 $ 27 - 33
Securitizations 9 10 14 13 - 16
Total public $ 14 $ 16 $ 28 $ 27 - 33
In 2023, Ford Credit completed $28 billion of public term funding. For 2024, Ford Credit projects full year public term
funding in the range of $27 billion to $33 billion. Through February 5, 2024, we completed $5 billion of public term
In 2023, Ford Credit completed $28 billion of public term funding. For 2024, Ford Credit projects full year public term
issuances.
funding in the range of $27 billion to $33 billion. Through February 5, 2024, we completed $5 billion of public term
issuances.
Liquidity. The following table shows Ford Credit’s liquidity sources and utilization (in billions):
December 31, December 31, December 31,
Liquidity. The following table shows Ford Credit’s liquidity sources and utilization
2021(in billions): 2022 2023
Liquidity Sources (a) December 31, December 31, December 31,
2021 2022 2023
Cash $ 12.5 $ 11.3 $ 10.9
Liquidity Sources (a)
Committed asset-backed facilities 37.1 37.4 42.9
Cash $ 12.5 $ 11.3 $ 10.9
Other unsecured credit facilities 2.7 2.3 2.4
Committed asset-backed facilities 37.1 37.4 42.9
Total liquidity sources $ 52.3 $ 51.0 $ 56.2
Other unsecured credit facilities 2.7 2.3 2.4
Total liquidity sources $ 52.3 $ 51.0 $ 56.2
Utilization of Liquidity (a)
Securitization cash and restricted cash $ (3.9) $ (2.9) $ (2.8)
Utilization of Liquidity (a)
Committed asset-backed facilities (12.5) (26.6) (27.5)
Securitization cash and restricted cash $ (3.9) $ (2.9) $ (2.8)
Other unsecured credit facilities (1.0) (0.8) (0.4)
Committed asset-backed facilities (12.5) (26.6) (27.5)
Total utilization of liquidity $ (17.4) $ (30.3) $ (30.7)
Other unsecured credit facilities (1.0) (0.8) (0.4)
Total utilization of liquidity $ (17.4) $ (30.3) $ (30.7)
Gross liquidity $ 34.9 $ 20.7 $ 25.5
Asset-backed capacity in excess of eligible receivables and other adjustments (2.8) 0.4 0.2
Gross liquidity $ 34.9 $ 20.7 $ 25.5
Net liquidity available for use $ 32.1 $ 21.1 $ 25.7
Asset-backed capacity in excess of eligible receivables and other adjustments (2.8) 0.4 0.2
__________
(a) Net
Seeliquidity available
Definitions for use
and Information Regarding Ford Credit Causal Factors section. $ 32.1 $ 21.1 $ 25.7
__________
(a) See
FordDefinitions
Credit’sand netInformation Regarding Ford
liquidity available Credit
for use Causal
will section.
Factorsquarterly
fluctuate based on factors including near-term debt maturities,
receivable growth and decline, and timing of funding transactions. At December 31, 2023, Ford Credit’s net liquidity
Ford Credit’s
available net liquidity
for use was available
$25.7 billion, $4.6for use higher
billion will fluctuate quarterly2022,
than year-end basedreflecting
on factors including
strong near-term
access to publicdebt maturities,
funding
receivable growth and decline, and timing of funding transactions. At December 31, 2023, Ford Credit’s
markets and the addition of $5.5 billion in committed asset-backed capacity. Ford Credit’s sources of liquidity include net liquidity
available for use asset-backed
cash, committed was $25.7 billion, $4.6 billion
facilities, higher than
and unsecured year-end
credit 2022,
facilities. At reflecting
Decemberstrong access
31, 2023, to Credit’s
Ford public funding
liquidity
markets and the addition of $5.5 billion in committed asset-backed capacity. Ford Credit’s
sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $56.2 sources of liquidity
billion,include
up
cash, committed
$5.2 billion asset-backed
from year-end [Link], and unsecured credit facilities. At December 31, 2023, Ford Credit’s liquidity
sources, including cash, committed asset-backed facilities, and unsecured credit facilities, totaled $56.2 billion, up
$5.2Material
billion from
Cashyear-end 2022. Ford Credit’s material cash requirements include: (1) the purchase of retail financing
Requirements.
and operating lease contracts from dealers and providing wholesale financing for dealers to finance new and used
Material
vehicles; andCash repayments Ford
Requirements.
(2) debt Credit’s material
(for additional cashon
information requirements
debt, see theinclude:
“Balance (1)Sheet
the purchase
Liquidity of retail financing
Profile” section
and operating
below, lease Cash
the “Material contracts from dealers
Requirements” and providing
section wholesale
in “Liquidity financing
and Capital for dealers
Resources to finance
- Company new and
excluding used
Ford Credit”
vehicles;
above, and
and (2) debt
Note 19 ofrepayments
the Notes to(for theadditional
Financial information
Statements). onIndebt, see the
addition, “Balance
subject Sheet Liquidity
to approval by Ford Profile”
Credit’ssection
Board of
below, the shareholder
Directors, “Material Cash Requirements”
distributions sectionthe
may require in “Liquidity
expenditureandofCapital Resources
a material amount-of Company excludingFord
cash. Moreover, FordCredit
Credit”
may
above,
be andtoNote
subject 19 of the
additional Notescash
material to therequirements
Financial Statements). In addition,
that are contingent uponsubject to approval
the occurrence of by Fordevents,
certain Credit’se.g.,
Board of
legal
Directors, shareholder
contingencies, distributions
uncertain tax positions, mayandrequire
otherthe expenditure of a material amount of cash. Moreover, Ford Credit may
matters.
be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal
contingencies,
Ford Credituncertain tax positions,
plans to utilize and(as
its liquidity other [Link]) and its cash flows from business operations to fund its
described
material cash requirements.
Ford Credit plans to utilize its liquidity (as described above) and its cash flows from business operations to fund its
material cash requirements.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemBalance
7. Management’s Discussion
Sheet Liquidity [Link] Analysis
Ford of Financial
Credit defines Condition
its balance andliquidity
sheet Resultsprofile
of Operations (Continued)
as the cumulative maturities,
including the impact of expected prepayments and allowance for credit losses, of its finance receivables, investment in
Balance
operating Sheetand
leases, Liquidity the Ford
Profile.
cash, less Credit debt
cumulative defines its balance
maturities oversheet liquidity
upcoming profile
annual as the Ford
periods. cumulative maturities,
Credit’s balance
including the impact of expected prepayments and allowance for credit losses, of its finance receivables,
sheet is inherently liquid because of the short-term nature of its finance receivables, investment in operating leases, and investment in
operating leases, and cash, less the cumulative debt maturities over upcoming annual periods.
cash. Ford Credit ensures its cumulative debt maturities have a longer tenor than its cumulative asset maturities. This Ford Credit’s balance
sheet is maturity
positive inherently liquidisbecause
profile intendedoftothe short-term
provide nature with
Ford Credit of itsadditional
finance receivables,
liquidity after investment in operating
all of its assets leases,
have been and
funded
cash. Ford Credit ensures its cumulative debt maturities have
and is in addition to liquidity available to protect for stress scenarios. a longer tenor than its cumulative asset maturities. This
positive maturity profile is intended to provide Ford Credit with additional liquidity after all of its assets have been funded
and The
is in following
addition to liquidity
table shows available to protect
Ford Credit’s for stress
cumulative scenarios.
maturities for assets and total debt for the periods presented and
unsecured long-term debt maturities in the individual periods presented (in billions):
The following table shows Ford Credit’s cumulative maturities for assets and total debt for the periods presented and
unsecured long-term debt maturities in the individual periods2024
presented (in billions):
2025 2026 2027 and Beyond
Balance Sheet Liquidity Profile
2024 2025 2026 2027 and Beyond
Assets (a) $ 76 $ 104 $ 126 $ 149
Balance Sheet Liquidity Profile
Total debt (b) 61 88 105 131
Assets (a) $ 76 $ 104 $ 126 $ 149
Memo: Unsecured long-term debt maturities 12 13 11 21
Total debt (b) 61 88 105 131
__________
Memo:
(a) Unsecured
Includes long-term
gross finance debt maturities
receivables less the allowance for credit losses (including12 13
certain finance receivables 11
that are reclassified in consolidation21
to
Trade
__________ and other receivables), investment in operating leases net of accumulated depreciation, cash and cash equivalents, and marketable
(a) securities (excluding
Includes gross amounts
finance related
receivables tothe
less insurance activities).
allowance for creditAmounts shown include
losses (including certainthe impactreceivables
finance of expectedthat
prepayments.
are reclassified in consolidation to
(b) Excludes
Trade andunamortized debt (discount)/premium,
other receivables), unamortized
investment in operating leases netissuance costs, anddepreciation,
of accumulated fair value adjustments.
cash and cash equivalents, and marketable
securities (excluding amounts related to insurance activities). Amounts shown include the impact of expected prepayments.
(b) Excludes
Maturities unamortized debt (discount)/premium,
of investment in operating leases unamortized
consist issuance costs,ofand
primarily thefairportion
value adjustments.
of rental payments attributable to
depreciation over the remaining life of the lease and the expected residual value at lease termination. Maturities of
Maturities
finance of investment
receivables in operating
and investment leases consist
in operating leases in primarily of above
the table the portion of rental
include payments
expected attributable
prepayments to Credit’s
for Ford
depreciation
retail installment sale contracts and investment in operating leases. The table above also reflects adjustments to of
over the remaining life of the lease and the expected residual value at lease termination. Maturities debt
finance
maturitiesreceivables andasset-backed
to match the investment indebt operating leases
maturities in the
with the underlying
table aboveasset
include expected prepayments for Ford Credit’s
maturities.
retail installment sale contracts and investment in operating leases. The table above also reflects adjustments to debt
maturities to match
All wholesale the asset-backed
securitization debt maturities
transactions with the
and wholesale underlyingare
receivables asset maturities.
shown maturing in the next 12 months, even if
the maturities extend beyond 2024. The retail securitization transactions under certain committed asset-backed facilities
All wholesale
are assumed securitization
to amortize transactions
immediately rather and
thanwholesale
amortizingreceivables are shown
after the expiration maturing
of the in the next
commitment 12 months,
period. As of even if
the maturities
December 31,extend beyond
2023, Ford 2024.
Credit hadThe
$149retail securitization
billion transactions
of assets, $68 under were
billion of which certain committed asset-backed facilities
unencumbered.
are assumed to amortize immediately rather than amortizing after the expiration of the commitment period. As of
December
Funding 31,
and2023, Ford Risks.
Liquidity Credit had
Ford$149 billion
Credit’s of assets,
funding plan $68 billion to
is subject of risks
whichand
were unencumbered.
uncertainties, many of which are
beyond its control, including disruption in the capital markets that could impact both unsecured debt and asset-backed
Funding
securities and Liquidity
issuance effectsFord
and theRisks. Credit’s funding
of regulatory changesplan
onisthe
subject to risks
financial and uncertainties, many of which are
markets.
beyond its control, including disruption in the capital markets that could impact both unsecured debt and asset-backed
securities
Despite issuance and the
Ford Credit’s effectssources
diverse of regulatory changes
of funding on the financial
and liquidity, markets.
its ability to maintain liquidity may be affected by, among
others, the following factors (not necessarily listed in order of importance or probability of occurrence):
Despite Ford Credit’s diverse sources of funding and liquidity, its ability to maintain liquidity may be affected by, among
others, the
• following
Prolongedfactors (not necessarily
disruption of the debt listed in order of importance
and securitization markets; or probability of occurrence):
• Global capital markets volatility;
•• Prolonged disruption
Credit ratings assigned of to
theFord
debtandandFord
securitization
Credit; markets;
•• Global capital markets volatility;
Market capacity for Ford- and Ford Credit-sponsored investments;
•• CreditGeneral ratings
demandassigned
for theto Ford
type of and Ford Credit;
securities Ford Credit offers;
•• Market capacity for Ford- and Ford Credit-sponsored
Ford Credit’s ability to continue funding through asset-backed investments;
financing structures;
•• General demand for the type of securities Ford
Performance of the underlying assets within Ford Credit’s Credit offers;
asset-backed financing structures;
•• Ford Credit’s
Inability ability
to obtain to continue
hedging funding through asset-backed financing structures;
instruments;
•• Performance of the underlying
Accounting and regulatory changes; and assets within Ford Credit’s asset-backed financing structures;
•• Inability to obtain hedging instruments;
Ford Credit’s ability to maintain credit facilities and committed asset-backed facilities.
• Accounting and regulatory changes; and
Stress • Tests.
Ford Credit’s abilityregularly
Ford Credit to maintain creditstress
conducts facilities and committed
testing asset-backed
on its funding facilities.
and liquidity sources to ensure it can
continue to meet financial obligations and support the sale of Ford and Lincoln vehicles during firm-specific and market-
wideStress [Link]
stressTests. Credit
Stress regularly
tests conducts
are intended stress testing
to quantify on its funding
the potential and
impact of liquidity
various sources
adverse to ensure
scenarios onit the
canbalance
continue to meet financial obligations and support the sale of Ford and Lincoln vehicles during firm-specific
sheet and liquidity. These scenarios include assumptions on access to unsecured and secured debt markets, runoff and market-
of
wide stress events. Stress tests are intended to quantify the potential impact of various adverse scenarios
short-term funding, and ability to renew expiring liquidity commitments and are measured over various time periods, on the balance
sheet and30
including liquidity.
days, 90These
days,scenarios
and longerinclude
term. assumptions
Ford Credit’son access
stress testtodoes
unsecured and secured
not assume debt markets,
any additional funding,runoff of or
liquidity,
short-term funding, and ability to renew expiring liquidity commitments and are measured over various time
capital support from Ford. Ford Credit routinely develops contingency funding plans as part of its liquidity stress [Link],
including 30 days, 90 days, and longer term. Ford Credit’s stress test does not assume any additional funding, liquidity, or
capital support from Ford. Ford Credit routinely develops contingency funding plans as part of its liquidity stress testing.

67

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemLeverage.
7. Management’s Discussion
Ford Credit and Analysis
uses leverage, or the of Financial Condition
debt-to-equity ratio, toand Results
make of business
various Operations (Continued)
decisions, including
evaluating and establishing pricing for finance receivable and operating lease financing, and assessing its capital
Leverage. Ford Credit uses leverage, or the debt-to-equity ratio, to make various business decisions, including
structure.
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):
December 31, December 31, December 31,
The table below shows the calculation of Ford Credit’s financial statement leverage
2021 (in billions):
2022 2023
Leverage Calculation December 31, December 31, December 31,
2021 2022 2023
Debt $ 117.7 $ 119.0 $ 129.3
Leverage Calculation
Equity (a) 12.4 11.9 13.4
Debt $ 117.7 $ 119.0 $ 129.3
Financial statement leverage (to 1) 9.5 10.0 9.7
Equity (a) 12.4 11.9 13.4
__________
Financial
(a) Total statement leverage
shareholder’s (toreported
interest 1) on Ford Credit’s balance sheets. 9.5 10.0 9.7
__________
(a) Total
Fordshareholder’s
Credit plans interest reported on
its leverage byFord Credit’s balance
considering sheets.
market conditions
and the risk characteristics of its business. At
December 31, 2023, Ford Credit’s financial statement leverage was 9.7:1. Ford Credit targets financial statement
Ford in
leverage Credit plans of
the range its 9:1
leverage by considering market conditions and the risk characteristics of its business. At
to 10:1.
December 31, 2023, Ford Credit’s financial statement leverage was 9.7:1. Ford Credit targets financial statement
leverage in the range of 9:1 to 10:1.

68

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item [Link]
Total Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Total Company
Pension Plan Contributions and Strategy. Our strategy is to reduce the risk of our funded defined benefit pension
plans, including minimizing the volatility of the value of our pension assets relative to pension liabilities and the need for
Pensionuse
unplanned Plan Contributions
of capital andto
resources fund the Our
Strategy. strategy
plans. is to reduce
The strategy the risk
reduces of oursheet,
balance funded defined
cash flow, benefit pension
and income
plans, including minimizing the volatility of the value of our pension assets
exposures and, in turn, reduces our risk profile. Going forward, we expect to: relative to pension liabilities and the need for
unplanned use of capital resources to fund the plans. The strategy reduces balance sheet, cash flow, and income
exposures
• Limit and,
ourinpension
turn, reduces our risktoprofile.
contributions Going forward,
offset ongoing servicewe expect
cost, to: our funded plans remain fully funded in
ensure
aggregate, and meet regulatory requirements, if any;
•• Limit our pension
Minimize contributions
the volatility to offset
of the value of ourongoing
pensionservice
assets cost, ensure
relative our funded
to pension plans remain
obligations fully assets
and ensure fundedare
in
aggregate, and meet regulatory
sufficient to pay plan benefits; and requirements, if any;
•• Minimize the volatility
Evaluate strategic of the
actions tovalue of pension
reduce our pension assetssuch
liabilities, relative to pension
as plan design obligations and ensure or
changes, curtailments, assets are
settlements
sufficient to pay plan benefits; and
2023
• Evaluate strategic actions to reduce pension liabilities, such as plan design changes, curtailments, or settlementsH / (L)
2022 2023 2022
2023
Pension Funded Status ($B) H / (L)
2022 2023 2022
U.S. Plans $ 0.1 $ (1.3) $ (1.4)
Pension Funded Status ($B)
Non-U.S. Plans (0.3) (1.0) (0.7)
U.S. Plans $ 0.1 $ (1.3) $ (1.4)
Total Global Pension $ (0.2) $ (2.3) $ (2.1)
Non-U.S. Plans (0.3) (1.0) (0.7)
Total Global Pension $ (0.2) $ (2.3) $ (2.1)
Year-End Discount Rate (Weighted Average)
U.S. Plans 5.51 % 5.17 % (34) bps
Year-End Discount Rate (Weighted Average)
Non-U.S. Plans 4.42 % 3.98 % (44) bps
U.S. Plans 5.51 % 5.17 % (34) bps
Non-U.S. Plans 4.42 % 3.98 % (44) bps
Actual Asset Returns
U.S. Plans (21.20)% 7.41 % 28.61 ppts
Actual Asset Returns
Non-U.S. Plans (25.40)% 5.56 % 30.96 ppts
U.S. Plans (21.20)% 7.41 % 28.61 ppts
Non-U.S. Plans (25.40)% 5.56 % 30.96 ppts
Pension - Funded Plans Only ($B)
Funded Status $ 4.1 $ 2.1 $ (2.0)
Pension - Funded Plans Only ($B)
Contributions for Funded Plans 0.6 0.6 —
Funded Status $ 4.1 $ 2.1 $ (2.0)
Contributions for Funded Plans 0.6 0.6 —
Worldwide, our defined benefit pension plans were underfunded by $2.3 billion at December 31, 2023, a deterioration
of $2.1 billion from December 31, 2022, primarily reflecting the impact of lower discount rates compared to year-end 2022
and Worldwide, our defined
pension benefit benefit pension
enhancements plans
as part of were underfunded
the collective byagreements
bargaining $2.3 billion at
in December 31, 2023,
the United States anda Canada,
deterioration
of
partially offset by asset gains in excess of our assumptions. Of the $2.3 billion underfunded status at year-end 2023,2022
$2.1 billion from December 31, 2022, primarily reflecting the impact of lower discount rates compared to year-end our
and pension
funded plansbenefit enhancements
were $2.1 as partand
billion overfunded of the
ourcollective
unfundedbargaining
plans wereagreements
$4.4 billion in the United States
underfunded. Theseand Canada,
unfunded plans
partially
are “pay offset
as youbygo”
asset
withgains in excess
benefits of our
paid from assumptions.
Company cash andOf primarily
the $2.3 billion
includeunderfunded
certain plansstatus at year-end
in Germany 2023, our
and U.S.
funded plans
defined benefitwere $2.1
plans forbillion
senioroverfunded
management. and our unfunded plans were $4.4 billion underfunded. These unfunded plans
are “pay as you go” with benefits paid from Company cash and primarily include certain plans in Germany and U.S.
defined
The benefit plans for
fixed income mixsenior
was 76%management.
in our U.S. plans and 78% in our non-U.S. plans at year-end 2023.

The
In fixedwe
2023, income mix was
contributed 76%
$592 in ourtoU.S.
million our plans
globaland 78%pension
funded in our non-U.S.
plans, anplans at year-end
increase 2023. compared with
of $25 million
2022. During 2024, we expect to contribute about $1 billion of cash to our global funded pension plans. We also expect
In 2023,
to make aboutwe$400
contributed $592
million of million
benefit to our global
payments funded pension
to participants plans,plans.
in unfunded an increase
Based of
on$25 million
current compared and
assumptions with
2022. During 2024, we expect to contribute about $1 billion of cash to our global funded pension plans. We
regulations, we do not expect to have a legal requirement to fund our major U.S. plans in 2024. Our global funded plans also expect
to makefully
remain about $400inmillion
funded of benefit
aggregate, payments to
demonstrating participants
the in unfunded
effectiveness plans. Based
of our de-risking onand
strategy current assumptionstoand
our commitment a
regulations,
strong we sheet.
balance do not expect to have a legal requirement to fund our major U.S. plans in 2024. Our global funded plans
remain fully funded in aggregate, demonstrating the effectiveness of our de-risking strategy and our commitment to a
strong
Forbalance sheet.
a detailed discussion of our pension plans, refer to the “Critical Accounting Estimates - Pensions and Other
Postretirement Employee Benefits” section of Item 7 of Part II of our 2023 Form 10-K Report and Note 17 of the Notes to
For a detailed
the Financial discussion of our pension plans, refer to the “Critical Accounting Estimates - Pensions and Other
Statements.
Postretirement Employee Benefits” section of Item 7 of Part II of our 2023 Form 10-K Report and Note 17 of the Notes to
the Financial Statements.

69

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemReturn
7. Management’s
on Invested Discussion and Analysis
Capital (“ROIC”). of Financial
We analyze Conditionperformance
total Company and Resultsusing
of Operations (Continued)
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
Return
years shownon(in billions):Capital (“ROIC”). We analyze total Company performance using an adjusted ROIC financial
Invested
metric based on an after-tax rolling four quarter average. The following table contains the calculation of our ROIC for the
December 31, December 31, December 31,
years shown (in billions): 2021 2022 2023
Adjusted Net Operating Profit/(Loss) After Cash Tax December 31, December 31, December 31,
2021 2022 2023
Net income/(loss) attributable to Ford $ 17.9 $ (2.0) $ 4.3
Adjusted Net Operating Profit/(Loss) After Cash Tax
Add: Noncontrolling interest — (0.2) —
Net income/(loss) attributable to Ford $ 17.9 $ (2.0) $ 4.3
Less: Income tax 0.1 0.9 0.4
Add: Noncontrolling interest — (0.2) —
Add: Cash tax (0.6) (0.8) (1.0)
Less: Income tax 0.1 0.9 0.4
Less: Interest on debt (1.8) (1.3) (1.3)
Add: Cash tax (0.6) (0.8) (1.0)
Less: Total pension / OPEB income / (cost) 4.9 0.4 (3.1)
Less: Interest on debt (1.8) (1.3) (1.3)
Add: Pension / OPEB service costs (1.1) (1.0) (0.6)
Less: Total pension / OPEB income / (cost) 4.9 0.4 (3.1)
Net operating profit/(loss) after cash tax $ 13.0 $ (3.9) $ 6.7
Add: Pension / OPEB service costs (1.1) (1.0) (0.6)
Less: Special items (excl. pension / OPEB) pre-tax 5.9 (11.7) (2.7)
Net operating profit/(loss) after cash tax $ 13.0 $ (3.9) $ 6.7
Adjusted net operating profit/(loss) after cash tax $ 7.1 $ 7.8 $ 9.5
Less: Special items (excl. pension / OPEB) pre-tax 5.9 (11.7) (2.7)
Adjusted net operating profit/(loss) after cash tax $ 7.1 $ 7.8 $ 9.5
Invested Capital
Equity $ 48.6 $ 43.2 $ 42.8
Invested Capital
Debt (excl. Ford Credit) 20.4 19.9 19.9
Equity $ 48.6 $ 43.2 $ 42.8
Net pension and OPEB liability 6.4 4.7 7.0
Debt (excl. Ford Credit) 20.4 19.9 19.9
Invested capital (end of period) $ 75.4 $ 67.8 $ 69.8
Net pension and OPEB liability 6.4 4.7 7.0
Average invested capital $ 72.1 $ 70.0 $ 68.1
Invested capital (end of period) $ 75.4 $ 67.8 $ 69.8
Average invested capital $ 72.1 $ 70.0 $ 68.1
ROIC (a) 18.0 % (5.6)% 9.9 %
Adjusted ROIC (Non-GAAP) (b) 9.8 % 11.2 % 13.9 %
ROIC (a) 18.0 % (5.6)% 9.9 %
__________
(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 %
Adjusted ROIC (Non-GAAP) (b) 9.8 % 11.2 % 13.9
four quarters.
__________
(b)
(a) Calculated
Calculated as
as the
the sum
sum of
of adjusted net operating
net operating profit/(loss)
profit/(loss) after cashafter cash the
tax from tax last
fromfour
the quarters,
last four quarters,
divided bydivided by the invested
the average average capital
invested capital
over over
the last
the
fourlast four quarters.
quarters.
Note: Numbers as
(b) Calculated may not
the sum
sum ofdue to rounding.
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.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
CREDIT RATINGS Discussion and Analysis of Financial Condition and Results of Operations (Continued)

CREDIT RATINGS and long-term debt is rated by four credit rating agencies designated as nationally recognized
Our short-term
statistical rating organizations (“NRSROs”) by the U.S. Securities and Exchange Commission: DBRS, Fitch, Moody’s, and
S&[Link] 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&[Link] 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
In several
agencies’ markets,
ratings locally
of us are recognized
based rating provided
on information agencies byalso
usrate
andus. A credit
other rating
sources. reflects
Credit an assessment
ratings are not by the
rating agency of the credit risk associated with a corporate entity or particular securities issued by that entity.
recommendations to buy, sell, or hold securities and are subject to revision or withdrawal at any time by the assigning Rating
agencies’ ratings
rating agency. of us
Each are based
rating agencyonmayinformation provided
have different by us
criteria forand other sources.
evaluating company Credit ratings
risk and, are not ratings should
therefore,
recommendations to buy, sell, or hold securities
be evaluated independently for each rating agency. 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
The following for each
rating actions were rating
taken agency.
by these NRSROs since the filing of our Quarterly Report on Form 10-Q for
the quarter ended September 30, 2023:
The following rating actions were taken by these NRSROs since the filing of our Quarterly Report on Form 10-Q for
the quarter
• On ended
OctoberSeptember
30, 2023, 30,
S&P2023:
upgraded the credit ratings for Ford and Ford Credit to BBB- from BB+ and revised the
outlook to stable from positive.
• On October 30, 2023, S&P upgraded the credit ratings for Ford and Ford Credit to BBB- from BB+ and revised the
The outlook to table
following stablesummarizes
from positive.
certain of the credit ratings and outlook presently assigned by these four NRSROs:

The following table summarizes certain of the credit ratings andNRSRO RATINGS
outlook presently assigned by these four NRSROs:
Ford Ford Credit NRSROs
NRSRO RATINGS
Issuer Minimum
Default / Long-Term
Ford Long-Term Ford Credit Long-Term
NRSROs
Corporate / Senior Outlook / Senior Short-Term Outlook / Investment
Issuer
Issuer Rating Unsecured Trend Unsecured Unsecured Trend Minimum
Grade Rating
Default / Long-Term Long-Term Long-Term
DBRS Corporate
BBB (low) / Senior
BBB (low) Outlook /
Stable Senior
BBB (low) Short-Term
R-2 (low) Outlook /
Stable Investment
BBB (low)
Issuer Rating Unsecured Trend Unsecured Unsecured Trend Grade Rating
Fitch BBB- BBB- Stable BBB- F3 Stable BBB-
DBRS BBB (low) BBB (low) Stable BBB (low) R-2 (low) Stable BBB (low)
Moody’s N/A Ba1 Stable Ba1 NP Stable Baa3
Fitch BBB- BBB- Stable BBB- F3 Stable BBB-
S&P BBB- BBB- Stable BBB- A-3 Stable BBB-
Moody’s N/A Ba1 Stable Ba1 NP Stable Baa3
S&P BBB- BBB- Stable BBB- A-3 Stable BBB-

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
OUTLOOK

OUTLOOK
We provided 2024 Company guidance in our earnings release furnished on Form 8-K dated February 6, 2024. The
guidance is based on our expectations as of February 6, 2024, and assumes no material change to our current
We provided
assumptions 2024 Company
for inflation, logisticsguidance in our earnings
issues, production, release furnished
or macroeconomic on FormOur
conditions. 8-K actual
dated results
February 6, 2024.
could differ The
guidance is based on our expectations as of February 6, 2024, and assumes no material change to our current
materially from our guidance due to risks, uncertainties, and other factors, including those set forth in “Risk Factors” in
assumptions [Link], logistics issues, production, or macroeconomic conditions. Our actual results could differ
Item 1A of Part
materially from our guidance due to risks, uncertainties, and other factors, including those set forth in “Risk Factors” in
2024 Guidance
Item 1A of Part I.
Total Company
2024 Guidance
Adjusted EBIT (a) $10 - $12 billion
Total Company
Adjusted Free Cash Flow (a) $6 - $7 billion
Adjusted EBIT (a) $10 - $12 billion
Capital spending $8 - $9.5 billion
Adjusted Free Cash Flow (a) $6 - $7 billion
Ford Credit
Capital spending $8 - $9.5 billion
EBT About $1.5 billion
Ford Credit
__________
(a)EBT About $1.5
When we provide guidance for Adjusted EBIT and Adjusted Free Cash Flow, we do not provide guidance for the most comparable GAAPbillion
measures
because, as described in more detail below in “Non-GAAP Measures That Supplement GAAP Measures,” they include items that are difficult to
__________
(a) predict
When we with reasonable
provide certainty.
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 $6 billion to
$7 billion.
For full-year 2024, we expect adjusted EBIT of $10 billion to $12 billion and adjusted free cash flow of $6 billion to
$7 billion.
On a segment basis, we expect:

On
• aFord segment basis,
Pro EBIT of we expect:to $9 billion driven by continued growth and favorable mix, partially offset by
$8 billion
moderated pricing
•• Ford Ford Pro
BlueEBIT
EBITofof$8$7billion
billiontoto$9 billion
$7.5 driven
billion, by continued
reflecting growth
a balanced and favorable
market equation, mix, partially
including theoffset
impact byof our all-
moderated pricing
new F-150 launch; we also expect costs to be flat as we offset higher labor and product cost with efficiencies
•• FordFord Blue
ModelEBIT of $7
e EBIT billion
loss of $5tobillion
$7.5 billion,
to $5.5reflecting a balanced
billion, primarily market
driven equation,pricing
by continued including the impact
pressure of our all-
and investments
new F-150 launch; we also
in next generation vehicles expect costs to be flat as we offset higher labor and product cost with efficiencies
•• Ford
Ford Model e EBIT
Credit EBT loss of$1.5
of about $5 billion
billionto $5.5 billion, primarily driven by continued pricing pressure and investments
in next generation vehicles
•Our Ford Credit
outlook EBT of
for 2024 about $1.5 billion
assumes:

Our outlook
• Flat for 2024
to modest assumes:
U.S. industry growth at 16 million to 16.5 million
• Non-recurrence of the UAW strike
•• Flat to modest
Full year U.S. Super
of all-new industry growth
Duty, at drives
which 16 million to 16.5
positive million
pricing and mix in Ford Pro
•• Lower
Non-recurrence of the UAW
industry pricing strikeand demand normalize
as supply
•• $2
Fullbillion
year of all-new
benefit fromSuper
costDuty, whichinitiatives,
reduction drives positive pricing
offsetting andlabor
higher mix in Ford
and Proproduct refresh actions
major
• Lower industry pricing as supply and demand normalize
• $2 billion benefit from cost reduction initiatives, offsetting higher labor and major product refresh actions

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
Cautionary Discussion and Analysis
Note on Forward-Looking of Financial Condition and Results of Operations (Continued)
Statements

Cautionary
StatementsNote on Forward-Looking
included or incorporated Statementsby 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,
Statements
forecasts, included or incorporated
and assumptions by our management by reference herein amay
and involve numberconstitute
of risks,“forward-looking
uncertainties, statements”
and other factorswithinthatthe could
meaning
cause of the
actual Private
results Securities
to differ Litigation
materially fromReform Act of including,
those stated, 1995. Forward-looking
without limitation: 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
Ford results
is highlytodependent
differ materially
on its from thosetostated,
suppliers deliverincluding,
components without limitation: with Ford’s production schedule
in accordance
and specifications, and a shortage of or inability to acquire key components or raw materials, such as lithium,
• cobalt,
Ford is nickel,
highly dependent
graphite, and on manganese,
its suppliers to candeliver
disrupt components
Ford’s productionin accordance
of vehicles;with Ford’s production schedule
• Toandfacilitate
specifications,
access and a shortage
to the raw materials of or andinability
other tocomponents
acquire key components
necessary fororthe raw materials,ofsuch
production as lithium,
electric vehicles,
cobalt,
Ford has nickel,
entered graphite,
into andandmay, manganese,
in the future, can enter
disrupt Ford’s
into production
multi-year of vehicles;
commitments to raw material and other
• suppliers
To facilitate thataccess
subject to Ford
the raw materials
to risks and other
associated withcomponents
lower future necessary
demand forfor the items
such production
as well of as
electric
costsvehicles,
that
Ford has and
fluctuate entered into andtomay,
are difficult in the future,
accurately forecast; enter into multi-year commitments to raw material and other
• suppliers that subject
Ford’s long-term Ford to risksdepends
competitiveness associated withsuccessful
on the lower future demandof
execution forFord+;
such items as well as costs that
fluctuate
• Ford’s and are
vehicles difficult
could to accurately
be affected by defectsforecast;that result in recall campaigns, increased warranty costs, or delays in
• new
Ford’s long-term
model competitiveness
launches, and the timedepends it takes to onimprove
the successful
the qualityexecution of Ford+;and services could continue to
of our vehicles
• have
Ford’san vehicles
adversecould effect beonaffected by defects that result in recall campaigns, increased warranty costs, or delays in
our business;
• new
Ford model
may not launches,
realize the andanticipated
the time it benefits
takes to of improve
existing theorquality
pending of strategic
our vehicles and services
alliances, could continue
joint ventures, to
acquisitions,
have an adverse
divestitures, effect onstrategies;
or business our business;
• Ford may not realize the anticipated benefits of restructuring existing or pending actionsstrategic
and such alliances, joint cause
actions may ventures, Fordacquisitions,
to incur
divestitures,
significant or business
charges, strategies;
disrupt our operations, or harm our reputation;
• Ford may notinformation
Operational realize thesystems,
anticipated benefits
security of restructuring
systems, vehicles, actions
and services and such could actions may cause
be affected Ford to incur
by cybersecurity
significant ransomware
incidents, charges, disrupt attacks,our operations, or harm our
and other disruptions andreputation;
impact Ford and Ford Credit as well as their suppliers
• and
Operational
dealers;information systems, security systems, vehicles, and services could be affected by cybersecurity
• incidents, ransomware
Ford’s production, as wellattacks,
as Ford’s and other
suppliers’disruptions and impact
production, and/or the Fordability
and Ford Creditproducts
to deliver as well as their suppliers
to consumers could
anddisrupted
be dealers; by labor issues, public health issues, natural or man-made disasters, adverse effects of climate
• change,
Ford’s production, as well as
financial distress, Ford’s suppliers’
production difficulties,production, and/or the ability
capacity limitations, or other to factors;
deliver products to consumers could
be disrupted
• Failure by labor
to develop andissues,
deploypublic secure health
digitalissues,
services natural or man-made
that appeal disasters,
to customers couldadverse
have aeffects
negative of climate
impact on
change, financial distress, production difficulties, capacity limitations, or other factors;
Ford’s business;
Failureability
• Ford’s to develop and deploy
to maintain secure digital
a competitive services could
cost structure that appeal to customers
be affected by laborcould have
or other a negative impact on
constraints;
business;
• Ford’s ability to attract, develop, grow, and reward talent is critical to its success and competitiveness;
• Ford’s ability
new and to maintain a competitive
existing products cost structure
and digital, software, could
and be affected
physical by labor
services areorsubject
other constraints;
to market acceptance
• and
Ford’s ability
face to attract,
significant develop, from
competition grow,existing
and reward and newtalent is critical
entrants in totheitsautomotive
success and andcompetitiveness;
digital and software
• services
Ford’s new and existing
industries, products
and its reputationand may digital,besoftware,
harmed ifand it is physical
unable toservices
achieveare thesubject to market
initiatives acceptance
it has announced;
and face
• Ford’s significant
results competition
are dependent on from
salesexisting
of larger, andmorenewprofitable
entrants vehicles,
in the automotive
particularlyandindigital and software
the United States;
• services industries,
With a global footprintand its supply
and reputation chain, may be harmed
Ford’s resultsifand it isoperations
unable to achievecould bethe initiatives
adversely it has announced;
affected by economic or
• geopolitical
Ford’s results are dependent
developments, on salesprotectionist
including of larger, more trade profitable
policies vehicles, particularly
such as tariffs, in the
or other United States;
events;
With a global
• Industry salesfootprint
volume and can be supply chain,
volatile andFord’s
could results
declineand operations
if there could crisis,
is a financial be adversely
recession,affected
publicbyhealth
economic or
geopolitical
emergency, developments, including protectionist
or significant geopolitical event; trade policies such as tariffs, or other events;
Industry
• Ford maysalesface volume
increased canpricebe volatile
competitionand could decline if there
or a reduction in demandis a financial crisis, recession,
for its products resulting frompublicindustry
health
emergency,
excess or significant
capacity, currencygeopolitical
fluctuations,event; competitive actions, or other factors, particularly for electric vehicles;
Ford may face
• Inflationary increased
pressure and price competition
fluctuations or a reduction
in commodity in demand
and energy prices, forforeign
its products
currencyresulting
exchange fromrates,
industry interest
excess
rates, andcapacity,
marketcurrency
value of fluctuations,
Ford or Fordcompetitive actions, orincluding
Credit’s investments, other factors, particularly
marketable for electric
securities, vehicles;
can have a
• significant
Inflationaryeffect
pressure and fluctuations in commodity and energy prices, foreign currency exchange rates, interest
on results;
rates,and
• Ford andFord market valueaccess
Credit’s of Fordtoordebt, Fordsecuritization,
Credit’s investments, including
or derivative marketsmarketable
around the securities,
world atcan have a rates
competitive
significant
or in sufficienteffect on results;
amounts could be affected by credit rating downgrades, market volatility, market disruption,
• regulatory
Ford and Ford Credit’s access
requirements, or other to debt,
factors; securitization, or derivative markets around the world at competitive rates
or in impact
• The sufficient amounts could
of government be affected
incentives by credit
on Ford’s rating downgrades,
business could be significant,marketand volatility,
Ford’smarket
receiptdisruption,
of government
regulatory could
incentives requirements,
be subject or to other factors;termination, or clawback;
reduction,
• The
Fordimpact
Credit of government
could experience incentives on Ford’s business
higher-than-expected creditcould
losses, belower-than-anticipated
significant, and Ford’s residualreceipt of government
values, or
incentives could be subject
higher-than-expected returntovolumesreduction, for termination,
leased vehicles; or clawback;
Ford Creditand
• Economic could experienceexperience
demographic higher-than-expected
for pension creditand OPEB losses, lower-than-anticipated
plans (e.g., discount ratesresidual values, returns)
or investment or
higher-than-expected
could be worse than Ford return has volumes
assumed; for leased vehicles;
• Economic
Pension and and demographic
other postretirement experience
liabilities for could
pension and OPEB
adversely affectplans
Ford’s(e.g., discount
liquidity andrates or investment
financial condition; returns)
couldand
• Ford be worse than Ford
Ford Credit couldhas assumed;unusual or significant litigation, governmental investigations, or adverse
experience
• publicity
Pension arising
and other outpostretirement
of alleged defects liabilities could adversely
in products, services, affect
perceivedFord’s liquidity and financial
environmental impacts, condition;
or otherwise;
• Ford and may FordneedCredit could experience
to substantially modify its unusual
product orplans
significant litigation,
and facilities togovernmental
comply with safety,investigations,
emissions, or fuel
adverse
publicity arising
economy, out of alleged
autonomous driving defects
technology, in products, services,
environmental, perceived
and environmental impacts, or otherwise;
other regulations;
• Ford and may FordneedCredit
to substantially
could be affectedmodify its byproduct plans and
the continued facilities toofcomply
development with safety,
more stringent emissions,
privacy, data use,fuel data
economy, autonomous
protection, and artificial driving
intelligence technology,
laws and environmental,
regulations as and other
well regulations;heightened expectations to
as consumers’
• Ford and Ford
safeguard theirCredit
personal could be affected
information; andby the continued development of more stringent privacy, data use, data
protection,
• Ford Creditand couldartificial intelligence
be subject to new laws and regulations
or increased as well as consumers’
credit regulations, heightened
consumer protection expectations
regulations, to
or other
safeguard their personal information; and
regulations.
• Ford Credit could be subject to new or increased credit regulations, consumer protection regulations, or other
regulations.
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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemWe
7. cannot
Management’s Discussion
be certain and Analysisforecast,
that any expectation, of Financial Condition and
or assumption madeResults of Operations
in preparing (Continued)
forward-looking statements will
prove accurate, or that any projection will be realized. It is to be expected that there may be differences between
We cannot
projected be certain
and actual thatOur
results. anyforward-looking
expectation, forecast, or assumption
statements speak onlymade
as ofinthe
preparing forward-looking
date of their statements
initial issuance, and wewill
do
prove accurate, or that any projection will be realized. It is to be expected that there may be differences
not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new between
projected and
information, actual
future results.
events, Our forward-looking
or otherwise. statements
For additional speaksee
discussion, only as of1A.
“Item theRisk
dateFactors”
of their initial
above. 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” above.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
NON-GAAP FINANCIAL Discussion
MEASURES and THAT
Analysis of Financial Condition
SUPPLEMENT and Results of Operations (Continued)
GAAP MEASURES

NON-GAAP FINANCIAL
We use both generallyMEASURES THAT SUPPLEMENT
accepted accounting GAAP and
principles (“GAAP”) MEASURES
non-GAAP financial measures for operational
and financial decision making, and to assess Company and segment business performance. The non-GAAP measures
listedWe use both
below generallytoaccepted
are intended accounting
be considered principles
by users (“GAAP”) and
as supplemental non-GAAP
information financial
to their measures
equivalent GAAP formeasures,
operationalto
and
aid investors in better understanding our financial results. We believe that these non-GAAP measures providemeasures
financial decision making, and to assess Company and segment business performance. The non-GAAP useful
listed below on
perspective areunderlying
intended to be considered
operating resultsby users
and as supplemental
trends, and a means information
to compare to ourtheir equivalent GAAP
period-over-period measures,
results. Theseto
aid investors in better understanding our financial results. We believe that these non-GAAP measures
non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance provide useful
perspective on underlying
prepared in accordance operating
with GAAP. results
These and trends, measures
non-GAAP and a meansmaytonotcompare our period-over-period
be the same as similarly titled results.
measures These
used
non-GAAP measures should not be considered as a substitute for, or superior to, measures
by other companies due to possible differences in method and in items or events being adjusted. 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
Company dueEBIT
Adjusted to possible differences inGAAP
(Most Comparable method and in items
Measure: or events being
Net Income/(Loss) adjusted. to Ford) – Earnings
Attributable
before interest and taxes (EBIT) excludes interest on debt (excl. Ford Credit Debt), taxes, and pre-tax special items.
• Company Adjusted
This non-GAAP EBIT (Most
measure Comparable
is useful GAAP and
to management Measure: Netbecause
investors Income/(Loss) Attributable
it focuses to Ford)
on underlying – Earnings
operating results
before
and trends, and improves comparability of our period-over-period results. Our management ordinarily special
interest and taxes (EBIT) excludes interest on debt (excl. Ford Credit Debt), taxes, and pre-tax excludesitems.
This non-GAAP measure is useful to management and investors because it focuses on underlying operating
special items from its review of the results of the operating segments for purposes of measuring segment profitability results
and
and trends, and
allocating improves comparability
resources. Our categories ofofour period-over-period
pre-tax special items results. Our management
and the applicable ordinarily
significance excludes
guideline for each
special items from its review of the results of the operating segments for purposes of
item (which may consist of a group of items related to a single event or action) are as follows: 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
Pre-Tax Special Item Significance Guideline
∘ Pension
Gains and losses
and OPEB onremeasurement
investments in equity securities
gains and losses ∘ No minimum
∘ Gains
Personneland expenses, supplier- andindealer-related
losses on investments costs, and
equity securities Generally
∘ No minimum$100 million or more
facility-related charges stemming from our efforts to match
∘ Personnel
production expenses, supplier-
capacity and and dealer-related
cost structure costs, and
to market demand and ∘ Generally $100 million or more
facility-related charges
changing model mix stemming from our efforts to match
production capacity and cost structure to market demand and
∘ Other
changingitems that mix
model we do not necessarily consider to be ∘ $500 million or more for individual field
indicative of earnings from ongoing operating activities service actions; generally $100 million or
∘ Other items that we do not necessarily consider to be more million
∘ $500 for other
or items
more for individual field
indicative of earnings from ongoing operating activities 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
When we provide
reasonable guidance
certainty, for gains
including adjusted
andEBIT, weondopension
losses not provide guidance
and OPEB on a net income
remeasurements basis
and because theinGAAP
on investments equity
measure
[Link] 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
• Company
is useful toAdjusted EBIT and
management Margin (Most Comparable
investors GAAP
because it allows Measure:
users Company
to evaluate Net Income/(Loss)
our operating with– industry
Margin)
results aligned
Company
reporting. 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
• Adjusted Earnings/(Loss)
special items, Per Share
and restructuring (Most
impacts Comparable GAAP
in noncontrolling Measure:
interests. Earnings/(Loss)
The measure providesPer – Measure
Share)with
investors useful of
Company’s diluted net earnings/(loss) per share adjusted for impact of pre-tax special items (described
information to evaluate performance of our business excluding items not indicative of earnings from ongoing operating above), tax
special items, and restructuring impacts in noncontrolling interests. The measure provides investors
activities. When we provide guidance for adjusted earnings/(loss) per share, we do not provide guidance on an with useful
information to evaluate
earnings/(loss) per share performance of our
basis because thebusiness excluding
GAAP measure willitems not potentially
include indicative of earningsspecial
significant from ongoing operating
items that have
activities.
not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and an
When we provide guidance for adjusted earnings/(loss) per share, we do not provide guidance on OPEB
earnings/(loss)
remeasurementper share
gains andbasis because the GAAP measure will include potentially significant special items that have
losses.
not yet occurred and are difficult to predict with reasonable certainty prior to year-end, including pension and OPEB
• remeasurement
Adjusted Effective gains
Taxand
Ratelosses.
(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
• Adjusted Effective
effective rate whichTax Rate (Most
investors Comparable
find useful GAAPcomparisons
for historical Measure: Effective Tax Rate) – Measure
and for forecasting. When weofprovide
Company’s tax for
guidance
rate excluding pre-tax special items (described above) and tax special items. The measure provides an
adjusted effective tax rate, we do not provide guidance on an effective tax rate basis because the GAAP measure will ongoing
effective rate whichsignificant
include potentially investors special
find useful forthat
items historical comparisons
have not andand
yet occurred for are
forecasting.
difficult toWhen
predictwe provide
with guidance for
reasonable
adjusted effective tax rate, we do not provide guidance on an effective tax rate
certainty prior to year-end, including pension and OPEB remeasurement gains and losses. 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.

75

75

199174_Ford_2023_AR_1OK.indd 79 2/9/24 2:55 PM

 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

•ItemCompany
7. Management’s
Adjusted Discussion
Free Cash Flowand Analysis of FinancialGAAP
(Most Comparable Condition and Results
Measure: Net Cashof Operations (Continued)
Provided By/(Used In) Operating
Activities) – Measure of Company’s operating cash flow excluding Ford Credit’s operating cash flows. The measure
• Company Adjustedmanagement
contains elements Free Cash Flow (Most Comparable
considers GAAP Measure:
operating activities, Net Cash excluding
including Company Provided By/(Used
Ford Credit In)capital
Operating
spending, Ford Credit distributions to its parent, and settlement of derivatives. The measure excludes cashmeasure
Activities) – Measure of Company’s operating cash flow excluding Ford Credit’s operating cash flows. The outflows
contains
for funded elements
pension management
contributions,considers operating
restructuring actions,activities,
and other including Company
items that excluding
are considered Ford Credit
operating cashcapital
flows
spending,
under [Link]. Credit distributions
This measure istouseful
its parent, and settlement
to management of derivatives.
and investors becauseTheitmeasure excludes
is consistent cash outflows
with management’s
for
assessment of the Company’s operating cash flow performance. When we provide guidance for Company flows
funded pension contributions, restructuring actions, and other items that are considered operating cash adjusted
under [Link],
free cash [Link] doThis
notmeasure is useful toformanagement
provide guidance and investors
net cash provided by/(usedbecause it is consistent
in) operating with management’s
activities because the GAAP
assessment
measure will of the Company’s
include items that operating cash
are difficult flow performance.
to quantify or predict withWhen we provide
reasonable guidance
certainty, for Company
including cash flowsadjusted
related
free
to the Company's exposures to foreign currency exchange rates and certain commodity prices (separate from GAAP
cash flow, we do not provide guidance for net cash provided by/(used in) operating activities because the any
measure will include
related hedges), Forditems thatoperating
Credit's are difficult
cashto quantify
flows, andor predict
cash flowswithrelated
reasonable certainty,
to special including
items, including cash flows related
separation
to the Company's exposures to foreign currency exchange rates and certain commodity prices
payments, each of which individually or in the aggregate could have a significant impact to our net cash provided (separate from anyby/
related hedges), Ford Credit's
(used in) our operating activities. 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
Adjustedin) ROIC
our operating activities.
– 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
(“AdjustedROIC
ROIC”)– Calculated as the sum ofand
provides management adjusted net with
investors operating
usefulprofit/(loss)
informationafter cash taxthe
to evaluate from the last four
Company’s after-cash
quarters, divided by the average invested capital over the last four quarters. Adjusted Return on Invested
tax operating return on its invested capital for the period presented. Adjusted net operating profit/(loss) after Capital
cash tax
(“Adjusted ROIC”) provides
measures operating results management and investors
less special items, with
interest on useful
debt information
(excl. Ford Creditto Debt),
evaluate
andthe Company’s
certain after-cash
pension/OPEB
tax operating
costs. Average return on itscapital
invested invested capital
is the sumfor the period
of average presented.
balance sheetAdjusted net (excl.
equity, debt operating
Fordprofit/(loss) after
Credit Debt), andcash
net tax
measures operating
pension/OPEB [Link] 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.

76

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
NON-GAAP FINANCIAL Discussion
MEASURE and Analysis of Financial Condition and Results of Operations (Continued)
RECONCILIATIONS

NON-GAAP FINANCIAL
The following MEASURE
tables show RECONCILIATIONS
our Non-GAAP financial measure reconciliations.

Net The following tables

Income/(Loss) show our Non-GAAP
Reconciliation financial
to Adjusted measure reconciliations.
EBIT ($M)
2021 2022 2023
Net Income/(Loss) Reconciliation to Adjusted EBIT ($M)
2021 2022 2023
Net income/(loss) attributable to Ford (GAAP) $ 17,937 $ (1,981) $ 4,347
Income/(Loss) attributable to noncontrolling interests (27) (171) (18)
Net income/(loss) attributable to Ford (GAAP) $ 17,937 $ (1,981) $ 4,347
Net income/(loss) $ 17,910 $ (2,152) $ 4,329
Income/(Loss) attributable to noncontrolling interests (27) (171) (18)
Less: (Provision for)/Benefit from income taxes (a) 130 864 362
Net income/(loss) $ 17,910 $ (2,152) $ 4,329
Income/(Loss) before income taxes $ 17,780 $ (3,016) $ 3,967
Less: (Provision for)/Benefit from income taxes (a) 130 864 362
Less: Special items pre-tax 9,583 (12,172) (5,147)
Income/(Loss) before income taxes $ 17,780 $ (3,016) $ 3,967
Income/(Loss) before special items pre-tax $ 8,197 $ 9,156 $ 9,114
Less: Special items pre-tax 9,583 (12,172) (5,147)
Less: Interest on debt (1,803) (1,259) (1,302)
Income/(Loss) before special items pre-tax $ 8,197 $ 9,156 $ 9,114
Adjusted EBIT (Non-GAAP) $ 10,000 $ 10,415 $ 10,416
Less: Interest on debt (1,803) (1,259) (1,302)
Adjusted EBIT (Non-GAAP) $ 10,000 $ 10,415 $ 10,416
Memo:
Revenue ($B) $ 136.3 $ 158.1 $ 176.2
Memo:
Net income/(loss) margin (%) 13.2 % (1.3)% 2.5 %
Revenue ($B) $ 136.3 $ 158.1 $ 176.2
Adjusted EBIT margin (%) 7.3 % 6.6 % 5.9 %
Net income/(loss) margin (%) 13.2 % (1.3)% 2.5 %
_________
(a) 2021 reflects a benefit from recognizing deferred tax assets and favorable changes in our valuation allowances offset by the tax consequences5.9
Adjusted EBIT margin (%) 7.3 % 6.6 % of %
unrealized gains on marketable securities; 2022 reflects the tax consequences of unrealized losses on marketable securities and favorable changes
_________
(a) in ourreflects
2021 valuation allowances;
a benefit 2023 reflects
from recognizing benefitstax
deferred from [Link]
assets research tax credits
favorable changesand
in legal entity restructuring
our valuation allowanceswithin
offsetour
by leasing operations andof
the tax consequences
China.
unrealized gains on marketable securities; 2022 reflects the tax consequences of unrealized losses on marketable securities and favorable changes
in our valuation allowances; 2023 reflects benefits from U.S. research tax credits and legal entity restructuring within our leasing operations and
Earnings/(Loss)
China. per Share Reconciliation to Adjusted Earnings/(Loss) per Share
2021 2022 2023
Earnings/(Loss) per Share Reconciliation to Adjusted Earnings/(Loss) per Share
Diluted After-Tax Results ($M)
2021 2022 2023
Diluted after-tax results (GAAP) $ 17,937 $ (1,981) $ 4,347
Diluted After-Tax Results ($M)
Less: Impact of pre-tax and tax special items (a) 11,507 (9,599) (3,786)
Diluted after-tax results (GAAP) $ 17,937 $ (1,981) $ 4,347
Adjusted net income/(loss) - Diluted (Non-GAAP) $ 6,430 $ 7,618 $ 8,133
Less: Impact of pre-tax and tax special items (a) 11,507 (9,599) (3,786)
Adjusted net income/(loss) - Diluted (Non-GAAP) $ 6,430 $ 7,618 $ 8,133
Basic and Diluted Shares (M)
Basic shares (average shares outstanding) 3,991 4,014 3,998
Basic and Diluted Shares (M)
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and
Basic shares
convertible (average shares outstanding)
debt 3,991
43 4,014
42 3,998
43
Diluted
Net shares
dilutive options, unvested restricted stock units, unvested restricted stock shares, and 4,034 4,056 4,041
convertible debt 43 42 43
Diluted shares 4,034 4,056 4,041
Earnings/(Loss) per share - diluted (GAAP) (b) $ 4.45 $ (0.49) $ 1.08
Less: Net impact of adjustments 2.86 (2.37) (0.93)
Earnings/(Loss) per share - diluted (GAAP) (b) $ 4.45 $ (0.49) $ 1.08
Adjusted earnings per share - diluted (Non-GAAP) $ 1.59 $ 1.88 $ 2.01
Less: Net impact of adjustments 2.86 (2.37) (0.93)
_________
Adjusted
(a) earnings
Includes per share
adjustment - diluted (Non-GAAP)
for noncontrolling interest in 2023. $ 1.59 $ 1.88 $ 2.01
(b) In 2022, there were 42 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect.
_________
(a) Includes adjustment for noncontrolling interest in 2023.
(b) In 2022, there were 42 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect.

77

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
Effective Discussion and
Tax Rate Reconciliation Analysis of
to Adjusted FinancialTax
Effective Condition
Rate and Results of Operations (Continued)
2021 2022 2023
Effective Tax Rate Reconciliation to Adjusted Effective Tax Rate
Pre-Tax Results ($M)
2021 2022 2023
Income/(Loss) before income taxes (GAAP) $ 17,780 $ (3,016) $ 3,967
Pre-Tax Results ($M)
Less: Impact of special items 9,583 (12,172) (5,147)
Income/(Loss) before income taxes (GAAP) $ 17,780 $ (3,016) $ 3,967
Adjusted earnings before taxes (Non-GAAP) $ 8,197 $ 9,156 $ 9,114
Less: Impact of special items 9,583 (12,172) (5,147)
Adjusted earnings before taxes (Non-GAAP) $ 8,197 $ 9,156 $ 9,114
Taxes ($M)
(Provision for)/Benefit from income taxes (GAAP) (a) $ 130 $ 864 $ 362
Taxes ($M)
Less: Impact of special items (b) 1,924 2,573 1,273
(Provision for)/Benefit from income taxes (GAAP) (a) $ 130 $ 864 $ 362
Adjusted (provision for)/benefit from income taxes (Non-GAAP) $ (1,794) $ (1,709) $ (911)
Less: Impact of special items (b) 1,924 2,573 1,273
Adjusted (provision for)/benefit from income taxes (Non-GAAP) $ (1,794) $ (1,709) $ (911)
Tax Rate (%)
Effective tax rate (GAAP) (a) (0.7)% 28.6 % (9.1)%
Tax Rate (%)
Adjusted effective tax rate (Non-GAAP) 21.9 % 18.7 % 10.0 %
Effective tax rate (GAAP) (a) (0.7)% 28.6 % (9.1)%
_________
Adjusted effective tax rate (Non-GAAP) 21.9 %
(a) 2023 reflects benefits from U.S. research tax credits and legal entity restructuring within our leasing operations and China. 18.7 % 10.0 %
(b) 2021 reflects a benefit from recognizing deferred tax assets and favorable changes in our valuation allowances offset by the tax consequences of
_________
(a) unrealized
2023 reflectsgains on marketable
benefits from U.S. securities;
research tax2022 reflects
credits andthe taxentity
legal consequences of unrealized
restructuring losses on
within our leasing marketable
operations andsecurities
China. and favorable changes
(b) in ourreflects
2021 valuation allowances;
a benefit 2023 reflects
from recognizing benefitstax
deferred from China
assets andlegal entity restructuring.
favorable changes in our valuation allowances offset by the tax consequences of
unrealized gains on marketable securities; 2022 reflects the tax consequences of unrealized losses on marketable securities and favorable changes
Net inCash Provided
our valuation by/(Used
allowances; 2023 in) Operating
reflects Activities
benefits from China legal Reconciliation to Company Adjusted Free Cash Flow ($M)
entity restructuring.
2021 2022 2023
Net Cash Provided by/(Used in) Operating Activities Reconciliation to Company Adjusted Free Cash Flow ($M)
2021 2022 2023
Net cash provided by/(used in) operating activities (GAAP) $ 15,787 $ 6,853 $ 14,918

Net cash provided by/(used in) operating activities (GAAP) $ 15,787 $ 6,853 $ 14,918
Less: Items not included in Company Adjusted Free Cash Flows
Ford Credit operating cash flows $ 15,293 $ (5,416) $ 1,180
Less: Items not included in Company Adjusted Free Cash Flows
Funded pension contributions (773) (567) (592)
Ford Credit operating cash flows $ 15,293 $ (5,416) $ 1,180
Restructuring (including separations) (a) (1,855) (835) (1,025)
Funded pension contributions (773) (567) (592)
Ford Credit tax payments/(refunds) under tax sharing agreement 15 147 169
Restructuring (including separations) (a) (1,855) (835) (1,025)
Other, net (421) (58) 240
Ford Credit tax payments/(refunds) under tax sharing agreement 15 147 169
Other, net (421) (58) 240
Add: Items included in Company Adjusted Free Cash Flows
Company excluding Ford Credit capital spending $ (6,183) $ (6,511) $ (8,152)
Add: Items included in Company Adjusted Free Cash Flows
Ford Credit distributions 7,500 2,100 —
Company excluding Ford Credit capital spending $ (6,183) $ (6,511) $ (8,152)
Settlement of derivatives (255) (90) 7
Ford Credit distributions 7,500 2,100 —
Company adjusted free cash flow (Non-GAAP) $ 4,590 $ 9,081 $ 6,801
Settlement of derivatives (255) (90) 7
__________
(a) Company adjusted
Restructuring free cash
excludes cashflow (Non-GAAP)
flows reported in investing activities. $ 4,590 $ 9,081 $ 6,801
__________
(a) Restructuring excludes cash flows reported in investing activities.

78

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7.
2023 Management’s Discussion
SUPPLEMENTAL and Analysis of Financial Condition and Results of Operations (Continued)
INFORMATION

2023The
SUPPLEMENTAL INFORMATION
tables below provide supplemental consolidating financial information and other financial information. Company
excluding Ford Credit includes our Ford Blue, Ford Model e, Ford Pro, and Ford Next reportable segments, Corporate
The
Other, tables on
Interest below provide
Debt, supplemental
and Special Items. consolidating financial
Eliminations, where information
presented, and other
primarily financial
represent information.
eliminations of Company
excluding Ford
intersegment Credit includes
transactions our Ford tax
and deferred Blue, Ford Model e, Ford Pro, and Ford Next reportable segments, Corporate
netting.
Other, Interest on Debt, and Special Items. Eliminations, where presented, primarily represent eliminations of
intersegment transactions
Selected Cash and deferred
Flow Information. taxfollowing
The netting. tables provide supplemental cash flow information (in millions):
For the Year Ended December 31, 2023
Selected Cash Flow Information. The following tables provide supplemental
Company
cash flow information (in millions):
excluding
For the Year Ended December 31, 2023
Cash flows from operating activities Ford Credit Ford Credit Eliminations Consolidated
Company
Net income/(loss) $ excluding
2,996 $ 1,333 $ — $ 4,329
Cash flows from operating activities Ford Credit Ford Credit Eliminations Consolidated
Depreciation and tooling amortization 5,336 2,354 — 7,690
Net income/(loss) $ 2,996 $ 1,333 $ — $ 4,329
Other amortization 28 (1,195) — (1,167)
Depreciation and tooling amortization 5,336 2,354 — 7,690
Provision for/(Benefit from) credit and insurance losses 107 331 — 438
Other amortization 28 (1,195) — (1,167)
Pension and OPEB expense/(income) 3,052 — — 3,052
Provision
Equity for/(Benefit
method from)dividends
investment credit andreceived
insurance losses of (earnings)/losses and
in excess 107 331 — 438
impairments
Pension and OPEB expense/(income) (29)
3,052 (4)
— —
— (33)
3,052
Foreign currency
Equity method adjustments
investment dividends received in excess of (earnings)/losses and (49) (185) — (234)
impairments
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, (29) (4) — (33)
and other
Foreign investments
currency adjustments 236
(49) (31)
(185) —
— 205
(234)
Net (gain)/loss
realized and onunrealized
changes in investments in
(gains)/losses onaffiliates
cash equivalents, marketable securities, (9) — — (9)
and other investments 236 (31) — 205
Stock compensation 446 14 — 460
Net (gain)/loss on changes in investments in affiliates (9) — — (9)
Provision for/(Benefit from) deferred income taxes (1,032) (617) — (1,649)
Stock compensation 446 14 — 460
Decrease/(Increase) in finance receivables (wholesale and other) — (4,827) — (4,827)
Provision for/(Benefit from) deferred income taxes (1,032) (617) — (1,649)
Decrease/(Increase) in intersegment receivables/payables 167 (167) — —
Decrease/(Increase) in finance receivables (wholesale and other) — (4,827) — (4,827)
Decrease/(Increase) in accounts receivable and other assets (2,512) (108) — (2,620)
Decrease/(Increase) in intersegment receivables/payables 167 (167) — —
Decrease/(Increase) in inventory (1,219) — — (1,219)
Decrease/(Increase) in accounts receivable and other assets (2,512) (108) — (2,620)
Increase/(Decrease) in accounts payable and accrued and other liabilities 9,602 227 — 9,829
Decrease/(Increase) in inventory (1,219) — — (1,219)
Other 539 134 — 673
Increase/(Decrease) in accounts payable and accrued and other liabilities 9,602 227 — 9,829
Interest supplements and residual value support to Ford Credit (3,921) 3,921 — —
Other 539 134 — 673
Net cash provided by/(used in) operating activities $ 13,738 $ 1,180 $ — $ 14,918
Interest supplements and residual value support to Ford Credit (3,921) 3,921 — —
Cash flowsprovided
Net cash from investing
by/(usedactivities
in) operating activities $ 13,738 $ 1,180 $ — $ 14,918
Capital spending $ (8,156) $ (80) $ — $ (8,236)
Cash flows from investing activities
Acquisitions of finance receivables and operating leases — (54,505) — (54,505)
Capital spending $ (8,156) $ (80) $ — $ (8,236)
Collections of finance receivables and operating leases — 44,561 — 44,561
Acquisitions of finance receivables and operating leases — (54,505) — (54,505)
Purchases of marketable securities and other investments (6,551) (2,039) — (8,590)
Collections of finance receivables and operating leases — 44,561 — 44,561
Sales and maturities of marketable securities and other investments 9,895 2,805 — 12,700
Purchases of marketable securities and other investments (6,551) (2,039) — (8,590)
Settlements of derivatives 7 (145) — (138)
Sales and maturities of marketable securities and other investments 9,895 2,805 — 12,700
Capital contributions to equity method investments (2,733) — — (2,733)
Settlements of derivatives 7 (145) — (138)
Other (687) — — (687)
Capital contributions to equity method investments (2,733) — — (2,733)
Investing activity (to)/from other segments — (3) 3 —
Other (687) — — (687)
Net cash provided by/(used in) investing activities $ (8,225) $ (9,406) $ 3 $ (17,628)
Investing activity (to)/from other segments — (3) 3 —
Cash flowsprovided
Net cash from financing
by/(usedactivities
in) investing activities $ (8,225) $ (9,406) $ 3 $ (17,628)
Cash payments for dividends and dividend equivalents $ (4,995) $ — $ — $ (4,995)
Cash flows from financing activities
Purchases of common stock (335) — — (335)
Cash payments for dividends and dividend equivalents $ (4,995) $ — $ — $ (4,995)
Net changes in short-term debt (115) (1,424) — (1,539)
Purchases of common stock (335) — — (335)
Proceeds from issuance of long-term debt — 51,659 — 51,659
Net changes in short-term debt (115) (1,424) — (1,539)
Payments on long-term debt (212) (41,753) — (41,965)
Proceeds from issuance of long-term debt — 51,659 — 51,659
Other (102) (139) — (241)
Payments on long-term debt (212) (41,753) — (41,965)
Financing activity to/(from) other segments 3 — (3) —
Other (102) (139) — (241)
Net cash provided by/(used in) financing activities $ (5,756) $ 8,343 $ (3) $ 2,584
Financing activity to/(from) other segments 3 — (3) —
Effect of exchange rate changes on cash, cash equivalents, and restricted cash $ (262) $ 158 $ — $ (104)
Net cash provided by/(used in) financing activities $ (5,756) $ 8,343 $ (3) $ 2,584
Effect of exchange rate changes on cash, cash equivalents, and restricted cash $ (262) $ 158 $ — $ (104)

79

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemSelected
7. Management’s Discussion
Income Statement and Analysis
Information. Theoffollowing
Financialtable
Condition andsupplemental
provides Results of Operations (Continued)
income statement information (in
millions):
Selected Income Statement Information. The following table provides supplemental income statement information (in
millions): For the Year Ended December 31, 2023
Company
For the
excluding FordYear Ended December 31, 2023
Credit
Company Ford Credit Consolidated
Revenues excluding
$ Ford
165,901 $ 10,290 $ 176,191
Credit Ford Credit Consolidated
Total costs and expenses 161,252 9,481 170,733
Revenues $ 165,901 $ 10,290 $ 176,191
Operating income/(loss) 4,649 809 5,458
Total costs and expenses 161,252 9,481 170,733
Interest expense on Company debt excluding Ford Credit 1,302 — 1,302
Operating income/(loss) 4,649 809 5,458
Other income/(loss), net (1,093) 490 (603)
Interest expense on Company debt excluding Ford Credit 1,302 — 1,302
Equity in net income/(loss) of affiliated companies 382 32 414
Other income/(loss), net (1,093) 490 (603)
Income/(Loss) before income taxes 2,636 1,331 3,967
Equity in net income/(loss) of affiliated companies 382 32 414
Provision for/(Benefit from) income taxes (360) (2) (362)
Income/(Loss) before income taxes 2,636 1,331 3,967
Net income/(loss) 2,996 1,333 4,329
Provision for/(Benefit from) income taxes (360) (2) (362)
Less: Income/(loss) attributable to noncontrolling interests (18) — (18)
Net income/(loss) 2,996 1,333 4,329
Net income/(loss) attributable to Ford Motor Company $ 3,014 $ 1,333 $ 4,347
Less: Income/(loss) attributable to noncontrolling interests (18) — (18)
Net income/(loss) attributable to Ford Motor Company $ 3,014 $ 1,333 $ 4,347

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemSelected
7. Management’s Discussion
Balance Sheet and Analysis
Information. of Financial
The following Condition
tables and Results ofbalance
provide supplemental Operations
sheet(Continued)
information (in
millions):
Selected Balance Sheet Information. The following tables provide supplemental balance sheet information (in
December 31, 2023
millions):
Company
excluding December 31, 2023
Assets Ford Credit Ford Credit Eliminations Consolidated
Company
Cash and cash equivalents $ excluding
14,204 $ 10,658 $ — $ 24,862
Assets Ford Credit Ford Credit Eliminations Consolidated
Marketable securities 14,520 789 — 15,309
Cash and cash equivalents $ 14,204 $ 10,658 $ — $ 24,862
Ford Credit finance receivables, net — 46,425 — 46,425
Marketable securities 14,520 789 — 15,309
Trade and other receivables, net 5,771 9,830 — 15,601
Ford Credit finance receivables, net — 46,425 — 46,425
Inventories 15,651 — — 15,651
Trade and other receivables, net 5,771 9,830 — 15,601
Other assets 2,658 975 — 3,633
Inventories 15,651 — — 15,651
Receivable from other segments 1,716 1,773 (3,489) —
Other assets 2,658 975 — 3,633
Total current assets 54,520 70,450 (3,489) 121,481
Receivable from other segments 1,716 1,773 (3,489) —
Total current assets 54,520 70,450 (3,489) 121,481
Ford Credit finance receivables, net — 55,650 — 55,650
Net investment in operating leases 1,052 20,332 — 21,384
Ford Credit finance receivables, net — 55,650 — 55,650
Net property 40,551 270 — 40,821
Net investment in operating leases 1,052 20,332 — 21,384
Equity in net assets of affiliated companies 5,431 117 — 5,548
Net property 40,551 270 — 40,821
Deferred income taxes 16,795 190 — 16,985
Equity in net assets of affiliated companies 5,431 117 — 5,548
Other assets 9,959 1,482 — 11,441
Deferred income taxes 16,795 190 — 16,985
Receivable from other segments — 30 (30) —
Other assets 9,959 1,482 — 11,441
Total assets $ 128,308 $ 148,521 $ (3,519) $ 273,310
Receivable from other segments — 30 (30) —
Liabilities
Total assets $ 128,308 $ 148,521 $ (3,519) $ 273,310
Payables $ 25,092 $ 900 $ — $ 25,992
Liabilities
Other liabilities and deferred revenue 23,273 2,597 — 25,870
Payables $ 25,092 $ 900 $ — $ 25,992
Company excluding Ford Credit debt payable within one year 477 — — 477
Other liabilities and deferred revenue 23,273 2,597 — 25,870
Ford Credit debt payable within one year — 49,192 — 49,192
Company excluding Ford Credit debt payable within one year 477 — — 477
Payable to other segments 3,373 116 (3,489) —
Ford Credit debt payable within one year — 49,192 — 49,192
Total current liabilities 52,215 52,805 (3,489) 101,531
Payable to other segments 3,373 116 (3,489) —
Total current liabilities 52,215 52,805 (3,489) 101,531
Other liabilities and deferred revenue 26,519 1,895 — 28,414
Company excluding Ford Credit long-term debt 19,467 — — 19,467
Other liabilities and deferred revenue 26,519 1,895 — 28,414
Ford Credit long-term debt — 80,095 — 80,095
Company excluding Ford Credit long-term debt 19,467 — — 19,467
Deferred income taxes 668 337 — 1,005
Ford Credit long-term debt — 80,095 — 80,095
Payable to other segments 30 — (30) —
Deferred income taxes 668 337 — 1,005
Total liabilities $ 98,899 $ 135,132 $ (3,519) $ 230,512
Payable to other segments 30 — (30) —
Total liabilities $ 98,899 $ 135,132 $ (3,519) $ 230,512

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
Selected Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Other Information.

Selected
[Link] Information.
At December 31, 2022, total equity attributable to Ford was $43.2 billion, a decrease of $5.3 billion compared
with December 31, 2021. At December 31, 2023, total equity attributable to Ford was $42.8 billion, a decrease of
$0.4Equity. At December
billion compared with31, 2022, total
December 31,equity
2022. attributable to Ford
The detail for was $43.2
the changes billion,below
is shown a decrease of $5.3 billion compared
(in billions):
with December 31, 2021. At December 31, 2023, total equity attributable to Ford was $42.8 billion,
2022 vs 2021 a decrease2023ofvs 2022
$0.4 billion compared with December 31, 2022. The detail for the changes is shown below (in billions):
Increase/ Increase/
(Decrease) (Decrease)
2022 vs 2021 2023 vs 2022
Net income/(loss) $ Increase/ (2.0) $ Increase/ 4.3
(Decrease) (Decrease)
Shareholder distributions (a) (2.5) (5.4)
Net income/(loss) $ (2.0) $ 4.3
Other comprehensive income/(loss) (1.0) 0.3
Shareholder distributions (a) (2.5) (5.4)
Adoption of accounting standards — —
Other comprehensive income/(loss) (1.0) 0.3
Common stock issued (including share-based compensation impacts) 0.2 0.4
Adoption of accounting standards — —
Total $ (5.3) $ (0.4)
Common stock issued (including share-based compensation impacts) 0.2 0.4
________
(a) Total
Includes cash dividends, dividend equivalents, and anti-dilutive share repurchases. $ (5.3) $ (0.4)
________
(a) Includes cash dividends, dividend equivalents, and anti-dilutive share repurchases.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
CRITICAL ACCOUNTING Discussion and Analysis of Financial Condition and Results of Operations (Continued)
ESTIMATES

CRITICAL ACCOUNTING
We consider ESTIMATES
an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions
about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate
that We
are consider an likely
reasonably accounting estimate
to occur to be to
from period critical
period,if: or
(1)use
theof
accounting estimate requires
different estimates us to makecould
that we reasonably assumptions
have used
about matters that were highly uncertain at the time the accounting estimate was made, and
in the current period, would have a material impact on our financial condition or results of operations. (2) changes in the estimate
that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used
in the current period,
Management haswould havethe
discussed a material impactand
development on our financial
selection condition
of these or results
critical of operations.
accounting estimates with the Audit
Committee of our Board of Directors. In addition, there are other items within our financial statements that require
Management
estimation, but arehas
notdiscussed the development
deemed critical and selection
as defined above. Changesof these critical accounting
in estimates estimates
used in these with
and other the Audit
items could have
Committee of our Board of Directors. In addition,
a material impact on our financial statements. there are other items within our financial statements that require
estimation, but are not deemed critical as defined above. Changes in estimates used in these and other items could have
a material impact
Warranties on our
and Field financial
Service statements.
Actions

Warranties
Nature ofand Field Service
Estimates [Link]
We provide base warranties on the products we sell for specific periods of time and/or
mileage, which vary depending upon the type of product and the geographic location of its sale. Separately, we also
Nature of
periodically Estimates
perform fieldRequired. We provide
service actions relatedbase warranties
to safety recalls,on the products
emission weand
recalls, sellother
for specific
productperiods of time and/or
campaigns.
mileage,
Pursuant to these warranties and field service actions, we will repair, replace, or adjust parts on a vehicle thatwe
which vary depending upon the type of product and the geographic location of its sale. Separately, arealso
periodically perform field service actions related to safety recalls, emission recalls, and other product
defective in factory-supplied materials or workmanship. We accrue the estimated cost of both base warranty coverages campaigns.
Pursuant to theseactions
and field service warranties
at theand field
time service
of sale. Inactions,
addition,we willtime
from repair, replace,
to time, we or adjust
issue parts on
extended a vehicleat
warranties that
ourare
expense,
defective in factory-supplied materials or workmanship.
the estimated cost of which is accrued at the time of issuance. We accrue the estimated cost of both base warranty coverages
and field service actions at the time of sale. In addition, from time to time, we issue extended warranties at our expense,
the estimated
Assumptionscostand
of which
Approachis accrued
Used. atWe theestablish
time of issuance.
our estimate of base warranty obligations using a patterned
estimation model. We use historical information regarding the nature, frequency, and average cost of claims for each
Assumptions
vehicle line by modeland year.
Approach Used. We our
We reevaluate establish ourofestimate
estimate of baseobligations
base warranty warranty obligations
on a regularusing a patterned
basis. Experience has
estimation
shown thatmodel. Wefor
initial data useany
historical information
given model year mayregarding the nature,
be volatile; frequency,
therefore, and average
our process relies oncost of claims
long-term for each
historical
vehicle line
averages by sufficient
until model year.
dataWearereevaluate
available. our
Withestimate of base warranty
actual experience, we useobligations onupdate
the data to a regular
thebasis. Experience
historical averages. has
shown
We thenthat initial data
compare for any given
the resulting model
accruals year
with may be
present volatile;rates
spending therefore, our process
to assess whetherrelies on long-term
the balances historicalto
are adequate
averages until sufficient
meet expected data are available.
future obligations. Based onWith actualwe
this data, experience,
update ourwe use the data
estimates to update the historical averages.
as necessary.
We then compare the resulting accruals with present spending rates to assess whether the balances are adequate to
meetField
expected
servicefuture obligations.
actions may occurBased on this
in periods data, we
beyond the update our estimates
base warranty as necessary.
coverage period. We establish our estimates of
field service action obligations using a patterned estimation model. We use historical information regarding the nature,
Field service
frequency, actions
severity, may occur
and average costinof
periods
claimsbeyond
for eachthe baseyear.
model warranty coverage
We assess ourperiod. We for
obligation establish our estimates
field service of
actions on
field service action obligations using a patterned estimation model. We use historical
a regular basis using actual claims experience and update our estimates as necessary. information regarding the nature,
frequency, severity, and average cost of claims for each model year. We assess our obligation for field service actions on
a regular
Due tobasis using actualand
the uncertainty claims experience
potential and
volatility of update our estimates
the factors as necessary.
used in establishing our estimates, changes in our
assumptions could materially affect our financial condition and results of operations. See Note 25 of the Notes to the
Due toStatements
Financial the uncertainty and potential
for information volatility
regarding of the factors
warranty used
and field in establishing
service our estimates, changes in our
action costs.
assumptions could materially affect our financial condition and results of operations. See Note 25 of the Notes to the
Financial
PensionsStatements
and Other for information regarding
Postretirement Employee warranty and field service action costs.
Benefits

Pensions
Natureand Other Postretirement
of Estimates Required. TheEmployee
estimationBenefits
of our defined benefit pension and OPEB plan obligations and
expenses requires that we make use of estimates of the present value of the projected future payments to all participants,
Nature
taking of Estimates Required.
into consideration Theofestimation
the likelihood of our events,
potential future definedsuch
benefit
as pension and OPEB
demographic plan obligations
experience and healthand care cost
expenses requires that we make use of estimates of the present value of the projected future
increases. Plan obligations and expenses are based on existing retirement plan provisions. No assumptionpayments to allisparticipants,
made
taking intoany
regarding consideration the likelihood
potential future changes ofto potential future events,
benefit provisions such
beyond as demographic
those experience
to which we are presentlyand health care
committed cost
(e.g., in
increases. Plan obligations
existing labor contracts). and expenses are based on existing retirement plan provisions. No assumption is made
regarding any potential future changes to benefit provisions beyond those to which we are presently committed (e.g., in
existing labor contracts).

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemAssumptions
7. Management’s Discussion
and Approach and The
Used. Analysis of Financial
assumptions used Condition and Results
in developing of Operations
the required (Continued)
estimates include the following
key factors:
Assumptions and Approach Used. The assumptions used in developing the required estimates include the following
key •factors:
Discount rates. Our discount rate assumptions are based primarily on the results of cash flow matching analyses,
which match the future cash outflows for each major plan to a yield curve based on high-quality bonds specific to
• Discount rates.
the country Our
of the discount
plan. rate
Benefit assumptions
payments are based at
are discounted primarily onon
the rates thethe
results
curveoftocash flow matching
determine analyses,
the year-end
which match
obligations. the future cash outflows for each major plan to a yield curve based on high-quality bonds specific to
the country of the plan. Benefit payments are discounted at the rates on the curve to determine the year-end
• obligations.
Expected long-term rate of return on plan assets. Our expected long-term rate of return considers inputs from a
range of advisors for capital market returns, adjusted for specific aspects of our investment strategy by plan.
• Expected long-term
Historical returns rate
also areofconsidered
return on plan
whenassets. Our expected
appropriate. long-termisrate
The assumption of return
based considers inputs
on consideration of all from a
inputs,
range of advisors for capital market returns, adjusted for specific
with a focus on long-term trends to avoid short-term market influences. aspects of our investment strategy by plan.
Historical returns also are considered when appropriate. The assumption is based on consideration of all inputs,
• with a focus
Salary on Our
growth. long-term
salarytrends
growthtoassumption
avoid short-term market
reflects influences.
our actual experience, long-term outlook, and assumed
inflation.
• Salary growth. Our salary growth assumption reflects our actual experience, long-term outlook, and assumed
• inflation.
Inflation. Our inflation assumption is based on an evaluation of external market indicators, including real gross
domestic product growth and central bank inflation targets.
• Inflation. Our inflation assumption is based on an evaluation of external market indicators, including real gross
• domestic
Expected product growth Our
contributions. and expected
central bank inflation
amount and targets.
timing of contributions are based on an assessment of
minimum requirements, cash availability, and other considerations (e.g., funded status, avoidance of regulatory
• and levies, andOur
Expected contributions.
premiums taxexpected amount and timing of contributions are based on an assessment of
efficiency).
minimum requirements, cash availability, and other considerations (e.g., funded status, avoidance of regulatory
• premiums and
Retirement levies,
rates. and tax efficiency).
Retirement rates are developed to reflect actual and projected plan experience.

•• Retirement
Mortality rates.
rates. Retirement
Mortality ratesrates are developed
are developed to reflect
to reflect actualactual and projected
and projected plan experience.
plan experience.

•• Mortality
Health costMortality
rates.
care rateshealth
trends. Our are developed
care cost to reflect
trend actual andare
assumptions projected planbased
developed experience.
on historical cost data, the
near-term outlook, and an assessment of likely long-term trends.
• Health care cost trends. Our health care cost trend assumptions are developed based on historical cost data, the
near-termare
Assumptions outlook,
set atand
eachanyear-end
assessment of likely
and are long-term
generally trends. during the year unless there is a major plan
not changed
event, such as a curtailment or settlement that would trigger a plan remeasurement.
Assumptions are set at each year-end and are generally not changed during the year unless there is a major plan
event,
See such as17
Note a curtailment
of the Notesortosettlement thatStatements
the Financial would trigger
foramore
plan information
remeasurement.
regarding pension and OPEB costs and
assumptions.
See Note 17 of the Notes to the Financial Statements for more information regarding pension and OPEB costs and
assumptions.
Pension Plans

Pension
EffectPlans
of Actual Results. The year-end 2023 weighted average discount rate was 5.17% for U.S. plans and 3.98% for
non-U.S. plans, reflecting decreases of 34 and 44 basis points, respectively, compared with year-end 2022. In 2023, the
[Link]
actualofreturn
ActualonResults. The 7.41%,
assets was year-end 2023was
which weighted
higheraverage
than thediscount
expectedrate was 5.17%
long-term forreturn
rate of U.S. plans and 3.98%
of 6.25%. for
Non-U.S.
non-U.S. plans, reflecting decreases of 34 and 44 basis points, respectively, compared with year-end
actual return on assets was 5.56%, which was higher than the expected long-term rate of return of 4.13%. The higher 2022. In 2023, the
U.S. actual
returns return on assets
are explained was
primarily by 7.41%,
gains on which
fixedwas higher
income than the
assets. expected
In total, lowerlong-term rate ofcompared
discount rates return of 6.25%. Non-U.S.
to year-end 2022,
actual return on assets was 5.56%, which was higher than the expected long-term rate of return of 4.13%.
partially offset by asset gains in excess of our assumptions resulted in a net remeasurement loss of $1.8 billion, which hasThe higher
returns are explained
been recognized primarily
within by gains
net periodic on fixed
benefit income
cost and assets.
reported as aInspecial
total, lower
[Link] rates compared to year-end 2022,
partially offset by asset gains in excess of our assumptions resulted in a net remeasurement loss of $1.8 billion, which has
beenFor
recognized
2024, thewithin net periodic
expected long-termbenefit
rate ofcost andon
return reported
assets as a special
is 5.93% for item.
U.S. plans, down 32 basis points from 2023,
reflecting lower capital market return expectations, and 4.53% for non-U.S. plans, up 40 basis points compared with a
yearFor 2024,
ago, the expected
reflecting long-term rate
return expectations of return
in those on assets
markets and aishigher
5.93%return
for U.S. plans,mix
seeking downfor 32 basisplans.
certain points from 2023,
reflecting lower capital market return expectations, and 4.53% for non-U.S. plans, up 40 basis points compared with a
yearDe-risking
ago, reflecting returnWe
Strategy. expectations in those
employ a broad marketsstrategy
de-risking and a higher
for ourreturn
globalseeking
fundedmix forthat
plans certain plans. the matching
increases
characteristics of our assets relative to our obligation as funded status improves. Changes in interest rates, which directly
De-risking
influence Strategy.
changes We employ
in discount a broad
rates, in additionde-risking strategyhave
to other factors for our global funded
a significant plans
impact thatvalue
on the increases
of ourthe matching
pension
characteristics
obligation and fixed income asset portfolio. Our de-risking strategy has increased the allocation to fixed income directly
of our assets relative to our obligation as funded status improves. Changes in interest rates, which
influence
investments changes in discount
and reduced rates, instatus
our funded addition to othertofactors
sensitivity changeshave a significant
in interest [Link] on the
Changes in value
interestof rates
our pension
should result
obligation and fixed income asset portfolio. Our de-risking strategy has increased the allocation
in offsetting effects in the value of our pension obligation and the value of the fixed income asset portfolio. to fixed income
investments and reduced our funded status sensitivity to changes in interest rates. Changes in interest rates should result
in offsetting effects in the value of our pension obligation and the value of the fixed income asset portfolio.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemSensitivity
7. Management’s
[Link]
The Decemberand Analysis
31, 2023ofpension
Financial Condition
funded and
status Results
and of Operations
2024 expense (Continued)
are affected by year-end
2023 assumptions. Sensitivities to these assumptions may be asymmetric and are specific to the time periods noted. The
Sensitivity
effects Analysis.
of changes The December
in the factors 31, 2023
that generally pension
have funded
the largest status
impact onand 2024 expense
year-end are affected
funded status by year-end
and pension expense
2023 assumptions.
are discussed below. Sensitivities to these assumptions may be asymmetric and are specific to the time periods noted. The
effects of changes in the factors that generally have the largest impact on year-end funded status and pension expense
are discussed below.
Discount rates and interest rates have the largest impact on our obligations and fixed income assets. The table below
estimates the effect on our funded status of an increase/decrease in discount rates and interest rates (in millions):
Discount rates and interest rates have the largest impact on our obligations and fixed income assets. The table below
estimates the effect on our funded status of an increase/decrease in discount rates and interest rates
Basis (in millions):in
Increase/(Decrease)
December 31, 2023 Funded Status
Point
Factor Change [Link]/(Decrease)
Plans Non-U.S.
in Plans
Basis December 31, 2023 Funded Status
Discount rate - obligation +/- Point
100 bps $2,900/$(3,400) $2,700/$(3,400)
Factor Change U.S. Plans Non-U.S. Plans
Interest rate - fixed income assets +/- 100 (2,800)/3,200 (1,800)/2,200
Discount rate - obligation +/- 100 bps $2,900/$(3,400) $2,700/$(3,400)
Net impact on funded status $100/$(200) $900/$(1,200)
Interest rate - fixed income assets +/- 100 (2,800)/3,200 (1,800)/2,200
Net impact on funded status $100/$(200) $900/$(1,200)
The fixed income asset sensitivity shown excludes other fixed income return components (e.g., changes in credit
spreads, bond coupon and active management excess returns), and growth asset returns. Other factors that affect net
Thestatus
funded fixed income asset sensitivity
(e.g., contributions) shown
are not excludes other fixed income return components (e.g., changes in credit
reflected.
spreads, bond coupon and active management excess returns), and growth asset returns. Other factors that affect net
funded status
Interest (e.g.,
rates andcontributions)
the expectedare not reflected.
long-term rate of return on assets have the largest effect on pension expense. These
assumptions are generally set at each year-end for expense recorded throughout the following year. The table below
Interest
estimates therates and
effect onthe expected
pension long-term
expense rate of returnassumption
of a higher/lower on assets have the largest
for these factorseffect on pension expense. These
(in millions):
assumptions are generally set at each year-end for expense recorded throughout the following year. The table below
estimates the effect on pension expense of a higher/lower assumption for these Basisfactors (in millions):
Increase/(Decrease) in
2024 Pension Expense
Point
Factor Change [Link]/(Decrease)
Plans Non-U.S.
in Plans
Basis 2024 Pension Expense
Interest rate - service cost and interest cost +/-Point
25 bps $25/$(25) $15/$(15)
Factor Change U.S. Plans Non-U.S. Plans
Expected long-term rate of return on assets +/- 25 (75)/75 (55)/55
Interest rate - service cost and interest cost +/- 25 bps $25/$(25) $15/$(15)
Expected long-term rate of return on assets +/- 25 (75)/75 (55)/55
The effect of changing multiple factors simultaneously cannot be calculated by combining the individual sensitivities.
The sensitivity of pension expense to a change in discount rate assumptions may not be linear.
The effect of changing multiple factors simultaneously cannot be calculated by combining the individual sensitivities.
The sensitivity
Other of pension
Postretirement expense
Employee to a change in discount rate assumptions may not be linear.
Benefits

Other Postretirement
Effect Employee
of Actual Results. TheBenefits
weighted average discount rate used to determine the benefit obligation for worldwide
OPEB plans at December 31, 2023 was 5.10%, compared with 5.48% at December 31, 2022, resulting in a worldwide net
Effect of Actual
remeasurement of $286 The
lossResults. weighted
million, average
which has beendiscount ratewithin
recognized used to
netdetermine the benefit
periodic benefit cost obligation for worldwide
and reported as a special
OPEB
item. plans at December 31, 2023 was 5.10%, compared with 5.48% at December 31, 2022, resulting in a worldwide net
remeasurement loss of $286 million, which has been recognized within net periodic benefit cost and reported as a special
[Link] Analysis. Discount rates and interest rates have the largest effect on our OPEB obligation and expense.
The table below estimates the effect on 2024 OPEB expense of higher/lower assumptions for these factors (in millions):
Sensitivity Analysis. Discount rates and interest rates have the largest effect on our OPEB obligation and expense.
Worldwide OPEB
The table below estimates the effect on 2024 OPEB expense of higher/lower assumptions for these factors (in millions):
(Increase)/
Basis Worldwide OPEB
Decrease Increase/
Point 2023 YE (Decrease)
Factor Change (Increase)/
Obligation 2024 Expense
Basis Decrease Increase/
Discount rate - obligation +/- Point
100 bps $450/$(540)
2023 YE N/A
(Decrease)
Factor Change Obligation 2024 Expense
Interest rate - service cost and interest cost +/- 25 N/A $5/$(5)
Discount rate - obligation +/- 100 bps $450/$(540) N/A
Interest rate - service cost and interest cost +/- 25 N/A $5/$(5)
Income Taxes

Income Taxes
Nature of Estimates Required. We must make estimates and apply judgment in determining the provision for income
taxes for financial reporting purposes. We make these estimates and judgments primarily in the following areas: (i) the
Nature of
calculation of tax
Estimates
credits,Required. We mustofmake
(ii) the calculation estimates
differences in theand applyofjudgment
timing recognitionin determining
of revenue andthe expense
provision for
for tax
income
taxes for financial
reporting reporting
and financial purposes.
statement We make
purposes, these
as well estimates
as (iii) and judgments
the calculation primarily
of interest in the following
and penalties areas:
related to (i) the
uncertain tax
calculation Changes
positions. of tax credits, (ii) the
in these calculation
estimates and of differences
judgments may in result
the timing of recognition
in a material of revenue
increase and expense
or decrease to our taxfor tax
provision,
reporting andbe
which would financial statement
recorded purposes,
in the period as well
in which as (iii) the
the change calculation of interest and penalties related to uncertain tax
occurs.
positions. Changes in these estimates and judgments may result in a material increase or decrease to our tax provision,
which would be recorded in the period in which the change occurs.

85

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemAssumptions
7. Management’s Discussion
and Approach and We
Used. Analysis of Financial
are subject to theCondition
income tax andlawsResults of Operations
and regulations (Continued)
of the many jurisdictions in
which we operate. These tax laws and regulations are complex and involve uncertainties in the application to our facts
and Assumptions
circumstances and Approach
that may be open [Link] are subject We
interpretation. to the income tax
recognize laws for
benefits andthese
regulations of the
uncertain taxmany jurisdictions
positions based in
which we operate. These tax laws and regulations are complex and involve uncertainties in
upon a process that requires judgment regarding the technical application of the laws, regulations, and various related the application to our facts
and circumstances that may be open to interpretation. We recognize benefits for these uncertain tax
judicial opinions. If, in our judgment, it is more likely than not (defined as a likelihood of more than 50%) that the uncertain positions based
upon a process
tax position thatsettled
will be requires judgment
favorably for regarding the technical
us, we estimate an amountapplication of the laws,
that ultimately regulations,
will be and various
realized. This processrelated
is
judicial
inherently subjective since it requires our assessment of the probability of future outcomes. We evaluatethat
opinions. If, in our judgment, it is more likely than not (defined as a likelihood of more than 50%) thesetheuncertain
uncertain
tax position will be settled favorably for us, we estimate an amount that ultimately will be realized.
tax positions on a quarterly basis, including consideration of changes in facts and circumstances, such as new regulations This process is
inherently subjective
or recent judicial since as
opinions, it requires
well as theour status
assessment
of auditofactivities
the probability of future
by taxing outcomes.
authorities. We evaluate
Changes these uncertain
to our estimate of the
tax
amount to be realized are recorded in our provision for income taxes during the period in which the changenew
positions on a quarterly basis, including consideration of changes in facts and circumstances, such as regulations
occurred.
or recent judicial opinions, as well as the status of audit activities by taxing authorities. Changes to our estimate of the
amount to be also
We must realized
assessare the
recorded in our
likelihood thatprovision for able
we will be income taxes during
to recover the period
our deferred tax in whichagainst
assets the change
futureoccurred.
sources of
taxable income and reduce the carrying amount of deferred tax assets by recording a valuation allowance if, based on all
We must
available also assess
evidence, the likely
it is more likelihood
than that we will
not that beaable
all or to recover
portion of suchour deferred
assets taxbe
will not assets against future sources of
realized.
taxable income and reduce the carrying amount of deferred tax assets by recording a valuation allowance if, based on all
available evidence, it iswhich
This assessment, moreislikely than not
completed onthat all or jurisdiction
a taxing a portion ofbasis,
such assets will account
takes into not be realized.
various types of evidence,
including the following:
This assessment, which is completed on a taxing jurisdiction basis, takes into account various types of evidence,
including the following:
• Nature, frequency, and severity of current and cumulative financial reporting losses. A pattern of objectively
measured recent financial reporting losses is heavily weighted as a source of negative evidence. We generally
• Nature,
considerfrequency,
cumulativeand severity
pre-tax of current
losses and cumulative
in the three-year periodfinancial reporting
ending with A pattern
[Link]
the current ofsignificant
to be objectively
measuredevidence
negative recent financial reporting
regarding losses is heavily
future profitability. weighted
We also as athe
consider source of negative
strength and trendevidence. We as
of earnings, generally
well as
consider
other cumulative
relevant pre-tax
factors. losses
In certain in the three-year
circumstances, periodinformation
historical ending withmay
the not
current quarter
be as to be
relevant duesignificant
to changes in
negative
our evidence
business regarding future profitability. We also consider the strength and trend of earnings, as well as
operations;
other relevant factors. In certain circumstances, historical information may not be as relevant due to changes in
• our business
Sources operations;
of future taxable income. Future reversals of existing temporary differences are heavily weighted
sources of objectively verifiable positive evidence. Projections of future taxable income exclusive of reversing
• Sources
temporary ofdifferences
future taxable a sourceFuture
areincome. reversals
of positive of existing
evidence temporary
only when differences
the projections areare heavily with
combined weighted
a history of
sources of objectively
recent profits and can verifiable
be reasonablypositive [Link],
estimated. Projections of future
these taxable
projections income
are exclusive
considered of reversing
inherently
temporary differences
subjective and arewill
generally a source of positivetoevidence
not be sufficient overcome only when the
negative projections
evidence are combined
that includes with
relevant a history of
cumulative
recent profits and can be reasonably estimated. Otherwise, these projections are considered
losses in recent years, particularly if the projected future taxable income is dependent on an anticipated inherently
subjective
turnaroundand generally will
to profitability thatnot
hasbenot
sufficient
yet beento achieved.
overcome negative evidence
In such cases, that includes
we generally giverelevant cumulativeof
these projections
losses in recent years, particularly if the projected future taxable income is dependent
future taxable income no weight for the purposes of our valuation allowance assessment; and on an anticipated
turnaround to profitability that has not yet been achieved. In such cases, we generally give these projections of
• future taxablestrategies.
Tax planning income no If weight for theand
necessary purposes of our
available, tax valuation allowance could
planning strategies assessment; and
be implemented to accelerate
taxable amounts to utilize expiring carryforwards. These strategies would be a source of additional positive
• Tax planning
evidence dependingIfon
and,strategies. necessary andcould
their nature, available, tax planning
be heavily strategies could be implemented to accelerate
weighted.
taxable amounts to utilize expiring carryforwards. These strategies would be a source of additional positive
evidence the
In assessing and, dependingofon
realizability their nature,
deferred could we
tax assets, be heavily
considerweighted.
the trade-offs between cash preservation and cash
outlays to preserve tax credits. We presently believe that global valuation allowances of $4.2 billion are required and that
In assessing
we ultimately will the realizability
recover of deferred
the remaining tax assets,
$16 billion we consider
of deferred the trade-offs
tax assets. However,between cash realization
the ultimate preservationof and
our cash
outlays to preserve tax credits. We presently believe that global valuation allowances of $4.2 billion are required
deferred tax assets is subject to a number of variables, including our future profitability within relevant tax jurisdictions, and that
we ultimately will recover the remaining $16 billion of deferred tax assets. However, the ultimate realization
and future tax planning and the related effects on our cash and liquidity position. Accordingly, our valuation allowances of our
deferred tax assets
may increase is subject
or decrease to a number
in future [Link] variables, including our future profitability within relevant tax jurisdictions,
and future tax planning and the related effects on our cash and liquidity position. Accordingly, our valuation allowances
mayFor
increase or decrease
additional in future
information periods.
regarding income taxes, see Note 7 of the Notes to the Financial Statements.

For additional information regarding income taxes, see Note 7 of the Notes to the Financial Statements.

86

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Item 7. Management’s
Impairment Discussion
of Long-Lived Assetsand Analysis of Financial Condition and Results of Operations (Continued)

Impairment of Long-Lived
Asset groups are tested Assets
at the level of the smallest identifiable group of assets that generate cash inflows that are
largely independent of the cash inflows from other assets or groups of assets. Asset groupings for impairment analysis
Asset groupswhen
are reevaluated are tested
eventsatoccur,
the level
suchofasthechanges
smallestinidentifiable group
organizational of assets
structure that
and generate cash
management inflows Following
reporting. that are
largely
the independent
organizational of segment
and the cash inflows
structurefrom otherinassets
change or groupsofof2023,
the beginning assets.
our Asset
asset groupings
groups are:forFord
impairment analysis
Blue North
are reevaluated
America, when
Ford Blue eventsFord
Europe, occur, such
Blue Restas of
changes in organizational
World, Ford Model e, Fordstructure andCredit,
Pro, Ford management
and Fordreporting.
Next. Following
the organizational and segment structure change in the beginning of 2023, our asset groups are: Ford Blue North
America,
NatureFord Blue Europe,
of Estimates Ford Blue
Required Rest of World,
- Held-and-Used Ford Model
Long-Lived e, FordWe
Assets. Pro, Ford
test our Credit, andasset
long-lived Ford groups
Next. when
changes in circumstances indicate their carrying value may not be recoverable. Events that trigger a test for recoverability
Nature of Estimates Required - Held-and-Used Long-Lived Assets. We test our long-lived asset groups when
include material adverse changes in projected revenues or expenses, present cash flow losses combined with a history of
changes in circumstances indicate their carrying value may not be recoverable. Events that trigger a test for recoverability
cash flow losses and a forecast that demonstrates significant continuing losses, significant negative industry or economic
include material adverse changes in projected revenues or expenses, present cash flow losses combined with a history of
trends (including a substantial shift in consumer preference), a current expectation that a long-lived asset group will be
cash flow losses and a forecast that demonstrates significant continuing losses, significant negative industry or economic
disposed of significantly before the end of its useful life, a significant adverse change in the manner in which an asset
trends (including a substantial shift in consumer preference), a current expectation that a long-lived asset group will be
group is used or in its physical condition, or when there is a change in the asset grouping. In addition, investing in new,
disposed of significantly before the end of its useful life, a significant adverse change in the manner in which an asset
emerging
group is usedproducts (e.g.,
or in its EVs) or
physical servicesor(e.g.,
condition, when connectivity) may require
there is a change in the substantial upfront
asset grouping. In investment, which may
addition, investing result
in new,
in initial forecasted negative cash flows in the near term. In these instances, near-term negative cash flows
emerging products (e.g., EVs) or services (e.g., connectivity) may require substantial upfront investment, which may result on their own
may not forecasted
in initial be indicative of a triggering
negative event
cash flows for evaluation
in the near term. ofInimpairment. In such
these instances, circumstances,
near-term negativewe cashalso conduct
flows a own
on their
qualitative
may not be indicative of a triggering event for evaluation of impairment. In such circumstances, we also conduct acash
evaluation of the business growth trajectory, which includes updating our assessment of when positive
flows are expected
qualitative evaluationto of
bethe
generated,
businessconfirming whetherwhich
growth trajectory, established
includesmilestones
updating are
our being achieved,
assessment and assessing
of when our
positive cash
abilityare
flows andexpected
intent to continue to access
to be generated, required whether
confirming funding to execute the
established plan. If this
milestones areevaluation indicates
being achieved, andaassessing
triggering event
our
has occurred,
ability a test
and intent for recoverability
to continue to accessisrequired
[Link] to execute the plan. If this evaluation indicates a triggering event
has occurred, a test for recoverability is performed.
When a triggering event occurs, a test for recoverability is performed, comparing projected undiscounted future cash
flowsWhen
to thea carrying
triggering value
event ofoccurs,
the asset group.
a test If the undiscounted
for recoverability forecasted
is performed, cash flows
comparing are less
projected than the carrying
undiscounted futurevalue
cash
of the assets, the asset group’s fair value is measured relying primarily on a discounted
flows to the carrying value of the asset group. If the undiscounted forecasted cash flows are less than the carrying cash flow method. To the extent
value
available,
of the assets,we willthe also
assetconsider
group’s third-party
fair value isvaluations
measuredofrelying
our long-lived
primarilyassets that were prepared
on a discounted cash flowfor other business
method. To the extent
purposes. An impairment charge is recognized for the amount by which the carrying
available, we will also consider third-party valuations of our long-lived assets that were prepared for other value of the asset group exceeds its
business
estimated fair value. When an impairment loss is recognized for assets to be held and
purposes. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its used, the adjusted carrying
amounts
estimatedoffair those assets
value. When arean depreciated
impairmentover losstheir remaining for
is recognized useful [Link] be held and used, the adjusted carrying
assets
amounts of those assets are depreciated over their remaining useful life.
Assumptions and Approach Used - Held-and-Used Long-Lived Assets. The fair value of an asset group is determined
fromAssumptions
the perspective andofApproach
a market-participant considering,Long-Lived
Used - Held-and-Used among other things,The
Assets. appropriate
fair value discount
of an asset rates, valuation
group is determined
techniques, the most of
from the perspective advantageous market, considering,
a market-participant and assumptions among about the
other highest
things, and best use
appropriate of therates,
discount assetvaluation
group.
techniques, the most advantageous market, and assumptions about the highest and best use of the asset group.
We measure the fair value of an asset group based on market prices (i.e., the amount for which the asset could be
soldWeto ameasure
third party)thewhen
fair value of an asset
available. Whengroupmarket based onare
prices market prices (i.e.,
not available, wethe amountestimate
generally for whichthe thefair
asset
valuecould be
of the
sold
assettogroup
a third party)
using thewhen
income available.
approach When
and/ormarket prices are
the market not available,
approach. we generally
The income approach estimate
uses cashthe fair
flowvalue of the
projections.
asset
Inherentgroup
in ourusing the incomeofapproach
development cash flowand/or the market
projections approach. The
are assumptions and income
estimatesapproach
derived uses
from cash flowof
a review projections.
our
Inherent inresults,
operating our development
business plan of cash flow projections
forecasts, are assumptions
expected growth rates, andand costestimates
of capital,derived
similar from a review
to those of our
a market participant
operating
would useresults,
to assess business plan We
fair value. forecasts,
also make expected
certaingrowth rates, and
assumptions about costfuture
of capital, similar
economic to those and
conditions a market
otherparticipant
data.
would of
Many usethetofactors
assessusedfair value. We also
in assessing fairmake
valuecertain assumptions
are outside about
the control future economic
of management, and conditions and other data.
these assumptions and
Many of the
estimates may factors
changeused in in assessing
future periods. fair value are outside the control of management, and these assumptions and
estimates may change in future periods.
Changes in assumptions or estimates can materially affect the fair value measurement of an asset group and,
Changes
therefore, caninaffect
assumptions or estimates
the test results. can materially
The following are key affect the fair value
assumptions we usemeasurement of anflow
in making cash asset group and,
projections:
therefore, can affect the test results. The following are key assumptions we use in making cash flow projections:
• Business projections. We make assumptions about the demand for our products in the marketplace. These
• Business
assumptions drive our We
projections. makeassumptions
planning assumptionsfor about the demand
volume, mix, andfor our products
pricing. We also in make
the marketplace.
assumptionsThese about our
assumptions drive our planning assumptions for volume, mix, and pricing.
cost levels (e.g., capacity utilization, cost performance). These projections are derived using We also make assumptions
our internalabout our
business
cost levels (e.g., capacity utilization, cost performance). These
plan forecasts that are updated at least annually and reviewed by our Board of Directors. projections are derived using our internal business
plan forecasts that are updated at least annually and reviewed by our Board of Directors.
• Long-term growth rate. A growth rate is used to calculate the terminal value of the business and is added to the
• Long-term growth
present value rate.
of the A growth
debt-free rate cash
interim is used to calculate
flows. the terminal
The growth value
rate is the of the rate
expected business andan
at which is asset
addedgroup’s
to the
present value of the debt-free interim cash flows. The growth
earnings stream is projected to grow beyond the planning period. rate is the expected rate at which an asset group’s
earnings stream is projected to grow beyond the planning period.
• Discount rate. When measuring possible impairment, future cash flows are discounted at a rate that is consistent
• Discount rate. When measuring possible impairment, future cash flows are discounted at a rate that is consistent
with a weighted-average cost of capital that we anticipate a potential market participant would use. Weighted-
with a weighted-average cost of capital that we anticipate a potential market participant would use. Weighted-
average cost of capital is an estimate of the overall risk-adjusted pre-tax rate of return expected by equity and
average cost of capital is an estimate of the overall risk-adjusted pre-tax rate of return expected by equity and
debt holders of a business enterprise.
debt holders of a business enterprise.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
• Economic projections. Assumptions regarding general economic conditions are included in and affect our
• assumptions
Economic regarding Assumptions
projections. industry salesregarding
and pricing estimates
general for ourconditions
economic vehicles. are These macroeconomic
included in and affectassumptions
our
include, but are
assumptions not limited
regarding to, industry
industry sales andsales volumes,
pricing inflation,
estimates interest
for our rates, These
vehicles. prices macroeconomic
of raw materials assumptions
(e.g.,
commodities),
include, but areand notforeign
limited currency exchange
to, industry rates. inflation, interest rates, prices of raw materials (e.g.,
sales volumes,
commodities), and foreign currency exchange rates.
The market approach is another method for measuring the fair value of an asset group. This approach relies on the
market
Thevalue
market(i.e., market capitalization)
approach is another method of companies
for measuringthat are the engaged
fair value in ofthe
an same or a similar
asset group. Thisline of business
approach reliesas onthe
the
asset group
market valuebeing evaluated.
(i.e., market In addition,oftocompanies
capitalization) the extent thatavailable we also in
are engaged consider
the same third-party
or a similarvaluations that wereas the
line of business
prepared
asset groupfor being
other evaluated.
business purposes.
In addition, to the extent available we also consider third-party valuations that were
prepared for other business purposes.
During 2023, we identified triggering events related to our Ford Blue Europe asset group. In each situation in which
we experienced
During 2023, a we
triggering event
identified during the
triggering year,
events we tested
related to ourour long-lived
Ford assetsasset
Blue Europe for impairment
group. In each usingsituation
our internalin which
economic
we experienced a triggering event during the year, we tested our long-lived assets for impairment using ourrecoverable.
and business projections, and determined that the carrying values of the long-lived assets were internal If,
in future quarters, our economic or business projections were to change as a result of
economic and business projections, and determined that the carrying values of the long-lived assets were recoverable. If, an update to our plans, a
deterioration
in of theour
future quarters, economic
economic or business
or business environment,
projectionsawere significant
to changeadverseas a change
result ofinan the extenttoorour
update manner
plans,ina which a
long-lived asset
deterioration is being
of the used,ororbusiness
economic an expectation that a long-lived
environment, a significant asset groupchange
adverse will be disposed
in the extentof significantly
or manner in before
whichthe a
end of its useful
long-lived asset is life, we would
being used, undertake additional
or an expectation thattesting, as appropriate,
a long-lived asset group which
will could
be disposedresult in
ofan impairment
significantly of long-
before the
livedofassets.
end its useful life, we would undertake additional testing, as appropriate, which could result in an impairment of long-
lived assets.
Allowance for Credit Losses
Allowance for Credit Losses
The allowance for credit losses represents Ford Credit’s estimate of the expected lifetime credit losses inherent in
finance
Thereceivables
allowance for as credit
of thelosses
balance sheet date.
represents FordThe adequacy
Credit’s of Ford
estimate Credit’s
of the allowance
expected lifetimeforcredit
creditlosses
lossesinherent
is assessed
in
quarterly, and the assumptions and models used in establishing the allowance are evaluated
finance receivables as of the balance sheet date. The adequacy of Ford Credit’s allowance for credit losses is assessed regularly. Because credit
losses canand
quarterly, varythesubstantially
assumptions over
andtime, estimating
models used incredit losses requires
establishing the allowancea number of assumptions
are evaluated aboutBecause
regularly. matters credit
that are
uncertain. Changes in assumptions affect Ford Credit interest, operating, and other
losses can vary substantially over time, estimating credit losses requires a number of assumptions about matters that expenses on our consolidated income
are
statements and the allowance for credit losses contained within Ford Credit finance receivables,
uncertain. Changes in assumptions affect Ford Credit interest, operating, and other expenses on our consolidated income net on our consolidated
balance
statements sheets.
and the See Note 10 of
allowance forthe Notes
credit to the
losses Financialwithin
contained Statements for more
Ford Credit information
finance receivables,regarding
net onallowance for credit
our consolidated
losses. sheets. See Note 10 of the Notes to the Financial Statements for more information regarding allowance for credit
balance
losses.
Nature of Estimates Required. Ford Credit estimates the allowance for credit losses for receivables that share similar
risk Nature
characteristics
of EstimatesbasedRequired.
on a collective assessment
Ford Credit using
estimates the a combination
allowance forofcreditmeasurement
losses formodelsreceivablesand management
that share similar
judgment.
risk The models
characteristics based consider factors such
on a collective as historical
assessment usingtrends in credit losses,
a combination recent portfolio
of measurement models performance,
and management and
forward-looking
judgment. macroeconomic
The models consider conditions.
factors suchThe models vary
as historical by in
trends portfolio and receivable
credit losses, type including
recent portfolio consumer
performance, andfinance
receivables, wholesale
forward-looking loans, and
macroeconomic dealer loans.
conditions. TheIfmodels
Ford Credit
vary by does not believe
portfolio the models
and receivable reflect
type lifetime
including expectedfinance
consumer credit
losses for thewholesale
receivables, portfolio, an adjustment
loans, and dealeris made
[Link] management
Ford Credit does not judgment regarding
believe the modelsqualitative factors,
reflect lifetime including
expected credit
economic
losses uncertainty,
for the portfolio,observable
an adjustment changes in portfolio
is made to reflectperformance,
managementand other relevant
judgment regarding factors.
qualitative factors, including
economic uncertainty, observable changes in portfolio performance, and other relevant factors.

88
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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemAssumptions
7. Management’s
Used. Discussion andallowance
Ford Credit’s Analysis of
forFinancial Condition
credit losses andon
is based Results of Operations
its assumptions (Continued)
regarding:

Assumptions
• ProbabilityUsed. Ford Credit’s
of default. allowance
The expected for credit
probability losses is and
of payment based ontoitsdefault,
time assumptions regarding:
which include assumptions about
macroeconomic factors and recent performance; and
•• Probability
Loss given of The
[Link]
default. expected of
percentage probability of payment
the expected balanceand
duetime to default,
at default thatwhich
is not include assumptions
recoverable. about
The loss
macroeconomic factors and recent performance; and
given default takes into account expected collateral value and future recoveries.
• Loss given default. The percentage of the expected balance due at default that is not recoverable. The loss
given default takes into account expected collateral value and future recoveries.
Macroeconomic factors used in Ford Credit’s models are country specific and include variables such as
unemployment rates, personal bankruptcy filings, housing prices, and gross domestic product.
Macroeconomic factors used in Ford Credit’s models are country specific and include variables such as
unemployment rates, personal
Sensitivity Analysis. bankruptcy
Changes filings, housing
in the probability prices,
of default andand
lossgross
givendomestic product.
default assumptions would affect the
allowance for credit losses. The effect of the indicated increase/decrease in the assumptions for Ford Credit’s U.S. Ford
and Sensitivity Analysis.
Lincoln retail Changes
financing in the(in
is as follows probability
millions):of default and loss given default assumptions would affect the
allowance for credit losses. The effect of the indicated increase/decrease in the assumptions for Ford Credit’s U.S. Ford
Basis Point Increase/
and Lincoln retail financing is as follows (in millions):
Assumption Change (Decrease)
Probability of default (lifetime) Basis
+/- 100Point
bps $230/$(230)
Increase/
Assumption Change (Decrease)
Loss given default +/- 100 10/(10)
Probability of default (lifetime) +/- 100 bps $230/$(230)
Loss given default +/- 100 10/(10)
Accumulated Depreciation on Vehicles Subject to Operating Leases

Accumulated
AccumulatedDepreciation
depreciationononVehicles
vehicles Subject
subject totooperating
Operating Leases
leases reduces the value of the leased vehicles in Ford
Credit’s operating lease portfolio from their original acquisition value to their expected residual value at the end of the
Accumulated
lease term. depreciation on vehicles subject to operating leases reduces the value of the leased vehicles in Ford
Credit’s operating lease portfolio from their original acquisition value to their expected residual value at the end of the
lease term.
Ford Credit monitors residual values each month, and it reviews the adequacy of accumulated depreciation on a
quarterly basis. If Ford Credit believes that the expected residual values for its vehicles have changed, it revises
Ford Credit
depreciation monitors
to ensure residual
that values each
net investment month, and
in operating it reviews
leases (equalthe adequacy
to the of accumulated
acquisition value of the depreciation
vehicles lesson a
quarterly basis.
accumulated If Ford Credit
depreciation) will believes that to
be adjusted thereflect
expected
Ford residual
Credit’s values
revisedfor its vehicles
estimate of thehave changed,
expected it revises
residual value at the
depreciation to ensure
end of the lease that net investment
term. Adjustments in operating
to depreciation leasesresult
expense (equal tochange
in a the acquisition value of therates
in the depreciation vehicles less
of the vehicles
accumulated depreciation) will be adjusted to reflect Ford Credit’s revised
subject to operating leases and are recorded prospectively on a straight-line basis. estimate of the expected residual value at the
end of the lease term. Adjustments to depreciation expense result in a change in the depreciation rates of the vehicles
subject to operating
Generally, lease leases and are
customers haverecorded
the optionprospectively on a straight-line
to buy the leased basis.
vehicle at the end of the lease or to return the vehicle to
the dealer.
Generally, lease customers have the option to buy the leased vehicle at the end of the lease or to return the vehicle to
the dealer.
Nature of Estimates Required. Each operating lease in Ford Credit’s portfolio represents a vehicle it owns that has
been leased to a customer. At the time Ford Credit purchases a lease, it establishes an expected residual value for the
Nature
vehicle. of Estimates
Ford Required.
Credit estimates Each operating
the expected residuallease in by
value Ford Credit’s recent
evaluating portfolio represents
auction a vehicle
values, it owns that
return volumes has
for its
been leased to a customer. At the time Ford Credit purchases a lease, it establishes an expected
leased vehicles, industrywide used vehicle prices, marketing incentive plans, and vehicle quality data. residual value for the
vehicle. Ford Credit estimates the expected residual value by evaluating recent auction values, return volumes for its
leased vehicles, industrywide
Assumptions Used. Ford used vehicle
Credit’s prices, marketing
accumulated incentive
depreciation plans, subject
on vehicles and vehicle quality data.
to operating leases is based on
assumptions regarding:
Assumptions Used. Ford Credit’s accumulated depreciation on vehicles subject to operating leases is based on
assumptions
• Auctionregarding:
value. Ford Credit’s projection of the market value of the vehicles when sold at the end of the lease; and
• Return volume. Ford Credit’s projection of the number of vehicles that will be returned at lease-end.
• Auction value. Ford Credit’s projection of the market value of the vehicles when sold at the end of the lease; and
•SeeReturn
Note 12volume. Ford Credit’s
of the Notes projection
to the Financial of the number
Statements of vehicles
for more that regarding
information will be returned at lease-end.
accumulated depreciation on
vehicles subject to operating leases.
See Note 12 of the Notes to the Financial Statements for more information regarding accumulated depreciation on
vehicles subject to operating leases.

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 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

ItemSensitivity
7. Management’s
[Link] andvehicles,
For returned AnalysisFord
of Financial Condition
Credit faces a riskand
thatResults of Operations
the amount (Continued)
it obtains from the vehicle sold at
auction will be less than its estimate of the expected residual value for the vehicle. The impact of the change in
SensitivityonAnalysis.
assumptions For returned
future auction vehicles,
values and returnFord Creditwould
volumes facesincrease
a risk that
or the amount
decrease it obtains from
accumulated the vehicle sold at
supplemental
auction
depreciation and depreciation expense over the remaining terms of the operating leases; however, the impactinmay be
will be less than its estimate of the expected residual value for the vehicle. The impact of the change
assumptions on future auction
tempered or exacerbated based values and auction
on future return volumes
values in would increase
relation to the or decrease
purchase accumulated
price supplemental
specified in the lease contract.
depreciation and depreciation expense over the remaining terms of the operating leases; however,
A change in the assumption for an auction value will impact Ford Credit’s estimate of accumulated supplemental the impact may be
tempered or exacerbated based on future auction values in relation to the purchase price specified
depreciation if the future auction value is lower than the purchase price specified in the lease contract. The in the lease contract.
effect of the
A change in the assumption for an auction value will impact Ford Credit’s estimate of accumulated
indicated increase/decrease in the assumptions for Ford Credit’s U.S. Ford and Lincoln operating lease portfolio is as supplemental
depreciation if the future auction value is lower than the purchase price specified in the lease contract. The effect of the
follows (in millions):
indicated increase/decrease in the assumptions for Ford Credit’s U.S. Ford and Lincoln operating lease portfolio is as
Basis Point Increase/
follows (in millions):
Assumption Change (Decrease)
Future auction values Basis
+/- 100Point
bps $(20)/$20
Increase/
Assumption Change (Decrease)
Return volumes +/- 100 5/(5)
Future auction values +/- 100 bps $(20)/$20
Return volumes +/- 100 5/(5)
Adjustments to the amount of accumulated supplemental depreciation on operating leases are reflected on our
balance sheets as Net investment in operating leases and on our income statements in Ford Credit interest, operating,
and Adjustments to the amount of accumulated supplemental depreciation on operating leases are reflected on our
other expenses.
balance sheets as Net investment in operating leases and on our income statements in Ford Credit interest, operating,
and other expenses.
ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

ACCOUNTING STANDARDS
For a discussion ISSUED BUT
of recent accounting NOT YET
standards, ADOPTED
see Note 3 of the Notes to the Financial Statements.

For a discussion of recent accounting standards, see Note 3 of the Notes to the Financial Statements.

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 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

OVERVIEW

We are exposed to a variety of market and other risks, including the effects of changes in foreign currency exchange
rates, commodity prices, and interest rates, as well as risks to availability of funding sources, hazard events, and specific
asset risks.

We monitor and manage these exposures as an integral part of our overall risk management program, which includes
regular reports to a central management committee, the Global Risk Management Committee (“GRMC”). The GRMC is
chaired by our Chief Financial Officer, and the committee includes our Controller and Treasurer.

We are exposed to liquidity risk, including the possibility of having to curtail business or being unable to meet financial
obligations as they come due because funding sources may be reduced or become unavailable. Our plan is to maintain
funding sources to ensure liquidity through a variety of economic or business cycles. As discussed in greater detail in
Item 7, our funding sources include sales of receivables in securitizations and other structured financings, unsecured debt
issuances, equity and equity-linked issuances, and bank borrowings.

We are exposed to a variety of other risks, such as loss or damage to property, liability claims, and employee injury.
We protect against these risks through the purchase of commercial insurance that is designed to protect us above our
self-insured retentions against events that could generate significant losses.

Direct responsibility for the execution of our market risk management strategies resides with our Treasurer’s Office
and is governed by written policies and procedures. Separation of duties is maintained between the development and
authorization of derivative trades, the transaction of derivatives, and the settlement of cash flows. Regular audits are
conducted to ensure that appropriate controls are in place and that they remain effective. In addition, our market risk
exposures and our use of derivatives to manage these exposures are approved by the GRMC, and reviewed by the Audit
Committee of our Board of Directors.

In accordance with our corporate risk management policies, we use derivative instruments, when available, such as
forward contracts, swaps, and options that economically hedge certain exposures (foreign currency, commodity, and
interest rates). We do not use derivative contracts for trading, market-making, or speculative purposes. In certain
instances, we forgo hedge accounting, and in certain other instances, our derivatives do not qualify for hedge accounting.
Either situation results in unrealized gains and losses that are recognized in income. For additional information on our
derivatives, see Note 20 of the Notes to the Financial Statements.

The market and counterparty risks of the Company excluding Ford Credit as well as our Ford Credit segment are
discussed and quantified below.

COMPANY EXCLUDING FORD CREDIT MARKET RISK

We frequently have expenditures and receipts denominated in foreign currencies, including the following: purchases
and sales of finished vehicles and production parts, debt and other payables, subsidiary dividends, and investments in
foreign operations. These expenditures and receipts create exposures to changes in exchange rates. We also are
exposed to changes in prices of commodities used in the production of our vehicles and changes in interest rates.

Foreign currency risk, commodity risk, and interest rate risk are measured and quantified using a model to evaluate
the sensitivity of market value to instantaneous, parallel shifts in rates and/or prices.

Foreign Currency Risk. Foreign currency risk is the possibility that our financial results could be worse than planned
because of changes in currency exchange rates. Accordingly, our practice is to use derivative instruments to hedge our
economic exposure with respect to forecasted revenues and costs, assets, liabilities, and firm commitments denominated
in certain foreign currencies consistent with our overall risk management strategy. In our hedging actions, we use
derivative instruments commonly used by corporations to reduce foreign exchange risk (e.g., forward contracts). The
extent to which we hedge is also impacted by materiality of the risk in the context of our overall portfolio, market liquidity,
and/or our ability to achieve designated hedge accounting.

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 Item 7A. Quantitative and Qualitative Disclosures About Market Risk (Continued)

ItemThe7A. net
Quantitative
fair value and Qualitative
of foreign exchangeDisclosures
forwardAbout Market
contracts Risk (Continued)
(including adjustments for credit risk) as of
December 31, 2023, was a liability of $319 million, compared with an asset of $236 million as of December 31, 2022. The
The net
potential fair value
change in theoffair
foreign
valueexchange
from a 10% forward
change contracts (including exchange
in the underlying adjustments for credit
rates, in [Link]) as terms,
dollar of would have
December 31, 2023, was a liability of $319 million, compared with an asset of $236
been $3.1 billion at December 31, 2023, compared with $1.9 billion at December 31, 2022. The sensitivity analysis million as of December 31, 2022. The
potential
presentedchange in the fairand
is hypothetical value from a foreign
assumes 10% change
exchange in the underlying
rate changesexchange rates, in U.S.
are instantaneous dollar terms,
and adverse would
across all have
been $3.1 billion at December 31, 2023, compared with $1.9 billion at December 31,
currencies. In reality, some of our exposures offset and foreign exchange rates move in different magnitudes and at 2022. The sensitivity analysis
presented is hypothetical
different times, and assumes
and any changes foreign
in fair value exchange
would rate be
generally changes arechanges
offset by instantaneous and adverse
in the underlying across allSee
exposure.
currencies. In reality, some of our exposures offset and foreign exchange rates move
Note 20 of the Notes to the Financial Statements for more information regarding our foreign currency exchange in different magnitudes and at
contracts.
different times, and any changes in fair value would generally be offset by changes in the underlying exposure. See
NoteCommodity
20 of the Notes
Price to the Financial
Risk. Commodity Statements
price risk for more
is the information
possibility that regarding ourresults
our financial foreigncould
currency exchange
be worse than contracts.
planned
because of changes in the prices of commodities used in the production of motor vehicles, such as base metals (e.g.,
steel,Commodity
copper, and Price Risk. Commodity
aluminum), price risk
precious metals is the
(e.g., possibility
palladium), that our
energy financial
(e.g., naturalresults
gas andcould be worseand
electricity), than planned
plastics/
because
resins of changes
(e.g., in the prices
polypropylene). As we of transition
commodities to a used
greaterin the
mixproduction of motor vehicles,
of electric vehicles, we expectsuch as base our
to increase metals (e.g.,on
reliance
steel, copper,
lithium, cobalt,and aluminum),
nickel, graphite,precious metals (e.g.,
and manganese, among palladium), energy (e.g.,
other materials, natural gas
for batteries. Ourand electricity),
practice andderivative
is to use plastics/
resins (e.g., to
instruments polypropylene).
hedge the price Asriskwewith
transition
respect to to
a greater
forecastedmix purchases
of electric vehicles,
of certainwe expect to increase
commodities consistent ourwith
reliance on
our overall
lithium,
risk cobalt, nickel,
management graphite,
strategy. In our and manganese,
hedging actions,among
we use other materials,
derivative for batteries.
instruments Our practice
commonly used byiscorporations
to use derivative
to
instruments
reduce to hedge
commodity therisk
price price riskfinancially
(e.g., with respect to forecasted
settled purchases The
forward contracts). of certain
extentcommodities
to which we consistent
hedge is also withimpacted
our overall
riskmateriality
by management strategy.
of the In our
risk in the hedging
context actions,
of our overallwe use derivative
portfolio, instruments
market liquidity, commonly
and/or used
our ability by corporations
to achieve designated to
reduce commodity price risk (e.g., financially settled forward contracts). The extent to which we hedge is also impacted
hedge accounting.
by materiality of the risk in the context of our overall portfolio, market liquidity, and/or our ability to achieve designated
hedge Theaccounting.
net fair value of commodity forward contracts (including adjustments for credit risk) as of December 31, 2023,
was a liability of $9 million, compared with a liability of $49 million as of December 31, 2022. The potential change in the
The net
fair value fairavalue
from of commodity
10% change forward contracts
in the underlying commodity (including
pricesadjustments
would have for credit
been $203 risk) as ofatDecember
million December31, 31,2023,
2023,
was a liability
compared withof$178
$9 million,
millioncompared
at December with31,
a liability
2022. of $49
The million asanalysis
sensitivity of December 31, 2022.
presented The potential
is hypothetical change in the
and assumes
fair value from
commodity pricea 10% change
changes are in the underlying
instantaneous andcommodity prices all
adverse across would have been In
commodities. $203 million
reality, at December
commodity prices31, 2023,
move in
compared
different with $178 million
magnitudes at December
and at different times,31,
and2022. The sensitivity
any changes in fair analysis
value wouldpresented
generally is hypothetical
be offset by and assumes
changes in the
commodity exposure.
underlying price changes are instantaneous and adverse across all commodities. In reality, commodity prices move in
different magnitudes and at different times, and any changes in fair value would generally be offset by changes in the
underlying exposure.
In addition, our purchasing organization (with guidance from the GRMC, as appropriate) negotiates contracts for the
continuous supply of raw materials. In some cases, these contracts stipulate minimum purchase amounts and specific
In addition,
prices, our purchasing
and, therefore, organization
play a role in managing (with guidanceprice
commodity fromrisk.
the GRMC, as appropriate) negotiates contracts for the
continuous supply of raw materials. In some cases, these contracts stipulate minimum purchase amounts and specific
prices, and, Rate
Interest therefore,
[Link] a rolerate
Interest in managing
risk relatescommodity
to the lossprice risk. incur in our Company cash investment portfolios due
we could
to a change in interest rates. Our interest rate sensitivity analysis on our investment portfolios includes cash and cash
Interest and
equivalents RatenetRisk. Interest securities.
marketable rate risk relates to the loss
At December we2023,
31, couldwe
incur
hadinCompany
our Companycash cash investment
of $28.8 billion inportfolios
our due
to a change in interest rates. Our interest rate sensitivity analysis on our investment portfolios includes
investment portfolios, compared to $32.3 billion at December 31, 2022. We invest the portfolios in securities of various cash and cash
equivalents and net marketable
types and maturities, the value of securities.
which areAt December
subject 31, 2023,inwe
to fluctuations had Company
interest rates. Thecash of $28.8 billion
investment strategyin our
is based on
investment
clearly defined risk and liquidity guidelines to maintain liquidity, minimize risk, and earn a reasonable return onofthe
portfolios, compared to $32.3 billion at December 31, 2022. We invest the portfolios in securities various
short-
types and maturities, the value of which are subject to fluctuations in interest rates. The investment strategy
term investments. In investing the cash in our investment portfolios, safety of principal is the primary objective and risk- is based on
clearly defined risk and liquidity guidelines
adjusted return is the secondary objective. to maintain liquidity, minimize risk, and earn a reasonable return on the short-
term investments. In investing the cash in our investment portfolios, safety of principal is the primary objective and risk-
adjusted return
At any time,isa the
risesecondary
in interest objective.
rates could have a material adverse impact on the fair value of our portfolios. Assuming
a hypothetical increase in interest rates of one percentage point, the value of our portfolios would be reduced by
$222Atmillion,
any time, a rise in interest
as calculated rates could31,
as of December have a material
2023. adverse impact
This compares to $256on the fair
million, asvalue of ouras
calculated portfolios.
of Assuming
a hypothetical increase in interest rates of one percentage point, the value of our portfolios would be reduced
December 31, 2022. While these are our best estimates of the impact of the specified interest rate scenario, actual by
$222
resultsmillion, as calculated
could differ as of
from those December
projected. 31,sensitivity
The 2023. This compares
analysis to $256
presented million, interest
assumes as calculated as of are
rate changes
December 31, 2022. While these are our best estimates of the impact of the specified interest rate scenario, actual
instantaneous, parallel shifts in the yield curve. In reality, interest rate changes of this magnitude are rarely instantaneous
results could
or parallel. differ from those projected. The sensitivity analysis presented assumes interest rate changes are
instantaneous, parallel shifts in the yield curve. In reality, interest rate changes of this magnitude are rarely instantaneous
or parallel.

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 Item 7A. Quantitative and Qualitative Disclosures About Market Risk (Continued)

Item 7A.
FORD Quantitative
CREDIT MARKETand Qualitative
RISK Disclosures About Market Risk (Continued)

FORD CREDIT
Market MARKET
risk for RISKis the possibility that changes in interest and currency exchange rates will adversely affect
Ford Credit
cash flow and economic value.
Market risk for Ford Credit is the possibility that changes in interest and currency exchange rates will adversely affect
cashInterest
flow and economic
Rate value.
Risk. Generally, Ford Credit’s assets and the related debt have different re-pricing periods, and
consequently, respond differently to changes in interest rates.
Interest Rate Risk. Generally, Ford Credit’s assets and the related debt have different re-pricing periods, and
consequently, respond
Ford Credit’s assetsdifferently to changes
consist primarily in interestretail
of fixed-rate rates.
financing and operating lease contracts and floating-rate
wholesale receivables. Fixed-rate retail financing and operating lease contracts generally require customers to make
Ford
equal Credit’s
monthly assets consist
payments over theprimarily
life of theof contract.
fixed-rate Wholesale
retail financing and operating
receivables lease contracts
are originated and
to finance floating-rate
new and used
wholesale receivables. Fixed-rate retail financing and operating lease contracts
vehicles held in dealers’ inventory and generally require dealers to pay a floating rate. generally require customers to make
equal monthly payments over the life of the contract. Wholesale receivables are originated to finance new and used
vehicles
Debtheld in dealers’
consists inventory
primarily and
of short- generally
and long-termrequire dealers
unsecured to securitized
and pay a floating rate.
debt. Ford Credit’s term debt instruments
are principally fixed-rate and require fixed and equal interest payments over the life of the instrument and a single principal
Debt at
payment consists
[Link] of short- and long-term unsecured and securitized debt. Ford Credit’s term debt instruments
are principally fixed-rate and require fixed and equal interest payments over the life of the instrument and a single principal
payment
Ford at maturity.
Credit’s interest rate risk management objective is to reduce volatility in its cash flows and volatility in its
economic value from changes in interest rates based on an established risk tolerance that may vary by market. Ford
Ford
Credit usesCredit’s interest
economic rate
value risk management
sensitivity objective
analysis and is to gap
re-pricing reduce volatility
analysis in its cash
to evaluate flows and
potential volatility
long-term in its of
effects
economic value from changes in interest rates based on an established risk tolerance that may
changes in interest rates. It then enters into interest rate swaps to convert portions of its floating-rate debt to fixed vary by market. Ford
or its
Credit uses
fixed-rate economic
debt value
to floating sensitivity
to ensure thatanalysis and re-pricing
Ford Credit’s exposuregap fallsanalysis to evaluate
within the established potential long-term
tolerances. Fordeffects
Creditofalso
changes
uses in interest
pre-tax cash flowrates. It then enters
sensitivity into
analysis to interest
monitor rate swaps
the level of to convert portions
near-term cash flowofexposure.
its floating-rate debt to cash
The pre-tax fixed flow
or its
fixed-rate debt
sensitivity to floating
analysis measuresto ensure that Ford
the changes Credit’s exposure
in expected cash flowsfalls within thewith
associated established tolerances.
Ford Credit’s Ford Credit also
interest-rate-sensitive
uses pre-tax
assets, cashand
liabilities, flowderivative
sensitivityfinancial
analysisinstruments
to monitor thefromlevel of near-term
hypothetical cash flow
changes exposure.
in interest rates The
overpre-tax cash flow
a twelve-month
sensitivityInterest
horizon. analysis measures
rate swaps are theplaced
changes in expected
to maintain cash flows
exposure within associated
approvedwith Ford Credit’s
thresholds and the interest-rate-sensitive
Asset-Liability
assets, liabilities,
Committee reviews andthederivative
re-pricingfinancial
mismatchinstruments
monthly. from hypothetical changes in interest rates over a twelve-month
horizon. Interest rate swaps are placed to maintain exposure within approved thresholds and the Asset-Liability
Committee
To providereviews the re-pricing
a quantitative measuremismatch
of themonthly.
sensitivity of its pre-tax cash flow to changes in interest rates, Ford Credit
uses interest rate scenarios that assume a hypothetical, instantaneous increase or decrease of one percentage point in all
To provide
interest a quantitative
rates across measure
all maturities of the sensitivity
(a “parallel shift”), as of itsas
well pre-tax cash
a base caseflow toassumes
that changes that
in interest rates,rates
all interest Fordremain
Credit
uses interest rate scenarios that assume a hypothetical, instantaneous increase or decrease of one percentage
constant at existing levels. In reality, interest rate changes are rarely instantaneous or parallel and rates could move more point in all
interest rates across all maturities (a “parallel shift”), as well as a base case that assumes that all interest
or less than the one percentage point assumed in Ford Credit’s analysis. As a result, the actual impact to pre-tax cash rates remain
constant
flow couldatbe
existing
higherlevels.
or lowerInthan
reality,
theinterest
results rate changes
detailed in theare rarely
table instantaneous
below. or parallel
These interest and ratesare
rate scenarios could move more
purely
or less than the one percentage point assumed in Ford Credit’s analysis.
hypothetical and do not represent Ford Credit’s view of future interest rate movements. As a result, the actual impact to pre-tax cash
flow could be higher or lower than the results detailed in the table below. These interest rate scenarios are purely
hypothetical and interest
Under these do not represent Ford Credit’s
rate scenarios, view expects
Ford Credit of futuremore
interest rate than
assets movements.
debt and liabilities to re-price in the next
twelve months. Other things being equal, this means that during a period of rising interest rates, the interest received on
FordUnder these
Credit’s interest
assets rate scenarios,
will increase Fordthe
more than Credit expects
interest paid more
on Fordassets thandebt,
Credit’s debt thereby
and liabilities
initiallytoincreasing
re-price inFord
the next
twelve
Credit’s pre-tax cash flow. During a period of falling interest rates, Ford Credit would expect its pre-tax cash flow to on
months. Other things being equal, this means that during a period of rising interest rates, the interest received
Ford Credit’s
initially assets
decrease. willCredit’s
Ford increasepre-tax
more than
cashtheflowinterest paidtooninterest
sensitivity Ford Credit’s debt, thereby
rate movement initially increasing
at December 31 was asFord
follows (in
Credit’s
millions): pre-tax cash flow. During a period of falling interest rates, Ford Credit would expect its pre-tax cash flow to
initially decrease. Ford Credit’s pre-tax cash flow sensitivity to interest rate movement at December 31 was as follows (in
Pre-Tax Cash Flow Sensitivity
millions): 2022 2023
One percentage point instantaneous increase in interest rates $ 127 $ 78
Pre-Tax Cash Flow Sensitivity 2022 2023
One percentage point instantaneous decrease in interest rates (127) (78)
One percentage point instantaneous increase in interest rates $ 127 $ 78
One percentage point instantaneous decrease in interest rates (127) (78)
While the sensitivity analysis presented is Ford Credit’s best estimate of the impacts of the specified assumed interest
rate scenarios, its actual results could differ from those projected. The model Ford Credit uses to conduct this analysis is
While
heavily the sensitivity
dependent analysis presented
on assumptions. Embedded is Ford Credit’s
in the modelbest
are estimate of theregarding
assumptions impacts of
thethe specified assumed
reinvestment interest
of maturing
rate
asset principal, refinancing of maturing debt, replacement of maturing derivatives, exercise of options embedded in debtis
scenarios, its actual results could differ from those projected. The model Ford Credit uses to conduct this analysis
heavily dependent
and derivatives, andonpredicted
assumptions. Embedded
repayment in financing
of retail the modeland
areoperating
assumptions
lease regarding
contractsthe reinvestment
ahead of maturing
of contractual maturity.
asset principal, refinancing of maturing debt, replacement of maturing derivatives, exercise of options embedded
Ford Credit’s repayment projections ahead of contractual maturity are based on historical experience. If interest rates in debt
or
and derivatives, and predicted repayment of retail financing and operating lease contracts
other factors change, Ford Credit’s actual prepayment experience could be different than projected. ahead of contractual maturity.
Ford Credit’s repayment projections ahead of contractual maturity are based on historical experience. If interest rates or
other factors change, Ford Credit’s actual prepayment experience could be different than projected.

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 Item 7A. Quantitative and Qualitative Disclosures About Market Risk (Continued)

ItemForeign
7A. Quantitative
Currency [Link] Disclosures
Ford Credit’s policy isAbout Marketexposure
to minimize Risk (Continued)
to changes in currency exchange rates. To meet
funding objectives, Ford Credit borrows in a variety of currencies, principally U.S. dollars, Canadian dollars, euros,
Foreign
sterling, andCurrency Ford Ford
[Link]. CreditCredit’s policy is to
faces exposure tominimize
currency exposure
exchangetorates
changes in currency
if a mismatch exchange
exists betweenrates. To meet
the currency
funding objectives, Ford Credit borrows in a variety of currencies, principally U.S. dollars, Canadian dollars,
of receivables and the currency of the debt funding those receivables. When possible, receivables are funded with debt in euros,
sterling,
the sameand renminbi.
currency, Ford Credit
minimizing faces to
exposure exposure
exchange to rate
currency exchangeWhen
movements. ratesaifdifferent
a mismatch existsisbetween
currency the Credit
used, Ford currency
of receivables and the currency of the debt funding those receivables. When possible, receivables
may use foreign currency swaps and foreign currency forwards to convert substantially all of its foreign currency debtare funded with debt in
the same currency, minimizing exposure to exchange rate movements. When a different currency is used,
obligations to the local country currency of the receivables. As a result of this policy, Ford Credit believes its market risk Ford Credit
may use foreign
exposure, currency
relating swaps
to changes and foreign
in currency currency
exchange forwards
rates to convert
at December 31,substantially all of its foreign currency debt
2023, is insignificant.
obligations to the local country currency of the receivables. As a result of this policy, Ford Credit believes its market risk
exposure, relating
Derivative Fairto changes
Values. in net
The currency exchange
fair value of Fordrates at December
Credit’s derivative31, 2023, instruments
financial is insignificant.
at December 31, 2023 was
a liability of $1.3 billion, compared to a liability of $2.0 billion at December 31, 2022.
Derivative Fair Values. The net fair value of Ford Credit’s derivative financial instruments at December 31, 2023 was
a liability
COUNTERPARTYof $1.3 billion,
RISKcompared to a liability of $2.0 billion at December 31, 2022.

COUNTERPARTY
Counterparty risk RISK
relates to the loss we could incur if an obligor or counterparty defaulted on an investment or a
derivative contract. We enter into master agreements with counterparties that allow netting of certain exposures in order
Counterparty
to manage riskExposures
this risk. relates to the loss we
primarily could
relate to incur if an obligor
investments or counterparty
in fixed defaulted
income instruments andonderivative
an investment or a used
contracts
derivative contract. We enter into master agreements with counterparties that allow netting of certain
for managing interest rate, foreign currency exchange rate, and commodity price risk. We, together with Ford Credit, exposures in order
to manage this risk. Exposures primarily relate to investments in fixed income instruments
establish exposure limits for each counterparty to minimize risk and provide counterparty [Link] derivative contracts used
for managing interest rate, foreign currency exchange rate, and commodity price risk. We, together with Ford Credit,
establish exposuretolimits
Our approach for each
managing counterparty
counterparty risktoisminimize risk andand
forward-looking provide counterparty
proactive, allowing diversification.
us to take risk mitigation
actions before risks become losses. Exposure limits are established based on our overall risk tolerance, which is
Our approach
calculated to managing
from counterparty counterparty
credit risk
ratings and is forward-looking
market-based credit and proactive,
default allowingspreads.
swap (“CDS”) us to take riskexposure
The mitigationlimits
actions
are before
lower risks become
for smaller losses. Exposure
and lower-rated limits are
counterparties, establishedthat
counterparties based
haveonrelatively
our overall risk tolerance,
higher CDS spreads,which is for
and
calculated
longer from
dated counterparty
exposures. Ourcredit ratings
exposures and
are market-based
monitored credit default
on a regular swap
basis and (“CDS”)
included in spreads. The exposure
periodic reports to our limits
are lower for smaller and lower-rated counterparties, counterparties that have relatively higher CDS spreads, and for
Treasurer.
longer dated exposures. Our exposures are monitored on a regular basis and included in periodic reports to our
Treasurer.
Substantially all of our counterparty exposures are with counterparties that have an investment grade rating.
Investment grade is our guideline for minimum counterparty long-term ratings.
Substantially all of our counterparty exposures are with counterparties that have an investment grade rating.
Investment grade isStatements
ITEM 8. Financial our guideline forSupplementary
and minimum counterparty
Data. long-term ratings.

ITEM 8. Financial
The Statements Registered
Report of Independent and Supplementary Data. Firm, our Financial Statements, the accompanying Notes to
Public Accounting
the Financial Statements, and the Financial Statement Schedule that are filed as part of this Report are listed under
“ItemThe
[Link] of and
Exhibits Independent
Financial Registered Public Accounting
Statement Schedules” and areFirm, our Financial
set forth beginningStatements,
on page 105 the accompanying
immediately Notesthe
following to
the Financial Statements, and
signature pages of this Report. the Financial Statement Schedule that are filed as part of this Report are listed under
“Item 15. Exhibits and Financial Statement Schedules” and are set forth beginning on page 105 immediately following the
signature pages of in
ITEM 9. Changes this
andReport.
Disagreements with Accountants on Accounting and Financial Disclosure.

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.

None.

94

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 ITEM 9A. 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) or 15d-15(e) of the Securities Exchange Act of 1934, as
amended (“Exchange Act”), as of December 31, 2023, 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.

Management’s Report on Internal Control Over Financial Reporting. Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f)
or 15d-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions or because the degree of compliance with policies or procedures may
deteriorate.

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an
assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023. The assessment
was based on criteria established in the framework Internal Control - Integrated Framework (2013), issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management
concluded that our internal control over financial reporting was effective as of December 31, 2023.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been
audited by PricewaterhouseCoopers LLP (PCAOB ID 238), an independent registered public accounting firm, as stated in
its report included herein.

Changes in Internal Control Over Financial Reporting. There were no changes in internal control over financial
reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.

ITEM 9B. Other Information.

During the three months ended December 31, 2023, 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 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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 PART III.

ITEM 10. Directors, Executive Officers of Ford, and Corporate Governance.

The information required by Item 10 regarding our directors is incorporated by reference from the information under
the captions “Proposal 1. Election of Directors,” “Corporate Governance – Beneficial Stock Ownership,” and “Corporate
Governance – Delinquent Section 16(a) Reports” in our Proxy Statement. The information required by Item 10 regarding
our executive officers appears as Item 4A under Part I of this Report. The information required by Item 10 regarding an
audit committee financial expert is incorporated by reference from the information under the caption “Corporate
Governance – Audit Committee Financial Expert and Auditor Rotation” in our Proxy Statement. The information required
by Item 10 regarding the members of our Audit Committee of the Board of Directors is incorporated by reference from the
information under the captions “Proxy Summary,” “Corporate Governance – Board Committee Functions,” “Corporate
Governance – Audit Committee Financial Expert and Auditor Rotation,” and “Proposal 1. Election of Directors” in our
Proxy Statement. The information required by Item 10 regarding the Audit Committee’s review and discussion of the
audited financial statements is incorporated by reference from information under the caption “Audit Committee Report” in
our Proxy Statement. The information required by Item 10 regarding our codes of ethics is incorporated by reference from
the information under the caption “Corporate Governance – Codes of Ethics” in our Proxy Statement. In addition, we have
included in Item 1 instructions for how to access our codes of ethics on our website and our Internet address.
Amendments to, and waivers granted under, our Code of Ethics for Senior Financial Personnel, if any, will be posted to
our website as well.

ITEM 11. Executive Compensation.

The information required by Item 11 is incorporated by reference from the information under the following captions in
our Proxy Statement: “Director Compensation in 2023,” “Compensation Discussion and Analysis,” “Compensation
Committee Report,” “Compensation Committee Interlocks and Insider Participation,” “Compensation of Named
Executives,” “Summary Compensation Table,” “Grants of Plan-Based Awards in 2023,” “Outstanding Equity Awards at
2023 Fiscal Year-End,” “Option Exercises and Stock Vested in 2023,” “Pension Benefits in 2023,” “Nonqualified Deferred
Compensation in 2023,” “Potential Payments Upon Termination or Change-in-Control,” and “Pay Ratio.”

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by Item 12 is incorporated by reference from the information under the captions “Equity
Compensation Plan Information” and “Corporate Governance – Beneficial Stock Ownership” in our Proxy Statement.

ITEM 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by Item 13 is incorporated by reference from the information under the captions “Corporate
Governance – Certain Relationships and Related Party Transactions” and “Corporate Governance – Independence of
Directors and Relevant Facts and Circumstances” in our Proxy Statement.

ITEM 14. Principal Accounting Fees and Services.

The information required by Item 14 is incorporated by reference from the information under the caption “Proposal 2.
Ratification of Independent Registered Public Accounting Firm” in our Proxy Statement.

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 PART IV.

ITEM 15. Exhibits and Financial Statement Schedules.

(a) 1. Financial Statements – Ford Motor Company and Subsidiaries

The following are contained in this 2023 Form 10-K Report:

• Report of Independent Registered Public Accounting Firm.

• Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2022, and 2023.

• Consolidated Income Statements for the years ended December 31, 2021, 2022, and 2023.

• Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2022, and
2023.

• Consolidated Balance Sheets at December 31, 2022 and 2023.

• Consolidated Statements of Equity for the years ended December 31, 2021, 2022, and 2023.

• Notes to the Financial Statements.

The Report of Independent Registered Public Accounting Firm, the Consolidated Financial Statements, and the Notes
to the Financial Statements listed above are filed as part of this Report and are set forth beginning on page 105
immediately following the signature pages of this Report.

(a) 2. Financial Statement Schedules

Designation
Designation Description
Description
Schedule II
Schedule II Valuation and
Valuation and Qualifying
Qualifying Accounts
Accounts for
for the
the years
years ended
ended 2021,
2021, 2022,
2022, and
and 2023
2023

Schedule II is filed as part of this Report and is set forth on page 179 immediately following the Notes to the Financial
Statements referred to above. The other schedules are omitted because they are not applicable, the information required
to be contained in them is disclosed elsewhere on our Consolidated Financial Statements, or the amounts involved are
not sufficient to require submission.

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 (a) 3. Exhibits
Designation Description Method of Filing
Exhibit 3-A Restated Certificate of Incorporation, dated Filed as Exhibit 3-A to our Annual Report on Form 10-K for the
August 2, 2000. year ended December 31, 2000. (a)
Exhibit 3-A-1 Certificate of Designations of Series A Junior Participating Filed as Exhibit 3.1 to our Current Report on Form 8-K filed
Preferred Stock filed on September 11, 2009. September 11, 2009. (a)
Exhibit 3-B By-laws. Filed as Exhibit 3.1 to our Form 8-K filed on December 9, 2022.
(a)
Exhibit 4-A Tax Benefit Preservation Plan (“TBPP”) dated Filed as Exhibit 4.1 to our Current Report on Form 8-K filed
September 11, 2009 between Ford Motor Company and September 11, 2009. (a)
Computershare Trust Company, N.A.
Exhibit 4-A-1 Amendment No. 1 to TBPP dated September 11, 2012. Filed as Exhibit 4 to our Current Report on Form 8-K filed
September 12, 2012. (a)
Exhibit 4-A-2 Amendment No. 2 to TBPP dated September 9, 2015. Filed as Exhibit 4 to our Current Report on Form 8-K filed
September 11, 2015. (a)
Exhibit 4-A-3 Amendment No. 3 to TBPP dated September 13, 2018. Filed as Exhibit 4 to our Current Report on Form 8-K filed
September 14, 2018. (a)
Exhibit 4-A-4 Amendment No. 4 to TBPP dated September 9, 2021. Filed as Exhibit 4 to our Current Report on Form 8-K filed
September 10, 2021. (a)
Exhibit 4-B Description of Securities. Filed with this Report.
Exhibit 10-A Executive Separation Allowance Plan, as amended and Filed as Exhibit 10.1 to our Current Report on Form 8-K filed
restated effective as of January 1, 2018. (b) February 7, 2018. (a)
Exhibit 10-B Deferred Compensation Plan for Non-Employee Directors, Filed as Exhibit 10-B to our Annual Report on Form 10-K for the
as amended and restated as of January 1, 2012. (b) year ended December 31, 2011. (a)
Exhibit 10-C 2014 Stock Plan for Non-Employee Directors (b) Filed as Exhibit 10-C to our Annual Report on Form 10-K for the
year ended December 31, 2013. (a)
Exhibit 10-D Benefit Equalization Plan, as amended and restated Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for
effective as of January 1, 2022. (b) the quarter ended March 31, 2022. (a)
Exhibit 10-E Description of financial counseling services provided to Filed as Exhibit 10-E to our Annual Report on Form 10-K for the
certain executives. (b) year ended December 31, 2019. (a)
Exhibit 10-F Defined Benefit Supplemental Executive Retirement Plan, Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for
as amended and restated effective as of January 1, 2022. the quarter ended March 31, 2022. (a)
(b)
Exhibit 10-F-1 Defined Contribution Supplemental Executive Retirement Filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q for
Plan, as amended and restated effective as of the quarter ended March 31, 2022. (a)
January 1, 2022. (b)
Exhibit 10-G Description of Director Compensation as of July 13, 2006. Filed as Exhibit 10-G-3 to our Quarterly Report on Form 10-Q for
(b) the quarter ended September 30, 2006. (a)
Exhibit 10-G-1 Amendment to Description of Director Compensation as of Filed as Exhibit 10-F-3 to our Annual Report on Form 10-K for the
February 8, 2012. (b) year ended December 31, 2011. (a)
Exhibit 10-G-2 Amendment to Description of Director Compensation as of Filed as Exhibit 10-G-2 to our Annual Report on Form 10-K for
July 1, 2013. (b) the year ended December 31, 2013. (a)
Exhibit 10-G-3 Amendment to Description of Director Compensation as of Filed as Exhibit 10-G-3 to our Annual Report on Form 10-K for
January 1, 2017. (b) the year ended December 31, 2016. (a)
Exhibit 10-H 2008 Long-Term Incentive Plan. (b) Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2008. (a)
Exhibit 10-I Description of Vehicle Evaluation Program for Non- Filed as Exhibit 10-I to our Annual Report on Form 10-K for the
Executive Directors. (b) year ended December 31, 2021. (a)
Exhibit 10-J Non-Employee Directors Life Insurance and Optional Filed as Exhibit 10-I to our Annual Report on Form 10-K for the
Retirement Plan as amended and restated as of year ended December 31, 2010. (a)
December 31, 2010. (b)
Exhibit 10-K Description of Non-Employee Directors Accidental Death, Filed as Exhibit 10-S to our Annual Report on Form 10-K for the
Dismemberment and Permanent Total Disablement year ended December 31, 1992. (a)
Indemnity. (b)
Exhibit 10-K-1 Description of Amendment to Basic Life Insurance and Filed as Exhibit 10-K-1 to our Annual Report on Form 10-K for the
Accidental Death & Dismemberment Insurance. (b) year ended December 31, 2013. (a)
Exhibit 10-L Offer Letter to Peter Stern dated July 21, 2023. (b) Filed with this Report.
Exhibit 10-M Offer Letter to Doug Field dated August 26, 2021. (b) Filed as Exhibit 10-N to our Annual Report on Form 10-K for the
year ended December 31, 2021. (a)
Exhibit 10-N Agreement between Ford Motor Company and James D. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for
Farley, Jr. dated August 3, 2020. (b) the quarter ended September 30, 2020. (a)
Exhibit 10-O Select Retirement Plan, as amended and restated effective Filed as Exhibit 10.4 to our Current Report on Form 8-K filed
as of January 1, 2018. (b) February 7, 2018. (a)
Exhibit 10-P Deferred Compensation Plan, as amended and restated as Filed as Exhibit 10-M to our Annual Report on Form 10-K for the
of December 31, 2010. (b) year ended December 31, 2010. (a)
Exhibit 10-P-1 Suspension of Open Enrollment in Deferred Compensation Filed as Exhibit 10-M-1 to our Annual Report on Form 10-K for
Plan. (b) the year ended December 31, 2009. (a)
Exhibit 10-Q Annual Performance Bonus Plan, as amended Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for
May 10, 2023. (b) the quarter ended June 30, 2023. (a)

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 Designation Description Method of Filing
Exhibit 10-Q-1 Annual Incentive Compensation Plan Metrics for 2022. (b) Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2022. (a)
Exhibit 10-Q-2 Annual Performance Bonus Plan Metrics for 2023. (b) Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2023. (a)
Exhibit 10-Q-3 Performance-Based Restricted Stock Unit Metrics for Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for
2020. (b) the quarter ended March 31, 2020. (a)
Exhibit 10-Q-4 Performance-Based Restricted Stock Unit Metrics for Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for
2021. (b) the quarter ended March 31, 2021. (a)
Exhibit 10-Q-5 Performance-Based Restricted Stock Unit Metrics for Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for
2022. (b) the quarter ended March 31, 2022. (a)
Exhibit 10-Q-6 Performance-Based Restricted Stock Unit Metrics for Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for
2023. (b) the quarter ended March 31, 2023. (a)
Exhibit 10-Q-7 Corporate Officer Compensation Recoupment Policy. (b) Filed with this Report.
Exhibit 10-R 2018 Long-Term Incentive Plan. (b) Filed as Exhibit 4.1 to Registration Statement No. 333-226348.
(a)
Exhibit 10-S 2023 Long-Term Incentive Plan. (b) Filed as Exhibit 4.9 to Registration Statement No. 333-271592.
(a)
Exhibit 10-S-1 Form of Stock Option Terms and Conditions for 2023 Long- Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for
Term Incentive Plan. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-2 Form of Stock Option Agreement for 2023 Long-Term Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for
Incentive Plan. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-3 Form of Stock Option Agreement (ISO) for 2023 Long- Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for
Term Incentive Plan. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-4 Form of Stock Option Agreement (U.K. NQO) for 2023 Filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q for
Long-Term Incentive Plan. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-5 Form of Stock Option (U.K.) Terms and Conditions for Filed as Exhibit 10.6 to our Quarterly Report on Form 10-Q for
2023 Long-Term Incentive Plan. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-6 Form of Restricted Stock Grant Letter for 2023 Long-Term Filed as Exhibit 10.7 to our Quarterly Report on Form 10-Q for
Incentive Plan. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-7 Form of Final Award Notification Letter for Performance Filed as Exhibit 10.8 to our Quarterly Report on Form 10-Q for
Stock Units. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-8 Form of Annual Equity Grant Letter for 2023 Long-Term Filed as Exhibit 10.9 to our Quarterly Report on Form 10-Q for
Incentive Plan V.1. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-9 Form of Annual Equity Grant Letter for 2023 Long-Term Filed as Exhibit 10.10 to our Quarterly Report on Form 10-Q for
Incentive Plan V.2. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-10 Form of 2023 Long-Term Incentive Plan Restricted Stock Filed as Exhibit 10.11 to our Quarterly Report on Form 10-Q for
Unit Agreement. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-11 Form of 2023 Long-Term Incentive Plan Restricted Stock Filed as Exhibit 10.12 to our Quarterly Report on Form 10-Q for
Unit Terms and Conditions. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-12 Form of Final Award Agreement for Performance Stock Filed as Exhibit 10.13 to our Quarterly Report on Form 10-Q for
Units under 2023 Long-Term Incentive Plan. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-S-13 Form of Final Award Terms and Conditions for Filed as Exhibit 10.14 to our Quarterly Report on Form 10-Q for
Performance Stock Units under 2023 Long-Term Incentive the quarter ended June 30, 2023. (a)
Plan. (b)
Exhibit 10-S-14 Form of Notification Letter for Time-Based Restricted Stock Filed as Exhibit 10.15 to our Quarterly Report on Form 10-Q for
Units under 2023 Long-Term Incentive Plan. (b) the quarter ended June 30, 2023. (a)
Exhibit 10-T Description of Company Practices regarding Club Filed as Exhibit 10-V to our Annual Report on Form 10-K for the
Memberships for Executives. (b) year ended December 31, 2021. (a)
Exhibit 10-U Amended and Restated Credit Agreement dated as of Filed as Exhibit 99.2 to our Current Report on Form 8-K filed
November 24, 2009. November 25, 2009. (a)
Exhibit 10-U-1 Seventh Amendment dated as of March 15, 2012 to our Filed as Exhibit 99.2 to our Current Report on Form 8-K filed
Credit Agreement dated as of December 15, 2006, as March 15, 2012. (a)
amended and restated as of November 24, 2009, and as
further amended.
Exhibit 10-U-2 Ninth Amendment dated as of April 30, 2013 to our Credit Filed as Exhibit 10 to our Quarterly Report on Form 10-Q for the
Agreement dated as of December 15, 2006, as amended quarter ended March 31, 2013. (a)
and restated as of November 24, 2009, and as further
amended.
Exhibit 10-U-3 Tenth Amendment dated as of April 30, 2014 to our Credit Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for
Agreement dated as of December 15, 2006, as amended the quarter ended March 31, 2014. (a)
and restated as of November 24, 2009, and as further
amended.
Exhibit 10-U-4 Eleventh Amendment dated as of April 30, 2015 to our Filed as Exhibit 10.1 to our Current Report on Form 8-K filed
Credit Agreement dated as of December 15, 2006, as May 1, 2015. (a)
amended and restated as of November 24, 2009, as
amended and restated as of April 30, 2014, and as further
amended, including the Third Amended and Restated
Credit Agreement.

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 Designation Description Method of Filing
Exhibit 10-U-5 Twelfth Amendment dated as of April 29, 2016 to our Credit Filed as Exhibit 10 to our Current Report on Form 8-K filed
Agreement dated as of December 15, 2006, as amended April 29, 2016. (a)
and restated as of November 24, 2009, as amended and
restated as of April 30, 2014, and as further amended and
restated as of April 30, 2015.
Exhibit 10-U-6 Thirteenth Amendment dated as of April 28, 2017 to our Filed as Exhibit 10 to our Current Report on Form 8-K filed
Credit Agreement dated as of December 15, 2006, as April 28, 2017. (a)
amended and restated as of November 24, 2009, as
amended and restated as of April 30, 2014, and as further
amended and restated as of April 30, 2015.
Exhibit 10-U-7 Fourteenth Amendment dated as of April 26, 2018 to our Filed as Exhibit 10 to our Current Report on Form 8-K filed
Credit Agreement dated as of December 15, 2006, as April 26, 2018. (a)
amended and restated as of November 24, 2009, as
amended and restated as of April 30, 2014, and as further
amended and restated as of April 30, 2015.
Exhibit 10-U-8 Fifteenth Amendment dated as of April 23, 2019 to our Filed as Exhibit 10.1 to our Current Report on Form 8-K filed
Credit Agreement dated as of December 15, 2006, as April 26, 2019. (a)
amended and restated as of November 24, 2009, as
amended and restated as of April 30, 2014, and as further
amended and restated as of April 30, 2015.
Exhibit 10-U-9 Sixteenth Amendment dated as of July 27, 2020 to our Filed as Exhibit 10.1 to our Current Report on Form 8-K filed
Credit Agreement dated as of December 15, 2006, as July 30, 2020. (a)
amended and restated as of November 24, 2009, as
amended and restated as of April 30, 2014, and as further
amended and restated as of April 30, 2015.
Exhibit 10-U-10 Seventeenth Amendment dated as of March 16, 2021 to Filed as Exhibit 10.1 to our Current Report on Form 8-K filed
our Credit Agreement dated as of December 15, 2006, as March 17, 2021. (a)
amended and restated as of November 24, 2009, as
amended and restated as of April 30, 2014, and as further
amended and restated as of April 30, 2015.
Exhibit 10-U-11 Eighteenth Amendment dated as of September 29, 2021 to Filed as Exhibit 10.1 to our Current Report on Form 8-K filed
our Credit Agreement dated as of December 15, 2006, as September 29, 2021. (a)
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, and as further amended,
including the Fourth Amended and Restated Credit
Agreement.
Exhibit 10-U-12 Nineteenth Amendment dated as of June 23, 2022 to our Filed as Exhibit 10.1 to our Current Report on Form 8-K filed
Credit Agreement dated as of December 15, 2006, as June 23, 2022. (a)
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, and as further
amended.
Exhibit 10-U-13 Twentieth Amendment dated as of April 26, 2023 to our Filed as Exhibit 10.1 to our Current Report on Form 8-K filed
Credit Agreement dated as of December 15, 2006, as April 26, 2023. (a)
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, and as further
amended.
Exhibit 10-V Revolving Credit Agreement dated as of April 23, 2019. Filed as Exhibit 10.2 to our Current Report on Form 8-K filed
April 26, 2019. (a)
Exhibit 10-V-1 First Amendment dated July 27, 2020 to the Revolving Filed as Exhibit 10.2 to our Current Report on Form 8-K filed
Credit Agreement dated April 23, 2019. July 30, 2020. (a)
Exhibit 10-V-2 Second Amendment dated March 16, 2021 to the Filed as Exhibit 10.2 to our Current Report on Form 8-K filed
Revolving Credit Agreement dated April 23, 2019. March 17, 2021. (a)
Exhibit 10-V-3 Third Amendment dated September 29, 2021 to the Filed as Exhibit 10.2 to our Current Report on Form 8-K filed
Revolving Credit Agreement dated April 23, 2019, and as September 29, 2021. (a)
further amended, including the First Amended and
Restated Revolving Credit Agreement.
Exhibit 10-V-4 Fourth Amendment dated June 23, 2022 to the Revolving Filed as Exhibit 10.2 to our Current Report on Form 8-K filed
Credit Agreement dated April 23, 2019, as amended and June 23, 2022. (a)
restated as of September 29, 2021, and as further
amended.
Exhibit 10-V-5 Fifth Amendment dated April 26, 2023 to the Revolving Filed as Exhibit 10.2 to our Current Report on Form 8-K filed
Credit Agreement dated April 23, 2019, as amended and April 26, 2023. (a)
restated as of September 29, 2021, and as further
amended.
Exhibit 10-W 364-Day Revolving Credit Agreement dated as of Filed as Exhibit 10.3 to our Current Report on Form 8-K filed
June 23, 2022. June 23, 2022. (a)
Exhibit 10-W-1 First Amendment dated October 26, 2022 to the 364-Day Filed as Exhibit 10 to our Current Report on Form 8-K filed
Revolving Credit Agreement dated as of June 23, 2022. October 28, 2022. (a)
Exhibit 10-W-2 Second Amendment dated April 26, 2023 to the 364-Day Filed as Exhibit 10.3 to our Current Report on Form 8-K filed
Revolving Credit Agreement dated as of June 23, 2022. April 26, 2023. (a)
Exhibit 21 List of Subsidiaries of Ford as of January 31, 2024. Filed with this Report.

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 Designation Description Method of Filing
Exhibit 23 Consent of Independent Registered Public Accounting Filed with this Report.
Firm.
Exhibit 24 Powers of Attorney. Filed with this Report.
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 97 Financial Statement Compensation Recoupment Policy. (b) Filed with this Report.
Exhibit [Link] Interactive Data Files pursuant to Rule 405 of Regulation (c)
S-T formatted in Inline Extensible Business Reporting
Language (“Inline XBRL”).
Exhibit [Link] XBRL Taxonomy Extension Schema Document. (c)
Exhibit [Link] XBRL Taxonomy Extension Calculation Linkbase (c)
Document.
Exhibit [Link] XBRL Taxonomy Extension Label Linkbase Document. (c)
Exhibit [Link] XBRL Taxonomy Extension Presentation Linkbase (c)
Document.
Exhibit [Link] XBRL Taxonomy Extension Definition Linkbase Document. (c)
Exhibit 104 Cover Page Interactive Data File (formatted in Inline XBRL (c)
contained in Exhibit 101).
__________
(a) Incorporated by reference as an exhibit to this Report (file number reference 1-3950, unless otherwise indicated).
(b) Management contract or compensatory plan or arrangement.
(c) Submitted electronically with this Report in accordance with the provisions of Regulation S-T.

Instruments defining the rights of holders of certain issues of long-term debt of Ford and of certain consolidated
subsidiaries and of any unconsolidated subsidiary, for which financial statements are required to be filed with this Report,
have not been filed as exhibits to this Report because the authorized principal amount of any one of such issues does not
exceed 10% of the total assets of Ford and our subsidiaries on a consolidated basis. Ford agrees to furnish a copy of
each of such instrument to the Securities and Exchange Commission upon request.

101

199174_Ford_2023_AR_1OK.indd 105 2/9/24 2:56 PM

 ITEM 16. Form 10-K Summary.

None.

102

199174_Ford_2023_AR_1OK.indd 106 2/9/24 2:56 PM

 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Ford has
duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

FORD MOTOR COMPANY

By: /s/ Cathy O’Callaghan
Cathy O’Callaghan, Controller
(principal accounting officer)

Date: February 6, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed
below by the following persons on behalf of Ford and in the capacities on the date indicated:
Signature Title Date

/s/ WILLIAM CLAY FORD, JR. Director, Chair of the Board, Executive Chair, Chair of the February 6, 2024
William Clay Ford, Jr. Office of the Chair and Chief Executive, and Chair of the
Finance Committee

/s/ JAMES D. FARLEY, JR. Director, President and Chief Executive Officer February 6, 2024
James D. Farley, Jr. (principal executive officer)

KIMBERLY A. CASIANO* Director February 6, 2024

Kimberly A. Casiano

ALEXANDRA FORD ENGLISH* Director February 6, 2024

Alexandra Ford English

HENRY FORD III* Director February 6, 2024

Henry Ford III

WILLIAM W. HELMAN IV* Director and Chair of the Sustainability, Innovation and February 6, 2024
William W. Helman IV Policy Committee

JON M. HUNTSMAN, JR.* Director February 6, 2024

Jon M. Huntsman, Jr.

WILLIAM E. KENNARD* Director and Chair of the Nominating and Governance February 6, 2024
William E. Kennard Committee

JOHN C. MAY II* Director February 6, 2024

John C. May II

BETH E. MOONEY* Director February 6, 2024

Beth E. Mooney

LYNN VOJVODICH RADAKOVICH* Director and Chair of the Compensation, Talent and February 6, 2024
Lynn Vojvodich Radakovich Culture Committee

JOHN L. THORNTON* Director February 6, 2024

John L. Thornton

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199174_Ford_2023_AR_1OK.indd 107 2/9/24 2:56 PM

 Signature Title Date

JOHN B. VEIHMEYER* Director and Chair of the Audit Committee February 6, 2024
John B. Veihmeyer

JOHN S. WEINBERG* Director February 6, 2024

John S. Weinberg

/s/ JOHN T. LAWLER Chief Financial Officer February 6, 2024

John T. Lawler (principal financial officer)

/s/ CATHY O’CALLAGHAN Controller February 6, 2024

Cathy O’Callaghan (principal accounting officer)

*By: /s/ JONATHAN E. OSGOOD February 6, 2024

Jonathan E. Osgood
Attorney-in-Fact

104

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 Report of Independent Registered Public Accounting Firm

To the Board of Directors and Report of Independent

Stockholders Registered
of Ford Motor CompanyPublic Accounting Firm

To the Board
Opinions on of
theDirectors
Financialand Stockholders
Statements andof Internal
Ford Motor Company
Control over Financial Reporting

Opinions on the the

We have audited Financial Statements
accompanying and Internal
consolidated Control
balance sheets over Financial
of Ford MotorReporting
Company and its subsidiaries
(the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of
We have auditedincome,
comprehensive the accompanying
of equity andconsolidated
of cash flows balance sheets
for each of theofthree
Fordyears
MotorinCompany
the periodand its subsidiaries
ended December 31, 2023,
(the “Company”) as of December 31, 2023 and 2022, and the related consolidated
including the related notes and financial statement schedule listed in the index appearing under Item statements of income, of (collectively
15(a)(2)
comprehensive
referred to as the income, of equity
“consolidated and of cash
financial flows for each
statements”). of the
We also havethree yearsthe
audited in the period ended
Company’s December
internal 31, 2023,
control over financial
including as
reporting theof related
Decembernotes31,
and2023,
financial
basedstatement schedule
on criteria listedininInternal
established the index appearing
Control under Item
- Integrated 15(a)(2)(2013)
Framework (collectively
issued
referred
by to as the “consolidated
the Committee of Sponsoringfinancial statements”).
Organizations We also have
of the Treadway audited (COSO).
Commission the Company’s internal control over financial
reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued
by our
In the opinion,
Committee the of Sponsoringfinancial
consolidated Organizations of thereferred
statements Treadway Commission
to above present(COSO).
fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each
In the
of our three
opinion,
yearsthe in
consolidated financial
the period ended statements
December 31, referred to above present
2023 in conformity fairly, in allprinciples
with accounting material respects,
generally the financial
accepted in
position
the of States
United the Company as of Also
of America. December
in our 31, 2023the
opinion, andCompany
2022, and the results in
maintained, ofall
itsmaterial
operations and itseffective
respects, cash flows for each
internal
of the three
control over years in the
financial period as
reporting ended December
of December 31,
31, 2023based
2023, in conformity with
on criteria accountinginprinciples
established generally
Internal Control accepted in
- Integrated
the United States
Framework (2013)ofissued
America. Also
by the in our opinion, the Company maintained, in all material respects, effective internal
COSO.
control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated
Framework
Basis (2013) issued by the COSO.
for Opinions

Basis
The for Opinions
Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting,
The Company’s
included management
in Management’s is responsible
Report on Internalfor theseOver
Control consolidated
Financialfinancial
Reporting statements,
appearingfor maintaining
under Item [Link]
Our internal
control over financial
responsibility reporting,
is to express and for
opinions on its
theassessment
Company’s of the effectiveness
consolidated financial of statements
internal controland over
on the financial reporting,
Company's internal
included in Management’s
control over Report
financial reporting basedon Internal ControlWe
on our audits. Over areFinancial
a public Reporting
accountingappearing underwith
firm registered [Link]
Our Company
responsibility is to express opinions on the Company’s consolidated financial statements
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company and on the Company's internal in
control over financial reporting based on our audits. We are a public accounting firm registered
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange with the Public Company
Accounting
CommissionOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in
and the PCAOB.
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission
We conducted andourthe PCAOB.
audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of
We conducted
material our audits
misstatement, in accordance
whether withor
due to error thefraud,
standards of the PCAOB.
and whether effective Those
internalstandards
control overrequire that we
financial plan and
reporting was
perform the audits to obtain
maintained in all material [Link] assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was
maintained
Our audits of in the
all material respects.
consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
Our audits
respond to of
thosethe consolidated financial statements
risks. Such procedures included performing
included examining, procedures
on a test basis, evidenceto assess the risks
regarding of material
the amounts and
misstatement
disclosures in of
thethe consolidated
consolidated financial
financial statements,Our
statements. whether
auditsdue
alsotoincluded
error or evaluating
fraud, and the performing
accounting procedures
principles that
used
respond
and to those
significant risks. Such
estimates made procedures includedasexamining,
by management, on a testthe
well as evaluating basis, evidence
overall regarding
presentation theconsolidated
of the amounts and
disclosures
financial in the consolidated
statements. Our audit financial statements.
of internal control overOur auditsreporting
financial also included evaluating
included obtainingtheanaccounting principles
understanding used
of internal
and significant
control estimates
over financial made assessing
reporting, by management,
the riskas well
that as evaluating
a material weaknessthe overall
exists,presentation
and testing and of the consolidated
evaluating the design
financial
and statements.
operating Our audit
effectiveness of internal
of internal control
control basedover
onfinancial reporting
the assessed [Link] obtaining
Our audits an understanding
also included performingofsuchinternal
controlprocedures
other over financial as wereporting, assessing
considered the risk
necessary thatcircumstances.
in the a material weaknessWe believeexists,that
andourtesting
auditsand evaluating
provide the design
a reasonable
and operating
basis effectiveness of internal control based on the assessed risk. Our audits also included performing such
for our opinions.
other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.

105

105

199174_Ford_2023_AR_1OK.indd 109 2/9/24 2:56 PM

 Definition and Limitations of Internal Control over Financial Reporting
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
A company’s
reliability internalreporting
of financial control over andfinancial reportingofisfinancial
the preparation a process designedfor
statements to external
provide reasonable
purposes inassurance accordance regarding
with the
reliability of financial reporting and the preparation of financial statements for external
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and purposes in accordance with
generally
procedures accepted accounting
that (i) pertain to theprinciples.
maintenance A company’s
of recordsinternal that, in control
reasonableover detail,
financial reportingand
accurately includes those policies
fairly reflect the and
procedures that (i) pertain to the maintenance of records that, in reasonable
transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are detail, accurately and fairly reflect the
transactions and dispositions
recorded as necessary to permitof the assets ofof
preparation the company;
financial (ii) provide
statements reasonable assurance
in accordance with generally thataccepted
transactions are
accounting
recorded as necessary to permit preparation of financial statements in accordance
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of with generally accepted accounting
principles,
management andand thatdirectors
receiptsof andtheexpenditures
company; and of the company
(iii) provide are being assurance
reasonable made only regarding
in accordance with authorizations
prevention or timely of
management and directorsacquisition,
detection of unauthorized of the company; use, orand (iii) provide
disposition of thereasonable
company’s assurance
assets that regarding
could have prevention
a material or timely
effect on the
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
Because
projections of of
itsany
inherent limitations,
evaluation internal control
of effectiveness to futureoverperiods
financial reporting
are subject may to thenot riskprevent or detect
that controls may misstatements.
become Also,
projections
inadequate of any evaluation
because of changes of effectiveness
in conditions,toorfuture that theperiods
degree areofsubject
complianceto thewithrisk the
thatpolicies
controlsormay become may
procedures
inadequate
deteriorate. because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Critical Audit Matters
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated
The critical
financial audit matters
statements communicated
that were communicated beloworare matters
required toarising from the current
be communicated to theperiod
audit audit
committee of the andconsolidated
that (i) relate to
financial
accountsstatements
or disclosures thatthat
were arecommunicated
material to theorconsolidated
required to be communicated
financial statements to the
andaudit committee
(ii) involved our and that (i) relate to
especially
accounts
challenging, or disclosures
subjective, or that are material
complex to the consolidated
judgments. The communication financialofstatements
critical audit and (ii) involved
matters does not ouralter
especially
in any way our
challenging,
opinion on the subjective,
consolidated or complex
financialjudgments.
statements,The communication
taken as a whole, and of critical
we areaudit not, matters does not alter
by communicating the in any way
critical auditour
opinion
matters on the consolidated
below, providing separate financial statements,
opinions on thetaken asaudit
critical a whole,
mattersandor weonare thenot, by communicating
accounts or disclosures thetocritical
which auditthey
matters
relate. below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they
relate.
Ford Credit Consumer Finance Receivables Allowance for Credit Losses
Ford Credit Consumer Finance Receivables Allowance for Credit Losses
As described in Note 10 to the consolidated financial statements, the Company had consumer finance receivables of
As described
$78,274 in Note
million, 10 toathe
for which consolidated
consumer allowancefinancial statements,
for credit losses the Company
of $879 millionhad wasconsumer
recordedfinance receivables
as of December 31,of2023.
$78,274 million, for which a consumer allowance for credit losses of $879
The consumer allowance for credit losses represents management’s estimate of the lifetime expected credit losses million was recorded as of December 31, 2023.
The consumer allowance for credit losses represents management’s estimate
inherent in the consumer finance receivables as of the balance sheet date. For consumer receivables that share similar of the lifetime expected credit losses
inherent in the consumer
risk characteristics, finance receivables
management estimates the aslifetime
of the balance
expected sheet
credit date.
lossesForbased
consumer receivables
on a collective that share using
assessment similar
risk characteristics, management estimates the lifetime expected credit
measurement models and management judgment. The lifetime expected credit losses for the receivables is determinedlosses based on a collective assessment using
measurement models and
by applying probability management
of default and lossjudgment.
given default Theassumptions
lifetime expected credit expected
to monthly losses forexposures,
the receivables then is determined
discounting
by applying probability of default and loss given default assumptions to monthly expected
these cash flows to present value using the receivable’s original effective interest rate or the current effective interest rate exposures, then discounting
these cash flows
for a variable ratetoreceivable.
present value using the receivable’s
If management does not believe originalthe effective
modelsinterest
reflect rate
lifetime or the currentcredit
expected effectivelossesinterest rate
for the
for a variable
portfolio, rate receivable.
an adjustment is made If management
to reflect management does not believejudgment theregarding
models reflect lifetime
qualitative expected
factors includingcredit losses for the
economic
portfolio,
uncertainty, an observable
adjustment changesis made to in reflect
portfolio management
performance, judgment
and other regarding
relevantqualitative
factors. factors including economic
uncertainty, observable changes in portfolio performance, and other relevant factors.
The principal considerations for our determination that performing procedures relating to the Ford Credit consumer finance
The principalallowance
receivables considerations for our
for credit losses determination
is a critical that auditperforming
matter areprocedures relating
(i) the significant to the Ford
judgment Credit consumer
by management in finance
receivables
determining allowance
the consumer for credit
finance losses is a critical
receivables audit matter
allowance are (i)
for credit the significant
losses; (ii) a high judgment
degree ofby management
auditor judgment, in
determining
subjectivity and the effort
consumer finance receivables
in performing proceduresallowanceand evaluating for credit
auditlosses;
evidence(ii) arelating
high degree to the of auditor judgment,
probability of default and loss
subjectivity
given default and effort in performing
assumptions proceduresjudgment
and management’s and evaluating regarding audit evidencefactors;
qualitative relatingand to the(iii)probability
the audit effort of default
involvedand the
loss
given
use ofdefault assumptions
professionals and management’s
with specialized judgment regarding qualitative factors; and (iii) the audit effort involved the
skill and knowledge.
use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
Addressing
overall opinion the on matter involved performing
the consolidated financialprocedures
[Link] evaluating
These audit evidence
procedures included testing in connection with forming
the effectiveness of our
controls
overall
relatingopinion on the consolidated
to the Company’s determination financial
of the statements.
consumer These financeprocedures
receivablesincluded allowance testing the effectiveness
for credit losses. These of controls
relating
procedures to the
alsoCompany’s
included, determination
among others of (i) the consumer
testing finance receivables
management’s process forallowance
determining forthe
credit losses. finance
consumer These
procedures
receivables also included,
allowance among
for credit others(ii)
losses; (i) evaluating
testing management’s
the appropriateness process of forthedetermining
models used the consumer
to determine finance
the allowance;
receivables
(iii) evaluating allowance for credit losses;
the reasonableness of the(ii) evaluating
probability ofthe appropriateness
default and loss given of the models
default used to determine
assumptions; (iv) testing thethe allowance;
data
(iii)
used evaluating the reasonableness
in the models; and (v) evaluating of the theprobability
reasonableness of default and loss given judgment
of management’s default assumptions; (iv) testingfactors
regarding qualitative the data
used
related in to
theeconomic
models; and (v) evaluating
uncertainty, observablethe reasonableness
changes in portfolio of management’s
performance,judgment and otherregarding qualitative
relevant factors. factors
Professionals
related to economic
with specialized skill uncertainty,
and knowledge observable
were used changes
to assistin portfolio performance,
in performing and other
the procedures relevantin
described factors. Professionals
(i) through (v).
with specialized skill and knowledge were used to assist in performing the procedures described in (i) through (v).

106
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 Warranty and Field Service Actions Accrual (United States)
Warranty and Field Service Actions Accrual (United States)
As described in Note 25 to the consolidated financial statements, the Company had an accrual for estimated future
As described
warranty and in Note
field 25 toaction
service the consolidated
costs, net offinancial
estimated statements, the Company
supplier recoveries had an accrual”),
(“warranty accrual forofestimated future as of
$11,504 million
warranty and field service action costs, net of estimated supplier recoveries (“warranty
December 31, 2023, of which the United States comprises a significant portion. Management accrues the estimated accrual”), of $11,504 million ascost
of
December 31, 2023, of which the United States comprises a significant portion. Management
of both base warranty coverages and field service actions at the time of sale. Management establishes their estimate of accrues the estimated cost
of both
base base warranty
warranty coverages
obligations using aand field service
patterned actions
estimation at the
model, timehistorical
using of sale. Management
information regardingestablishesthe their estimate
nature, of
frequency,
base warranty obligations using a patterned estimation model, using historical information
and average cost of claims for each vehicle line by model year. Management establishes their estimates of field service regarding the nature, frequency,
and average
action cost of
obligations claims
using for each estimation
a patterned vehicle linemodel,by model year.
using Management
historical establishes
information regarding their
theestimates of field service
nature, frequency,
action obligations
severity, and average using a patterned
cost of claims estimation
for each model model, using
year. historical information
Management reevaluates regarding
the adequacythe nature, frequency,
of their accruals on a
severity, and average cost of claims for each model year. Management reevaluates the adequacy of their accruals on a
regular basis.
regular basis.
The principal considerations for our determination that performing procedures relating to the warranty accrual for the
The principal
United Statesconsiderations
is a critical audit formatter
our determination that performing
are (i) the significant judgment procedures relating in
by management to the
the estimation
warranty accrual for the and
of the accrual
United Statesof
development is the
a critical auditestimation
patterned matter aremodel;
(i) the significant judgment
(ii) a high degree by management
of auditor judgment,insubjectivity,
the estimation and of the in
effort accrual and
performing
development
procedures and of the patterned
evaluating theestimation
estimationmodel;
model (ii)anda significant
high degree of auditor judgment,
assumptions related tosubjectivity,
the frequency andandeffort in performing
average cost of
procedures
claims; and and evaluating
(iii) the the involved
audit effort estimation themodel
use ofand significant assumptions
professionals with specialized related
skill to
andtheknowledge.
frequency and average cost of
claims; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
Addressing the on
overall opinion matter involved performing
the consolidated financialprocedures
[Link] evaluating
These audit evidence
procedures in connection
included testing with forming
the effectiveness of our
controls
overall
related opinion on the consolidated
to the estimate of the warranty financial
accrual statements. These
for the United procedures
States. included testing
These procedures also the effectiveness
included, of controls
among others,
related to the
evaluating theestimate of the warranty
reasonableness accrual
of significant for the United
assumptions usedStates. These procedures
by management to develop alsotheincluded,
warranty among
accrual others,
for the
evaluating the reasonableness
United States, of significant
related to the frequency assumptions
and average used
cost of by management
claims, to develop
in part by considering thethe warrantyexperience
historical accrual forofthe the
United
[Link], related to the
Professionals withfrequency
specialized andskill
average cost of claims,
and knowledge were in parttobyassist
used considering the historical
in evaluating experience ofofthe
the appropriateness the
Company.
model as wellProfessionals with specialized
as the reasonableness skill and knowledge
of significant assumptions were usedtotothe
related assist in evaluating
frequency the appropriateness
and average cost of claims. of the
model as well as the reasonableness of significant assumptions related to the frequency and average cost of claims.

/s/ PricewaterhouseCoopers LLP

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan
Detroit,
February Michigan
6, 2024
February 6, 2024

We have served as the Company’s auditor since 1946.

We have served as the Company’s auditor since 1946.

107
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199174_Ford_2023_AR_1OK.indd 111 2/9/24 2:56 PM

 FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
For the years ended December 31,
2021 2022 2023
Cash flows from operating activities
Net income/(loss) $ 17,910 $ (2,152) $ 4,329
Depreciation and tooling amortization (Note 12 and Note 13) 7,318 7,642 7,690
Other amortization (1,358) (1,149) (1,167)
(Gains)/Losses on extinguishment of debt (Note 5 and Note 19) 1,702 121 —
Provision for/(Benefit from) credit and insurance losses (298) 46 438
Pension and other postretirement employee benefits (“OPEB”) expense/(income) (Note 17) (4,865) (378) 3,052
Equity method investment dividends received in excess of (earnings)/losses and impairments 116 3,324 (33)
Foreign currency adjustments 532 (27) (234)
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and
other investments (Note 5) (9,159) 7,518 205
Net (gain)/loss on changes in investments in affiliates (Note 5) (368) 147 (9)
Stock compensation (Note 6) 305 336 460
Provision for/(Benefit from) deferred income taxes (563) (1,910) (1,649)
Decrease/(Increase) in finance receivables (wholesale and other) 7,656 (10,560) (4,827)
Decrease/(Increase) in accounts receivable and other assets (1,141) (1,183) (2,620)
Decrease/(Increase) in inventory (1,778) (2,576) (1,219)
Increase/(Decrease) in accounts payable and accrued and other liabilities (36) 7,268 9,829
Other (186) 386 673
Net cash provided by/(used in) operating activities 15,787 6,853 14,918

Cash flows from investing activities

Capital spending (6,227) (6,866) (8,236)
Acquisitions of finance receivables and operating leases (48,379) (45,533) (54,505)
Collections of finance receivables and operating leases 52,094 46,276 44,561
Proceeds from sale of business (Note 22) 145 449 —
Purchases of marketable securities and other investments (27,491) (17,458) (8,590)
Sales and maturities of marketable securities and other investments 33,229 19,117 12,700
Settlements of derivatives (272) 94 (138)
Capital contributions to equity method investments (Note 24) (57) (738) (2,733)
Other (297) 312 (687)
Net cash provided by/(used in) investing activities 2,745 (4,347) (17,628)

Cash flows from financing activities

Cash payments for dividends and dividend equivalents (403) (2,009) (4,995)
Purchases of common stock — (484) (335)
Net changes in short-term debt 3,273 5,460 (1,539)
Proceeds from issuance of long-term debt 27,901 45,470 51,659
Payments of long-term debt (54,164) (45,655) (41,965)
Other (105) (271) (241)
Net cash provided by/(used in) financing activities (23,498) 2,511 2,584
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (232) (414) (104)
Net increase/(decrease) in cash, cash equivalents, and restricted cash $ (5,198) $ 4,603 $ (230)

Cash, cash equivalents, and restricted cash at beginning of period (Note 9) $ 25,935 $ 20,737 $ 25,340
Net increase/(decrease) in cash, cash equivalents, and restricted cash (5,198) 4,603 (230)
Cash, cash equivalents, and restricted cash at end of period (Note 9) $ 20,737 $ 25,340 $ 25,110

The accompanying notes are part of the consolidated financial statements.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in millions, except per share amounts)
For the years ended December 31,
2021 2022 2023
Revenues
Company Excluding Ford Credit $ 126,268 $ 149,079 $ 165,901
Ford Credit 10,073 8,978 10,290
Total revenues (Note 4) 136,341 158,057 176,191

Costs and expenses

Cost of sales 114,651 134,397 150,550
Selling, administrative, and other expenses 11,915 10,888 10,702
Ford Credit interest, operating, and other expenses 5,252 6,496 9,481
Total costs and expenses 131,818 151,781 170,733
Operating income/(loss) 4,523 6,276 5,458
Interest expense on Company debt excluding Ford Credit 1,803 1,259 1,302
Other income/(loss), net (Note 5) 14,733 (5,150) (603)
Equity in net income/(loss) of affiliated companies (Note 14) 327 (2,883) 414
Income/(Loss) before income taxes 17,780 (3,016) 3,967
Provision for/(Benefit from) income taxes (Note 7) (130) (864) (362)
Net income/(loss) 17,910 (2,152) 4,329
Less: Income/(Loss) attributable to noncontrolling interests (27) (171) (18)
Net income/(loss) attributable to Ford Motor Company $ 17,937 $ (1,981) $ 4,347

EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 8)
Basic income/(loss) $ 4.49 $ (0.49) $ 1.09
Diluted income/(loss) 4.45 (0.49) 1.08

Weighted-average shares used in computation of earnings/(loss) per share

Basic shares 3,991 4,014 3,998
Diluted shares 4,034 4,014 4,041

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)
For the years ended December 31,
2021 2022 2023
Net income/(loss) $ 17,910 $ (2,152) $ 4,329
Other comprehensive income/(loss), net of tax (Note 23)
Foreign currency translation 43 (933) 974
Marketable securities (175) (423) 272
Derivative instruments 73 322 (460)
Pension and other postretirement benefits 18 30 (488)
Total other comprehensive income/(loss), net of tax (41) (1,004) 298
Comprehensive income/(loss) 17,869 (3,156) 4,627
Less: Comprehensive income/(loss) attributable to noncontrolling interests (23) (175) (17)
Comprehensive income/(loss) attributable to Ford Motor Company $ 17,892 $ (2,981) $ 4,644

The accompanying notes are part of the consolidated financial statements.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions)
December 31, December 31,
2022 2023
ASSETS
Cash and cash equivalents (Note 9) $ 25,134 $ 24,862
Marketable securities (Note 9) 18,936 15,309
Ford Credit finance receivables, net of allowance for credit losses of $255 and $256 (Note 10) 38,720 46,425
Trade and other receivables, less allowances of $105 and $64 15,729 15,601
Inventories (Note 11) 14,080 15,651
Other assets 3,877 3,633
Total current assets 116,476 121,481
Ford Credit finance receivables, net of allowance for credit losses of $590 and $626 (Note 10) 49,903 55,650
Net investment in operating leases (Note 12) 22,772 21,384
Net property (Note 13) 37,265 40,821
Equity in net assets of affiliated companies (Note 14) 2,798 5,548
Deferred income taxes (Note 7) 15,552 16,985
Other assets 11,118 11,441
Total assets $ 255,884 $ 273,310
LIABILITIES
Payables $ 25,605 $ 25,992
Other liabilities and deferred revenue (Note 16 and Note 25) 21,097 25,870
Debt payable within one year (Note 19)
Company excluding Ford Credit 730 477
Ford Credit 49,434 49,192
Total current liabilities 96,866 101,531
Other liabilities and deferred revenue (Note 16 and Note 25) 25,497 28,414
Long-term debt (Note 19)
Company excluding Ford Credit 19,200 19,467
Ford Credit 69,605 80,095
Deferred income taxes (Note 7) 1,549 1,005
Total liabilities 212,717 230,512
EQUITY
Common Stock, par value $0.01 per share (4,086 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 22,832 23,128
Retained earnings 31,754 31,029
Accumulated other comprehensive income/(loss) (Note 23) (9,339) (9,042)
Treasury stock (2,047) (2,384)
Total equity attributable to Ford Motor Company 43,242 42,773
Equity attributable to noncontrolling interests (75) 25
Total equity 43,167 42,798
Total liabilities and equity $ 255,884 $ 273,310

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. See Note 24 for additional information on our VIEs.
December 31, December 31,
2022 2023
ASSETS
Cash and cash equivalents $ 2,274 $ 2,298
Ford Credit finance receivables, net 49,142 56,131
Net investment in operating leases 12,545 11,179
Other assets 264 90
LIABILITIES
Other liabilities and deferred revenue $ 2 $ 45
Debt 45,451 48,177
The accompanying notes are part of the consolidated financial statements.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in millions)
Equity Attributable to Ford Motor Company
Cap. in
Excess
of Accumulated Equity
Par Retained Other Attributable
Value Earnings/ Comprehensive to Non-
Capital of (Accumulated Income/(Loss) Treasury controlling Total
Stock Stock Deficit) (Note 23) Stock Total Interests Equity
Balance at December 31, 2020 $ 41 $ 22,290 $ 18,243 $ (8,294) $ (1,590) $ 30,690 $ 121 $ 30,811
Net income/(loss) — — 17,937 — — 17,937 (27) 17,910
Other comprehensive income/(loss), net
of tax — — — (45) — (45) 4 (41)
Common stock issued (a) — 321 — — — 321 — 321
Treasury stock/other — — — — 27 27 5 32
Dividend and dividend equivalents
declared (b) — — (411) — — (411) — (411)
Balance at December 31, 2021 $ 41 $ 22,611 $ 35,769 $ (8,339) $ (1,563) $ 48,519 $ 103 $ 48,622

Balance at December 31, 2021 $ 41 $ 22,611 $ 35,769 $ (8,339) $ (1,563) $ 48,519 $ 103 $ 48,622
Net income/(loss) — — (1,981) — — (1,981) (171) (2,152)
Other comprehensive income/(loss), net
of tax — — — (1,000) — (1,000) (4) (1,004)
Common stock issued (a) 1 221 — — — 222 — 222
Treasury stock/other — — — — (484) (484) 7 (477)
Dividend and dividend equivalents
declared (b) — — (2,034) — — (2,034) (10) (2,044)
Balance at December 31, 2022 $ 42 $ 22,832 $ 31,754 $ (9,339) $ (2,047) $ 43,242 $ (75) $ 43,167

Balance at December 31, 2022 $ 42 $ 22,832 $ 31,754 $ (9,339) $ (2,047) $ 43,242 $ (75) $ 43,167
Net income/(loss) — — 4,347 — — 4,347 (18) 4,329
Other comprehensive income/(loss), net
of tax — — — 297 — 297 1 298
Common stock issued (a) — 425 — — — 425 — 425
Treasury stock/other — (129) — — (337) (466) 129 (337)
Dividend and dividend equivalents
declared (b) — — (5,072) — — (5,072) (12) (5,084)
Balance at December 31, 2023 $ 42 $ 23,128 $ 31,029 $ (9,042) $ (2,384) $ 42,773 $ 25 $ 42,798
__________
(a) Includes impacts of share-based compensation.
(b) We declared dividends per share of Common and Class B Stock of $0.10, $0.50, and $1.25 in 2021, 2022 and 2023, respectively. In the first
quarter of 2023, in addition to a regular dividend of $0.15 per share, we declared a supplemental dividend of $0.65 per share. On
February 6, 2024, we declared a regular dividend of $0.15 per share and a supplemental dividend of $0.18 per share.

The accompanying notes are part of the consolidated financial statements.

111

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS

Table of Contents

Footnote Page
Note 1 Presentation 113
Note 2 Summary of Significant Accounting Policies 114
Note 3 New Accounting Standards 120
Note 4 Revenue 121
Note 5 Other Income/(Loss) 123
Note 6 Share-Based Compensation 124
Note 7 Income Taxes 125
Note 8 Capital Stock and Earnings/(Loss) Per Share 129
Note 9 Cash, Cash Equivalents, and Marketable Securities 130
Note 10 Ford Credit Finance Receivables and Allowance for Credit Losses 133
Note 11 Inventories 140
Note 12 Net Investment in Operating Leases 141
Note 13 Net Property 142
Note 14 Equity in Net Assets of Affiliated Companies 143
Note 15 Other Investments 145
Note 16 Other Liabilities and Deferred Revenue 145
Note 17 Retirement Benefits 146
Note 18 Lease Commitments 153
Note 19 Debt and Commitments 155
Note 20 Derivative Financial Instruments and Hedging Activities 163
Note 21 Employee Separation Actions and Exit and Disposal Activities 166
Note 22 Acquisitions and Divestitures 167
Note 23 Accumulated Other Comprehensive Income/(Loss) 169
Note 24 Variable Interest Entities 170
Note 25 Commitments and Contingencies 171
Note 26 Segment Information 174

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 1. PRESENTATION NOTES TO THE FINANCIAL STATEMENTS
[Link]
PRESENTATION
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
For purposes
requires [Link] We
this also
report, “Ford,”
make the “Company,”
reference “we,”Credit
to Ford Motor “our,” Company
“us,” or similar
LLC, references mean Ford
herein referenced to asMotor
Ford Company,
Credit.
our consolidated
Our consolidated subsidiaries, and our are
financial statements consolidated
presentedVIEs of which we
in accordance areU.S.
with the generally
primary beneficiary, unless the principles
accepted accounting context
requires otherwise.
(“GAAP”). We also
We reclassified makeprior
certain reference to Ford Motor
year amounts in ourCredit Company
consolidated LLC, herein
financial referenced
statements to as to
to conform Ford
theCredit.
current
Our consolidated
year [Link] statements are presented in accordance with U.S. generally accepted accounting principles
(“GAAP”). We reclassified certain prior year amounts in our consolidated financial statements to conform to the current
year presentation.
Certain Transactions with Ford Credit

Certain Transactions
Transactions withFord
between Ford Credit
Credit and our other segments occur in the ordinary course of business. Additional detail
regarding certain of those transactions is below (in billions):
Transactions between Ford Credit and our other segments occur in the ordinary course of business. Additional detail
regarding certain of those transactions is below (in billions): December 31, December 31,
2022 2023
Balance Sheet December 31, December 31,
2022 2023
Trade and other receivables (a) $ 10.6 $ 9.2
Balance Sheet
Unearned interest supplements and residual support (b) (3.4) (4.6)
Trade and other receivables (a) $ 10.6 $ 9.2
Other (c) 1.3 1.6
Unearned interest supplements and residual support (b) (3.4) (4.6)
__________
Other
(a) (c) Blue, Ford Model e, and Ford Pro receivables (generated primarily from vehicle and parts sales to third parties) sold to Ford
Ford 1.3 Credit. 1.6
(b) Ford
__________ Blue, Ford Model e, and Ford Pro pay amounts to Ford Credit at the point of retail financing or lease origination, which represent interest
supplements
(a) Ford andModel
Blue, Ford residual support.
e, and Ford Pro receivables (generated primarily from vehicle and parts sales to third parties) sold to Ford Credit.
(c) Ford
(b) Includes a sale-leaseback
Blue, agreement
Ford Model e, and Ford Probetween Ford Blue
pay amounts andCredit
to Ford Ford Credit relating
at the point primarily
of retail to vehicles
financing thatorigination,
or lease we lease towhich
our employees.
represent interest
supplements and residual support.
See Note
(c) Includes 2 for additional
a sale-leaseback information
agreement betweenregarding
Ford Blue andour finance
Ford and lease
Credit relating incentives
primarily between
to vehicles Fordto Credit
that we lease and our other
our employees.
segments.
See Note 2 for additional information regarding our finance and lease incentives between Ford Credit and our other
segments.

113

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
NOTES POLICIES STATEMENTS
TO THE FINANCIAL
[Link]
SUMMARY OFtopic
accounting SIGNIFICANT ACCOUNTING
that is addressed in its ownPOLICIES
note, the description of the accounting policy may be found in
the related note. Other significant accounting policies are described below.
For each accounting topic that is addressed in its own note, the description of the accounting policy may be found in
the related
Use note. Other significant accounting policies are described below.
of Estimates

UseThe
of Estimates
preparation of financial statements requires us to make estimates and assumptions that affect our results.
Estimates are used to account for certain items such as marketing accruals, warranty costs, employee benefit programs,
The preparation
allowance of financial
for credit losses, and statements
other items requires
requiringus to make estimates
judgment. Estimatesandare assumptions that affect that
based on assumptions our we
results.
believe are
Estimates
reasonableare used
under theto circumstances.
account for certain
Dueitems
to thesuch as marketing
inherent accruals,
uncertainty warranty
involved costs, employee
with estimates, benefit
actual results programs,
may differ.
allowance for credit losses, and other items requiring judgment. Estimates are based on assumptions that we believe are
reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.
Foreign Currency

Foreign
WhenCurrency
an entity has monetary assets and liabilities denominated in a currency that is different from its functional
currency, we remeasure those assets and liabilities from the transactional currency to the entity’s functional currency. The
When
effect anremeasurement
of this entity has monetary assets
process andand
the liabilities
results ofdenominated in a currency
our related foreign currency that is different
hedging fromare
activities its functional
reported in Cost
currency, we remeasure those assets and liabilities from the transactional currency to the
of sales and Other income/(loss), net and were $(74) million, $180 million, and $13 million for the years ended entity’s functional currency.
2021, The
effect of this remeasurement
2022, and 2023, respectively. process and the results of our related foreign currency hedging activities are reported in Cost
of sales and Other income/(loss), net and were $(74) million, $180 million, and $13 million for the years ended 2021,
2022, and 2023,
Generally, ourrespectively.
foreign subsidiaries use the local currency as their functional currency. We translate the assets and
liabilities of our foreign subsidiaries from their respective functional currencies to U.S. dollars using end-of-period
Generally,
exchange [Link]
foreign subsidiaries usevalue
in the carrying the local currency
of these asand
assets theirliabilities
functional currency. toWe
attributable translate the
fluctuations assets and
in exchange rates
liabilities of our foreign subsidiaries from their respective functional currencies to U.S. dollars using
are recognized in Foreign currency translation, a component of Other comprehensive income/(Ioss), net of tax. Upon sale end-of-period
exchange
or rates. Changes
upon complete in the carrying
or substantially complete value of these
liquidation of assets and liabilities
an investment attributable
in a foreign to fluctuations
subsidiary, the amount in exchange rates
of accumulated
are recognized in Foreign currency translation, a component of Other comprehensive income/(Ioss),
foreign currency translation related to the entity is reclassified to income and recognized as part of the gain or loss on thenet of tax. Upon sale
or upon complete or substantially complete liquidation of an investment in a foreign subsidiary, the amount of accumulated
investment.
foreign currency translation related to the entity is reclassified to income and recognized as part of the gain or loss on the
investment.
Cash Equivalents

Cash Equivalents
Cash and cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and
are subject to an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal. A debt
Cashisand
security cash equivalents
classified are highly ifliquid
as a cash equivalent investments
it meets that are
these criteria andreadily
if it hasconvertible
a remainingto time
knownto amounts ofthree
maturity of cash months
and
areless
or subject
fromto andate
the insignificant risk ofAmounts
of purchase. change on in value due
deposit to available
and interest rate,
upon quoted price,
demand, or or penalty on
negotiated to withdrawal. A debt
provide for daily
security without
liquidity is classified as aare
penalty, cash equivalent
classified if it meets
as Cash theseequivalents.
and cash criteria and ifTime
it has a remaining
deposits, time toofmaturity
certificates deposit,ofand
three months
money
or less from
market the date
accounts that of purchase.
meet the aboveAmounts
criteriaon aredeposit andatavailable
reported par valueupon
on ourdemand, or negotiated
consolidated balancetosheets.
provide for daily
liquidity without penalty, are classified as Cash and cash equivalents. Time deposits, certificates of deposit, and money
market accounts
Restricted Cashthat meet the above criteria are reported at par value on our consolidated balance sheets.

Restricted
Cash andCash
cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual
agreements are recorded in Other assets in the non-current assets section of our consolidated balance sheets. Our
Cash and
Company cash equivalents
excluding Ford Creditthat are restricted
restricted as to withdrawal
cash balances or use under
primarily include theescrow
various terms agreements
of certain contractual
related to legal,
agreements are recorded in Other assets in the non-current assets section of our consolidated
insurance, customs, and environmental matters and cash held under the terms of certain contractual balance sheets. OurOur
agreements.
Company excluding Ford Credit restricted cash balances primarily include various escrow agreements
Ford Credit segment restricted cash balances primarily include cash held to meet certain local governmental and related to legal,
insurance,
regulatory reserve requirements and cash held under the terms of certain contractual agreements. Restricted cashOur
customs, and environmental matters and cash held under the terms of certain contractual agreements. does
Ford Credit required
not include segmentminimum
restrictedbalances
cash balances
or cashprimarily
securinginclude cash held
debt issued to meet
through certain local
securitization governmental and
transactions.
regulatory reserve requirements and cash held under the terms of certain contractual agreements. Restricted cash does
not include required minimum balances or cash securing debt issued through securitization transactions.

114

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
NOTES POLICIES (Continued)
TO THE FINANCIAL STATEMENTS
NOTE 2. SUMMARY
Marketable SecuritiesOF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Marketable
Investments Securities
in debt securities with a maturity date greater than three months at the date of purchase and other debt
securities for which there is more than an insignificant risk of change in value due to interest rate, quoted price, or penalty
Investments
on withdrawal areinclassified
debt securities with a maturity
and accounted for as date
eithergreater
tradingthan three months at the
or available-for-sale date of purchase
marketable securities. and other debt
Equity
securities with
securities for which theredeterminable
a readily is more thanfairan value
insignificant risk of change
are classified in valuefor
and accounted due astotrading
interest rate, quoted
marketable price, or penalty
securities.
on withdrawal are classified and accounted for as either trading or available-for-sale marketable securities. Equity
securities
Realizedwithgains
a readily determinable
and losses, interestfair value are
income, andclassified
dividend and accounted
income on all offor
our asmarketable
trading marketable
securitiessecurities.
and unrealized
gains and losses on securities not classified as available for sale are recorded in Other income/(loss), net. Unrealized
gainsRealized
and losses gainsonand losses, interestsecurities
available-for-sale income, and dividend income
are recognized on all of gains
in Unrealized our marketable
and lossessecurities and unrealized
on securities, a
gains and losses on securities not classified as available for sale are recorded in Other
component of Other comprehensive income/(loss), net of tax. Realized gains and losses and reclassifications income/(loss), net. Unrealized
of
gains and losses
accumulated otheroncomprehensive
available-for-sale securities
income areincome
into net recognized in Unrealized
are measured usinggains and losses
the specific on securities,
identification a
method.
component of Other comprehensive income/(loss), net of tax. Realized gains and losses and reclassifications of
accumulated other basis,
On a quarterly comprehensive
we reviewincome into net incomedebt
our available-for-sale are measured using
securities for creditthelosses.
specificWe identification
compare the method.
present value
of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value
On aflows
of cash quarterly basis,
expected to we
be review ourisavailable-for-sale
collected debt securities
less than the amortized cost basisforofcredit losses. we
the security, We determine
compare the if apresent value
credit loss
of cash flows expected to be collected from the security with the amortized cost basis of the
allowance is necessary. If a credit loss allowance is necessary, we will record an allowance, limited by the amount thatsecurity. If the present value
of
faircash flows
value expected
is less than theto amortized
be collected is basis,
cost less than
andthe amortized
recognize thecost basis of thecharge
corresponding security, in we
Otherdetermine if a credit
income/(loss), [Link]
allowance is necessary. If a credit loss allowance is necessary, we will record an allowance,
Factors we consider include the severity and reason for the decline in value, interest rate changes, and counterparty limited by the amount that
long-
fair value is
term ratings. less than the amortized cost basis, and recognize the corresponding charge in Other income/(loss), net.
Factors we consider include the severity and reason for the decline in value, interest rate changes, and counterparty long-
term
Trade,ratings.
Notes, and Other Receivables

Trade, Notes,
Trade, andand
notes, Other
other Receivables
receivables consist primarily of receivables from contracts with customers for the sale of
vehicles, parts, and accessories. The current portion of trade and notes receivables is reported in Trade and other
Trade, notes,
receivables, and non-current
net. The other receivablesportionconsist
of notesprimarily of receivables
receivables is reportedfrom contracts
in Other with Trade
assets. customers for thereceivables
and notes sale of
vehicles,
are parts,
initially and accessories.
recorded at transactionThe current
cost. Tradeportion of trade
receivables areand notes outstanding
typically receivables for
is reported
30 days in
orTrade
less. and
Eachother
reporting
receivables,
period, net. The
we evaluate non-current
the collectibilityportion
of the of notes
trade andreceivables is reported
notes receivables andinrecord
Other an
assets. Tradefor
allowance and notes
credit receivables
losses
are initially recorded
representing at transaction
our estimate cost. Trade
of the expected losses receivables
that result are
fromtypically outstanding
all possible for 30 days
default events over or
theless. Each life
expected reporting
of the
period, we evaluate
receivables. thetocollectibility
Additions the allowance of the
fortrade
creditand notes
losses arereceivables and record
made by recording an allowance
charges for credit
to bad debt losses
expense reported in
representing
Selling, our estimate
administrative, andofother
the expected
expenseslosses that of
and Cost result
[Link] all possible
Trade and notesdefault events over
receivables the expected
are written life of
off against thethe
receivables.
allowance forAdditions to the
credit losses allowance
when for credit
the account losses are
is deemed to be made by recording charges to bad debt expense reported in
uncollectible.
Selling, administrative, and other expenses and Cost of sales. Trade and notes receivables are written off against the
allowance for credit
The carrying losses
value whennotes,
of trade, the account is deemed
and other to bewas
receivables uncollectible.
$15.9 billion and $16.4 billion at December 31, 2022
and 2023, respectively. The credit loss reserve included in the carrying value of trade, notes, and other receivables was
$105The carrying
million value
and $86 of trade,
million notes, and31,
at December other
2022receivables
and 2023,was $15.9 billion and $16.4 billion at December 31, 2022
respectively.
and 2023, respectively. The credit loss reserve included in the carrying value of trade, notes, and other receivables was
$105 million andAssets
Net Intangible $86 million at December 31, 2022 and 2023, respectively.
and Goodwill

Net Indefinite-lived
Intangible Assets and Goodwill
intangible assets and goodwill are not amortized but are tested for impairment annually or more
frequently if events or circumstances indicate the assets may be impaired. Goodwill impairment testing is also performed
Indefinite-lived
following intangible
an allocation assets
of goodwill to aand goodwill
business toare not amortized
be disposed but are tested
or a change for impairment
in reporting units. Weannually or more by
test for impairment
frequently if events or circumstances indicate the assets may be impaired. Goodwill impairment testing
assessing qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived is also performed
following an allocation of goodwill to a business to be disposed or a change in reporting units. We test
intangible asset or the reporting unit allocated the goodwill is less than its carrying amount. If the qualitative assessment for impairment by
assessing qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived
indicates a possible impairment, the carrying value of the asset or reporting unit is compared with its fair value. Fair value
intangible
is measured asset or the
relying reporting
primarily on unit allocated
the income the goodwill
approach is less than
by applying its carrying
a discounted amount.
cash If the qualitative
flow method, the market assessment
approach
indicates a possible impairment, the carrying value of the asset or reporting unit is compared with
using market values or multiples, and/or third-party valuations. We capitalize and amortize our finite-lived intangible its fair value. Fair value
is measured relying primarily on the
assets over their estimated useful lives. income approach by applying a discounted cash flow method, the market approach
using market values or multiples, and/or third-party valuations. We capitalize and amortize our finite-lived intangible
Theover
assets carrying amount of useful
their estimated intangible
[Link] and goodwill is reported in Other assets in the non-current assets section of
our consolidated balance sheets. Intangible assets are comprised primarily of advertising agreements and land rights.
The The carrying amount
net carrying amount of of our
intangible
intangibleassets andwas
assets goodwill is reported
$86 million in Other
and $80 assets
million in the non-current
at December 31, 2022 and assets section of
2023,
our consolidated balance sheets. Intangible assets are comprised primarily of advertising agreements
respectively. The net carrying amount of goodwill was $603 million and $683 million at December 31, 2022 and 2023, and land rights.
The net carrying amount of our intangible assets was $86 million and $80 million at December 31,
respectively. For the periods presented, we did not record any material impairments for indefinite-lived intangibles or 2022 and 2023,
respectively.
goodwill. The net carrying amount of goodwill was $603 million and $683 million at December 31, 2022 and 2023,
respectively. For the periods presented, we did not record any material impairments for indefinite-lived intangibles or
goodwill.

115

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
NOTES POLICIES (Continued)
TO THE FINANCIAL STATEMENTS
NOTE 2. SUMMARY
Held-and-Used OF SIGNIFICANT
Long-Lived ACCOUNTING POLICIES (Continued)
Asset Impairment

Held-and-Used Long-Lived
We test long-lived Asset Impairment
asset groups when changes in circumstances indicate the carrying value may not be recoverable.
Events that trigger a test for recoverability include material adverse changes in projected revenues or expenses, present
cashWe flowtest long-lived
losses assetwith
combined groups whenofchanges
a history cash flow in circumstances indicatethat
losses and a forecast thedemonstrates
carrying valuesignificant
may not be recoverable.
continuing
Events that trigger a test for recoverability include material adverse changes in projected revenues
losses, significant negative industry or economic trends, a current expectation that a long-lived asset group will be or expenses, present
cash flow losses combined with a history of cash flow losses and a forecast that demonstrates significant
disposed of significantly before the end of its useful life, a significant adverse change in the manner in which an asset continuing
losses, significant negative industry or economic trends, a current expectation that a long-lived asset group will be
group is used or in its physical condition, or when there is a change in the asset grouping. In addition, investing in new,
disposed of significantly before the end of its useful life, a significant adverse change in the manner in which an asset
emerging products (e.g., EVs) or services (e.g., connectivity) may require substantial upfront investment, which may result
group is used or in its physical condition, or when there is a change in the asset grouping. In addition, investing in new,
in initial forecasted negative cash flows in the near term. In these instances, near term negative cash flows on their own
emerging products (e.g., EVs) or services (e.g., connectivity) may require substantial upfront investment, which may result
may not be indicative of a triggering event for evaluation of impairment. In such circumstances, we also conduct a
in initial forecasted negative cash flows in the near term. In these instances, near term negative cash flows on their own
qualitative evaluation of the business growth trajectory, which includes updating our assessment of when positive cash
may not be indicative of a triggering event for evaluation of impairment. In such circumstances, we also conduct a
flows are expected to be generated, confirming whether established milestones are being achieved, and assessing our
qualitative evaluation of the business growth trajectory, which includes updating our assessment of when positive cash
ability and intent to continue to access required funding to execute the plan. If this evaluation indicates a triggering event
flows are expected to be generated, confirming whether established milestones are being achieved, and assessing our
has occurred, a test for recoverability is performed.
ability and intent to continue to access required funding to execute the plan. If this evaluation indicates a triggering event
has occurred, a test for recoverability is performed.
When a triggering event occurs, a test for recoverability is performed, comparing projected undiscounted future cash
flowsWhen
to thea carrying
triggeringvalue
eventofoccurs,
the asset group.
a test If the undiscounted
for recoverability forecasted
is performed, cash flows
comparing are less
projected than the carrying
undiscounted futurevalue
cash
of the assets, the asset group’s fair value is measured relying primarily on a discounted cash
flows to the carrying value of the asset group. If the undiscounted forecasted cash flows are less than the carrying flow method. To the extent
value
available, we will
of the assets, the also
assetconsider
group’s third-party
fair value isvaluations
measuredofrelyingour long-lived
primarilyassets that were prepared
on a discounted cash flowfor other business
method. To the extent
purposes. An impairment charge is recognized for the amount by which the carrying
available, we will also consider third-party valuations of our long-lived assets that were prepared for othervalue of the asset group exceeds its
business
estimated fair
purposes. An value. When
impairment an impairment
charge loss is
is recognized forrecognized
the amountfor byassets
which to thebecarrying
held and used,
value of the
the adjusted carrying
asset group exceeds its
amounts offair
estimated those assets
value. Whenareandepreciated
impairmentover losstheir remaining for
is recognized useful [Link]
assets be the
heldperiods presented,
and used, we have
the adjusted not
carrying
recorded of
amounts any material
those impairments.
assets are depreciated over their remaining useful life. For the periods presented, we have not
recorded any material impairments.
Held-for-Sale Asset Impairment
Held-for-Sale Asset Impairment
We perform an impairment test on a disposal group to be discontinued, held for sale (“HFS”), or otherwise disposed
when We weperform
have committed to an test
an impairment actionon and the action
a disposal is expected
group to be completed
to be discontinued, within
held for sale one [Link]
(“HFS”), estimate
otherwise fair value
disposed
to approximate the expected proceeds to be received, less cost to sell, and compare it to
when we have committed to an action and the action is expected to be completed within one year. We estimate fair value the carrying value of the
disposal group. the
to approximate An expected
impairment charge to
proceeds is recognized
be received,when the carrying
less cost value
to sell, and exceeds
compare thethe
it to estimated
carryingfair
valuevalue (see
of the
Note 22).group.
disposal We also An assess fair value
impairment charge if circumstances
is recognized when arise that were considered
the carrying unlikely
value exceeds theand, as a result,
estimated we decide
fair value (see not to
sell
Notea 22).
disposal
We alsogroup previously
assess classified
fair value as HFS upon
if circumstances reclassification
arise as held and
that were considered [Link],
unlikely When as there is awe
a result, change
decidetonota to
plan
sell aofdisposal
sale, and the assets
group are reclassified
previously classified asfrom HFSHFS upontoreclassification
held and used,as the long-lived
held and used. assets
Whenwould be is
there reported
a change at the
to a
lower
plan ofofsale,
(i) theandcarrying amount
the assets are before HFS designation,
reclassified from HFS to held adjusted
and for depreciation
used, that assets
the long-lived would have
wouldbeen recognized
be reported if the
at the
assets
lower ofhad not carrying
(i) the been classified
amountas HFS,HFS
before or (ii)designation,
the fair value at the date
adjusted the assets no
for depreciation longer
that would satisfy
have the
beencriteria for
recognized if the
classification
assets had not asbeen
[Link] as HFS, or (ii) the fair value at the date the assets no longer satisfy the criteria for
classification as HFS.
Fair Value Measurements
Fair Value Measurements
We measure fair value of our financial instruments, including those held within our pension plans, using various
We measure
valuation methodsfair value
and of ourthe
prioritize financial
use of instruments,
observable [Link]
use held within ourand
of observable pension plans, using
unobservable various
inputs and their
valuation
significance methods and prioritize
in measuring the are
fair value usereflected
of observablein our inputs. The
fair value use of observable and unobservable inputs and their
hierarchy:
significance in measuring fair value are reflected in our fair value hierarchy:
• Level 1 - inputs include quoted prices for identical instruments and are the most observable
•• Level
Level 1 2 -- inputs
inputs include
include quoted
quoted prices
prices for for identical instruments
similar instruments and and are the most
observable observable
inputs such as interest rates,
• Level 2 - inputs include quoted
currency exchange rates, and yield curvesprices for similar instruments and observable inputs such as interest rates,
currency exchange rates, and yield curves
• Level 3 - inputs include data not observable in the market and reflect management judgment about the
• Level 3 - inputs
assumptions include
market data not observable
participants would use in in pricing
the market and reflect management judgment about the
the instruments
assumptions market participants would use in pricing the instruments
Fixed income securities, equities, commingled funds, derivative financial instruments, and alternative assets are
Fixed income
remeasured securities,within
and presented equities,
our commingled
consolidatedfunds, derivative
financial financial
statements at fairinstruments, and alternative
value on a recurring basis. assets are
Finance
remeasured and presented within our consolidated financial statements at fair value on a recurring basis. Finance
receivables and debt are measured at fair value for the purpose of disclosure. Other assets and liabilities are measured
receivables
at fair value and
on adebt are measured
nonrecurring [Link] fair value for the purpose of disclosure. Other assets and liabilities are measured
at fair value on a nonrecurring basis.
Transfers into and transfers out of the hierarchy levels are recognized as if they had taken place at the end of the
Transfers into and transfers out of the hierarchy levels are recognized as if they had taken place at the end of the
reporting period.
reporting period.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
NOTES POLICIES (Continued)
TO THE FINANCIAL STATEMENTS
NOTE 2. SUMMARY
Valuation Method OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Valuation MethodSecurities. Fixed income securities primarily include government securities, government agency
Fixed Income
securities, corporate bonds, and asset-backed securities. We generally measure fair value using prices obtained from
Fixed
pricing Income
services quotes fromFixed
orSecurities. dealersincome securities
that make primarily
markets in suchinclude government
securities. Pricingsecurities,
methods government
and inputs toagency valuation
securities, corporate bonds, and asset-backed securities. We generally
models used by the pricing services depend on the security type (i.e., asset class). Where possible, measure fair value using prices
fair obtained
values are from
pricing services or quotes from dealers that make markets in such securities. Pricing
generated using market inputs, including quoted prices (the closing price in an exchange market), bid prices (the price at methods and inputs to valuation
models
which a used
buyerby the pricing
stands readyservices depend
to purchase), and onother
the security type (i.e., asset
market information. Forclass). Wheresecurities
fixed income possible, that fair values
are notare actively
generated using market inputs, including quoted prices (the closing price in an
traded, the pricing services use alternative methods to determine fair value for the securities, including quotes exchange market), bid prices (the
for price at
similar
which a buyer stands ready to purchase), and other market information. For fixed income
fixed income securities, matrix pricing, discounted cash flow using benchmark curves, or other factors. In certain cases, securities that are not actively
traded, the pricing
when market services
data are use alternative
not available, we may methods
use broker to determine
quotes orfair value
pricing for the securities,
services including pricing
that use proprietary quotes models
for similar
to
fixed
determine fair value. The proprietary models incorporate unobservable inputs primarily consisting of prepayment cases,
income securities, matrix pricing, discounted cash flow using benchmark curves, or other factors. In certain curves,
when
discountmarket
rates,data are not
default available, we
assumptions, may use
recovery broker
rates, yieldquotes or pricing
assumptions, and services that useassumptions.
credit spread proprietary pricing models to
determine fair value. The proprietary models incorporate unobservable inputs primarily consisting of prepayment curves,
discount rates, review
An annual defaultisassumptions,
performed onrecovery the securityrates,prices
yield received
assumptions, from and credit spread
our pricing services, assumptions.
which includes discussion
and analysis of the inputs used by the pricing services to value our securities. We also compare the price of certain
An annual
securities sold review
close toisthe
performed
quarter end on the security
to the priceprices
of the received
same security from ourat thepricing services,
balance sheetwhich
date to includes
ensure discussion
the reported
and analysis of the
fair value is reasonable. inputs used by the pricing services to value our securities. We also compare the price of certain
securities sold close to the quarter end to the price of the same security at the balance sheet date to ensure the reported
fair value is reasonable.
Equities. Equity securities are primarily exchange-traded and are valued based on the closing bid, official close, or
last trade pricing on an active exchange. If closing prices are not available, securities are valued at the last quoted bid
priceEquities.
or may be Equity
valuedsecurities
using the arelast
primarily
available exchange-traded
price. Securities and areare
that valued
thinlybased
tradedonorthe closing
delisted arebid, official
valued close, or
using
last trade pricing on
unobservable pricing data. an active exchange. If closing prices are not available, securities are valued at the last quoted bid
price or may be valued using the last available price. Securities that are thinly traded or delisted are valued using
unobservable
Commingled pricing
[Link] income and public equity securities may each be combined into commingled fund
investments. Most commingled funds are valued to reflect our interest in the fund based on the reported year-end net
assetCommingled
value (“NAV”). Funds. Fixed income and public equity securities may each be combined into commingled fund
investments. Most commingled funds are valued to reflect our interest in the fund based on the reported year-end net
asset value (“NAV”).
Derivative Financial Instruments. Exchange-traded derivatives for which market quotations are readily available are
valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary
Derivative
market Financial
or exchange they areExchange-traded
Instruments.
on which traded. Over-the-counter derivatives for whichare
derivatives market quotationstraded
not exchange are readily
and are available
valuedare
valuedindependent
using at the last reported sale price
pricing services oror official closing price
industry-standard as reported
valuation modelsbysuch an independent
as a discounted pricingcashservice
flow. onWhen the primary
market or exchange
discounted cash flowon whichare
models theyused,
are traded.
projected Over-the-counter
future cash flows derivatives
are discounted are nottoexchange
a presenttraded and are
value using valued
market-based
using independent
expectations pricing
for interest services
rates, foreignor industry-standard
exchange rates, commodity valuation models prices, such
and the as a discountedterms
contractual cashofflow. When
the derivative
discounted
[Link] Theflow models
discount rateare used,
used projected
is the relevant future cash flows
benchmark are discounted
interest rate (e.g., SOFR,to a present
SONIA) value
plususing market-based
an adjustment for
expectations for interest rates, foreign exchange rates, commodity prices, and the contractual
non-performance risk. The adjustment reflects the full credit default swap (“CDS”) spread applied to a net exposure, by terms of the derivative
instruments.
counterparty, The discountthe
considering rate used is
master the relevant
netting agreementsbenchmark
we have interest
entered rate (e.g.,
into andSOFR, SONIA)
any posted plus an We
collateral. adjustment
use our for
non-performance risk. The adjustment reflects the full credit default swap (“CDS”)
counterparty’s CDS spread when we are in a net asset position and our own CDS spread when we are in a net liability spread applied to a net exposure, by
counterparty, considering the master netting agreements we have entered into
position. In cases when market data are not available, we use broker quotes and models (e.g., Black-Scholes) to and any posted collateral. We use our
counterparty’s CDS spread
determine fair value. when we
This includes are in a net
situations whereasset position
there is a lackandofour own CDS
liquidity for aspread when
particular we areorincommodity,
currency a net liabilityor
position. In cases when market data are not available, we use broker quotes and
when the instrument is longer dated. When broker quotes or models are used to determine fair value, the derivative models (e.g., Black-Scholes) to is
determine
categorizedfair value.
within This
Level 3 includes situations
of the hierarchy. Allwhere
other there is a lack
derivatives areofcategorized
liquidity forwithin
a particular
Level currency
2. or commodity, or
when the instrument is longer dated. When broker quotes or models are used to determine fair value, the derivative is
categorized
Alternative within LevelHedge
Assets. 3 of thefunds
hierarchy.
generally All other derivatives
hold liquid are categorized
and readily-priced within Level
securities, such [Link] public equities, exchange-
traded derivatives, and corporate bonds. Private equity and real estate investments are less liquid. External investment
Alternative
managers Assets.
typically reportHedge fundsreflecting
valuations generallyinitial
hold liquid
cost orand readily-priced
updated appraisals, securities,
which are such as public
adjusted for equities,
cash flows, exchange-
and
traded derivatives, and corporate bonds. Private equity and real estate investments
realized and unrealized gains/losses. All alternative assets are valued at the NAV provided by the investment sponsor or are less liquid. External investment
managers typically reportas
third party administrator, valuations
they do not reflecting initial cost or updated
have readily-available marketappraisals,
[Link] are adjusted
Valuations may beforlagged cash flows,
up to and
realized
six months. The NAV will be adjusted for cash flows (additional investments or contributions, and distributions)sponsor
and unrealized gains/losses. All alternative assets are valued at the NAV provided by the investment throughor
third party administrator, as they do not have readily-available market quotations.
year end. We may make further adjustments for any known substantive valuation changes not reflected in the NAV. Valuations may be lagged up to
six months. The NAV will be adjusted for cash flows (additional investments or contributions, and distributions) through
year end. We may make further adjustments for any known substantive valuation changes not reflected in the NAV.

117

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
NOTES POLICIES (Continued)
TO THE FINANCIAL STATEMENTS
[Link] SUMMARY
hold annuityOF contracts
SIGNIFICANT withinACCOUNTING
some of our non-U.S. POLICIES (Continued)
pension plans (see Note 17). Generally, the contract
valuation method is applied for markets where we have purchased annuity contracts from an insurer as a plan asset. We
We may
measure the hold annuity
fair value contracts
of the insurancewithin some
asset byof our non-U.S.
projecting pension
expected plans
future cash (see Note
flows from17).theGenerally,
contract andthe discounting
contract
valuation methodvalue
them to present is applied
basedfor onmarkets
current where
marketwe haveThe
rates. purchased
assumptionsannuity contracts
used to project from an insurer
expected as acash
future planflows
[Link]
measure the fair value of the insurance asset by projecting expected
based on actuarial estimates. We include all annuity contracts within Level 3 of the [Link] cash flows from the contract and discounting
them to present value based on current market rates. The assumptions used to project expected future cash flows are
based on actuarial
Finance estimates.
Receivables. We We include
measure all annuity
finance contracts
receivables within
at fair Level
value 3 ofinternal
using the hierarchy.
valuation models (see Note 10).
These models project future cash flows of financing contracts based on scheduled contract payments (including principal
and Finance
interest) Receivables.
and assumptions We regarding
measure finance
expected receivables
credit losses at fair
and value using internal
pre-payment speed. valuation models cash
The projected (see Note
flows10).
are
These
discounted to present value at current rates that incorporate present yield curve and credit spread assumptions. principal
models project future cash flows of financing contracts based on scheduled contract payments (including The fair
and
valueinterest) andreceivables
of finance assumptions regarding expected
is categorized within Levelcredit3 losses and pre-payment speed. The projected cash flows are
of the hierarchy.
discounted to present value at current rates that incorporate present yield curve and credit spread assumptions. The fair
value
Onofafinance receivables
nonrecurring basis,iswe categorized
also measure within at Level 3 of retail
fair value the hierarchy.
contracts greater than 120 days past due or deemed to
be uncollectible, and individual dealer loans probable of foreclosure. We use the fair value of collateral, adjusted for
On a nonrecurring
estimated costs to sell,basis, we alsothe
to determine measure
fair value at fair valuereceivables.
of these retail contracts Thegreater thanfor
collateral 120 days financing
a retail past due or or deemed
wholesale to
be uncollectible, and individual dealer loans probable of foreclosure.
receivable is the vehicle financed, and for dealer loans is real estate or other property. We use the fair value of collateral, adjusted for
estimated costs to sell, to determine the fair value of these receivables. The collateral for a retail financing or wholesale
receivable
The fairisvalue
the vehicle financed,
of collateral and for
for retail dealer loans
receivables is real estate
is calculated or other
as the property.
outstanding receivable balances multiplied by the
average recovery value percentage. The fair value of collateral for wholesale receivables is based on the wholesale
Thevalue
market fair value of collateral
or liquidation valueforfor
retail
newreceivables is calculated
and used vehicles. Theas the
fair outstanding
value of collateralreceivable balances
for dealer loans ismultiplied
determinedby the
by
average recovery value percentage. The fair value of collateral for wholesale receivables
reviewing various appraisals, which include total adjusted appraised value of land and improvements, alternate use is based on the wholesale
market
appraisedvalue or liquidation
value, value for
broker’s opinion of new
value, andand used vehicles.
purchase The fair value of collateral for dealer loans is determined by
offers.
reviewing various appraisals, which include total adjusted appraised value of land and improvements, alternate use
appraised
Debt. value, broker’s
We measure opinion
debt at fairofvalue
value,using
and purchase
quoted prices offers.
for our own debt with approximately the same remaining
maturities (see Note 19). Where quoted prices are not available, we estimate fair value using discounted cash flows and
Debt. We expectations
market-based measure debtfor atinterest
fair value using
rates, quoted
credit risk,prices
and thefor contractual
our own debt withofapproximately
terms the sameFor
the debt instruments. remaining
certain
maturities (see
short-term debt Note
with an19).original
Wherematurity
quoted datepricesof are
onenotyearavailable,
or less, wewe assume
estimatethatfair book
valuevalue
usingisdiscounted
a reasonable cash flows and
market-based expectations
approximation of the debt’s fairfor interest
value. Therates, faircredit
valuerisk, and is
of debt thecategorized
contractualwithin
termsLevelof the2debt
of theinstruments.
hierarchy. For certain
short-term debt with an original maturity date of one year or less, we assume that book value is a reasonable
approximation
Finance of the Incentives
and Lease debt’s fair value. The fair value of debt is categorized within Level 2 of the hierarchy.

Finance and Lease

We routinely Incentives
sponsor special retail financing and lease incentives to dealers’ customers who choose to finance or
lease our vehicles from Ford Credit. The cost for these incentives is included in our estimate of variable consideration
whenWe theroutinely
vehicle sponsor
is sold tospecial retail Ford
the dealer. financing
Creditand lease aincentives
records reductiontotodealers’ customers
the finance whoor
receivable choose to finance
reduces the costor of the
lease our vehicles from Ford Credit. The cost for these incentives is included in our estimate of variable
vehicle operating lease when it records the underlying finance contract, and we transfer to Ford Credit the amount of the consideration
when the on
incentive vehicle is of
behalf sold
thetodealer’s
the dealer. Ford Credit
customer. records
See Note 1 fora additional
reduction to the finance
information receivable
regarding or reducesbetween
transactions the costFordof the
vehicle
Credit and our other segments. The Ford Credit segment recognized interest revenue of $2.4 billion, $2.1 billion, andthe
operating lease when it records the underlying finance contract, and we transfer to Ford Credit the amount of
incentive
$2.3 billiononinbehalf
2021,of the dealer’s
2022, and 2023,customer. See Note
respectively, 1 for depreciation
and lower additional information regarding
of $1.9 billion, $1.2 transactions between
billion, and $0.9 billionFord
in
Credit and our other segments. The Ford Credit segment
2021, 2022, and 2023, respectively, associated with these incentives. recognized interest revenue of $2.4 billion, $2.1 billion, and
$2.3 billion in 2021, 2022, and 2023, respectively, and lower depreciation of $1.9 billion, $1.2 billion, and $0.9 billion in
2021, 2022,
Supplier andAdjustments
Price 2023, respectively, associated with these incentives.

Supplier Price Adjustments

We frequently negotiate price adjustments with our suppliers throughout a production cycle, even after receiving
production material. These price adjustments relate to changes in design specification or other commercial terms such as
We frequently
economics, negotiate
productivity, and price adjustments
competitive with
pricing. Weour suppliersprice
recognize throughout a production
adjustments when we cycle,
reacheven
finalafter receiving
agreement with
production
our suppliers. In general, we avoid direct price changes in consideration of future business; however, when terms
material. These price adjustments relate to changes in design specification or other commercial these such
occur,as
economics,
our policy is productivity,
to defer the and competitive
recognition pricing.
of any We recognize
such price priceexplicitly
change given adjustments when we reach
in consideration final business.
of future agreement with
our suppliers. In general, we avoid direct price changes in consideration of future business; however, when these occur,
our policy is to defer the recognition of any such price change given explicitly in consideration of future business.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
NOTES POLICIES (Continued)
TO THE FINANCIAL STATEMENTS
NOTE 2. SUMMARY
Government OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Incentives

Government
We receive Incentives
incentives from U.S. and non-U.S. governmental entities in the form of tax rebates or credits, grants, and
loans. Government incentives are recorded in our consolidated financial statements in accordance with their purpose as a
We receive
reduction incentives
of expense or asfrom
otherU.S. and non-U.S.
income. The benefitgovernmental
is generallyentities
recordedin the form
when all of tax rebates
conditions or credits,
attached grants,
to the and
incentive
loans.
have been met and there is reasonable assurance of receipt. Government incentives related to capital investment areas a
Government incentives are recorded in our consolidated financial statements in accordance with their purpose
reduction
recognized ofinexpense or as other
Net Property income. The
as a reduction to thebenefit is generally
net book value of recorded
the related when
[Link] conditions
The incentives attached to the incentive
are recognized over
have been met and there is reasonable assurance of receipt.
the life of the asset as a reduction to depreciation and amortization [Link] incentives related to capital investment are
recognized in Net Property as a reduction to the net book value of the related asset. The incentives are recognized over
the life of the
During asset
2022, weaswere
a reduction
awardedtoincentives
depreciation andState
by the amortization expense.
of Tennessee related to land, capital, and property tax
abatements in connection with Ford’s capital investment in our new electric vehicle assembly plant and job commitments.
TheseDuring 2022, are
incentives we were awarded
available incentives by
until December the State
2051. of Tennessee
The fair value of therelated
land into land,was
2022 capital,
$144and property
million tax
and was
abatements in connection with Ford’s capital investment in our new electric vehicle assembly plant
recorded in Net Property fully offset by the value of the incentive. A capital grant of $285 million was received in 2023 and and job commitments.
These incentives are
will be recognized as available until
a reduction to December
depreciation 2051. The fair value
and amortization of the land
expense overinthe
2022life was $144
of the million
related and was
assets.
recorded in Net Property fully offset by the value of the incentive. A capital grant of $285 million was received in 2023 and
will be recognized
In 2022, we wereas aalso
reduction
awarded to depreciation
incentives byand the amortization expense over
Canadian government and the life of of
Province theOntario
relatedinassets.
connection with
the development of electric vehicles at our Oakville Assembly Plant. Equipment, tooling, and labor incentives of
C$590In 2022,
millionwe arewere also awarded
expected incentives
to be received overby the
the Canadian
terms of the government
agreements and Province
beginning of Ontario
in 2024 in connection
through 2033 and willwith
be
the development of electric vehicles at
recognized as a reduction of the related [Link] Oakville Assembly Plant. Equipment, tooling, and labor incentives of
C$590 million are expected to be received over the terms of the agreements beginning in 2024 through 2033 and will be
recognized
Ford may as also
a reduction of benefit
indirectly the related
fromexpenses.
incentives and grants awarded to companies with which we are affiliated but are
not included in our consolidated financial statements.
Ford may also indirectly benefit from incentives and grants awarded to companies with which we are affiliated but are
not included in ourof
Ford’s receipt consolidated
governmentfinancial statements.
incentives could be subject to reduction, termination, or claw back. Claw back
provisions are monitored for ongoing compliance and are accrued for when losses are deemed probable and estimable
(seeFord’s
Note 25).receipt of government incentives could be subject to reduction, termination, or claw back. Claw back
provisions are monitored for ongoing compliance and are accrued for when losses are deemed probable and estimable
(see Note 25).
Employee Bonus and Lump-Sum Payments

Employee Bonus
Effective and Lump-Sum
November 20, 2023, we Payments
entered into a new agreement with the International Union, United Automobile,
Aerospace, and Agricultural Implement Workers of America (“UAW”) covering approximately 59,000 employees in the
Effective
United [Link] 20, 2023,
The agreement we entered
established into a
wages new
and agreement
benefits with theemployees
for covered International Union,
over United Automobile,
a four-and-a-half year period
Aerospace,
through April 30, 2028. The agreement also provided for a lump-sum ratification bonus of $5,000 peremployees
and Agricultural Implement Workers of America (“UAW”) covering approximately 59,000 employee,inwhich
the
United
was States.
paid in the The agreement
fourth quarter ofestablished
2023. wages and benefits for covered employees over a four-and-a-half year period
through April 30, 2028. The agreement also provided for a lump-sum ratification bonus of $5,000 per employee, which
wasInpaid in the fourth
addition, quarter
we entered ofa2023.
into new three-year agreement on September 25, 2023 with Unifor covering approximately
5,600 employees in Canada. The agreement included a Productivity and Quality bonus of C$10,000 for full-time
In addition,
employees and we entered
C$4,000 forinto a new three-year
temporary agreement upon
part-time employees on September
signing of25,
the2023 with Unifor covering approximately
contract.
5,600 employees in Canada. The agreement included a Productivity and Quality bonus of C$10,000 for full-time
employees
Lump-sumandcash
C$4,000 for temporary
bonuses part-time employees
paid in connection with ratifyingupon signing
a union of theare
contract contract.
recognized in the period that the
contract negotiations are finalized and approved by its members. We recorded approximately $400 million in Cost of
Lump-sum
sales related tocash
thesebonuses
bonusespaid in connection
for the year endedwith ratifying31,
December a union
[Link] are recognized in the period that the
contract negotiations are finalized and approved by its members. We recorded approximately $400 million in Cost of
sales related
Selected to these
Other Costsbonuses for the year ended December 31, 2023.

Selected Other Costs

Engineering, research, and development expenses are primarily reported in Cost of sales and consist of salaries,
materials, and associated costs. Engineering, research, and development costs are expensed as incurred when
Engineering,
performed research,
internally and
or when development
performed expenses
by a supplier areguarantee
if we primarily reported in Cost ofAdvertising
reimbursement. sales and consist of reported
costs are salaries, in
materials, and associated costs. Engineering, research, and development costs are expensed as incurred
Selling, administrative, and other expenses and are expensed as incurred. Engineering, research, development, and when
performed
advertisinginternally
expensesorforwhen performed
the years byDecember
ended a supplier31
if we guarantee
were reimbursement.
as follows (in billions): Advertising costs are reported in
Selling, administrative, and other expenses and are expensed as incurred. Engineering, research, development, and
2021 2022 2023
advertising expenses for the years ended December 31 were as follows (in billions):
Engineering, research, and development $ 7.6 $ 7.8 $ 8.2
2021 2022 2023
Advertising 3.1 2.2 2.5
Engineering, research, and development $ 7.6 $ 7.8 $ 8.2
Advertising 3.1 2.2 2.5

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 3. NEW ACCOUNTING STANDARDS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 3. NEW
Adoption ACCOUNTING
of New STANDARDS
Accounting Standards

Adoption of New
Accounting Accounting
Standards UpdateStandards
(“ASU”) 2022-02, Financial Instruments – Credit Losses, Troubled Debt Restructurings
and Vintage Disclosures. Effective January 1, 2023, we adopted the new standard, which eliminates the troubled debt
Accounting
recognition and Standards
measurement Update (“ASU”)
guidance and2022-02,
requiresFinancial
disclosure Instruments – Creditgross
of current-period Losses, TroubledbyDebt
charge-offs yearRestructurings
of origination
and Vintage Disclosures. Effective January 1, 2023, we adopted the new standard, which
(vintage disclosure). Adoption of the new standard did not have a material impact to our consolidated financial eliminates the troubled debt
statements
recognition and measurement
or financial statement disclosures. guidance and requires disclosure of current-period gross charge-offs by year of origination
(vintage disclosure). Adoption of the new standard did not have a material impact to our consolidated financial statements
or financial statement
ASU 2022-04, disclosures.
Liabilities – Supplier Finance Programs, Disclosure of Supplier Finance Program Obligations. Effective
January 1, 2023, we adopted the new standard, which requires that entities that use supplier finance programs disclose
ASU 2022-04,
information about theLiabilities
nature – Supplier
and potentialFinance Programs,
magnitude of theDisclosure
programs, of Supplier
activity Finance
during Program
the period, andObligations.
changes from Effective
period
January
to period.1, 2023, we adopted the new standard, which requires that entities that use supplier finance programs disclose
information about the nature and potential magnitude of the programs, activity during the period, and changes from period
to period.
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
Financial institutions
non-recourse basis in order participate in aearlier
to be paid supply chain
than ourfinance
payment (“SCF”)
terms program
provide. that
Ourenables
suppliers’ourvoluntary
suppliers, at their of
inclusion sole
discretion,
invoices in to
thesell
SCFtheir Ford receivables
program (i.e., on
has no bearing ourour
payment
payment obligations
terms, the to amounts
the suppliers) to the
we pay, financial
or our institutions
liquidity. We have onnoa
non-recourse
economic basisinina order
interest to bedecision
supplier’s paid earlier than our payment
to participate in the SCF terms provide.
program, andOur
we suppliers’ voluntary
do not provide inclusion of in
any guarantees
invoices
connection in the
withSCF program
it. The has no amount
outstanding bearing of onFord
our payment
receivables terms,
that the amounts
suppliers we pay,
elected or our
to sell liquidity.
to the We have no
SCF financial
economic interest
institutions, reportedin ainsupplier’s
Payables,decision
was $253 to million
participate
and in the million
$220 SCF program, and we
at December 31,do2022
not provide
and 2023, anyrespectively.
guarantees in The
connection
amount withthrough
settled it. The outstanding
the SCF programamount of Ford
during receivables
2023 that suppliers elected to sell to the SCF financial
was $1.8 billion.
institutions, reported in Payables, was $253 million and $220 million at December 31, 2022 and 2023, respectively. The
amount settled
We also through
adopted thethe SCF program
following during2023,
ASUs during 2023 was
none$1.8 billion.
of which had a material impact to our consolidated financial
statements or financial statement disclosures:
We also adopted the following ASUs during 2023, none of which had a material impact to our consolidated financial
statements or financial statement disclosures:
ASU Effective Date
2022-01 Derivatives and Hedging – Fair Value Hedging – Portfolio Layer Hedging January 1, 2023
ASU Effective Date
2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions January 1, 2023
2022-01 Derivatives and Hedging – Fair Value Hedging – Portfolio Layer Hedging January 1, 2023
2018-12 Targeted Improvements to the Accounting for Long Duration Contracts (and related amendments) January 1, 2023
2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions January 1, 2023
2023-03 Amendments to SEC Paragraphs Pursuant to SEC Bulletins & Announcements July 14, 2023
2018-12 Targeted Improvements to the Accounting for Long Duration Contracts (and related amendments) January 1, 2023
2023-04 Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 121 August 3, 2023
2023-03 Amendments to SEC Paragraphs Pursuant to SEC Bulletins & Announcements July 14, 2023
2023-04 Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 121 August 3, 2023
Accounting Standards Issued But Not Yet Adopted

Accounting Standards
ASU 2023-07, SegmentIssued But Not
Reporting Yet Adopted to Reportable Segment Disclosures. In November 2023, the
- Improvements
FASB issued a new accounting standard related to disclosures about a public entity’s reportable segments and provides
moreASU 2023-07,
detailed Segment
information Reporting
about - Improvements
a reportable segment’sto Reportable
expenses. TheSegment Disclosures.
new standard In November
is effective for fiscal 2023,
years the
FASB issued
beginning a new
after accounting
December standard
15, 2023 relatedperiods
and interim to disclosures about
beginning a public
after entity’s
December 15,reportable
2024, withsegments and application
retrospective provides
more detailed
required. information
We are assessing about
the a reportable
effect on our segment’s expenses. financial
annual consolidated The newstatement
standard disclosures;
is effective for fiscal years
however, adoption will
beginning
not impactafter December 15,
our consolidated 2023 and
balance interim
sheets periodsstatements.
or income beginning after December 15, 2024, with retrospective application
required. We are assessing the effect on our annual consolidated financial statement disclosures; however, adoption will
not impact our consolidated
ASU 2023-09, balance
Improvements sheets or
to Income income
Tax statements.
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
ASU years
for fiscal 2023-09, Improvements
beginning to Income
after December 15,Tax Disclosures.
2024, In December
with retrospective 2023,permitted.
application the FASB issued
We areaassessing
new accounting
the effect
standard
on to enhance
our annual the transparency
consolidated and decision
financial statement usefulness
disclosures; of income
however, tax disclosures.
adoption will not impactTheour
new standard isbalance
consolidated effective
for fiscal
sheets oryears
income beginning after December 15, 2024, with retrospective application permitted. We are assessing the effect
statements.
on our annual consolidated financial statement disclosures; however, adoption will not impact our consolidated balance
sheets or income
All other ASUsstatements.
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.
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.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 4. REVENUE NOTES TO THE FINANCIAL STATEMENTS
NOTE
[Link]
REVENUE tables disaggregate our revenue by major source for the years ended December 31 (in millions):
2021
The following tables disaggregate our revenue by major source for the years ended December 31 (in millions):
Company Excluding
Ford Credit Ford Credit
2021 Consolidated
Vehicles, parts, and accessories $Company Excluding
120,973 $ — $ 120,973
Ford Credit Ford Credit Consolidated
Used vehicles 2,358 — 2,358
Vehicles, parts, and accessories $ 120,973 $ — $ 120,973
Services and other revenue (a) 2,651 161 2,812
Used vehicles 2,358 — 2,358
Revenues from sales and services 125,982 161 126,143
Services and other revenue (a) 2,651 161 2,812
Revenues from sales and services 125,982 161 126,143
Leasing income 286 5,291 5,577
Financing income — 4,560 4,560
Leasing income 286 5,291 5,577
Insurance income — 61 61
Financing income — 4,560 4,560
Total revenues $ 126,268 $ 10,073 $ 136,341
Insurance income — 61 61
Total revenues $ 126,268 $ 2022 10,073 $ 136,341
Company Excluding
Ford Credit Ford Credit
2022 Consolidated
Vehicles, parts, and accessories $Company Excluding
144,471 $ — $ 144,471
Ford Credit Ford Credit Consolidated
Used vehicles 1,719 — 1,719
Vehicles, parts, and accessories $ 144,471 $ — $ 144,471
Services and other revenue (a) 2,688 100 2,788
Used vehicles 1,719 — 1,719
Revenues from sales and services 148,878 100 148,978
Services and other revenue (a) 2,688 100 2,788
Revenues from sales and services 148,878 100 148,978
Leasing income 201 4,569 4,770
Financing income — 4,254 4,254
Leasing income 201 4,569 4,770
Insurance income — 55 55
Financing income — 4,254 4,254
Total revenues $ 149,079 $ 8,978 $ 158,057
Insurance income — 55 55
Total revenues $ 149,079 $ 2023 8,978 $ 158,057
Company Excluding
Ford Credit Ford Credit
2023 Consolidated
Vehicles, parts, and accessories $Company Excluding
161,052 $ — $ 161,052
Ford Credit Ford Credit Consolidated
Used vehicles 1,873 — 1,873
Vehicles, parts, and accessories $ 161,052 $ — $ 161,052
Services and other revenue (a) 2,797 105 2,902
Used vehicles 1,873 — 1,873
Revenues from sales and services 165,722 105 165,827
Services and other revenue (a) 2,797 105 2,902
Revenues from sales and services 165,722 105 165,827
Leasing income 179 4,105 4,284
Financing income — 5,980 5,980
Leasing income 179 4,105 4,284
Insurance income — 100 100
Financing income — 5,980 5,980
Total revenues $ 165,901 $ 10,290 $ 176,191
Insurance income — 100 100
__________
(a) Total revenues
Includes extended service contract revenue. $ 165,901 $ 10,290 $ 176,191
__________
(a) Includes extended service contract revenue.
Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this
occurs when we transfer control of our vehicles, parts, or accessories, or provide services. Revenue is measured as the
Revenue
amount is recognized
of consideration wewhen
expectobligations
to receiveunder the terms
in exchange for of a contract goods
transferring with our
or customer
providing are satisfied;
services. Forgenerally thisof
the majority
occurs when
sales, this we transfer
occurs control of
when products areour vehicles,
shipped parts,
from our or accessories,facilities.
manufacturing or provideHowever,
[Link] Revenue is measured
defer a portion of theas the
amount of consideration
consideration we expect
received when there istoareceive in exchange
separate for transferring
future or stand-ready goods or providing
performance obligation,services. For the majority
such as extended serviceof
sales, thisor
contracts occurs when
ongoing products
vehicle are shipped
connectivity. fromvalue-added,
Sales, our manufacturing facilities.
and other taxes weHowever, we defer a portion
collect concurrent of the
with revenue-
consideration received
producing activities are when therefrom
excluded is arevenue.
separate Incidental
future or stand-ready performance
items that are immaterialobligation, suchofas
in the context theextended
contract service
are
contracts
recognized as expense. The expected costs associated with our base warranties and field service actionsrevenue-
or ongoing vehicle connectivity. Sales, value-added, and other taxes we collect concurrent with are recognized
producing
as expenseactivities
when theare excluded
products arefrom
soldrevenue.
(see NoteIncidental
25). Weitems
do notthat areany
have immaterial
materialin the context
significant of the contract
payment terms asare
recognized as expense. The expected costs associated
payment is received at or shortly after the point of sale. with our base warranties and field service actions are recognized
as expense when the products are sold (see Note 25). We do not have any material significant payment terms as
payment is received at or shortly after the point of sale.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 4. REVENUE (Continued) NOTES TO THE FINANCIAL STATEMENTS
NOTE 4. REVENUE
Company Excluding(Continued)
Ford Credit

Company
Vehicles,Excluding
Parts, and Ford Credit
Accessories. For the majority of vehicles, parts, and accessories, we transfer control and
recognize a sale when we ship the product from our manufacturing facility to our customer (dealers and distributors). We
Vehicles,
receive Parts,toand
cash equal invoice price For
theAccessories. the majority
for most vehicle of vehicles,
sales at the parts,
time ofand accessories,
wholesale. When wethe transfer
vehicle control
sale isand
financed
recognize a sale when we ship the product from our manufacturing facility to our customer
by our wholly-owned subsidiary Ford Credit, the dealer is obligated to pay Ford Credit when it sells the vehicle to the retail (dealers and distributors). We
receive cash equal to the invoice price for most vehicle sales at the time of wholesale.
customer (see Note 10). Payment terms on part sales to dealers, distributors, and retailers range from 30 to 120 days. When the vehicle sale is financed
by
Theour wholly-owned
amount subsidiary
of consideration weFord
receive Credit,
and the dealerwe
revenue is recognize
obligated to pay Ford
varies Credit when
with changes it sellsrights
in return the vehicle to the retail
and marketing
customer (see Note 10). Payment terms on part sales to dealers, distributors,
incentives we offer to our customers and their customers. When we give our dealers the right to return eligible partsand retailers range from 30 to 120 [Link]
The amount of consideration we receive and revenue we recognize varies with
accessories, we estimate the expected returns based on an analysis of historical experience. Estimates of marketing changes in return rights and marketing
incentives
incentives we are offer
based to onourexpected
customers andand
retail their customers.
fleet sales volumes,When mixwe give our dealers
of products to bethe right
sold, and to incentive
return eligible partsto
programs and
be
accessories, we estimate the expected returns based on an analysis of historical
offered. Customer acceptance of products and programs, as well as other market conditions, will impact these estimates. experience. Estimates of marketing
incentives
We adjust our are estimate
based onofexpected revenueretailat theand fleetofsales
earlier whenvolumes,
the value mixof of products to we
consideration be sold,
expect and to incentive
receive changes programs or to be
when
offered. Customer acceptance of products and programs, as well as other market
the consideration becomes fixed. As a result of changes in our estimate of marketing incentives, we recorded an increase conditions, will impact these estimates.
We adjust our
in revenue estimate
of $252 million of revenue
and $209atmillion the earlier
during of 2021
whenand the 2022,
value of consideration
respectively, andwe expect to in
a decrease receive
revenue changes
of $147 ormillion
when
the consideration becomes fixed. As a result
during 2023 related to revenue recognized in prior annual periods. of changes in our estimate of marketing incentives, we recorded an increase
in revenue of $252 million and $209 million during 2021 and 2022, respectively, and a decrease in revenue of $147 million
during
We2023
haverelated
electedtotorevenuerecognize recognized
the cost for in prior annual
freight periods. when control over vehicles, parts, or accessories has
and shipping
transferred to the customer as an expense in Cost of sales.
We have elected to recognize the cost for freight and shipping when control over vehicles, parts, or accessories has
transferred
We sell to the customer
vehicles to dailyas an expense
rental companies in Cost
and of sales.
may guarantee that we will pay them the difference between an agreed
amount and the value they are able to realize upon resale. At the time of transfer of vehicles to the daily rental
We sell vehicles
companies, we record tothe
daily rental companies
probable amount weand will may guarantee
pay under that we willtopay
the guarantee them
Other the difference
liabilities and deferred between an agreed
revenue (see
amount
Note 25). and the value they are able to realize upon resale. At the time of transfer of vehicles to the daily rental
companies, we record the probable amount we will pay under the guarantee to Other liabilities and deferred revenue (see
NoteUsed
25). Vehicles. We sell used vehicles both at auction and through our consolidated dealerships. Proceeds from the
sale of these vehicles are recognized in Company excluding Ford Credit revenues upon transfer of control of the vehicle
Used
to the Vehicles.
customer, andWe the sell usedvehicle
related vehicles both atvalue
carrying auction and through
is recognized in our
Costconsolidated
of sales. dealerships. Proceeds from the
sale of these vehicles are recognized in Company excluding Ford Credit revenues upon transfer of control of the vehicle
to the customer,
Services andandother therevenue.
related vehicle
For separatecarryingorvalue is recognized
stand-ready in Costobligations
performance of sales. that are included as part of the
vehicle consideration received (e.g., free extended service contracts, vehicle connectivity, over-the-air updates), we use
Services and
an observable other
price revenue. the
to determine For stand-alone
separate or stand-ready
selling price performance
or, when one obligations
is not available,that arewe included as part margin
use a cost-plus of the
vehicle consideration
approach. We also sell received (e.g.,priced
separately free extended service contracts,
service contracts that extend vehicle connectivity,
mechanical over-the-aircoverages
and maintenance updates), we use
beyond
an
ourobservable
base warranty priceagreements
to determine to the
vehiclestand-alone
owners. selling price or,
We receive when one
payment is not available,
at contract inceptionwe anduse theacontracts
cost-plusgenerally
margin
approach.
range from We 12 to also
120sell separately
months. priced service
We recognize contracts
revenue that extend
for vehicle servicemechanical
contracts thatandextend
maintenance mechanical coverages
and beyond
our base warranty agreements to vehicle owners. We receive payment
maintenance coverages beyond our base warranties over the term of the agreement in proportion to the costs weat contract inception and the contracts generally
expect
range from 12 to 120 months. We recognize revenue for vehicle service contracts
to incur in satisfying the contract obligations. Revenue related to other future or stand-ready performance obligations is that extend mechanical and
maintenance coverages
generally recognized on a beyond our base
straight-line basiswarranties
over the over
period theinterm
which of services
the agreement in proportion
are expected to the costs we expect
to be performed.
to incur in satisfying the contract obligations. Revenue related to other future or stand-ready performance obligations is
generally
We had recognized
a balanceon ofa$4.3
straight-line
billion and basis
$4.4over theofperiod
billion unearned in which
revenueservices are expected
associated primarily to be with performed.
outstanding extended
service contracts reported in Other liabilities and deferred revenue at December 31, 2021 and 2022, respectively. We
We had$1.4
recognized a balance
billion of and $4.3
$1.5billion
billion and of $4.4 billion of unearned
the unearned amounts as revenue
revenue associated
during theprimarily
years ended with outstanding
December 31, extended
2022
service
and 2023, respectively. At December 31, 2023, the unearned amount was $4.8 billion. We expect to recognize We
contracts reported in Other liabilities and deferred revenue at December 31, 2021 and 2022, respectively.
recognized
approximately $1.4 billion
$1.5 andof$1.5
billion billion of the
the unearned unearned
amount amounts
in 2024, as revenue
$1.2 billion during
in 2025, and the
$2.1 years
billion ended December 31, 2022
thereafter.
and 2023, respectively. At December 31, 2023, the unearned amount was $4.8 billion. We expect to recognize
approximately
We record $1.5 billion of
a premium the unearned
deficiency reserve amount
to theinextent
2024,we $1.2 billion in
estimate the2025,
futureand $2.1
costs billion thereafter.
associated with extended service
contracts exceed the unrecognized revenue. Amounts paid to dealers to obtain these contracts are deferred and recorded
We record
as Other assets. a premium
These costs deficiency reserve to
are amortized to expense
the extentconsistent
we estimate withthe howfuture costs associated
the related revenue iswith extendedWe
recognized. service
had a
contracts
balance of $315 million and $317 million in deferred costs as of December 31, 2022 and 2023, respectively. We recorded
exceed the unrecognized revenue. Amounts paid to dealers to obtain these contracts are deferred and
as Other assets.
recognized These$88
$81 million, costs are amortized
million, and $103tomillion expense consistent with
of amortization during howthe
theyears
related revenue
ended December is recognized.
31, 2021,We had a
2022,
balance of $315
and 2023, [Link] and $317 million in deferred costs as of December 31, 2022 and 2023, respectively. We
recognized $81 million, $88 million, and $103 million of amortization during the years ended December 31, 2021, 2022,
and 2023, respectively.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 4. REVENUE (Continued) NOTES TO THE FINANCIAL STATEMENTS
NOTE [Link]
REVENUE (Continued)
receive other revenue related to vehicle-related design and testing services we perform for others, various
Ford Next operations, and net commissions for serving as the agent in facilitating the sale of a third party’s products or
We also
services receive
to our other revenue
customers. We have related
appliedto the
vehicle-related design and
practical expedient testing services
to recognize Company we excluding
perform for others,
Ford various
Credit
Ford Nextfor
revenues operations, and net
vehicle-related commissions
design for serving
and testing servicesas thethe
over agent
twointofacilitating
three yearthetermsale
of of a third
these party’s products
agreements or
in proportion
services to our customers. We have
to the amount we have the right to invoice. applied the practical expedient to recognize Company excluding Ford Credit
revenues for vehicle-related design and testing services over the two to three year term of these agreements in proportion
to the amount
Leasing we haveWe
Income. thesell
right to invoice.
vehicles to daily rental companies with an obligation to repurchase the vehicles at an agreed
upon amount, exercisable at the option of the customer. The transactions are accounted for as operating leases. Upon
Leasingof
the transfer vehiclesWe
Income. sell daily
to the vehicles to companies,
rental daily rental companies with an obligation
we record proceeds receivedto in repurchase the vehicles
Other liabilities at an agreed
and deferred
revenue. The difference between the proceeds received and the agreed upon repurchase amount is recorded in Upon
upon amount, exercisable at the option of the customer. The transactions are accounted for as operating leases.
the transfer
Company of vehicles
excluding to Credit
Ford the daily rental companies,
revenues over the termweofrecord proceeds
the lease usingreceived in Other
a straight-line liabilities
method. The and deferred
cost of the vehicle
revenue. The difference between the proceeds received and the agreed upon repurchase amount
is recorded in Net investment in operating leases on our consolidated balance sheets and the difference between is recorded in the cost
Company excluding Ford Credit revenues over the term of the lease using a straight-line
of the vehicle and the estimated auction value is depreciated in Cost of sales over the term of the lease. method. The cost of the vehicle
is recorded in Net investment in operating leases on our consolidated balance sheets and the difference between the cost
of theCredit
Ford vehicleSegment
and the estimated auction value is depreciated in Cost of sales over the term of the lease.

FordLeasing
Credit Income.
SegmentFord Credit offers leasing plans to retail consumers through Ford and Lincoln brand dealers that
originate the leases. Ford Credit records an operating lease upon purchase of a vehicle subject to a lease from the
Leasing
dealer. Income.
The retail Ford Credit
consumer makes offers
leaseleasing plansrepresenting
payments to retail consumers through
the difference Ford and
between Lincoln
Ford brand
Credit’s dealersprice
purchase that of
originate the leases. Ford Credit records an operating lease upon purchase of a vehicle subject to a lease
the vehicle and the contractual residual value of the vehicle plus lease fees, which we recognize on a straight-line basis from the
dealer.
over theThe
termretail consumer
of the makes lease
lease agreement. payments and
Depreciation representing theloss
the gain or difference between Ford
upon disposition of theCredit’s
vehiclepurchase
is recordedprice
in of
the vehicle and the contractual residual value
Ford Credit interest, operating, and other expenses. of the vehicle plus lease fees, which we recognize on a straight-line basis
over the term of the lease agreement. Depreciation and the gain or loss upon disposition of the vehicle is recorded in
FordFinancing
Credit interest,
Income. operating, and other
Ford Credit expenses.
originates and purchases finance installment contracts. Financing income represents
interest earned on the finance receivables (including sales-type and direct financing leases). Interest is recognized using
Financing
the interest andFord
Income.
method Credit
includes theoriginates and of
amortization purchases finance
certain direct installment
origination contracts. Financing income represents
costs.
interest earned on the finance receivables (including sales-type and direct financing leases). Interest is recognized using
the interest method
Insurance and Income
Income. includesfrom
the amortization of certain
insurance contracts direct origination
is recognized evenlycosts.
over the term of the agreement. Insurance
commission revenue is recognized on a net basis at the time of sale of the third party’s product or service to our customer.
Insurance Income. Income from insurance contracts is recognized evenly over the term of the agreement. Insurance
commission
NOTE revenue
5. OTHER is recognized on a net basis at the time of sale of the third party’s product or service to our customer.
INCOME/(LOSS)

NOTE
[Link]
OTHERincluded
INCOME/(LOSS)
in Other income/(loss), net for the years ended December 31 were as follows (in millions):
2021 2022 2023
The amounts included in Other income/(loss), net for the years ended December 31 were as follows (in millions):
Net periodic pension and OPEB income/(cost), excluding service cost (Note 17) $ 5,997 $ 1,336 $ (2,494)
2021 2022 2023
Investment-related interest income 254 639 1,567
Net periodic pension and OPEB income/(cost), excluding service cost (Note 17) $ 5,997 $ 1,336 $ (2,494)
Interest income/(expense) on income taxes 7 (23) (16)
Investment-related interest income 254 639 1,567
Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other
investments
Interest (a)
income/(expense) on income taxes 9,159
7 (7,518)
(23) (205)
(16)
Gains/(Losses) on changes
Realized and unrealized in investments
gains/(losses) in affiliates
on cash (Note 21
equivalents, and Notesecurities,
marketable 22) and other 368 (147) 9
investments (a) 9,159 (7,518) (205)
Gains/(Losses) on extinguishment of debt (Note 19) (1,702) (121) —
Gains/(Losses) on changes in investments in affiliates (Note 21 and Note 22) 368 (147) 9
Royalty income 619 483 477
Gains/(Losses) on extinguishment of debt (Note 19) (1,702) (121) —
Other 31 201 59
Royalty income 619 483 477
Total $ 14,733 $ (5,150) $ (603)
Other 31 201 59
__________
Total $ 14,733 $ (5,150) $ (603)
(a) Includes a $9.1 billion gain, $7.4 billion loss, and $31 million loss on our Rivian investment during the years ended December 31, 2021, 2022, and
2023, respectively.
__________
(a) Includes a $9.1 billion gain, $7.4 billion loss, and $31 million loss on our Rivian investment during the years ended December 31, 2021, 2022, and
2023, respectively.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 6. SHARE-BASED COMPENSATION
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6. SHARE-BASED
Under COMPENSATION
our Long-Term Incentive Plans, we may issue restricted stock units (“RSUs”), restricted stock shares (“RSSs”),
and stock options. RSUs and RSSs consist of time-based and performance-based awards. The number of shares that
mayUnder our Long-Term
be granted in any year Incentive
is limitedPlans,
to 2%we of may issue restricted
our issued stock units
and outstanding Common(“RSUs”),
Stockrestricted stock shares
as of December 31 of(“RSSs”),
the prior
and stockyear.
calendar options.
The RSUs andbe
limit may RSSs consistupoftotime-based
increased 3% in any and year,performance-based
with a corresponding awards.
reductionTheinnumber
sharesof shares that
available for
may
grantsbeingranted in any year
future years. is limited
Granted RSUstogenerally
2% of our issued
cliff and
vest or outstanding
ratably Common
vest over Stock service
a three-year as of December 31 of the prior
period. Performance-
calendar
based RSUs [Link]
basedmayonbe increased
internal up toperformance
financial 3% in any year, withor
metrics a corresponding
total shareholder reduction in shares
return relative available
to a peer group for or
grants in future years. Granted RSUs generally cliff vest or ratably vest over a three-year service
a combination of the two metrics. At the time of vest, RSU awards are net settled (i.e., shares are withheld to cover the period. Performance-
based
employeeRSUstaxcan be basedStock
obligation). on internal
options financial
ratably performance metrics orservice
vest over a three-year total shareholder
period andreturnexpirerelative
ten yearsto afrom
peerthe group
grantor
a combination
date. of the two metrics. At the time of vest, RSU awards are net settled (i.e., shares are withheld to cover the
employee tax obligation). Stock options ratably vest over a three-year service period and expire ten years from the grant
[Link] fair value of both the time-based and the internal performance metrics portion of the performance-based RSUs
and RSSs is determined using the closing price of our Common Stock at grant date. For awards that include a market
The fair
condition, wevalue of both
measure thethe
fairtime-based
value usingand the internal
a Monte performanceThe
Carlo simulation. metrics portion
weighted of the per
average performance-based
unit grant date fair RSUs
value
and RSSs is determined using the closing price of our Common Stock at grant
for the years ended December 31, 2021, 2022, and 2023 was $13.02, $15.63, and $12.98, respectively. date. For awards that include a market
condition, we measure the fair value using a Monte Carlo simulation. The weighted average per unit grant date fair value
for the years ended
Time-based RSUsDecember
generally31, 2021,
have 2022, and
a graded 2023
vesting was $13.02,
feature whereby $15.63, andof$12.98,
one-third each grantrespectively.
vests after the first
anniversary of the grant date, one-third after the second anniversary, and one-third after the third anniversary. The graded
Time-based
vesting RSUs generally
method recognizes expense haveover
a graded vesting
the service feature
period for whereby one-third of each
each separately-vesting grant vests
tranche, whichafter the in
results first
anniversary
accelerated recognition of expense. The fair value of time-based RSUs, RSSs, and stock options is expensed overgraded
of the grant date, one-third after the second anniversary, and one-third after the third anniversary. The the
vesting
shorter ofmethod recognizes
each separate expense
vesting overusing
period, the service period
the graded for each
vesting separately-vesting
method, or the time periodtranche, which results
an employee in
becomes
accelerated recognition
eligible to retain the award of expense.
at [Link] fair
Thevalue of time-based
fair value RSUs, RSSs,RSUs
of performance-based and stock
and RSSs optionsis is expensed
expensed overitthe
when is
shorter of each separate vesting period, using the graded vesting method, or the time period
probable and estimable as measured against the performance metrics over the shorter of the performance or required an employee becomes
eligible
service to retain the
periods. Weaward
measureat retirement.
the fair value The of fair
ourvalue
stock of performance-based
options on the date of RSUs and RSSs
grant using eitheristhe expensed when it is
Black-Scholes
probable and estimable as measured against the performance metrics over the shorter of
option-pricing model (for options without a market condition) or a Monte Carlo simulation (for options with a market the performance or required
service periods.
condition). We haveWe measure
elected tothe fair value
recognize of our stock
forfeitures options
as an on theto
adjustment date of grant using
compensation either the
expense Black-Scholes
for all RSUs, RSSs, and
option-pricing
stock options inmodel (for options
the same period without a market condition)
as the forfeitures or a Monte
occur. Expense Carlo simulation
is recorded in Selling,(for options withand
administrative, a market
other
condition). We have elected to recognize forfeitures as an adjustment to compensation expense for all RSUs, RSSs, and
expenses.
stock options in the same period as the forfeitures occur. Expense is recorded in Selling, administrative, and other
expenses. Stock Units and Restricted Stock Shares
Restricted

Restricted
The fairStock Units
value of andRSUs
vested Restricted Stock
and RSSs asShares
well as the compensation cost for the years ended December 31 were as
follows (in millions):
The fair value of vested RSUs and RSSs as well as the compensation cost for the years ended December 31 were as
2021 2022 2023
follows (in millions):
Fair value of vested shares $ 217 $ 252 $ 303
2021 2022 2023
Compensation cost (a) 229 223 356
Fair value of vested shares $ 217 $ 252 $ 303
__________
Compensation cost (a)
(a) Net of tax benefit of $74 million, $113 million, and $104 million in 2021, 2022, and 2023, respectively. 229 223 356
__________
As of
(a) Net December
of tax 31,million,
benefit of $74 2023,$113
there wasand
million, approximately $3722022,
$104 million in 2021, million
andin unrecognized
2023, respectively. compensation cost related to non-
vested RSUs. This expense will be recognized over a weighted average period of 1.9 years.
As of December 31, 2023, there was approximately $372 million in unrecognized compensation cost related to non-
vested
TheRSUs. This expense RSUs
performance-based will begranted
recognized over a2021,
in March weighted
2022,average period
and 2023 of 1.9
include years. Total Shareholder Return
a relative
(“TSR”) metric. Inputs and assumptions used to calculate the fair value at grant date through a Monte Carlo simulation
wereThe performance-based RSUs granted in March 2021, 2022, and 2023 include a relative Total Shareholder Return
as follows:
(“TSR”) metric. Inputs and assumptions used to calculate the fair value at grant date through a Monte Carlo simulation
2021 2022 2023
were as follows:
Fair value per stock award $ 13.45 $ 18.10 $ 18.57
2021 2022 2023
Grant date stock price 11.93 16.85 13.08
Fair value per stock award $ 13.45 $ 18.10 $ 18.57
Assumptions:
Grant date stock price 11.93 16.85 13.08
Ford’s stock price expected volatility (a) 39.9 % 44.8 % 49.5 %
Assumptions:
Expected average volatility of peer companies (a) 39.6 39.6 49.6
Ford’s stock price expected volatility (a) 39.9 % 44.8 % 49.5 %
Risk-free interest rate 0.32 1.62 4.57
Expected average volatility of peer companies (a) 39.6 39.6 49.6
__________
(a)Risk-free interest
Expected ratebased on three years of daily closing share price changes ending on the grant date.
volatility 0.32 1.62 4.57
__________
(a) Expected volatility based on three years of daily closing share price changes ending on the grant date.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 6. SHARE-BASED COMPENSATION
NOTES (Continued)
TO THE FINANCIAL STATEMENTS
NOTE 6. SHARE-BASED
During 2023, activity forCOMPENSATION (Continued)
RSUs and RSSs was as follows (in millions, except for weighted-average fair value):
Weighted-
During 2023, activity for RSUs and RSSs was as follows (in millions, except for weighted-average fair value):
Average
Shares Fair Value
Weighted-
Outstanding, beginning of year 63.9 $
Average12.90
Shares Fair Value
Granted (a) 54.8 12.98
Outstanding, beginning of year 63.9 $ 12.90
Vested (a) (27.2) 11.11
Granted (a) 54.8 12.98
Forfeited (10.9) 10.62
Vested (a) (27.2) 11.11
Outstanding, end of year (b) 80.6 13.86
Forfeited (10.9) 10.62
__________
Outstanding, end of year
(a) Includes shares (b) to non-employee directors.
awarded 80.6 13.86
(b) Excludes
__________ 1,225,297 non-employee director shares that were vested but unissued at December 31, 2023.
(a) Includes shares awarded to non-employee directors.
Stock
(b) Options
Excludes 1,225,297 non-employee director shares that were vested but unissued at December 31, 2023.

Stock Options
Activity related to stock options for 2023 was as follows:
Weighted
Activity related to stock options for 2023 was as follows: Average
Weighted Remaining Aggregate
Shares Average Weighted
Contractual Intrinsic Value
(millions) Exercise Price Average
Life (years) (millions)
Weighted Remaining Aggregate
Outstanding, beginning of period Shares 10.1 $ Average 10.84 Contractual Intrinsic Value
(millions) Exercise Price Life (years) (millions)
Granted — —
Outstanding, beginning of period 10.1 $ 10.84
Exercised (a) (1.3) 11.90
Granted — —
Forfeited (including expirations) (0.4) 12.75
Exercised (a) (1.3) 11.90
Outstanding, end of period 8.4 10.60
Forfeited (including expirations) (0.4) 12.75
Exercisable, end of period 8.4 10.60 3.73 $ 26.8
Outstanding, end of period 8.4 10.60
Options expected to vest — — — —
Exercisable, end of period 8.4 10.60 3.73 $ 26.8
__________
Options
(a) expected
Exercised to vestprices ranging from $6.19 to $12.75 during 2023.
at option — — — —
__________
We received
(a) Exercised approximately
at option $16 $6.19
prices ranging from million in proceeds
to $12.75 with
an equivalent of about $18 million in new issues used to
during 2023.
settle the exercised options. For options exercised during the year ended December 31, 2023, the difference between the
We received
fair value approximately
of the Common Stock $16 million
issued and in
theproceeds with
respective an equivalent
exercise of about
price was $18 million
$2 million. in new issues
Compensation cost used to
for stock
settle the exercised options. For options exercised during the year ended December 31, 2023, the
options for the year ended December 31, 2023 was $0. As of December 31, 2023, there was no unrecognized difference between the
fair value of the Common Stock issued and the respective exercise price was $2 million. Compensation
compensation cost related to non-vested stock options. During 2023, no new stock options were granted. cost for stock
options for the year ended December 31, 2023 was $0. As of December 31, 2023, there was no unrecognized
compensation
NOTE 7. INCOME cost related
TAXESto non-vested stock options. During 2023, no new stock options were granted.

[Link]
INCOMEincomeTAXEStax-related penalties in Provision for/(Benefit from) income taxes on our consolidated income
statements. We recognize income tax-related interest income and interest expense in Other income/(loss), net on our
We recognize
consolidated incomeincome tax-related penalties in Provision for/(Benefit from) income taxes on our consolidated income
statements.
statements. We recognize income tax-related interest income and interest expense in Other income/(loss), net on our
consolidated
We account income statements.
for U.S. tax on global intangible low-taxed income in the period incurred, and we account for investment
tax credits using the deferral method.
We account for U.S. tax on global intangible low-taxed income in the period incurred, and we account for investment
tax credits of
Valuation using the deferral
Deferred method.
Tax Assets and Liabilities

Valuation
Deferredof tax
Deferred
assetsTax
andAssets
liabilitiesand
areLiabilities
recognized based on the future tax consequences attributable to temporary
differences that exist between the financial statement carrying value of assets and liabilities and their respective tax
Deferred
bases, tax assets
and operating and
loss liabilities
and arecarryforwards
tax credit recognized based on the jurisdiction
on a taxing future tax consequences
basis. We measureattributable to temporary
deferred tax assets and
differences that exist between the financial statement carrying value of assets and liabilities and their respective
liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be recovered tax
bases,
or paid. and operating loss and tax credit carryforwards on a taxing jurisdiction basis. We measure deferred tax assets and
liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be recovered
or paid.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 7. INCOME TAXES (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE [Link]
INCOME TAXES (Continued)
for deferred tax consequences represents our best estimate of the likely future tax consequences of
events that have been recognized on our consolidated financial statements or tax returns and their future probability. In
Our accounting
assessing the need for
for deferred taxallowance,
a valuation consequences represents
we consider bothour best estimate
positive of theevidence
and negative likely future tax consequences
related to the likelihoodofof
events thatof
realization have been recognized
the deferred on our
tax assets. consolidated
If, based financial
on the weight of statements or tax returns
available evidence, and likely
it is more their future probability.
than not that the In
assessing the need for a valuation allowance, we consider both positive
deferred tax assets will not be realized, we record a valuation allowance. and negative evidence related to the likelihood of
realization of the deferred tax assets. If, based on the weight of available evidence, it is more likely than not that the
deferred
Componentstax assets will notTaxes
of Income be realized, we record a valuation allowance.

Components
Components of Income Taxes
of income taxes excluding cumulative effects of changes in accounting principles, other comprehensive
income/(loss), and equity in net results of affiliated companies accounted for after-tax for the years ended December 31
wereComponents
as follows: of income taxes excluding cumulative effects of changes in accounting principles, other comprehensive
income/(loss), and equity in net results of affiliated companies accounted for after-tax
2021
for the years2022
ended December
2023
31
were as follows:
Income/(Loss) before income taxes (in millions)
U.S. $ 2021
10,043 $ 2022
(6,548) $ 2023
3,395
Income/(Loss)
Non-U.S. before income taxes (in millions) 7,737 3,532 572
U.S.
Total $
$ 10,043
17,780 $
$ (6,548)
(3,016) $
$ 3,395
3,967
Non-U.S.
Provision for/(Benefit from) income taxes (in millions) 7,737 3,532 572
Total
Current $ 17,780 $ (3,016) $ 3,967
Provision
Federal for/(Benefit from) income taxes (in millions) $ 102 $ 68 $ 62
Current
Non-U.S. 598 781 948
Federal
State and local $ 102
26 $ 68
123 $ 62
229
Non-U.S.
Total current 598
726 781
972 948
1,239
State and local
Deferred 26 123 229
Total
Federal current 726
2,290 972
(2,292) 1,239
(413)
Deferred
Non-U.S. (3,254) 688 (1,149)
Federal
State and local 2,290
108 (2,292)
(232) (413)
(39)
Non-U.S.
Total deferred (3,254)
(856) 688
(1,836) (1,149)
(1,601)
State and local
Total $ 108
(130) $ (232)
(864) $ (39)
(362)
Total deferred
Reconciliation of effective tax rate (856) (1,836) (1,601)
Total
U.S. statutory tax rate $ (130)
21.0 % $ (864)
21.0 % $ (362)
21.0 %
Reconciliation of effective
Non-U.S. tax rate differential tax rate 1.3 (8.7) (3.4)
U.S.
Statestatutory
and localtax rate taxes
income 21.0
0.5 % 21.0
2.3 % 21.0
1.9 %
Non-U.S. tax rate differential
General business credits 1.3
(2.3) (8.7)
13.0 (3.4)
(15.9)
State and local
Nontaxable income
foreign taxesgains and losses
currency 0.5
— 2.3
(4.2) 1.9
—
General business credits
Dispositions and restructurings (a) (2.3)
(18.8) 13.0
(7.0) (15.9)
(14.7)
Nontaxable foreign currency
U.S. tax on non-U.S. earningsgains and losses —
2.4 (4.2)
2.8 —
7.7
Dispositions
Prior and restructurings
year settlements and claims(a) (18.8)
(0.3) (7.0)
1.5 (14.7)
1.2
[Link]
Tax tax on non-U.S. earnings 2.4
(0.6) 2.8
2.0 7.7
(3.9)
Prior
Enactedyearchange
settlements
in tax and
lawsclaims (0.3)
1.1 1.5
(2.0) 1.2
0.1
Tax incentives
Valuation allowances (0.6)
(4.7) 2.0
6.2 (3.9)
(0.7)
Enacted
Other change in tax laws 1.1
(0.3) (2.0)
1.7 0.1
(2.4)
Valuation
Effectiveallowances
tax rate (4.7)
(0.7)% 6.2 %
28.6 (0.7)
(9.1)%
Other (0.3) 1.7 (2.4)
__________
(a)Effective tax rate a benefit of $2.9 billion to recognize deferred tax assets resulting from changes in our global
2021 includes (0.7)% 28.6 %
tax structure; 2023 (9.1)
includes benefits of%
$610 million associated with legal entity restructuring within our leasing operations and China.
__________
(a) 2021 includes a benefit of $2.9 billion to recognize deferred tax assets resulting from changes in our global tax structure; 2023 includes benefits of
In
$6102021,
millionwe reversed
associated with$918 million
legal entity of previously
restructuring within established U.S. valuation
our leasing operations and [Link]. The reversal primarily
reflected a change in our intent to pursue planning actions involving cash outlays to preserve tax credits. During 2022, we
In 2021,
reversed we reversed
an additional $405$918 million
million of previously
of U.S. valuationestablished
allowances,U.S. valuation
primarily as aallowances. The reversal
result of planning [Link]
reflected a change in our intent to pursue planning actions involving cash outlays to preserve tax credits. During 2022, we
reversed an additional
At December $405$14.5
31, 2023, millionbillion
of [Link] valuation allowances,
non-U.S. earnings areprimarily as aindefinitely
considered result of planning actions.
reinvested in operations outside
the United States, for which deferred taxes have not been provided. Quantification of the deferred tax liability, if any,
At December
associated 31, 2023, reinvested
with indefinitely $14.5 billion of non-U.S.
basis earnings
differences is not are considered indefinitely reinvested in operations outside
practicable.
the United States, for which deferred taxes have not been provided. Quantification of the deferred tax liability, if any,
associated with indefinitely reinvested basis differences is not practicable.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 7. INCOME TAXES (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7. INCOME
Components TAXESTax
of Deferred (Continued)
Assets and Liabilities

Components of Deferred
The components Tax Assets
of deferred and and
tax assets Liabilities
liabilities at December 31 were as follows (in millions):
2022 2023
The components of deferred tax assets and liabilities at December 31 were as follows (in millions):
Deferred tax assets
2022 2023
Employee benefit plans $ 1,953 $ 2,470
Deferred tax assets
Net operating loss carryforwards 6,809 7,262
Employee benefit plans $ 1,953 $ 2,470
Tax credit carryforwards 9,354 8,944
Net operating loss carryforwards 6,809 7,262
Research expenditures 3,240 3,799
Tax credit carryforwards 9,354 8,944
Dealer and dealers’ customer allowances and claims 2,192 2,752
Research expenditures 3,240 3,799
Other foreign deferred tax assets 3,107 3,456
Dealer and dealers’ customer allowances and claims 2,192 2,752
All other 2,201 2,299
Other foreign deferred tax assets 3,107 3,456
Total gross deferred tax assets 28,856 30,982
All other 2,201 2,299
Less: Valuation allowances (4,052) (4,187)
Total gross deferred tax assets 28,856 30,982
Total net deferred tax assets 24,804 26,795
Less: Valuation allowances (4,052) (4,187)
Deferred tax liabilities
Total net deferred tax assets 24,804 26,795
Leasing transactions 2,992 3,253
Deferred tax liabilities
Depreciation and amortization (excluding leasing transactions) 3,116 3,389
Leasing transactions 2,992 3,253
Finance receivables 792 699
Depreciation and amortization (excluding leasing transactions) 3,116 3,389
Carrying value of investments 487 —
Finance receivables 792 699
Other foreign deferred tax liabilities 1,110 1,255
Carrying value of investments 487 —
All other 2,304 2,219
Other foreign deferred tax liabilities 1,110 1,255
Total deferred tax liabilities 10,801 10,815
All other 2,304 2,219
Net deferred tax assets/(liabilities) $ 14,003 $ 15,980
Total deferred tax liabilities 10,801 10,815
Net deferred tax assets/(liabilities) $ 14,003 $ 15,980
Operating loss carryforwards for tax purposes were $22 billion at December 31, 2023, resulting in a deferred tax asset
of $7.3 billion. There is no expiration date for $6.1 billion of these losses. A substantial portion of the remaining losses will
Operating
expire beyond loss carryforwards
2027. for tax purposes
Tax credits available to offsetwere
future $22
taxbillion at December
liabilities 31, 2023,
are $8.9 billion. Theresulting
majorityin
ofathese
deferred tax have
credits asset
ofremaining
a $7.3 billion. There is noperiod
carryforward expiration date
of nine for $6.1
years billionTax
or more. of these
benefitslosses. A substantial
of operating portion
loss and of thecarryforwards
tax credit remaining losses
are will
expire beyond
evaluated on an2027. Tax basis,
ongoing creditsincluding
availableato offsetoffuture
review tax liabilities
historical are $8.9
and projected billion.
future The majority
operating results,ofthe
these credits have
eligible
a remaining carryforward
carryforward period of tax
period, and available nineplanning
years orstrategies.
more. TaxIn benefits of operating
our evaluation, loss and tax
we anticipate credittax
making carryforwards
elections thatare
evaluated
change theon an ongoing
order basis,
of tax credit including a utilization
carryforward review of historical
on U.S. tax and projected future operating results, the eligible
returns.
carryforward period, and available tax planning strategies. In our evaluation, we anticipate making tax elections that
change the order of tax credit carryforward utilization on U.S. tax returns.

127

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 7. INCOME TAXES (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7. INCOME TAXES (Continued)
Other

Other
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31
were as follows (in millions):
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31
2022 2023
were as follows (in millions):
Beginning balance $ 2,910 $ 2,939
2022 2023
Increase – tax positions in prior periods 338 103
Beginning balance $ 2,910 $ 2,939
Increase – tax positions in current period 17 45
Increase – tax positions in prior periods 338 103
Decrease – tax positions in prior periods (236) (79)
Increase – tax positions in current period 17 45
Settlements (2) (115)
Decrease – tax positions in prior periods (236) (79)
Lapse of statute of limitations (1) (33)
Settlements (2) (115)
Foreign currency translation adjustment (87) 53
Lapse of statute of limitations (1) (33)
Ending balance $ 2,939 $ 2,913
Foreign currency translation adjustment (87) 53
Ending balance $ 2,939 $ 2,913
The amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $2.9 billion as of
December 31, 2022 and 2023.
The amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $2.9 billion as of
December 31, 2022
Examinations byand
tax 2023.
authorities have been completed through 2008 in Germany; 2014 in the United States; 2018 in
Canada, China, Spain, and the United Kingdom; and 2019 in India and Mexico.
Examinations by tax authorities have been completed through 2008 in Germany; 2014 in the United States; 2018 in
Canada, China, on
Net interest Spain, and taxes
income the United
was $7Kingdom;
million ofand 2019 in
income, India
$23 andof
million Mexico.
expense, and $16 million of expense for the
years ended December 31, 2021, 2022, and 2023, respectively. These were reported in Other income/(loss), net on our
Net interest
consolidated on income
income taxes was
statements. $7 million
Tax-related of income,
interest $23million
was $17 millionof
ofaexpense, andand
net payable $16$25
million of expense
million of a net for the
receivable
years
as ended December
of December 31, 2022 31,
and2021, 2022,
2023, and 2023, respectively. These were reported in Other income/(loss), net on our
respectively.
consolidated income statements. Tax-related interest was $17 million of a net payable and $25 million of a net receivable
as ofCash
December
paid for31, 2022 and
income taxes2023,
was respectively.
$568 million, $801 million, and $1,027 million in 2021, 2022, and 2023, respectively.

Cash paid for income taxes was $568 million, $801 million, and $1,027 million in 2021, 2022, and 2023, respectively.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 8. CAPITAL STOCK AND EARNINGS/(LOSS)
NOTES TO THE PER SHARESTATEMENTS
FINANCIAL
NOTE All 8. CAPITAL
general votingSTOCK
power isAND EARNINGS/(LOSS)
vested PER SHARE
in the holders of Common Stock and Class B Stock. Holders of our Common Stock
have 60% of the general voting power, and holders of our Class B Stock are entitled to such number of votes per share as
All general
will give them thevoting power 40%.
remaining is vested in the
Shares ofholders
Common of Stock
Common andStock
Classand Classshare
B Stock B Stock. Holders
equally of our Common
in dividends when andStock
as
have 60% stock
paid, with of thedividends
general voting
payablepower, and holders
in shares of stockofofour
theClass
classBheld.
Stock are entitled to such number of votes per share as
will give them the remaining 40%. Shares of Common Stock and Class B Stock share equally in dividends when and as
paid,If with stock dividends
liquidated, each sharepayable in shares
of Common of stock
Stock of the
is entitled toclass held.
the first $0.50 available for distribution to holders of Common
Stock and Class B Stock, each share of Class B Stock is entitled to the next $1.00 so available, each share of Common
StockIf liquidated, each
is entitled to the share of Common
next $0.50 Stock and
so available, is entitled to the of
each share first $0.50 available
Common and ClassforBdistribution to holders
Stock is entitled to anofequal
Common
Stock and Class
amount thereafter. B Stock, each share of Class B Stock is entitled to the next $1.00 so available, each share of Common
Stock is entitled to the next $0.50 so available, and each share of Common and Class B Stock is entitled to an equal
amount thereafter.
We present both basic and diluted earnings/(loss) per share (“EPS”) amounts in our financial reporting. Basic EPS
excludes dilution and is computed by dividing Net income/(loss) attributable to Ford Motor Company by the weighted-
We present
average numberboth basic of
of shares and diluted earnings/(loss)
Common and Class B Stockper share (“EPS”)
outstanding foramounts in our
the period. financial
Diluted EPSreporting.
reflects the Basic EPS
maximum
excludes dilution and is computed by dividing Net income/(loss) attributable to Ford Motor Company
potential dilution that could occur from our share-based compensation (“in-the-money” stock options, unvested RSUs, and by the weighted-
average
unvestednumber of shares
RSSs) and of Common
convertible and Class B
debt. Potentially Stock shares
dilutive outstanding for the period.
are excluded Diluted
from the EPS reflects
calculation the maximum
if they have an anti-
potential dilution that could
dilutive effect in the period. occur from our share-based compensation (“in-the-money” stock options, unvested RSUs, and
unvested RSSs) and convertible debt. Potentially dilutive shares are excluded from the calculation if they have an anti-
dilutive effect in the
Earnings/(Loss) period.
Per Share Attributable to Ford Motor Company Common and Class B Stock

Earnings/(Loss) Per income/(loss)

Basic and diluted Share Attributable to Ford
per share wereMotor Company
calculated using Common and
the following (inClass B Stock
millions):
2021 2022 2023
Basic and diluted income/(loss) per share were calculated using the following (in millions):
Net income/(loss) attributable to Ford Motor Company $ 17,937 $ (1,981) $ 4,347
2021 2022 2023
Net income/(loss) attributable to Ford Motor Company $ 17,937 $ (1,981) $ 4,347
Basic and Diluted Shares
Basic shares (average shares outstanding) 3,991 4,014 3,998
Basic and Diluted Shares
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and
convertible
Basic sharesdebt (a) shares outstanding)
(average 43
3,991 —
4,014 43
3,998
Diluted
Net shares
dilutive options, unvested restricted stock units, unvested restricted stock shares, and 4,034 4,014 4,041
convertible debt (a) 43 — 43
__________
Diluted shares 4,034 4,014
(a) In 2022, there were 42 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect. 4,041
__________
(a) In 2022, there were 42 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 9. CASH, CASH EQUIVALENTS, ANDTO
NOTES MARKETABLE SECURITIES
THE FINANCIAL STATEMENTS
[Link]
CASH,
valuesCASH EQUIVALENTS,
of cash, ANDand
cash equivalents, MARKETABLE SECURITIES
marketable securities measured at fair value on a recurring basis were
as follows (in millions):
The fair values of cash, cash equivalents, and marketable securities measured at fair value on a recurring basis were
December 31, 2022
as follows (in millions):
Company excluding
Fair Value Level Ford Credit Ford Credit
December 31, 2022 Consolidated
Cash and cash equivalents Company excluding
Fair Value Level Ford Credit Ford Credit Consolidated
U.S. government 1 $ 3,295 $ 1,045 $ 4,340
Cash and cash equivalents
U.S. government agencies 2 2,245 150 2,395
U.S. government 1 $ 3,295 $ 1,045 $ 4,340
Non-U.S. government and agencies 2 1,048 199 1,247
U.S. government agencies 2 2,245 150 2,395
Other cash equivalents 2 10 — 10
Non-U.S. government and agencies 2 1,048 199 1,247
Corporate debt 2 593 792 1,385
Other
Total cash equivalents
marketable securities classified as cash 2 10 — 10
equivalents
Corporate debt 2 7,191
593 2,186
792 9,377
1,385
Cash,
Total time deposits,
marketable and money
securities market
classified asfunds
cash 7,550 8,207 15,757
equivalents 7,191 2,186 9,377
Total cash and cash equivalents $ 14,741 $ 10,393 $ 25,134
Cash, time deposits, and money market funds 7,550 8,207 15,757
Total cash and cash equivalents $ 14,741 $ 10,393 $ 25,134
Marketable securities
U.S. government 1 $ 4,947 $ 187 $ 5,134
Marketable securities
U.S. government agencies 2 2,641 221 2,862
U.S. government 1 $ 4,947 $ 187 $ 5,134
Non-U.S. government and agencies 2 2,625 658 3,283
U.S. government agencies 2 2,641 221 2,862
Corporate debt 2 6,755 266 7,021
Non-U.S. government and agencies 2 2,625 658 3,283
Equities (a) 1 223 — 223
Corporate debt 2 6,755 266 7,021
Other marketable securities 2 252 161 413
Equities (a) 1 223 — 223
Total marketable securities $ 17,443 $ 1,493 $ 18,936
Other marketable securities 2 252 161 413
Total marketable
Restricted cash securities $ 17,443
79 $ 1,493
127 $ 18,936
206

Restricted cash $ 79 $December 31, 2023

127 $ 206
Fair Value Company excluding
Level Ford Credit Ford Credit
December 31, 2023 Consolidated
Cash and cash equivalents Fair Value Company excluding
Level Ford Credit Ford Credit Consolidated
U.S. government 1 $ 2,320 $ 912 $ 3,232
Cash and cash equivalents
U.S. government agencies 2 2,075 625 2,700
U.S. government 1 $ 2,320 $ 912 $ 3,232
Non-U.S. government and agencies 2 699 276 975
U.S. government agencies 2 2,075 625 2,700
Corporate debt 2 1,617 101 1,718
Non-U.S. government
Total marketable and agencies
securities classified as cash 2 699 276 975
equivalents
Corporate debt 2 6,711
1,617 1,914
101 8,625
1,718
Cash,
Total time deposits,
marketable and money
securities market
classified asfunds
cash 7,493 8,744 16,237
equivalents 6,711 1,914 8,625
Total cash and cash equivalents $ 14,204 $ 10,658 $ 24,862
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
Marketable securities
U.S. government agencies 2 1,774 49 1,823
U.S. government 1 $ 4,467 $ 207 $ 4,674
Non-U.S. government and agencies 2 2,096 109 2,205
U.S. government agencies 2 1,774 49 1,823
Corporate debt 2 5,807 268 6,075
Non-U.S. government and agencies 2 2,096 109 2,205
Equities (a) 1 23 — 23
Corporate debt 2 5,807 268 6,075
Other marketable securities 2 353 156 509
Equities (a) 1 23 — 23
Total marketable securities $ 14,520 $ 789 $ 15,309
Other marketable securities 2 353 156 509
Total marketable
Restricted cash securities $ 14,520
111 $ 789
137 $ 15,309
248
__________
Restricted cash $ 111 $ 137 $ 248
(a) Net unrealized gains/losses recognized during full year 2022 and 2023 on all equity securities held at December 31, 2022 and 2023 were a
__________
$968 million loss and a $23 million loss, respectively.
(a) Net unrealized gains/losses recognized during full year 2022 and 2023 on all equity securities held at December 31, 2022 and 2023 were a
$968 million loss and a $23 million loss, respectively.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 9. CASH, CASH EQUIVALENTS, ANDTO
NOTES MARKETABLE SECURITIES
THE FINANCIAL (Continued)
STATEMENTS
[Link]
CASH, CASH EQUIVALENTS,
equivalents and marketable AND MARKETABLE
securities SECURITIES
accounted for (Continued)
as available-for-sale (“AFS”) securities were as follows
(in millions):
The cash equivalents and marketable securities accounted for as available-for-sale (“AFS”) securities were as follows
December 31, 2022
(in millions): Fair Value of Securities with
December 31, 2022 Contractual Maturities
Gross Gross Fair Value of Securities
After 1 Year with
Amortized Unrealized Unrealized Within 1Contractual
throughMaturities
5 After 5
Cost Gains Losses Fair Value Year Years Years
Gross Gross After 1 Year
Company excluding Ford Credit Amortized Unrealized Unrealized Within 1 through 5 After 5
Cost Gains Losses Fair Value Year Years Years
U.S. government $ 4,797 $ 1 $ (145) $ 4,653 $ 1,008 $ 3,645 $ —
Company excluding Ford Credit
U.S. government agencies 2,508 — (119) 2,389 1,244 1,109 36
U.S. government $ 4,797 $ 1 $ (145) $ 4,653 $ 1,008 $ 3,645 $ —
Non-U.S. government and agencies 2,248 — (132) 2,116 294 1,810 12
U.S. government agencies 2,508 — (119) 2,389 1,244 1,109 36
Corporate debt 7,511 6 (197) 7,320 3,117 4,195 8
Non-U.S. government and agencies 2,248 — (132) 2,116 294 1,810 12
Other marketable securities 246 — (9) 237 — 181 56
Corporate debt 7,511 6 (197) 7,320 3,117 4,195 8
Total $ 17,310 $ 7 $ (602) $ 16,715 $ 5,663 $ 10,940 $ 112
Other marketable securities 246 — (9) 237 — 181 56
Total $ 17,310 $ 7 $ (602) $
December 16,715
31, 2023 $ 5,663 $ 10,940 $ 112
Fair Value of Securities with
December 31, 2023 Contractual Maturities
Gross Gross Fair Value of Securities
After 1 Year with
Amortized Unrealized Unrealized Within 1Contractual
throughMaturities
5 After 5
Cost Gains Losses Fair Value Year Years Years
Gross Gross After 1 Year
Company excluding Ford Credit Amortized Unrealized Unrealized Within 1 through 5 After 5
Cost Gains Losses Fair Value Year Years Years
U.S. government $ 4,458 $ 6 $ (66) $ 4,398 $ 2,172 $ 2,216 $ 10
Company excluding Ford Credit
U.S. government agencies 2,053 4 (62) 1,995 490 1,487 18
U.S. government $ 4,458 $ 6 $ (66) $ 4,398 $ 2,172 $ 2,216 $ 10
Non-U.S. government and agencies 1,948 1 (75) 1,874 587 1,275 12
U.S. government agencies 2,053 4 (62) 1,995 490 1,487 18
Corporate debt 7,433 27 (67) 7,393 2,830 4,558 5
Non-U.S. government and agencies 1,948 1 (75) 1,874 587 1,275 12
Other marketable securities 322 2 (4) 320 — 247 73
Corporate debt 7,433 27 (67) 7,393 2,830 4,558 5
Total $ 16,214 $ 40 $ (274) $ 15,980 $ 6,079 $ 9,783 $ 118
Other marketable securities 322 2 (4) 320 — 247 73
Total $ 16,214 $ 40 $ (274) $ 15,980 $ 6,079 $ 9,783 $ 118
Sales proceeds and gross realized gains/losses from the sale of AFS securities for the years ended December 31
were as follows (in millions):
Sales proceeds and gross realized gains/losses from the sale of AFS securities for the years ended December 31
2021 2022 2023
were as follows (in millions):
Company excluding Ford Credit
2021 2022 2023
Sales proceeds $ 5,943 $ 6,207 $ 3,140
Company excluding Ford Credit
Gross realized gains 26 7 2
Sales proceeds $ 5,943 $ 6,207 $ 3,140
Gross realized losses 3 26 37
Gross realized gains 26 7 2
Gross realized losses 3 26 37

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 9. CASH, CASH EQUIVALENTS, ANDTO
NOTES MARKETABLE SECURITIES
THE FINANCIAL (Continued)
STATEMENTS
[Link]
CASH,fair
CASH EQUIVALENTS,
values AND MARKETABLE
and gross unrealized losses for cashSECURITIES (Continued)
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
The present
individual fair have
securities values andingross
been unrealized
a continuous losses
loss for cash
position, wereequivalents andmillions):
as follows (in marketable securities accounted for as
AFS securities that were in an unrealized loss position, aggregated by investment category and the length of time that
December 31, 2022
individual securities have been in a continuous loss position, were as follows (in millions):
Less than 1 Year 1 Year or Greater Total
Unrealized December 31, 2022
Unrealized Unrealized
Fair Less
Valuethan 1 Year
Losses Fair 1Value Losses
Year or Greater Fair Value Total Losses
Company excluding Ford Credit Unrealized Unrealized Unrealized
Fair Value Losses Fair Value Losses Fair Value Losses
U.S. government $ 2,860 $ (52) $ 1,570 $ (93) $ 4,430 $ (145)
Company excluding Ford Credit
U.S. government agencies 707 (14) 1,658 (105) 2,365 (119)
U.S. government $ 2,860 $ (52) $ 1,570 $ (93) $ 4,430 $ (145)
Non-U.S. government and agencies 751 (23) 1,271 (109) 2,022 (132)
U.S. government agencies 707 (14) 1,658 (105) 2,365 (119)
Corporate debt 4,571 (79) 1,737 (118) 6,308 (197)
Non-U.S. government and agencies 751 (23) 1,271 (109) 2,022 (132)
Other marketable securities 123 (4) 108 (5) 231 (9)
Corporate debt 4,571 (79) 1,737 (118) 6,308 (197)
Total $ 9,012 $ (172) $ 6,344 $ (430) $ 15,356 $ (602)
Other marketable securities 123 (4) 108 (5) 231 (9)
Total $ 9,012 $ (172) $ 6,344 $ (430) $ 15,356 $ (602)
December 31, 2023
Less than 1 Year 1 Year or Greater Total
December 31, 2023
Unrealized Unrealized Unrealized
Fair Less
Valuethan 1 Year
Losses Fair 1Value Losses
Year or Greater Fair Value Total Losses
Company excluding Ford Credit Unrealized Unrealized Unrealized
Fair Value Losses Fair Value Losses Fair Value Losses
U.S. government $ 619 $ (2) $ 2,735 $ (64) $ 3,354 $ (66)
Company excluding Ford Credit
U.S. government agencies 283 (1) 1,068 (61) 1,351 (62)
U.S. government $ 619 $ (2) $ 2,735 $ (64) $ 3,354 $ (66)
Non-U.S. government and agencies 67 — 1,654 (75) 1,721 (75)
U.S. government agencies 283 (1) 1,068 (61) 1,351 (62)
Corporate debt 2,608 (2) 2,192 (65) 4,800 (67)
Non-U.S. government and agencies 67 — 1,654 (75) 1,721 (75)
Other marketable securities 26 — 122 (4) 148 (4)
Corporate debt 2,608 (2) 2,192 (65) 4,800 (67)
Total $ 3,603 $ (5) $ 7,771 $ (269) $ 11,374 $ (274)
Other marketable securities 26 — 122 (4) 148 (4)
Total $ 3,603 $ (5) $ 7,771 $ (269) $ 11,374 $ (274)
We determine credit losses on AFS debt securities using the specific identification method. During the years ended
December 31, 2021, 2022, and 2023, we did not recognize any credit loss. The unrealized losses on securities are due to
We determine
changes in interestcredit
rates losses on AFS
and market debt securities using the specific identification method. During the years ended
liquidity.
December 31, 2021, 2022, and 2023, we did not recognize any credit loss. The unrealized losses on securities are due to
changes in interest
Cash, Cash rates and
Equivalents, andmarket liquidity.
Restricted Cash

Cash,
Cash,Cash Equivalents,
cash and
equivalents, andRestricted Cashas reported in the consolidated statements of cash flows were as follows
restricted cash
(in millions):
Cash, cash equivalents, and restricted cash as reported in the consolidated statements of cash flows were as follows
December 31, December 31,
(in millions): 2022 2023
Cash and cash equivalents $ December25,134
31, $ December24,862
31,
2022 2023
Restricted cash (a) 206 248
Cash and cash equivalents $ 25,134 $ 24,862
Total cash, cash equivalents, and restricted cash $ 25,340 $ 25,110
Restricted cash (a) 206 248
__________
(a)Total cash,incash
Included equivalents,
Other assets in theand restrictedassets
non-current cash section of our consolidated balance sheets. $ 25,340 $ 25,110
__________
(a) Included in Other assets in the non-current assets section of our consolidated balance sheets.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 10. FORD CREDIT FINANCE RECEIVABLES
NOTES TO THEAND ALLOWANCE
FINANCIAL FOR CREDIT LOSSES
STATEMENTS
[Link]
FORD CREDITfinance
manages FINANCE RECEIVABLES
receivables AND ALLOWANCE
as “consumer” FOR CREDIT
and “non-consumer” LOSSES
portfolios. The receivables are
generally secured by the vehicles, inventory, or other property being financed.
Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios. The receivables are
generally secured
Consumer by the vehicles,
Portfolio. inventory,
Receivables or other property
in this portfolio being financed.
include products offered to individuals and businesses that finance
the acquisition of Ford and Lincoln vehicles from dealers for personal or commercial use. Retail financing includes retail
Consumer
installment Portfolio.
contracts Receivables
for new and usedinvehicles
this portfolio includeleases
and finance products
withoffered to individuals
retail customers, and businesses
government that
entities, finance
daily rental
the acquisition of Ford and
companies, and fleet customers. Lincoln vehicles from dealers for personal or commercial use. Retail financing includes retail
installment contracts for new and used vehicles and finance leases with retail customers, government entities, daily rental
companies, and fleetPortfolio.
Non-Consumer [Link] in this portfolio include products offered to automotive dealers. Dealer
financing includes wholesale loans to dealers to finance the purchase of vehicle inventory, also known as floorplan
Non-Consumer
financing, as well asPortfolio. Receivables
loans to dealers in this
to finance portfolio
working include
capital andproducts offered to
improvements to dealership
automotivefacilities,
dealers. finance
Dealer the
financing includes wholesale loans to dealers to finance the purchase of vehicle inventory, also known
purchase of dealership real estate, and finance other dealer programs. Wholesale financing is approximately 96% of as floorplan
financing,
dealer as well as loans to dealers to finance working capital and improvements to dealership facilities, finance the
financing.
purchase of dealership real estate, and finance other dealer programs. Wholesale financing is approximately 96% of
dealer financing.
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.
Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at
amortized
For all cost, netreceivables,
finance of any allowance for credit
Ford Credit losses.
defines “past due” as any payment, including principal and interest, that is at
least 31 days past the contractual due date.
For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at
least 31 days
Finance past the contractual
Receivables due date.
Classification

Finance Receivables
Finance receivables Classification
are accounted for as held for investment (“HFI”) if Ford Credit has the intent and ability to hold
the receivables for the foreseeable future or until maturity or payoff. The determination of intent and ability to hold for the
Finance future
foreseeable receivables arejudgmental
is highly accounted and for as held forFord
requires investment
Credit to(“HFI”)
make ifgood
Fordfaith
Credit has thebased
estimates intent onandallability to hold
information
the receivables
available for the
at the time of foreseeable
origination orfuture or untilIfmaturity
purchase. or payoff.
Ford Credit does not Thehave
determination of intent
the intent and abilityand ability
to hold theto receivables,
hold for the
foreseeable
then future is are
the receivables highly judgmental
classified as [Link] requires Ford Credit to make good faith estimates based on all information
available at the time of origination or purchase. If Ford Credit does not have the intent and ability to hold the receivables,
thenEach
the receivables
quarter, Ford areCredit
classified
makes as aHFS.
determination of whether it is probable that finance receivables originated or
purchased during the quarter will be held for the foreseeable future based on historical receivables sale experience,
Each
internal quarter, and
forecasts Fordbudgets,
Credit makes
as wella asdetermination of whether
other relevant, reliable itinformation
is probableavailable
that finance receivables
through the dateoriginated or For
of evaluation.
purchasedofduring
purposes the quarter will
this determination, be held means
probable for the at
foreseeable
least 70% future based
likely and, on historical
consistent withreceivables
the budgeting sale experience,
and forecasting
internal the
period, forecasts and budgets,
foreseeable as welltwelve
future means as other relevant,
months. Fordreliable
Creditinformation available through
classifies receivables as HFI the dateon
or HFS of aevaluation.
receivable-by-For
purposes
receivableofbasis.
this determination, probable
Specific receivables meansin
included atoff-balance
least 70% likely
sheetand,saleconsistent
transactions with
arethe budgeting
generally notand forecasting
identified until the
period,
month in the foreseeable
which the sale future
[Link] twelve months. Ford Credit classifies receivables as HFI or HFS on a receivable-by-
receivable basis. Specific receivables included in off-balance sheet sale transactions are generally not identified until the
month in which the sale occurs.
Held-for-Investment. Finance receivables classified as HFI 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. Cash flows from finance
Held-for-Investment.
receivables, Financeand
excluding wholesale receivables classified that
other receivables, as HFIwere areoriginally
recordedclassified
at the timeas of
HFIorigination
are recordedor purchase at fair
as an investing
value and are subsequently reported at amortized cost, net of any allowance for credit losses.
activity since GAAP requires the statement of cash flows presentation to be based on the original classification of the Cash flows from finance
receivables,
receivables. excluding
Cash flows wholesale and other
from wholesale andreceivables, that were
other receivables areoriginally
recordedclassified as HFI activity.
as an operating are recorded as an investing
activity since GAAP requires the statement of cash flows presentation to be based on the original classification of the
receivables. Cash flows
Held-for-Sale. Finance from wholesaleclassified
receivables and otheras receivables are recorded
HFS are carried as anofoperating
at the lower activity.
cost or fair value. Cash flows
resulting from the origination or purchase and sale of HFS receivables are recorded as an operating activity in Decrease/
Held-for-Sale.
(Increase) in finance Finance receivables
receivables (wholesaleclassified as HFSOnce
and other). are carried at the
a decision haslower
beenofmade
cost ortofair
sellvalue. Cash that
receivables flowswere
resulting from the origination or purchase and sale of HFS receivables are recorded as an operating
originally classified as HFI, the receivables are reclassified as HFS and carried at the lower of cost or fair [Link]/ activity in The
(Increase) in finance receivables
valuation adjustment, if applicable, (wholesale
is recorded andin other). Once a decision
Other income/(loss), net has been made
to recognize thetoreceivables
sell receivables
at thethat were
lower of cost
originally classified
or fair value. as HFI, the receivables are reclassified as HFS and carried at the lower of cost or fair value. The
valuation adjustment, if applicable, is recorded in Other income/(loss), net to recognize the receivables at the lower of cost
or fair value.

133

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 10. FORD CREDIT FINANCE RECEIVABLES
NOTES TO THEAND ALLOWANCE
FINANCIAL FOR CREDIT LOSSES (Continued)
STATEMENTS
NOTE [Link]
Ford FORD CREDIT
finance FINANCEnet
receivables, RECEIVABLES AND
at December 31 ALLOWANCE
were as follows (inFOR CREDIT LOSSES (Continued)
millions):
2022 2023
Ford Credit finance receivables, net at December 31 were as follows (in millions):
Consumer
2022 2023
Retail installment contracts, gross $ 66,954 $ 73,825
Consumer
Finance leases, gross 6,765 7,793
Retail installment contracts, gross $ 66,954 $ 73,825
Retail financing, gross 73,719 81,618
Finance leases, gross 6,765 7,793
Unearned interest supplements (2,305) (3,344)
Retail financing, gross 73,719 81,618
Consumer finance receivables 71,414 78,274
Unearned interest supplements (2,305) (3,344)
Non-Consumer
Consumer finance receivables 71,414 78,274
Dealer financing 18,054 24,683
Non-Consumer
Non-Consumer finance receivables 18,054 24,683
Dealer financing 18,054 24,683
Total recorded investment $ 89,468 $ 102,957
Non-Consumer finance receivables 18,054 24,683
Total recorded investment $ 89,468 $ 102,957
Recorded investment in finance receivables $ 89,468 $ 102,957
Allowance for credit losses (845) (882)
Recorded investment in finance receivables $ 89,468 $ 102,957
Total finance receivables, net $ 88,623 $ 102,075
Allowance for credit losses (845) (882)
Total finance receivables, net $ 88,623 $ 102,075
Current portion $ 38,720 $ 46,425
Non-current portion 49,903 55,650
Current portion $ 38,720 $ 46,425
Total finance receivables, net $ 88,623 $ 102,075
Non-current portion 49,903 55,650
Total finance receivables, net $ 88,623 $ 102,075
Net finance receivables subject to fair value (a) $ 82,200 $ 94,728
Fair value (b) 79,521 93,189
Net finance receivables subject to fair value (a) $ 82,200 $ 94,728
__________
Fair Net
(a) value (b) receivables subject to fair value exclude finance leases.
finance 79,521 93,189
(b)
__________ value of finance receivables is categorized within Level 3 of the fair value hierarchy.
The fair
(a) Net finance receivables subject to fair value exclude finance leases.
FordfairCredit’s
(b) The financereceivables
value of finance leases are comprised
is categorized of sales-type
within Level 3 of theand direct
fair value financing
leases. These financings include
hierarchy.
primarily lease plans for terms of 24 to 60 months. Financing revenue from finance leases for the years ended
Ford Credit’s
December finance
31, 2021, 2022,leases are comprised
and 2023, was $345of sales-type
million, $303and direct
million, andfinancing leases.
$381 million, These financings
respectively, include in
and is included
primarily lease plans for terms of 24 to 60 months. Financing
Ford Credit revenues on our consolidated income statements. revenue from finance leases for the years ended
December 31, 2021, 2022, and 2023, was $345 million, $303 million, and $381 million, respectively, and is included in
FordThe
Credit revenues
amounts on our consolidated
contractually due on Ford income statements.
Credit’s finance leases at December 31 were as follows (in millions):
2023
The amounts contractually due on Ford Credit’s finance leases at December 31 were as follows (in millions):
2024 $ 1,488
2023
2025 1,686
2024 $ 1,488
2026 1,242
2025 1,686
2027 640
2026 1,242
2028 87
2027 640
Thereafter 2
2028 87
Total future cash payments 5,145
Thereafter 2
Less: Present value discount 358
Total future cash payments 5,145
Finance lease receivables $ 4,787
Less: Present value discount 358
Finance lease receivables $ 4,787

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 10. FORD CREDIT FINANCE RECEIVABLES
NOTES TO THEAND ALLOWANCE
FINANCIAL FOR CREDIT LOSSES (Continued)
STATEMENTS
NOTEThe10. FORD CREDIT
reconciliation from FINANCE RECEIVABLES
finance lease receivables toAND ALLOWANCE
finance FOR
leases, gross andCREDIT
finance LOSSES (Continued)
leases, net at December 31 is
as follows (in millions):
The reconciliation from finance lease receivables to finance leases, gross and finance leases, net at December 31 is
2022 2023
as follows (in millions):
Finance lease receivables $ 4,297 $ 4,787
2022 2023
Unguaranteed residual assets 2,389 2,910
Finance lease receivables $ 4,297 $ 4,787
Initial direct costs 79 96
Unguaranteed residual assets 2,389 2,910
Finance leases, gross 6,765 7,793
Initial direct costs 79 96
Unearned interest supplements from Ford and affiliated companies (307) (408)
Finance leases, gross 6,765 7,793
Allowance for credit losses (35) (38)
Unearned interest supplements from Ford and affiliated companies (307) (408)
Finance leases, net $ 6,423 $ 7,347
Allowance for credit losses (35) (38)
Finance leases, net $ 6,423 $ 7,347
At December 31, 2022 and 2023, accrued interest was $187 million and $294 million, respectively, which we report in
Other assets in the current assets section of our consolidated balance sheets.
At December 31, 2022 and 2023, accrued interest was $187 million and $294 million, respectively, which we report in
Other assets in
Included in the
the recorded
current assets sectioninof
investment our consolidated
finance receivablesbalance sheets.
at December 31, 2022 and 2023 were consumer
receivables of $43.9 billion and $46.0 billion, respectively, and non-consumer receivables of $18.2 billion and $21.3 billion,
Included (including
respectively, in the recorded investment
Ford Blue, in finance
Ford Model receivables
e, and at Decembersold
Ford Pro receivables 31,to2022
Fordand 2023which
Credit, were we consumer
report in Trade
receivables
and of $43.9 billion
other receivables) that and
have$46.0
beenbillion,
sold forrespectively, and in
legal purposes non-consumer
securitizationreceivables
transactionsofbut$18.2 billiontoand
continue be $21.3 billion,
reported in
respectively,
our (including
consolidated Ford
financial Blue, FordThe
statements. Model e, and Ford
receivables arePro receivables
available sold
only for to FordofCredit,
payment which
the debt we report
issued by, andinother
Trade
and other receivables)
obligations that haveentities
of, the securitization been sold
thatfor
arelegal purposes
parties in securitization
to those securitization transactions;
transactions buttheycontinue
are not to be reported
available to pay in
our other
the consolidated
obligationsfinancial
or thestatements. TheCredit’s
claims of Ford receivables
otherare available
creditors. Fordonly for payment
Credit of right
holds the the debt issuedthe
to receive by,excess
and other
cash
obligations
flows of, theto
not needed securitization
pay the debtentities
issued that are parties
by, and to those securitization
other obligations transactions;
of, the securitization they
entities are
that arenot available
parties to pay
to those
the other obligations
securitization or the(see
transactions claims of Ford
Note 24). 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
Credit Qualitytransactions (see Note 24).

Credit Quality
Consumer Portfolio

Consumer Portfolio consumer receivables, Ford Credit uses a proprietary scoring system that measures credit quality
When originating
using information in the credit application, proposed contract terms, credit bureau data, and other information. After a
When originating
proprietary risk score consumer
is generated, receivables,
Ford Credit Ford Creditwhether
decides uses a proprietary
to purchasescoring system
a contract usingthat measures
a decision credit quality
process based on
using information in the credit application, proposed contract terms, credit bureau data, and other
a judgmental evaluation of the applicant, the credit application, the proposed contract terms, credit bureau information information. After a
proprietary
(e.g., FICO risk score
score), is generated,
proprietary Ford Credit
risk score, decides
and other whether to
information. Thepurchase a contract
evaluation using the
emphasizes a decision process
applicant’s abilitybased
to payon
a judgmental evaluation of the applicant, the credit application, the proposed contract terms,
and creditworthiness focusing on payment, affordability, applicant credit history, and stability as key considerations. credit bureau information
(e.g., FICO score), proprietary risk score, and other information. The evaluation emphasizes the applicant’s ability to pay
and After
creditworthiness focusing
origination, Ford on reviews
Credit payment, theaffordability, applicant
credit quality of retailcredit history,
financing andon
based stability as key
customer considerations.
payment activity. As each
customer develops a payment history, an internally developed behavioral scoring model is used to assist in determining
Aftercollection
the best origination, Ford Credit
strategies, whichreviews
allowsthe credit
Ford quality
Credit of retail
to focus financing
collection based
activity onon customer accounts.
higher-risk payment activity. As each
These models
customer develops a payment history, an internally developed behavioral scoring model is used
are used to refine Ford Credit’s risk-based staffing model to ensure collection resources are aligned with portfolio risk. to assist in determining
the bestoncollection
Based data fromstrategies,
this scoringwhich allows
model, Ford Credit
contracts to focus collection
are categorized activity
by collection on higher-risk
risk. Ford Credit’s accounts.
collectionThese
models models
are used to refine Ford Credit’s risk-based staffing model to ensure collection resources
evaluate several factors, including origination characteristics, updated credit bureau data, and payment [Link] aligned with portfolio risk.
Based on data from this scoring model, contracts are categorized by collection risk. Ford Credit’s collection models
evaluate
Creditseveral
qualityfactors,
ratings including
for consumer origination characteristics,
receivables are based updated
on [Link] bureaureceivables
Consumer data, and payment patterns.
credit quality ratings are
as follows:
Credit quality ratings for consumer receivables are based on aging. 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
Pass – current
•• Substandard – to 60 days
greater than past
120due;
days past due and for which the uncollectible portion of the receivables has
• Special
already Mention
been charged– 61 to 120
off, asdays past due
measured and
using in fair
the intensified
value ofcollection
collateralstatus; and to sell.
less costs
• 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.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 10. FORD CREDIT FINANCE RECEIVABLES
NOTES TO THEAND ALLOWANCE
FINANCIAL FOR CREDIT LOSSES (Continued)
STATEMENTS
NOTE
The10. FORD
credit CREDIT
quality FINANCE
analysis RECEIVABLES
of consumer receivablesAND ALLOWANCE
at December FOR
31, 2022 CREDIT
was LOSSES
as follows (Continued)
(in millions):
Amortized Cost Basis by Origination Year
The credit quality analysis of consumer receivables at December 31, 2022 was as follows (in millions):
Prior to
2018 2018 2019Basis by 2020
Amortized Cost 2021
Origination Year 2022 Total Percent
Consumer Prior to
2018 2018 2019 2020 2021 2022 Total Percent
31 - 60 days past due $ 41 $ 60 $ 91 $ 181 $ 150 $ 126 $ 649 0.9 %
Consumer
61 - 120 days past due 9 12 20 39 40 29 149 0.2
31 - 60 days past due $ 41 $ 60 $ 91 $ 181 $ 150 $ 126 $ 649 0.9 %
Greater than 120 days past due 9 4 5 7 7 6 38 0.1
61 - 120 days past due 9 12 20 39 40 29 149 0.2
Total past due 59 76 116 227 197 161 836 1.2
Greater than 120 days past due 9 4 5 7 7 6 38 0.1
Current 883 2,563 6,137 13,844 18,357 28,794 70,578 98.8
Total past due 59 76 116 227 197 161 836 1.2
Total $ 942 $ 2,639 $ 6,253 $ 14,071 $ 18,554 $ 28,955 $ 71,414 100.0 %
Current 883 2,563 6,137 13,844 18,357 28,794 70,578 98.8
Total $ 942 $ 2,639 $ 6,253 $ 14,071 $ 18,554 $ 28,955 $ 71,414 100.0 %
The credit quality analysis of consumer receivables at December 31, 2023 was as follows (in millions):
Amortized Cost Basis by Origination Year
The credit quality analysis of consumer receivables at December 31, 2023 was as follows (in millions):
Prior to
2019 2019 2020Basis by 2021
Amortized Cost 2022
Origination Year 2023 Total Percent
Consumer Prior to
2019 2019 2020 2021 2022 2023 Total Percent
31 - 60 days past due $ 40 $ 49 $ 130 $ 125 $ 187 $ 159 $ 690 0.9 %
Consumer
61 - 120 days past due 9 11 30 37 58 50 195 0.2
31 - 60 days past due $ 40 $ 49 $ 130 $ 125 $ 187 $ 159 $ 690 0.9 %
Greater than 120 days past due 7 4 7 10 10 5 43 0.1
61 - 120 days past due 9 11 30 37 58 50 195 0.2
Total past due 56 64 167 172 255 214 928 1.2
Greater than 120 days past due 7 4 7 10 10 5 43 0.1
Current 891 2,359 7,385 11,301 20,247 35,163 77,346 98.8
Total past due 56 64 167 172 255 214 928 1.2
Total $ 947 $ 2,423 $ 7,552 $ 11,473 $ 20,502 $ 35,377 $ 78,274 100.0 %
Current 891 2,359 7,385 11,301 20,247 35,163 77,346 98.8
Gross charge-offs $ 47 $ 40 $ 75 $ 85 $ 117 $ 37 $ 401
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

Non-Consumer Portfolio

Non-Consumer Portfolio
Ford Credit extends credit to dealers primarily in the form of lines of credit to purchase new Ford and Lincoln vehicles
as well as used vehicles. Payment is typically required when the dealer has sold the vehicle. Each non-consumer lending
FordisCredit
request extends
evaluated credit to dealers
by considering primarily in
the borrower’s the form
financial of lines of
condition credit
and to purchasecollateral
the underlying new Ford and Lincoln
securing vehicles
the loan.
as well as used vehicles. Payment is typically required when the dealer has sold the vehicle. Each non-consumer
Ford Credit uses a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance lending
request is evaluated by considering the borrower’s financial condition and the underlying collateral securing
data to identify key factors about a dealer that are considered most significant in predicting a dealer’s ability to meet its the loan.
Ford Credit
financial uses a proprietary
obligations. model
Ford Credit alsotoconsiders
assign each dealer other
numerous a risk financial
rating. This
and model usesfactors
qualitative historical dealer
of the performance
dealer’s
data to identify key factors about a dealer that are considered most significant in predicting a dealer’s
operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Fordability to meet its
Credit
financial obligations.
and other creditors. 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 Dealers
other creditors.
are assigned to one of four groups according to risk ratings as follows:

Dealers
• Group areI –
assigned
strong totosuperior
one of four groups
financial according to risk ratings as follows:
metrics;
• Group II – fair to favorable financial metrics;
•• Group I ––strong
Group III to superior
marginal to weakfinancial
financialmetrics;
metrics; and
•• Group II ––fair
Group IV to favorable financial metrics;dealers classified as uncollectible.
poor financial metrics, including
• Group III – marginal to weak financial metrics; and
•FordGroup
CreditIV – poor financial
generally suspendsmetrics, including
credit lines and dealers
extendsclassified
no furtheras uncollectible.
funding to dealers classified in Group IV.

Ford Credit generally suspends credit lines and extends no further funding to dealers classified in Group IV.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 10. FORD CREDIT FINANCE RECEIVABLES
NOTES TO THEAND ALLOWANCE
FINANCIAL FOR CREDIT LOSSES (Continued)
STATEMENTS
NOTE [Link]
Ford FORD CREDIT
regularly FINANCE
reviews RECEIVABLES
the model to confirm theAND ALLOWANCE
continued business FOR CREDIT LOSSES
significance (Continued)
and statistical predictability of
the model and may make updates to improve the performance of the model. In addition, Ford Credit regularly audits
Ford
dealer Credit regularly
inventory and dealerreviews
sales the model
records to to confirm
verify that the
the continued
dealer is inbusiness
possessionsignificance and statistical
of the financed vehiclespredictability
and is promptly of
the model
paying eachand may make
receivable updatesthe
following to sale
improve
of thethefinanced
performance of the
vehicle. Themodel. In addition,
frequency Ford
of on-site Credit
vehicle regularlyaudits
inventory audits
dealer
depends inventory
primarily and
on dealer sales records
the dealer’s to verify
risk rating. Under that theCredit’s
Ford dealer is in possession
policies, of the financed
on-site vehicle inventoryvehicles
audits ofand is promptly
low-risk
paying each receivable following the sale of the financed vehicle. The frequency of on-site
dealers are conducted only as circumstances warrant. On-site vehicle inventory audits of higher-risk dealers are vehicle inventory audits
depends
conducted primarily on the dealer’s
with increased frequency riskbased
[Link]
Under Fordon theCredit’s
dealer’s policies, on-site
risk rating, butvehicle inventory audits
also considering of low-risk
the results of
dealers
electronic monitoring of the dealer’s performance, including daily payment verifications and monthly analyses are
are conducted only as circumstances warrant. On-site vehicle inventory audits of higher-risk dealers of the
conducted with increased
dealer’s financial statements,frequency
payoffs,based
aged primarily
inventory,onover the credit
dealer’s risk
line, andrating, but also reports.
delinquency considering
Fordthe results
Credit of
typically
electronic monitoring of the dealer’s performance, including daily payment verifications and
performs a credit review of each dealer annually and more frequently reviews certain dealers based on the dealer’s monthly analyses of the risk
dealer’s financial statements, payoffs, aged inventory, over credit line, and delinquency reports. Ford
rating and total exposure. Ford Credit adjusts the dealer’s risk rating, if necessary. The credit quality of dealer financing Credit typically
performs
receivables a credit review of
is evaluated basedeachondealer
Ford annually and more
Credit’s internal frequently
dealer reviews
risk rating certainA dealers
analysis. based
dealer has the on the risk
same dealer’s
ratingrisk
for
rating and total exposure. Ford Credit adjusts the
its entire dealer financing regardless of the type of financing. dealer’s risk rating, if necessary. The credit quality of dealer financing
receivables is evaluated based on Ford Credit’s internal dealer risk rating analysis. A dealer has the same risk rating for
its entire dealerquality
The credit financing regardless
analysis of dealerof the type ofreceivables
financing financing. at December 31, 2022 was as follows (in millions):
Amortized Cost Basis by Origination Year
The credit quality analysis of dealer financing receivables at December 31, 2022 was as follows (in millions):
Dealer Loans
Amortized Cost Basis by Origination Year
Prior to Wholesale
2018 2018 2019 2020
Dealer Loans 2021 2022 Total Loans Total Percent
Group I $ Prior 402
to $ 148 $ 35 $ 67 $ 185 $ 224 $ 1,061 $ 13,888
Wholesale $ 14,949 82.8 %
2018 2018 2019 2020 2021 2022 Total Loans Total Percent
Group II 2 21 — 5 2 42 72 2,751 2,823 15.6
Group I $ 402 $ 148 $ 35 $ 67 $ 185 $ 224 $ 1,061 $ 13,888 $ 14,949 82.8 %
Group III — — — — — 10 10 233 243 1.4
Group II 2 21 — 5 2 42 72 2,751 2,823 15.6
Group IV — — 1 — — 3 4 35 39 0.2
Group III — — — — — 10 10 233 243 1.4
Total (a) $ 404 $ 169 $ 36 $ 72 $ 187 $ 279 $ 1,147 $ 16,907 $ 18,054 100.0 %
Group IV — — 1 — — 3 4 35 39 0.2
__________
(a)Total (a)past due dealer
Total $ 404 $ receivables
financing 169 $at December
36 $ 31, 2022
72were
$ $9 million.
187 $ 279 $ 1,147 $ 16,907 $ 18,054 100.0 %
__________
(a) The credit
Total past duequality analysisreceivables
dealer financing of dealeratfinancing receivables
December 31, at million.
2022 were $9 December 31, 2023 was as follows (in millions):
Amortized Cost Basis by Origination Year
The credit quality analysis of dealer financing receivables at December 31, 2023 was as follows (in millions):
Dealer Loans
Amortized Cost Basis by Origination Year
Prior to Wholesale
2019 2019 2020 2021
Dealer Loans 2022 2023 Total Loans Total Percent
Group I $ Prior 383
to $ 30 $ 58 $ 156 $ 61 $ 331 $ 1,019 $ 20,419
Wholesale $ 21,438 86.9 %
2019 2019 2020 2021 2022 2023 Total Loans Total Percent
Group II 16 — 1 3 2 44 66 2,834 2,900 11.7
Group I $ 383 $ 30 $ 58 $ 156 $ 61 $ 331 $ 1,019 $ 20,419 $ 21,438 86.9 %
Group III — — — — 1 8 9 292 301 1.2
Group II 16 — 1 3 2 44 66 2,834 2,900 11.7
Group IV — 1 — — — 2 3 41 44 0.2
Group III — — — — 1 8 9 292 301 1.2
Total (a) $ 399 $ 31 $ 59 $ 159 $ 64 $ 385 $ 1,097 $ 23,586 $ 24,683 100.0 %
Group IV — 1 — — — 2 3 41 44 0.2
Gross charge-offs $ — $ — $ — $ — $ — $ 1 $ 1 $ 3 $ 4
Total (a) $ 399 $ 31 $ 59 $ 159 $ 64 $ 385 $ 1,097 $ 23,586 $ 24,683 100.0 %
__________
Gross
(a) charge-offs
Total $
past due dealer — $ receivables
financing — $at December
— $ 31, 2023—were$ $33 million.
— $ 1 $ 1 $ 3 $ 4
__________
(a) Non-Accrual of Revenue.
Total past due dealer The accrual
financing receivables of financing
at December revenue
31, 2023 were $33ismillion.
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
Non-Accrual
all past-due of Revenue.
deficiency balances The accrual
and future of financingare
payments revenue is discontinued
reasonably at the
assured. For time a receivable
receivables is determined
in non-accrual status, to
be uncollectible or when it is 90 days past due. Accounts may be restored to accrual status only when a
subsequent financing revenue is recognized only to the extent a payment is received. Payments are generally applied customer settles
all past-due deficiency balances and future payments are reasonably
first to outstanding interest and then to the unpaid principal balance. 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 Loan
to outstanding interest
Modifications. and then and
Consumer to the unpaid principal
non-consumer [Link] have a modified interest rate and/or a term
receivables
extension (including receivables that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code)
considered toConsumer
Loan Modifications.
are typically and non-consumer
be loan modifications. receivables
Ford Credit thatgrant
does not havemodifications
a modified interest
to the rate and/or
principal a termof the
balance
extension (including receivables that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy
receivables. If a receivable is modified in a reorganization proceeding, all payment requirements of the reorganizationCode)
are typically
plan need to considered to be
be met before loan modifications.
remaining balances areFord Credit does not grant modifications to the principal balance of the
forgiven.
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.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 10. FORD CREDIT FINANCE RECEIVABLES
NOTES TO THEAND ALLOWANCE
FINANCIAL FOR CREDIT LOSSES (Continued)
STATEMENTS
NOTE The10.
useFORD CREDIT
of interest rateFINANCE RECEIVABLES
modifications AND ALLOWANCE
and term extensions helps Ford CreditFOR mitigate
CREDITfinancial
LOSSESloss.
(Continued)
Term extensions
may assist in cases where Ford Credit believes the customer will recover from short-term financial difficulty and resume
The use
regularly of interest
scheduled rate modifications
payments. The effectand termloan
of most extensions helps Ford
modifications madeCredit mitigate experiencing
to borrowers financial [Link]
Term extensions
difficulty is
may assist
included in in
thecases where
historical Fordused
trends Credittobelieves
measurethe thecustomer
allowance will
forrecover from short-term
credit losses. financial difficulty
A loan modification and resume
that improves the
regularly scheduled
delinquency status ofpayments.
a borrowerThe effect the
reduces of most loan modifications
probability made
of default, which to borrowers
results experiencing
in a lower allowance forfinancial
credit difficulty
losses. At is
included in the historical trends used to measure the allowance for credit losses. A loan modification that
December 31, 2023, an insignificant portion of Ford Credit's total finance receivables portfolio had been granted a loan improves the
delinquency
modification,status of a borrower
and these reduces
modifications the probability
are generally of as
treated default, which results
a continuation in existing
of the a lower allowance
loan. for credit losses. At
December 31, 2023, an insignificant portion of Ford Credit's total finance receivables portfolio had been granted a loan
modification,
Allowance for and theseLosses
Credit modifications are generally treated as a continuation of the existing loan.

Allowance for Credit

The allowance Losses
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.
The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in finance
receivables as of to
Adjustments thethebalance sheet
allowance fordate.
creditThe adequacy
losses of the
are made by allowance for credittolosses
recording charges is assessed
Ford Credit quarterly.
interest, operating, and
other expenses on our consolidated income statements. The uncollectible portion of a finance receivable is charged to
Adjustments
the allowance forto the allowance
credit for earlier
losses at the credit losses are
of when anmade by recording
account is deemedcharges to Ford Credit
to be uncollectible interest,
or when an operating,
account and
other expenses on our consolidated income statements. The uncollectible portion of a finance
is 120 days delinquent, taking into consideration the financial condition of the customer or borrower, the value receivable is charged
of the to
the allowance for credit losses at the earlier
collateral, recourse to guarantors, and other factors. 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
Charge-offs to guarantors,
on finance and other
receivables includefactors.
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
Charge-offs
allowance on finance
for credit losses. receivables
In the eventinclude uncollected
Ford Credit amounts
repossesses therelated to principal,
collateral, interest,
the receivable late fees,off
is charged and other
and the
allowable charges. Recoveries on finance receivables previously charged off as uncollectible are credited
collateral is recorded at its estimated fair value less costs to sell and reported in Other assets on our consolidated balance to the
allowance
sheets. 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.
Consumer Portfolio

Consumer Portfolio
For consumer receivables that share similar risk characteristics such as product type, initial credit risk, term, vintage,
geography, and other relevant factors, Ford Credit estimates the lifetime expected credit loss allowance based on a
For consumer
collective assessment receivables that share similar
using measurement models riskand
characteristics
managementsuch as product
judgment. The type, initial
lifetime credit risk,
expected term,
credit vintage,
losses for the
geography, and
receivables other relevant
is determined factors, probability
by applying Ford Creditofestimates
default and theloss
lifetime
given expected credit loss allowance
default assumption to monthlybased on a
expected
collective assessment
exposures, using measurement
then discounting these cash flows models and management
to present value using the judgment. The lifetime
receivable’s original expected credit losses
effective interest rate orforthe
the
receivables
current is determined
effective by for
interest rate applying probability
a variable of default and
rate receivable. loss given
Probability defaultmodels
of default assumption to monthlyfrom
are developed expected
internal risk
exposures,
scoring models thentaking
discounting these cash
into account flows to present
the expected probabilityvalue using theand
of payment receivable’s originaladjusted
time to default, effectivefor
interest rate or the
macroeconomic
current effective interest rate for a variable rate receivable. Probability of default models are
outlook and recent performance. The models consider factors such as risk evaluation at the time of origination, historical developed from internal risk
scoring models taking into account the expected probability of payment and time to default,
trends in credit losses, and the composition and recent performance of the present portfolio (including vehicle brand, term,adjusted for macroeconomic
outlook and recent
risk evaluation, andperformance.
new/used vehicles).The models consider
The loss givenfactors
defaultsuch
is theaspercentage
risk evaluation
of the atexpected
the time of origination,
balance due athistorical
default
trends in credit losses, and the composition and recent performance of the present portfolio
that is not recoverable, taking into account the expected collateral value and trends in recoveries (including key (including vehicle brand, term,
metrics
risk evaluation, and new/used vehicles). The loss given default is the percentage of
such as delinquencies, repossessions, and bankruptcies). Monthly exposures are equal to the receivables’ expected the expected balance due at default
that is not recoverable,
outstanding principal andtaking intobalance.
interest account the expected collateral value and trends in recoveries (including key metrics
such as delinquencies, repossessions, and bankruptcies). Monthly exposures are equal to the receivables’ expected
outstanding principal
The allowance forand interest
credit losses balance.
incorporates forward-looking macroeconomic conditions for baseline, upturn, and
downturn scenarios. Three separate credit loss allowances are calculated from these scenarios. They are then
The allowance for
probability-weighted tocredit losses
determine theincorporates
quantitativeforward-looking
estimate of the macroeconomic
credit loss allowanceconditions for baseline,
recognized upturn, and
in the financial
downturn
statements. Ford Credit uses forecasts from a third party that revert to a long-term historical average after athen
scenarios. Three separate credit loss allowances are calculated from these scenarios. They are reasonable
probability-weighted
and supportable forecastingto determine
period, thewhich
quantitative
is specificestimate
to the of the credit
particular loss allowancevariable
macroeconomic recognized and in the financial
which varies by
statements.
market. FordFord Credit
Credit usesthe
updates forecasts from a third
forward-looking party that revert
macroeconomic to a long-term
forecasts historical average after a reasonable
quarterly.
and supportable forecasting period, which is specific to the particular macroeconomic variable and which varies by
market. Ford Creditdoes
If management updates the forward-looking
not believe macroeconomic
the models reflect forecasts
lifetime expected quarterly.
credit losses for the portfolio, an adjustment is
made to reflect management judgment regarding qualitative factors, including economic uncertainty, observable changes
If management
in portfolio performance,does and
not believe the models
other relevant reflect lifetime expected credit losses for the portfolio, an adjustment is
factors.
made to reflect management judgment regarding qualitative factors, including economic uncertainty, observable changes
in portfolio performance,
On an ongoing basis,andFord other relevant
Credit reviews factors.
its models, including macroeconomic factors, the selection of
macroeconomic scenarios, and their weighting, to ensure they reflect the risk of the portfolio.
On an ongoing basis, Ford Credit reviews its models, including macroeconomic factors, the selection of
macroeconomic scenarios, and their weighting, to ensure they reflect the risk of the portfolio.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 10. FORD CREDIT FINANCE RECEIVABLES
NOTES TO THEAND ALLOWANCE
FINANCIAL FOR CREDIT LOSSES (Continued)
STATEMENTS
NOTE 10. FORDPortfolio
Non-Consumer CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Non-Consumer Portfolio
Dealer financing is evaluated on an individual dealer basis by segmenting dealers by risk characteristics (such as the
amount of the loans, the nature of the collateral, and the financial status of the dealer) to determine if an individual dealer
Dealer
requires financing
a specific is evaluated
allowance on anloss.
for credit individual dealerthe
If required, basis by segmenting
allowance is baseddealers
on the by risk characteristics
present (such as the
value of the expected
amount
future cash flows of the dealer’s receivables discounted at the loans’ original effective interest rate or the fair value dealer
of the loans, the nature of the collateral, and the financial status of the dealer) to determine if an individual of the
requires
collateralaadjusted
specific allowance for costs
for estimated credit to
loss.
[Link] required, the allowance is based on the present value of the expected
future cash flows of the dealer’s receivables discounted at the loans’ original effective interest rate or the fair value of the
collateral adjusted
For the for estimated
remaining costs toFord
dealer financing, [Link] estimates an allowance for credit losses on a collective basis.

For the remaining

Wholesale Loans. dealer financing,
Ford Credit Ford Credit
estimates estimates
the allowance foran allowance
credit lossesfor forcredit losses
wholesale on abased
loans collective basis. loss-
on historical
to-receivable (“LTR”) ratios, expected future cash flows, and the fair value of collateral. For wholesale loans with similar
risk Wholesale the Ford
Loans.
characteristics, Creditfor
allowance estimates the allowance
credit losses for credit
is estimated losses forbasis
on a collective wholesale loans
using the LTRbased
model onand
historical loss-
to-receivable (“LTR”) ratios, expected future cash flows, and the fair value of collateral.
management judgment. The LTR model is based on the most recent years of history. An LTR ratio is calculated For wholesale loans with by
similar
risk characteristics, the allowance for credit losses is estimated on a collective basis using the LTR
dividing credit losses (i.e., charge-offs net of recoveries) by average net finance receivables, excluding unearned interestmodel and
management
supplements and judgment.
allowanceTheforLTR model
credit is based
losses. Theon the most
average LTRrecent years
ratio is of history.
multiplied by the Anend-of-period
LTR ratio is calculated
balances, by
dividing credit losses (i.e., charge-offs net of
representing the lifetime expected credit loss reserve. recoveries) by average net finance receivables, excluding unearned interest
supplements and allowance for credit losses. The average LTR ratio is multiplied by the end-of-period balances,
representing the lifetime
Dealer Loans. expected
Ford Credit credit
uses loss reserve.
a weighted-average remaining maturity method to estimate the lifetime expected
credit loss reserve for dealer loans. The loss model is based on the industry-wide commercial real estate credit losses,
Dealer
adjusted factor inFord
to Loans. Credit uses
the historical a weighted-average
credit losses for the dealer remaining maturity method
loans portfolio. to estimate
The expected creditthe lifetime
loss expected
is calculated under
credit loss reserve for dealer loans. The loss model is based on the industry-wide
different macroeconomic scenarios that are weighted to provide the total lifetime expected credit loss. commercial real estate credit losses,
adjusted to factor in the historical credit losses for the dealer loans portfolio. The expected credit loss is calculated under
different
Aftermacroeconomic
establishing the scenarios
collective that
and are weighted
specific to provide
allowance the total
for credit lifetime
losses, expected credit
if management [Link] allowance does
believes
not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant
After establishing
forward-looking the collective
economic factors, anand specific allowance
adjustment is made basedfor credit losses, if management
on management judgment. believes the allowance does
not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant
forward-looking economic factors, an adjustment is made based on management judgment.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 10. FORD CREDIT FINANCE RECEIVABLES
NOTES TO THEAND ALLOWANCE
FINANCIAL FOR CREDIT LOSSES (Continued)
STATEMENTS
NOTE An 10. FORD
analysis of CREDIT FINANCE
the allowance RECEIVABLES
for credit AND
losses related ALLOWANCE
to finance FORfor
receivables CREDIT LOSSES
the years ended (Continued)
December 31 was as
follows (in millions):
An analysis of the allowance for credit losses related to finance receivables for the years ended December 31 was as
2022
follows (in millions):
Consumer Non-Consumer Total
2022
Allowance for credit losses
Consumer Non-Consumer Total
Beginning balance $ 903 $ 22 $ 925
Allowance for credit losses
Charge-offs (278) (1) (279)
Beginning balance $ 903 $ 22 $ 925
Recoveries 165 5 170
Charge-offs (278) (1) (279)
Provision for/(Benefit from) credit losses 56 (17) 39
Recoveries 165 5 170
Other (a) (8) (2) (10)
Provision for/(Benefit from) credit losses 56 (17) 39
Ending balance $ 838 $ 7 $ 845
Other (a) (8) (2) (10)
Ending balance $ 838 $ 2023 7 $ 845
Consumer Non-Consumer Total
2023
Allowance for credit losses
Consumer Non-Consumer Total
Beginning balance $ 838 $ 7 $ 845
Allowance for credit losses
Charge-offs (401) (4) (405)
Beginning balance $ 838 $ 7 $ 845
Recoveries 151 2 153
Charge-offs (401) (4) (405)
Provision for/(Benefit from) credit losses 280 (2) 278
Recoveries 151 2 153
Other (a) 11 — 11
Provision for/(Benefit from) credit losses 280 (2) 278
Ending balance $ 879 $ 3 $ 882
Other (a) 11 — 11
__________
Ending balance
(a) Primarily represents amounts related to translation adjustments. $ 879 $ 3 $ 882
__________
(a) For the represents
Primarily year ended December
amounts related to31, 2023, the
translation allowance
for credit losses increased $37 million driven by an increase in
adjustments.
Ford Credit finance receivables, partially offset by the impact of an improved U.S. economic outlook that was reflected in
For the year
the reserve ended
balance December
in the 31, 2023,
fourth quarter the allowance
of 2023. for credit
Net charge-offs losses increased
increased $37
from a year million
ago, drivennormalization
reflecting by an increase in
Ford Credit finance receivables, partially offset by the impact of an improved U.S. economic outlook that
from extraordinarily low levels. The impact of inflationary pressure and high interest rates on future credit losses was reflected in
remains
the reserveFord
uncertain. balance in the
Credit will fourth quarter
continue of 2023.
to monitor Net charge-offs
economic trends and increased from
conditions anda portfolio
year ago,performance
reflecting normalization
and will adjust
fromreserve
the extraordinarily low levels. The impact of inflationary pressure and high interest rates on future credit losses remains
accordingly.
uncertain. Ford Credit will continue to monitor economic trends and conditions and portfolio performance and will adjust
the
NOTEreserve accordingly.
11. INVENTORIES

NOTE
All 11. INVENTORIES
inventories are stated at the lower of cost or net realizable value. Cost of our inventories is determined by costing
methods that approximate a first-in, first-out (“FIFO”) basis. Inventories at December 31 were as follows (in millions):
All inventories are stated at the lower of cost or net realizable value. Cost of our inventories is determined by costing
2022 2023
methods that approximate a first-in, first-out (“FIFO”) basis. Inventories at December 31 were as follows (in millions):
Raw materials, work-in-process, and supplies $ 5,997 $ 6,196
2022 2023
Finished products 8,083 9,455
Raw materials, work-in-process, and supplies $ 5,997 $ 6,196
Total inventories $ 14,080 $ 15,651
Finished products 8,083 9,455
Total inventories $ 14,080 $ 15,651
Our finished product inventory at December 31, 2023 was higher than at December 31, 2022, primarily reflecting
higher in-transit inventory.
Our finished product inventory at December 31, 2023 was higher than at December 31, 2022, primarily reflecting
higher in-transit inventory.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 12. NET INVESTMENT IN OPERATING
NOTES TOLEASES
THE FINANCIAL STATEMENTS
NOTE Net12. NET INVESTMENT
investment in operatingIN OPERATING
leases LEASESof lease contracts for vehicles with individuals, daily rental
consists primarily
companies, government entities, and fleet customers. Assets subject to operating leases are depreciated using the
Net investment
straight-line methodinover
operating of theconsists
leases
the term lease toprimarily
reduce theof lease
assetcontracts for vehicles
to its estimated withvalue
residual individuals, daily
at the end ofrental
the
companies,
scheduled leasegovernment entities, and
term. Estimated fleet customers.
residual Assetsonsubject
values are based to operating
assumptions leases
for used are prices
vehicle depreciated using
at lease the
termination
straight-line method over the term of the lease to reduce the asset to its estimated residual value
and the number of vehicles that are expected to be returned. Adjustments to depreciation expense reflecting revisedat the end of the
scheduled
estimates of lease term. residual
expected Estimated residual
values values
at the end of are
thebased
leaseon assumptions
terms are recorded for used vehicle prices
prospectively at lease termination
on a straight-line basis.
and the number of vehicles that are expected to be returned. Adjustments to depreciation expense reflecting revised
estimates
The netof investment
expected residual values
in operating at theatend
leases of the lease
December 31 wasterms
as are recorded
follows prospectively on a straight-line basis.
(in millions):
2022 2023
The net investment in operating leases at December 31 was as follows (in millions):
Company excluding Ford Credit
2022 2023
Vehicles, net of depreciation $ 951 $ 1,052
Company excluding Ford Credit
Ford Credit Segment
Vehicles, net of depreciation $ 951 $ 1,052
Vehicles, at cost (a) 26,055 24,182
Ford Credit Segment
Accumulated depreciation (4,234) (3,850)
Vehicles, at cost (a) 26,055 24,182
Total Ford Credit Segment 21,821 20,332
Accumulated depreciation (4,234) (3,850)
Total $ 22,772 $ 21,384
Total Ford Credit Segment 21,821 20,332
__________
Total
(a) Includes Ford Credit’s operating lease assets of $12.5 billion and $11.2 billion at December 31, 2022 and 2023,$respectively, 22,772 $ been 21,384
that have
included in securitization transactions. These net investments in operating leases are available only for payment of the debt or other obligations
__________
(a) issued
IncludesorFord
arising in theoperating
Credit’s securitization
leasetransactions; theybillion
assets of $12.5 are not available
and to payatother
$11.2 billion obligations
December or the
31, 2022 claims
and 2023,ofrespectively,
other creditors.
that have been
included in securitization transactions. These net investments in operating leases are available only for payment of the debt or other obligations
Fordissued
Credit Segment
or arising in the securitization transactions; they are not available to pay other obligations or the claims of other creditors.

FordIncluded
Credit Segment
in Ford Credit interest, operating, and other expense is operating lease depreciation expense, which includes
gains and losses on disposal of assets along with fees assessed to a customer at lease termination such as excess wear
and Included in Ford mileage
use and excess Credit interest,
that areoperating,
consideredand other expense
variable is operating
lease payments. lease depreciation
Operating expense,
lease depreciation which includes
expense for the
gains and losses on disposal of assets along with fees
years ended December 31 was as follows (in millions): assessed to a customer at lease termination such as excess wear
and use and excess mileage that are considered variable lease payments. Operating lease depreciation expense for the
2021 2022 2023
years ended December 31 was as follows (in millions):
Operating lease depreciation expense $ 1,626 $ 2,240 $ 2,309
2021 2022 2023
Operating lease depreciation expense $ 1,626 $ 2,240 $ 2,309
The amounts contractually due on operating leases at December 31, 2023 were as follows (in millions):
2024 2025 2026 2027 2028 Total
The amounts contractually due on operating leases at December 31, 2023 were as follows (in millions):
Operating lease payments $ 3,298 $ 2,175 $ 996 $ 192 $ 11 $ 6,672
2024 2025 2026 2027 2028 Total
Operating lease payments $ 3,298 $ 2,175 $ 996 $ 192 $ 11 $ 6,672

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 13. NET PROPERTY NOTES TO THE FINANCIAL STATEMENTS
NOTENet13. NET PROPERTY
property is reported at cost, net of accumulated depreciation, which includes impairments. We capitalize new
assets when we expect to use the asset for more than one year. Routine maintenance and repair costs are expensed
whenNet property is reported at cost, net of accumulated depreciation, which includes impairments. We capitalize new
incurred.
assets when we expect to use the asset for more than one year. Routine maintenance and repair costs are expensed
when incurred.
Property and equipment are depreciated primarily using the straight-line method over the estimated useful life of the
asset. Useful lives range from 3 years to 40 years. The estimated useful lives generally are 14.5 years for machinery and
Property8 and
equipment, years equipment are depreciated
for software, 30 years for primarily using the straight-line
land improvements, and 40 yearsmethod over the estimated
for buildings. useful life
Tooling generally is of the
asset. Useful lives range from 3 years to 40 years. The estimated useful
amortized over the expected life of a product program using a straight-line [Link] generally are 14.5 years for machinery and
equipment, 8 years for software, 30 years for land improvements, and 40 years for buildings. Tooling generally is
amortized over the
Net property at expected
Decemberlife 31ofwas
a product program
as follows using a straight-line method.
(in millions):
2022 2023
Net property at December 31 was as follows (in millions):
Land $ 371 $ 367
2022 2023
Buildings and land improvements 11,946 12,636
Land $ 371 $ 367
Machinery, equipment, and other 38,964 41,202
Buildings and land improvements 11,946 12,636
Software 5,042 5,423
Machinery, equipment, and other 38,964 41,202
Construction in progress 3,203 5,308
Software 5,042 5,423
Total land, plant and equipment, and other 59,526 64,936
Construction in progress 3,203 5,308
Accumulated depreciation (31,781) (33,679)
Total land, plant and equipment, and other 59,526 64,936
Net land, plant and equipment, and other 27,745 31,257
Accumulated depreciation (31,781) (33,679)
Tooling, net of amortization 9,520 9,564
Net land, plant and equipment, and other 27,745 31,257
Total $ 37,265 $ 40,821
Tooling, net of amortization 9,520 9,564
Total $ 37,265 $ 40,821
Property-related expenses, excluding net investment in operating leases, for the years ended December 31 were as
follows (in millions):
Property-related expenses, excluding net investment in operating leases, for the years ended December 31 were as
2021 2022 2023
follows (in millions):
Depreciation and other amortization $ 2,986 $ 2,878 $ 3,041
2021 2022 2023
Tooling amortization 2,706 2,556 2,340
Depreciation and other amortization $ 2,986 $ 2,878 $ 3,041
Total (a) $ 5,692 $ 5,434 $ 5,381
Tooling amortization 2,706 2,556 2,340
Total (a) $ 5,692 $ 5,434 $ 5,381
Maintenance and rearrangement $ 1,940 $ 2,083 $ 1,909
__________
Maintenance
(a) and rearrangement
Includes impairment $
of held-for-sale long-lived assets. See Note 22 for additional information. 1,940 $ 2,083 $ 1,909
__________
(a) Includes impairment of held-for-sale long-lived assets. See Note 22 for additional information.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 14. EQUITY IN NET ASSETS OF AFFILIATED
NOTES TO THE COMPANIES
FINANCIAL STATEMENTS
NOTE We14.
useEQUITY IN method
the equity NET ASSETS OF AFFILIATED
of accounting COMPANIES
for our investments in entities over which we do not have control, but over
whose operating and financial policies we are able to exercise significant influence.
We use the equity method of accounting for our investments in entities over which we do not have control, but over
whoseOuroperating and financial
carrying value policies percentages
and ownership we are able to
of exercise significant
our equity influence. at December 31 were as follows (in
method investments
millions, except percentages):
Our carrying value and ownership percentages of our equity method investments at December 31 were as follows (in
Ownership
millions, except percentages): Investment Balance Percentage
2022 2023 2023
Ownership
Investment Balance Percentage
BlueOval SK, LLC $ 690 $ 3,254 50 %
2022 2023 2023
Ford Otomotiv Sanayi Anonim Sirketi 479 807 41
BlueOval SK, LLC $ 690 $ 3,254 50 %
Jiangling Motors Corporation, Limited (a) 471 495 32
Ford Otomotiv Sanayi Anonim Sirketi 479 807 41
Changan Ford Automobile Corporation, Limited (b) 409 225 50
Jiangling Motors Corporation, Limited (a) 471 495 32
AutoAlliance (Thailand) Co., Ltd. 346 344 50
Changan Ford Automobile Corporation, Limited (b) 409 225 50
Ionity Holding GmbH & Co. KG 67 96 15
AutoAlliance (Thailand) Co., Ltd. 346 344 50
FFS Finance South Africa (Pty) Limited 70 65 50
Ionity Holding GmbH & Co. KG 67 96 15
Other 266 262 Various
FFS Finance South Africa (Pty) Limited 70 65 50
Total $ 2,798 $ 5,548
Other 266 262 Various
__________
Total $ 2,798 $ 5,548
(a) In 2022 and 2023, Jiangling Motors Corporation, Limited recorded restructuring charges, our share of which was $13 million and $12 million,
respectively. These charges are included in Equity in net income/(loss) of affiliated companies.
__________
(b) In
(a) In 2022
2022 andand 2023,
2023, Jiangling
Changan Motors
Ford Automobile Corporation,
Corporation, Limited restructuring
Limited recorded recorded long-lived asset
charges, our and other
share assetwas
of which impairment charges
$13 million as well
and $12 as
million,
restructuring
respectively. charges, our share
These charges are of which was
included $368 in
in Equity million and $432 million,
net income/(loss) respectively.
of affiliated These charges are included in Equity in net income/(loss)
companies.
(b) ofIn affiliated
2022 andcompanies.
2023, Changan Ford Automobile Corporation, Limited recorded long-lived asset and other asset impairment charges as well as
restructuring charges, our share of which was $368 million and $432 million, respectively. These charges are included in Equity in net income/(loss)
We
of recorded
affiliated $452 million, $452 million, and $381 million of dividends from these affiliated companies for the years
companies.
ended December 31, 2021, 2022, and 2023, respectively.
We recorded $452 million, $452 million, and $381 million of dividends from these affiliated companies for the years
ended
An December
aggregate 31, 2021, 2022,
summary of the and 2023,
balance respectively.
sheets and income statements of our equity method investees, on a stand
alone basis, as reported by those investees at December 31 is below (in millions). Our investment in each equity method
An aggregate
investee is reportedsummary
in Equityofinthe
netbalance sheets
assets of and companies,
affiliated income statements
and ourof our equity method
proportionate investees,
share of on a
each of the stand
entities’
alone basis, asisreported
income/(loss) reportedby those investees
in Equity at December
in net income/(loss) 31 is below
of affiliated (in millions). Our investment in each equity method
companies.
investee is reported in Equity in net assets of affiliated companies, and our proportionate share of each of the entities’
income/(loss) is reported in Equity in net income/(loss) of affiliated companies.
Summarized Balance Sheet 2022 2023
Current assets $ 10,361 $ 11,223
Summarized Balance Sheet 2022 2023
Non-current assets 11,142 16,907
Current assets $ 10,361 $ 11,223
Total assets $ 21,503 $ 28,130
Non-current assets 11,142 16,907
Total assets $ 21,503 $ 28,130
Current liabilities $ 10,371 $ 11,232
Non-current liabilities 4,498 6,572
Current liabilities $ 10,371 $ 11,232
Total liabilities $ 14,869 $ 17,804
Non-current liabilities 4,498 6,572
Total liabilities $ 14,869 $ 17,804
Equity attributable to noncontrolling interests $ — $ 61

Equity attributable to noncontrolling interests $ — $ 61

For the years ended December 31,
Summarized Income Statement 2021 2022 2023
For the years ended December 31,
Total revenue $ 27,760 $ 27,153 $ 31,052
Summarized Income Statement 2021 2022 2023
Income/(Loss) before income taxes (a) 1,002 (1,806) 991
Total revenue $ 27,760 $ 27,153 $ 31,052
Net income/(loss) (a) 1,029 (1,769) 1,207
Income/(Loss) before income taxes (a) 1,002 (1,806) 991
Net income/(loss) (a) 1,029 (1,769) 1,207
Net income/(loss) attributable to noncontrolling interests — (8) (63)
__________
Net income/(loss)
(a) attributable
The 2022 results to noncontrolling
reflects Argo interests
AI’s impairment, partially offset by the net income/(loss) of our other equity —
method investees. (8) (63)
__________
(a) The 2022 results reflects Argo AI’s impairment, partially offset by the net income/(loss) of our other equity method investees.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 14. EQUITY IN NET ASSETS OF AFFILIATED
NOTES TO THE COMPANIES (Continued)
FINANCIAL STATEMENTS
NOTE 14. ordinary
In the EQUITYcourse
IN NET ofASSETS
business,OF
weAFFILIATED COMPANIES
buy/sell various (Continued)
products and services including vehicles, parts, and
components to/from our equity method investees. In addition, we receive royalty income.
In the ordinary course of business, we buy/sell various products and services including vehicles, parts, and
components to/from
Transactions withour equity
equity method
method investees.
investees In addition,
reported for thewe receive
years royalty
ended or at income.
December 31 were as follows (in
millions):
Transactions with equity method investees reported for the years ended or at December 31 were as follows (in
For the years ended December 31,
millions):
Income Statement 2021 2022 2023
For the years ended December 31,
Sales $ 4,777 $ 4,369 $ 5,237
Income Statement 2021 2022 2023
Purchases 9,245 9,670 13,457
Sales $ 4,777 $ 4,369 $ 5,237
Royalty income 458 483 329
Purchases 9,245 9,670 13,457
Royalty income
Balance Sheet 458 2022 483 2023 329
Receivables $ 1,007 $ 1,070
Balance Sheet 2022 2023
Payables 1,676 1,766
Receivables $ 1,007 $ 1,070
Payables 1,676 1,766
Argo AI

ArgoInAIthe third quarter of 2022, Ford made the strategic decision to shift our capital spending from L4 technology being
developed by Argo AI to advanced L2/L3 systems, which we believe will ultimately be essential to achieve profitable
In the third quarter
commercialization of L4ofautonomy
2022, Ford at made thethe
scale in strategic
future. decision to shift our
We determined thatcapital
Argo AIspending
no longer from
hadL4 technology
value being
as a going
developed by Argo AI to advanced L2/L3 systems, which we believe will ultimately be essential
concern, and as a result, we reassessed the carrying value of our investment as of September 30, 2022. Our valuation to achieve profitable
commercialization
assumed an orderly ofconclusion
L4 autonomy at scale in at
of operations theArgo
future. We
AI, in determined
which the cashthat Argo AI
required to no longer
satisfy thehad value asobligations
remaining a going
concern, and as a result, we reassessed the carrying value of our investment as of September
would consume all of Argo AI’s remaining capital. In addition, we assessed whether Argo AI’s technology components 30, 2022. Our valuationhad
assumed an orderly conclusion of operations at Argo AI, in which the cash required to satisfy
value in isolation, and we concluded that the cost to integrate into anticipated technology ecosystems would be the remaining obligations
would consume
prohibitive. all of Argo
Accordingly, weAI’s remaining
recorded capital.
a $2.7 billionInpre-tax
addition, we assessed
impairment in thewhether Argo AI’s
third quarter technology
of 2022. components
The non-cash had
charge
value in isolation, and we concluded that the cost to integrate
was reported in Equity in net income/(loss) of affiliated companies. into anticipated technology ecosystems would be
prohibitive. Accordingly, we recorded a $2.7 billion pre-tax impairment in the third quarter of 2022. The non-cash charge
wasInreported in Equity
the fourth quarterinofnet income/(loss)
2022, of affiliated companies.
Ford and Volkswagen AG, who held equal interests that together comprised a majority
ownership of Argo AI, initiated the process of exiting the joint development of highly automated driving technology (L4)
In the
through fourth
Argo AI. quarter
Argo AIofis2022,
in the Ford andof
process Volkswagen
winding down AG,operations,
who held equal with nointerests thatfuture
expected together comprised
funding a majority
required.
ownership of Argo AI, initiated the process of exiting the joint development of highly automated driving technology (L4)
through Argo AI. Argo AI is in the process of winding down operations, with no expected future funding required.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 15. OTHER INVESTMENTS NOTES TO THE FINANCIAL STATEMENTS

NOTEWe15. OTHER
have INVESTMENTS
investments in entities not accounted for under the equity method for which fair values are not readily
available. We record these investments at cost (less impairment, if any), adjusted for observable price changes in orderly
We havefor
transactions investments in entities
the identical not accounted
or a similar investmentfor under
of the the issuer.
same equity method for the
We report which fair values
carrying valueare not readily
of these investments
available. We record
in Other assets in the these investments
non-current assetsat cost (less
section impairment,
of our if any),
consolidated adjusted
balance for observable
sheets. price changes
These investments were in orderly
transactions for the
$384 million and identical
$242 millionorataDecember
similar investment
31, 2022ofandthe2023,
samerespectively.
issuer. We report the carrying
The cumulative netvalue of these
unrealized investments
gain from
in Other assets in the non-current assets section of our consolidated balance
adjustments related to Other Investments held at December 31, 2023 is $24 million. sheets. These investments were
$384 million and $242 million at December 31, 2022 and 2023, respectively. The cumulative net unrealized gain from
adjustments related LIABILITIES
NOTE 16. OTHER to Other Investments held at December
AND DEFERRED REVENUE 31, 2023 is $24 million.

NOTE 16. liabilities

Other OTHER and LIABILITIES AND DEFERRED
deferred revenue REVENUE
at December 31 were as follows (in millions):
2022 2023
Other liabilities and deferred revenue at December 31 were as follows (in millions):
Current
2022 2023
Dealer and dealers’ customer allowances and claims $ 9,219 $ 12,910
Current
Deferred revenue 2,404 2,515
Dealer and dealers’ customer allowances and claims $ 9,219 $ 12,910
Employee benefit plans 2,020 2,282
Deferred revenue 2,404 2,515
Accrued interest 935 1,224
Employee benefit plans 2,020 2,282
Operating lease liabilities 404 481
Accrued interest 935 1,224
OPEB 329 331
Operating lease liabilities 404 481
Pension 196 205
OPEB 329 331
Other (a) 5,590 5,922
Pension 196 205
Total current other liabilities and deferred revenue $ 21,097 $ 25,870
Other (a) 5,590 5,922
Total current other liabilities and deferred revenue $ 21,097 $ 25,870
Non-current
Dealer and dealers’ customer allowances and claims $ 6,095 $ 7,506
Non-current
Pension 5,673 6,383
Dealer and dealers’ customer allowances and claims $ 6,095 $ 7,506
OPEB 4,130 4,365
Pension 5,673 6,383
Deferred revenue 4,883 5,051
OPEB 4,130 4,365
Operating lease liabilities 1,101 1,395
Deferred revenue 4,883 5,051
Employee benefit plans 834 837
Operating lease liabilities 1,101 1,395
Other (a) 2,781 2,877
Employee benefit plans 834 837
Total non-current other liabilities and deferred revenue $ 25,497 $ 28,414
Other (a) 2,781 2,877
__________
(a)Total non-current
Includes currentother liabilities
derivative and deferred
liabilities of $1.3 revenue $ Includes
billion and $1.0 billion at December 31, 2022 and 2023, respectively. 25,497 $ derivative
non-current 28,414
liabilities of $1.7 billion and $1.3 billion at December 31, 2022 and 2023, respectively (see Note 20).
__________
(a) Includes current derivative liabilities of $1.3 billion and $1.0 billion at December 31, 2022 and 2023, respectively. Includes non-current derivative
liabilities of $1.7 billion and $1.3 billion at December 31, 2022 and 2023, respectively (see Note 20).

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 17. RETIREMENT BENEFITS NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT

Defined benefit pension BENEFITS
and OPEB plan obligations are remeasured at least annually as of December 31 based on
the present value of projected future benefit payments for all participants for services rendered to date. The measurement
Defined future
of projected benefitbenefits
pensionisand OPEB plan
dependent on theobligations
provisions areofremeasured
each specific at plan,
least demographics
annually as of Decemberof the group31covered
based on by
the
the present
plan, and value
otherofkey
projected
measurementfuture benefit payments
assumptions. Forforplans
all participants
that provide forbenefits
servicesdependent
rendered to ondate.
salaryThe measurement
assumptions, we
of projected
include future benefits
a projection of salary is growth
dependent in ouronmeasurements.
the provisions ofNo each specific plan,
assumption is madedemographics
regarding any of the group future
potential covered by
the plan, to
changes and other provisions
benefit key measurement beyond those assumptions.
to which For plans
we are that provide
presently benefits
committed dependent
(e.g., in existing on labor
salarycontracts).
assumptions, we
include a projection of salary growth in our measurements. No assumption is made regarding any potential future
changes to benefit
Net periodic provisions
benefit costs,beyond
including those to which
service cost, we are presently
interest cost, andcommitted (e.g., in
expected return onexisting
assets,labor contracts). using
are determined
assumptions regarding the benefit obligation and the fair value of plan assets (where applicable) as of the beginning of
eachNet periodic
year. We havebenefit costs,toincluding
elected use a fairservice
value of cost,planinterest
assetscost, and expected
to calculate return on
the expected assets,
return are determined
on assets using
in net periodic
assumptions regarding the benefit obligation and the fair value of plan assets (where
benefit cost. The funded status of the benefit plans, which represents the difference between the benefit obligation and applicable) as of the beginning of
each year. We have elected to use a fair value of plan assets to calculate the expected
fair value of plan assets, is calculated on a plan-by-plan basis. The benefit obligation and related funded status are return on assets in net periodic
benefit
[Link]
The funded
assumptionsstatusas of of
thethebenefit
end ofplans,
each which
year. represents
Actuarial gains the difference
and lossesbetweenresultingthe benefit
from plan obligation
remeasurement and
fair value of plan assets, is calculated on a plan-by-plan basis. The benefit
are recognized in net periodic benefit cost in the period of the remeasurement. The impact of a retroactive planobligation and related funded status are
determined
amendmentusing assumptions
is recorded as of the other
in Accumulated end ofcomprehensive
each year. Actuarial gains and
income/(loss), andlosses resultingas
is amortized from plan remeasurement
a component of net
are recognized in net periodic benefit cost in the period of the remeasurement.
periodic cost, generally over the remaining service period of the active employees. The service cost component The impact of a retroactive plan is
amendment
included is recorded
in Cost of salesinand Accumulated other comprehensive
Selling, administrative and other income/(loss),
expenses. Other andcomponents
is amortizedofasnet a component
periodic benefitof netcost/
periodic cost, generally over the remaining service period of
(income) are included in Other income/(loss), net on our consolidated income [Link] active employees. 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
A curtailment in Other
results from an income/(loss), net on our reduces
event that significantly consolidated income statements.
the expected years of future service or eliminates the
accrual of defined benefits for the future services of a significant number of employees. A curtailment gain is recorded
when A the
curtailment
employees results
whofrom an eventtothat
are entitled significantly
a benefit terminatereduces the expected or
their employment, years
when of afuture
plan service
suspensionor eliminates
or amendmentthe
accrual of defined benefits for the future services of a significant number of employees.
that results in a curtailment gain is adopted. A curtailment loss is recorded when it becomes probable a curtailment loss A curtailment gain is recorded
when the employees
will occur. We recognize whosettlement
are entitledexpenseto a benefit
when terminate
the coststheir employment,
associated with allorsettlements
when a planduring suspension
the year or exceed
amendment the
that results
interest in a curtailment
component gain is cost
of net periodic adopted.
for the A affected
curtailment loss
plan. is recorded
Expense fromwhen it becomes
curtailments andprobable
settlements a curtailment
is recordedloss in
will occur.
Other We recognize
income/(loss), net. settlement expense when the costs associated with all settlements during the year exceed the
interest component of net periodic cost for the affected plan. Expense from curtailments and settlements is recorded in
Other income/(loss),
Defined net.
Benefit Pension Plans. We have defined benefit pension plans covering hourly and salaried employees in the
United States, Canada, United Kingdom, Germany, and other locations. The largest portion of our worldwide obligation is
Definedwith
associated Benefit Pension
our U.S. [Link]. We have
Virtually all of defined benefitdefined
our worldwide pensionbenefitplans covering
plans arehourly
closedand salaried
to new employees in the
participants.
United States, Canada, United Kingdom, Germany, and other locations. The largest portion of our worldwide obligation is
associated withour
In general, ourdefined
U.S. [Link] Virtually
pension all plans
of ourare worldwide defined
funded (i.e., havebenefit plansassets
restricted are closed
from to newbenefits
which participants.
are paid).
Our unfunded defined benefit pension plans are treated on a “pay as you go” basis with benefit payments from general
In general,
Company [Link] defined
These benefitplans
unfunded pension plans include
primarily are funded (i.e.,plans
certain haveinrestricted
Germanyassets and the from
U.S. which benefits
defined benefitareplans
paid).for
Our unfunded
senior management. defined benefit pension plans are treated on a “pay as you go” basis with benefit payments from general
Company cash. These unfunded plans primarily include certain plans in Germany and the U.S. defined benefit plans for
senior management.
OPEB. We have defined benefit OPEB plans, primarily certain health care and life insurance benefits, covering hourly
and salaried employees in the United States, Canada, and other locations. The largest portion of our worldwide obligation
OPEB. We
is associated have
with our defined
U.S. plans. benefit Our OPEB
OPEB plans,
plansprimarily
are unfundedcertainand health care andare
the benefits lifepaid
insurance benefits,
from general coveringcash.
Company hourly
and salaried employees in the United States, Canada, and other locations. The largest portion of our worldwide obligation
is associated with our U.S.
Defined Contribution plans.
and Savings OurPlans.
OPEB plansWe also arehave
unfunded
defined and the benefits
contribution andaresavings
paid from plansgeneral Company
for hourly cash.
and salaried
employees in the United States and other locations. Company contributions to these plans, if any, are made from general
Defined
Company Contribution
cash and Savings
and are expensed Plans. We
as incurred. The also have defined
expense for our contribution
worldwide defined and savings plans for
contribution andhourly
savings andplans
salaried
was
$432 million, $478 million, and $546 million for the years ended December 31, 2021, 2022, and 2023, [Link]
employees in the United States and other locations. Company contributions to these plans, if any, are made from This
Companythe
includes cash and are
expense forexpensed
Company-matchingas [Link]
The expense to for
ourour worldwide
primary employeedefined contribution
savings plan in and savingsStates
the United plansof was
$432 million, $478 million, and $546 million for the years ended December 31,
$152 million, $152 million, and $155 million for the years ended December 31, 2021, 2022, and 2023, respectively. 2021, 2022, and 2023, respectively. This
includes the expense for Company-matching contributions to our primary employee savings plan in the United States of
$152 million, $152 million, and $155 million for the years ended December 31, 2021, 2022, and 2023, respectively.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 17. RETIREMENT BENEFITS NOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTE 17.
Defined RETIREMENT
Benefit BENEFITS
Plans – Expense (Continued)
and Status

Defined Benefit Plans

The assumptions – Expense
used and Status
to determine benefit obligation and net periodic benefit cost/(income) were as follows:
Pension Benefits
The assumptions used to determine benefit obligation and net periodic benefit cost/(income) were as follows:
U.S. Plans Non-U.S. Plans Worldwide OPEB
Pension Benefits
2022 2023 2022 2023 2022 2023
U.S. Plans Non-U.S. Plans Worldwide OPEB
Weighted Average Assumptions at December 31
2022 2023 2022 2023 2022 2023
Discount rate 5.51 % 5.17 % 4.42 % 3.98 % 5.48 % 5.10 %
Weighted Average Assumptions at December 31
Average rate of increase in compensation 3.70 4.05 3.42 3.54 3.65 3.98
Discount rate 5.51 % 5.17 % 4.42 % 3.98 % 5.48 % 5.10 %
Weighted Average Assumptions Used to Determine Net
Benefit rate
Average Costoffor the Year
increase Ended December 31
in compensation 3.70 4.05 3.42 3.54 3.65 3.98
Discount
Weightedrate - Service
Average cost
Assumptions Used to Determine Net 3.12 % 5.60 % 1.78 % 4.29 % 3.27 % 5.65 %
Benefit Cost for the Year Ended December 31
Effective interest rate on benefit obligation 2.40 5.39 1.54 4.45 2.49 5.36
Discount rate - Service cost 3.12 % 5.60 % 1.78 % 4.29 % 3.27 % 5.65 %
Expected long-term rate of return on assets 5.75 6.25 3.29 4.13 — —
Effective interest rate on benefit obligation 2.40 5.39 1.54 4.45 2.49 5.36
Average rate of increase in compensation 3.50 3.70 3.19 3.42 3.46 3.65
Expected long-term rate of return on assets 5.75 6.25 3.29 4.13 — —
Average rate of increase in compensation 3.50 3.70 3.19 3.42 3.46 3.65
The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the years ended
December 31 was as follows (in millions):
The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the years ended
Pension Benefits
December 31 was as follows (in millions):
U.S. Plans Non-U.S. Plans Worldwide OPEB
Pension Benefits
2021 2022 2023 2021 2022 2023 2021 2022 2023
U.S. Plans Non-U.S. Plans Worldwide OPEB
Service cost $ 526 $ 500 $ 292 $ 557 $ 416 $ 245 $ 49 $ 42 $ 21
2021 2022 2023 2021 2022 2023 2021 2022 2023
Interest cost 928 1,054 1,641 420 504 965 127 146 231
Service cost $ 526 $ 500 $ 292 $ 557 $ 416 $ 245 $ 49 $ 42 $ 21
Expected return on assets (2,728) (2,569) (1,897) (1,130) (1,006) (890) — — —
Interest cost 928 1,054 1,641 420 504 965 127 146 231
Amortization of prior service costs/(credits) 2 2 — 24 22 22 (12) (3) 3
Expected return on assets (2,728) (2,569) (1,897) (1,130) (1,006) (890) — — —
Net remeasurement (gain)/loss (254) 1,720 841 (3,241) (436) 932 (376) (1,314) 286
Amortization of prior service costs/(credits) 2 2 — 24 22 22 (12) (3) 3
Separation programs/other 19 46 20 156 63 261 — — 1
Net remeasurement (gain)/loss (254) 1,720 841 (3,241) (436) 932 (376) (1,314) 286
Settlements and curtailments 70 438 69 (2) (2) 9 — (1) —
Separation programs/other 19 46 20 156 63 261 — — 1
Net periodic benefit cost/(income) $ (1,437) $ 1,191 $ 966 $ (3,216) $ (439) $ 1,544 $ (212) $ (1,130) $ 542
Settlements and curtailments 70 438 69 (2) (2) 9 — (1) —
Net periodic benefit cost/(income) $ (1,437) $ 1,191 $ 966 $ (3,216) $ (439) $ 1,544 $ (212) $ (1,130) $ 542
In 2021, we recognized an expense of $244 million related to separation programs, settlements, and curtailments,
which included $70 million of settlement losses related to a U.S. pension plan and separation expenses of $156 million for
In 2021,
non-U.S. we recognized
pension an expense
plans related of restructuring
to ongoing $244 million related to separation programs, settlements, and curtailments,
programs.
which included $70 million of settlement losses related to a U.S. pension plan and separation expenses of $156 million for
non-U.S. pension
In 2022, plans related
we recognized to ongoing
an expense of restructuring programs.
$544 million related to separation programs, settlements, and curtailments,
which included $438 million of settlement losses related to a U.S. pension plan and separation and curtailment expenses
In 2022,
of $57 millionwe
forrecognized an expense
non-U.S. pension plansofrelated
$544 million related
to ongoing to separation
restructuring programs, settlements, and curtailments,
programs.
which included $438 million of settlement losses related to a U.S. pension plan and separation and curtailment expenses
of $57 millionwe
In 2023, forrecognized
non-U.S. pension plansofrelated
an expense to ongoing
$360 million restructuring
related programs.
to separation programs, settlements, and curtailments,
which included $71 million of settlement losses related to U.S. and non-U.S. pension plans and separation and curtailment
In 2023,
expenses we recognized
of $268 million foran expense
non-U.S. of $360plans
pension million related
related to separation
to ongoing programs,
restructuring settlements, and curtailments,
programs.
which included $71 million of settlement losses related to U.S. and non-U.S. pension plans and separation and curtailment
expenses of $268 million for non-U.S. pension plans related to ongoing restructuring programs.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 17. RETIREMENT BENEFITS NOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTE
The17. RETIREMENT
year-end status ofBENEFITS
these plans(Continued)
was as follows (in millions):
Pension Benefits
The year-end status of these plans was as follows (in millions):
U.S. Plans Non-U.S. Plans Worldwide OPEB
Pension Benefits
2022 2023 2022 2023 2022 2023
U.S. Plans Non-U.S. Plans Worldwide OPEB
Change in Benefit Obligation
2022 2023 2022 2023 2022 2023
Benefit obligation at January 1 $ 44,888 $ 32,867 $ 34,432 $ 21,605 $ 6,040 $ 4,459
Change in Benefit Obligation
Service cost 500 292 416 245 42 21
Benefit obligation at January 1 $ 44,888 $ 32,867 $ 34,432 $ 21,605 $ 6,040 $ 4,459
Interest cost 1,054 1,641 504 965 146 231
Service cost 500 292 416 245 42 21
Amendments (a) — 581 — 46 — 32
Interest cost 1,054 1,641 504 965 146 231
Separation programs/other 4 (18) 56 255 — —
Amendments (a) — 581 — 46 — 32
Curtailments — — (2) 6 — —
Separation programs/other 4 (18) 56 255 — —
Settlements (b) (1,172) (1,479) (674) (21) — —
Curtailments — — (2) 6 — —
Plan participant contributions 18 16 12 11 1 —
Settlements (b) (1,172) (1,479) (674) (21) — —
Benefits paid (2,466) (2,417) (1,302) (1,257) (363) (359)
Plan participant contributions 18 16 12 11 1 —
Foreign exchange translation — — (2,877) 960 (92) 26
Benefits paid (2,466) (2,417) (1,302) (1,257) (363) (359)
Actuarial (gain)/loss (9,959) 1,193 (8,960) 1,189 (1,315) 286
Foreign exchange translation — — (2,877) 960 (92) 26
Benefit obligation at December 31 32,867 32,676 21,605 24,004 4,459 4,696
Actuarial (gain)/loss (9,959) 1,193 (8,960) 1,189 (1,315) 286
Change in Plan Assets
Benefit obligation at December 31 32,867 32,676 21,605 24,004 4,459 4,696
Fair value of plan assets at January 1 45,909 32,922 33,085 21,344 — —
Change in Plan Assets
Actual return on plan assets (9,548) 2,180 (7,516) 1,145 — —
Fair value of plan assets at January 1 45,909 32,922 33,085 21,344 — —
Company contributions 223 238 722 756 — —
Actual return on plan assets (9,548) 2,180 (7,516) 1,145 — —
Plan participant contributions 18 16 12 11 — —
Company contributions 223 238 722 756 — —
Benefits paid (2,466) (2,417) (1,302) (1,257) — —
Plan participant contributions 18 16 12 11 — —
Settlements (b) (1,172) (1,479) (674) (21) — —
Benefits paid (2,466) (2,417) (1,302) (1,257) — —
Foreign exchange translation — — (2,973) 990 — —
Settlements (b) (1,172) (1,479) (674) (21) — —
Other (42) (37) (10) (10) — —
Foreign exchange translation — — (2,973) 990 — —
Fair value of plan assets at December 31 32,922 31,423 21,344 22,958 — —
Other (42) (37) (10) (10) — —
Funded status at December 31 $ 55 $ (1,253) $ (261) $ (1,046) $ (4,459) $ (4,696)
Fair value of plan assets at December 31 32,922 31,423 21,344 22,958 — —
Funded status at December 31 $ 55 $ (1,253) $ (261) $ (1,046) $ (4,459) $ (4,696)
Amounts Recognized on the Balance Sheets
Prepaid assets $ 2,064 $ 1,229 $ 3,599 $ 3,060 $ — $ —
Amounts Recognized on the Balance Sheets
Other liabilities (2,009) (2,482) (3,860) (4,106) (4,459) (4,696)
Prepaid assets $ 2,064 $ 1,229 $ 3,599 $ 3,060 $ — $ —
Total $ 55 $ (1,253) $ (261) $ (1,046) $ (4,459) $ (4,696)
Other liabilities (2,009) (2,482) (3,860) (4,106) (4,459) (4,696)
Amounts Recognized in Accumulated Other
Comprehensive
Total Loss (pre-tax) $ 55 $ (1,253) $ (261) $ (1,046) $ (4,459) $ (4,696)
Unamortized
Amounts prior service
Recognized costs/(credits)
in Accumulated Other $ — $ 581 $ 130 $ 161 $ 25 $ 55
Comprehensive Loss (pre-tax)
Unamortized prior service costs/(credits) $ — $ 581 $ 130 $ 161 $ 25 $ 55
Pension Plans in which Accumulated Benefit
Obligation Exceeds Plan Assets at December 31
Accumulated
Pension Plans benefit obligation
in which Accumulated Benefit $ 15,055 $ 14,045 $ 8,346 $ 9,135
Obligation Exceeds Plan Assets at December 31
Fair value of plan assets 13,576 12,154 5,068 5,587
Accumulated benefit obligation $ 15,055 $ 14,045 $ 8,346 $ 9,135
Fair value of plan assets 13,576 12,154 5,068 5,587
Accumulated Benefit Obligation at December 31 $ 32,336 $ 32,086 $ 20,304 $ 22,661

Accumulated Benefit Obligation at December 31 $ 32,336 $ 32,086 $ 20,304 $ 22,661

Pension Plans in which Projected Benefit Obligation
Exceeds Plan Assets at December 31
Projected
Pension benefit
Plans obligation
in which Projected Benefit Obligation $ 15,585 $ 14,636 $ 8,932 $ 9,991
Exceeds Plan Assets at December 31
Fair value of plan assets 13,576 12,154 5,068 5,885
Projected benefit obligation $ 15,585 $ 14,636 $ 8,932 $ 9,991
Fair value of plan assets 13,576 12,154 5,068 5,885
Projected Benefit Obligation at December 31 $ 32,867 $ 32,676 $ 21,605 $ 24,004
__________
Projected
(a) Benefit
Reflects benefitObligation at December
enhancements 31the collective bargaining
included in $ 32,867 $ 32,676
agreements with the$UAW21,605 $ ratified
and Unifor 24,004
in 2023.
(b) For U.S. plans, 2022 and 2023 primarily reflect salaried lump sum retirement payments. For non-U.S. plans, in 2022, we transferred a pension
__________
(a) obligation and related
Reflects benefit plan assets
enhancements to an insurance
included company.
in the collective bargaining agreements with the UAW and Unifor ratified in 2023.
(b) For U.S. plans, 2022 and 2023 primarily reflect salaried lump sum retirement payments. For non-U.S. plans, in 2022, we transferred a pension
obligation and related plan assets to an insurance company.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 17. RETIREMENT BENEFITS NOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTEThe17. RETIREMENT
actuarial BENEFITS
(gain)/loss (Continued)
for our pension benefit obligations in 2022 and 2023 was primarily related to changes in
discount rates.
The actuarial (gain)/loss for our pension benefit obligations in 2022 and 2023 was primarily related to changes in
discount
Pension rates.
Plan Contributions

Pension Plan Contributions

Our policy for funded pension plans is to contribute annually, at a minimum, amounts required by applicable laws and
regulations. We may make contributions beyond those legally required.
Our policy for funded pension plans is to contribute annually, at a minimum, amounts required by applicable laws and
regulations. We contributed
In 2023, we may make contributions beyond
$592 million to thosefunded
our global legallypension
required.
plans and made $402 million of benefit payments to
participants in unfunded plans. During 2024, we expect to contribute about $1 billion of cash to our global funded pension
In 2023,
plans. we expect
We also contributed $592
to make million
about to our
$400 global
million fundedpayments
of benefit pension plans and madein$402
to participants millionplans.
unfunded of benefit payments
Based on to
participants in unfunded plans. During 2024, we expect to contribute about $1 billion of cash to our global funded
current assumptions and regulations, we do not expect to have a legal requirement to fund our major U.S. pension plans pension
plans.
in [Link] also expect to make about $400 million of benefit payments to participants in unfunded plans. Based on
current assumptions and regulations, we do not expect to have a legal requirement to fund our major U.S. pension plans
in 2024. Future Benefit Payments
Expected

Expected Future Benefit

The expected Payments
future benefit payments at December 31, 2023 were as follows (in millions):
Benefit Payments
The expected future benefit payments at December 31, 2023 were as follows (in millions):
Pension
Benefit Payments
Non-U.S. Worldwide
U.S. PlansPension Plans OPEB
2024 $ 2,715 $ 1,430
Non-U.S. $ Worldwide340
U.S. Plans Plans OPEB
2025 2,670 1,295 340
2024 $ 2,715 $ 1,430 $ 340
2026 2,635 1,310 340
2025 2,670 1,295 340
2027 2,600 1,325 330
2026 2,635 1,310 340
2028 2,575 1,330 330
2027 2,600 1,325 330
2029-2033 12,475 6,640 1,610
2028 2,575 1,330 330
2029-2033 12,475 6,640 1,610
Pension Plan Asset Information

Pension Plan Asset

Investment Information
Objectives and Strategies. Our investment objectives for the U.S. plans are to minimize the volatility of
the value of our U.S. pension assets relative to U.S. pension obligations and to ensure assets are sufficient to pay plan
Investment
benefits. Objectives
Our largest and plans
non-U.S. Strategies. Our investment
(e.g., United Kingdom objectives
and Canada) for the
have U.S. plans
similar are to minimize
investment the volatility
objectives to the [Link]
the value
plans. of our U.S. pension assets relative to U.S. pension obligations and to ensure assets are sufficient to pay plan
benefits. Our largest non-U.S. plans (e.g., United Kingdom and Canada) have similar investment objectives to the U.S.
plans.
Investment strategies and policies for the U.S. plans and the largest non-U.S. plans reflect a balance of risk-reducing
and return-seeking considerations. The objective of minimizing the volatility of assets relative to obligations is addressed
Investment
primarily throughstrategies and policies
asset-liability matching, for asset
the U.S. plans and the
diversification, andlargest non-U.S.
hedging. plansincome
The fixed reflect asset
a balance of risk-reducing
allocation matches
and return-seeking considerations. The objective of minimizing the volatility of assets relative to
the bond-like and long-dated nature of the pension obligations. Assets are broadly diversified within asset classes obligations is addressed
to
primarily through asset-liability
achieve risk-adjusted matching,
returns that, in total,asset
lowerdiversification,
asset volatilityand hedging.
relative to theThe fixed income
obligations. asset allocation
Strategies to addressmatches
the goal
the bond-like
of ensuring and long-dated
sufficient assets tonature of the pension
pay benefits include obligations. Assets
target allocations toare broadly
a broad diversified
array of assetwithin asset
classes, andclasses to
strategies
achieve risk-adjusted returns that, in total, lower asset volatility relative
within asset classes that provide adequate returns, diversification, and liquidity. to the obligations. Strategies to address the goal
of ensuring sufficient assets to pay benefits include target allocations to a broad array of asset classes, and strategies
within asset classes that provide adequate returns, diversification, and liquidity.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 17. RETIREMENT BENEFITS NOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTE 17. RETIREMENT
Derivatives are permitted BENEFITS
for fixed (Continued)
income investment and public equity managers to use as efficient substitutes for
traditional securities and to manage exposure to interest rate and foreign exchange risks. Interest rate and foreign
Derivatives
currency are instruments
derivative permitted forare fixed
usedincome
for theinvestment
purpose ofand public changes
hedging equity managers
in the fairtovalue
use as efficientthat
of assets substitutes
result fromfor
traditional
interest rate securities
changesand andtocurrency
managefluctuations.
exposure to Interest
interest rate
rate and foreign are
derivatives exchange
also used risks. Interest
to adjust rate and
portfolio foreign
duration.
currency
Derivatives derivative
may notinstruments are used or
be used to leverage fortothe purpose
alter of hedging
the economic changes
exposure to inanthe fairclass
asset valueoutside
of assets thethat result
scope from
of the
interest rate changes and currency fluctuations. Interest rate derivatives are also
mandate an investment manager has been given. Alternative investment managers are permitted to employ leverage used to adjust portfolio duration.
Derivatives may not
(including through the beuse
used of to leverage or
derivatives or other
to alter the economic
tools) exposure
that may alter to anexposure.
economic asset class outside the scope of the
mandate an investment manager has been given. Alternative investment managers are permitted to employ leverage
(including through
Alternative the use ofexecute
investments derivatives or other
diverse tools) that
strategies that provide
may alter economic
exposure to exposure.
a broad range of hedge fund strategies,
equity investments in private companies, and investments in private property funds.
Alternative investments execute diverse strategies that provide exposure to a broad range of hedge fund strategies,
equity investments
Significant in private companies,
Concentrations and investments
of Risk. Significant in private
concentrations of property
risk in ourfunds.
plan assets relate to interest rates, growth
assets, and operating risks. In order to minimize asset volatility relative to the obligations, the majority of plan assets are
Significant
allocated to fixedConcentrations
income investments of [Link] Significant concentrations
are exposed to interest of rate
risk risk.
in ourRate
plan increases
assets relate to interest
generally rates,ingrowth
will result a
assets, and operating risks. In order to minimize asset volatility relative to the obligations,
decline in the value of fixed income assets, while reducing the present value of the obligations. Conversely, rate the majority of plan assets are
allocated
decreasestogenerally
fixed income investments
will increase whichofare
the value exposed
fixed income toassets,
interestoffsetting
rate risk. theRate increases
related increasegenerally will result in a
in the obligations.
decline in the value of fixed income assets, while reducing the present value of the obligations. Conversely, rate
decreases
In ordergenerally
to ensurewill increase
assets the value to
are sufficient of pay
fixedbenefits,
income aassets,
portionoffsetting the related
of plan assets increase
is allocated to in the obligations.
growth assets (primarily
hedge funds, real estate, private equity, and public equity) that are expected over time to earn higher returns with more
In order
volatility thantofixed
ensure
incomeassets are sufficient
investments, to pay
which morebenefits,
closelyamatch
portionpension
of plan obligations.
assets is allocated to growth
Within growth assets
assets, (primarily
risk is
hedge
mitigated by constructing a portfolio that is broadly diversified by asset class, investment strategy, manager, style, more
funds, real estate, private equity, and public equity) that are expected over time to earn higher returns with and
volatility
process. than fixed income investments, which more closely match pension obligations. Within growth assets, risk is
mitigated by constructing a portfolio that is broadly diversified by asset class, investment strategy, manager, style, and
process.
Operating risks include the risks of inadequate diversification and weak controls. To mitigate these risks, investments
are diversified across and within asset classes in support of investment objectives. Policies and practices to address
Operating
operating risksrisks
includeinclude
ongoingthe risks
managerof inadequate
oversight diversification and weakteam
(e.g., style adherence, controls. To mitigate
strength, these
firm health, andrisks, investments
internal risk
are diversified
controls), plan across
and asset andclass
within asset classes
investment in support
guidelines and of investment
instructions objectives.
that Policies and
are communicated practices toand
to managers, address
periodic
operating risks
compliance include
reviews ongoingadherence.
to ensure manager oversight (e.g., style adherence, team strength, firm health, and internal risk
controls), plan and asset class investment guidelines and instructions that are communicated to managers, and periodic
compliance
At year-end reviews
2023, to Ford
ensure adherence.
securities comprised less than 1% of our plan assets.

At year-end
Expected 2023, Ford
Long-Term securities
Rate comprised
of Return lessThe
on Assets. thanlong-term
1% of ourreturn
plan assets.
assumption at year-end 2023, which will be
used to determine the 2024 expected return on assets, is 5.93% for the U.S. plans, 3.84% for the U.K. plans, and 5.06%
Expected
for the Long-Term
Canadian Rate
plans, and of Return
averages on Assets.
4.53% The long-term
for all non-U.S. plans. return assumption
A generally at year-end
consistent approach2023, which
is used will be to
worldwide
used to determine the 2024 expected return on assets, is 5.93% for the U.S. plans, 3.84% for the U.K. plans,
develop this assumption. This approach considers inputs from advisors for long-term capital market returns adjusted and 5.06%
for
for the Canadian plans, and averages 4.53% for all non-U.S. plans. A generally consistent approach is
specific aspects of our investment strategy by plan. Historical returns also are considered where appropriate. Theused worldwide to
develop this assumption. This approach considers inputs from advisors for long-term capital market returns adjusted
assumption is based on consideration of all inputs, with a focus on long-term trends to avoid short-term market influences. for
specific aspects of our investment strategy by plan. Historical returns also are considered where appropriate. The
assumption is based on consideration of all inputs, with a focus on long-term trends to avoid short-term market influences.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 17. RETIREMENT BENEFITS NOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTE
The17.
fairRETIREMENT BENEFITS
value of our defined (Continued)
benefit pension plan assets (including dividends and interest receivables of $268 million
and $74 million for U.S. and non-U.S. plans, respectively) by asset category at December 31 was as follows (in millions):
The fair value of our defined benefit pension plan assets (including dividends and interest receivables of $268 million
2022
and $74 million for U.S. and non-U.S. plans, respectively) by asset category at December 31 was as follows (in millions):
U.S. Plans Non-U.S. Plans
2022
Assets Assets
U.S. Plans measured Non-U.S. Plans
measured
Level 1 Level 2 Level 3 at NAV (a) Total Level 1 Level 2 Level 3 at NAV (a) Total
Assets Assets
Asset Category measured measured
Level 1 Level 2 Level 3 at NAV (a) Total Level 1 Level 2 Level 3 at NAV (a) Total
Equity
Asset Category
U.S. companies $ 412 $ 2 $ — $ — $ 414 $ 1,426 $ 33 $ — $ — $ 1,459
Equity
International companies 269 6 8 — 283 989 13 — — 1,002
U.S. companies $ 412 $ 2 $ — $ — $ 414 $ 1,426 $ 33 $ — $ — $ 1,459
Total equity 681 8 8 — 697 2,415 46 — — 2,461
International companies 269 6 8 — 283 989 13 — — 1,002
Fixed Income
Total equity 681 8 8 — 697 2,415 46 — — 2,461
U.S. government and
Fixed Income
agencies 7,380 1,509 — — 8,889 36 35 — — 71
U.S. government
Non-U.S. and
government — 640 — — 640 — 12,256 231 — 12,487
agencies 7,380 1,509 — — 8,889 36 35 — — 71
Corporate bonds — 17,774 1 — 17,775 — 2,059 124 — 2,183
Non-U.S. government — 640 — — 640 — 12,256 231 — 12,487
Mortgage/other asset-
Corporate
backed bonds — 17,774
422 1
— — 17,775
422 — 2,059
265 124
10 — 2,183
275
Mortgage/other
Commingled asset-
funds — 104 — — 104 — 170 — — 170
backed — 422 — — 422 — 265 10 — 275
Derivative financial
Commingled
instruments,funds
net —
(2) 104
19 — — 104
17 —
2 170
(74) —
77 — 170
5
Derivative
Total fixedfinancial
income 7,378 20,468 1 — 27,847 38 14,711 442 — 15,191
instruments, net (2) 19 — — 17 2 (74) 77 — 5
Alternatives
Total fixed income 7,378 20,468 1 — 27,847 38 14,711 442 — 15,191
Hedge funds — — — 3,342 3,342 — — — 1,009 1,009
Alternatives
Private equity — — — 1,411 1,411 — — — 584 584
Hedge funds — — — 3,342 3,342 — — — 1,009 1,009
Real estate — — — 1,553 1,553 — — — 405 405
Private equity — — — 1,411 1,411 — — — 584 584
Total alternatives — — — 6,306 6,306 — — — 1,998 1,998
Realcash
Cash, estateequivalents, — — — 1,553 1,553 — — — 405 405
and repurchase
Total alternatives — — — 6,306 6,306 — — — 1,998 1,998
agreements (b) (1,135) — — — (1,135) (1,363) — — — (1,363)
Cash, cash equivalents,
and repurchase
Other (c) (793) — — — (793) (310) — 3,367 — 3,057
agreements (b) (1,135) — — — (1,135) (1,363) — — — (1,363)
Total assets at fair
Other (c)
value $ (793) $ 20,476
6,131 — $ —
9 $ —
6,306 (793) $
$ 32,922 (310) —
780 $ 14,757 $ 3,367
3,809 $ —
1,998 3,057
$ 21,344
Total assets at fair
__________
value assets that are measured
(a) Certain $ 6,131 at $fair20,476 $ the NAV
value using 9 $per share
6,306(or$its32,922 $ practical
equivalent) 780 expedient
$ 14,757 have
$ not
3,809been $classified
1,998in the
$ 21,344
fair
value
__________ hierarchy.
(b)
(a) Primarily short-term
Certain assets investment
that are measured funds to value
at fair provide liquidity
using to plan
the NAV perinvestment managers,
share (or its cash
equivalent) held toexpedient
practical pay benefits,
haveand
not repurchase agreements
been classified in the fair
valued at $2.6 billion in U.S. plans and $2.1 billion in non-U.S. plans.
value hierarchy.
(c) Primarily
(b) For U.S. plans, amounts
short-term relatedfunds
investment to nettopending
providesecurity
liquidity(purchases)/sales
to plan investmentand net pending
managers, cashforeign
held tocurrency purchases/(sales).
pay benefits, and repurchase For non-U.S plans,
agreements
$2.5 billion
valued of insurance
at $2.6 contracts,
billion in U.S. primarily
plans and $2.1 Ford-Werke, and amounts
billion in non-U.S. plans. related to net pending security (purchases)/sales and net pending foreign
(c) currency purchases/(sales).
For U.S. plans, amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). For non-U.S plans,
$2.5 billion of insurance contracts, primarily Ford-Werke, and amounts related to net pending security (purchases)/sales and net pending foreign
currency purchases/(sales).

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 17. RETIREMENT BENEFITS NOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTE
The17.
fairRETIREMENT BENEFITS
value of our defined (Continued)
benefit pension plan assets (including dividends and interest receivables of $239 million
and $58 million for U.S. and non-U.S. plans, respectively) by asset category at December 31 was as follows (in millions):
The fair value of our defined benefit pension plan assets (including dividends and interest receivables of $239 million
2023
and $58 million for U.S. and non-U.S. plans, respectively) by asset category at December 31 was as follows (in millions):
U.S. Plans Non-U.S. Plans
2023
Assets Assets
U.S. Plans measured Non-U.S. Plans
measured
Level 1 Level 2 Level 3 at NAV (a) Total Level 1 Level 2 Level 3 at NAV (a) Total
Assets Assets
Asset Category measured measured
Level 1 Level 2 Level 3 at NAV (a) Total Level 1 Level 2 Level 3 at NAV (a) Total
Equity
Asset Category
U.S. companies $ 855 $ 1 $ 2 $ — $ 858 $ 1,968 $ 37 $ — $ — $ 2,005
Equity
International companies 493 29 6 — 528 1,293 20 — — 1,313
U.S. companies $ 855 $ 1 $ 2 $ — $ 858 $ 1,968 $ 37 $ — $ — $ 2,005
Total equity 1,348 30 8 — 1,386 3,261 57 — — 3,318
International companies 493 29 6 — 528 1,293 20 — — 1,313
Fixed Income
Total equity 1,348 30 8 — 1,386 3,261 57 — — 3,318
U.S. government and
agencies
Fixed Income 7,236 1,493 — — 8,729 38 28 — — 66
Non-U.S. government
U.S. government and 2 482 2 — 486 — 12,843 184 — 13,027
agencies 7,236 1,493 — — 8,729 38 28 — — 66
Corporate bonds — 16,470 11 — 16,481 — 1,890 66 — 1,956
Non-U.S. government 2 482 2 — 486 — 12,843 184 — 13,027
Mortgage/other asset-
backed bonds
Corporate — 444
16,470 —
11 — 444
16,481 — 289
1,890 11
66 — 300
1,956
Commingled
Mortgage/otherfunds
asset- — 65 — — 65 23 191 — — 214
backed — 444 — — 444 — 289 11 — 300
Derivative financial
instruments,funds
Commingled net (3)
— 161
65 — — 158
65 —
23 36
191 36
— — 72
214
Total fixedfinancial
Derivative income 7,235 19,115 13 — 26,363 61 15,277 297 — 15,635
instruments, net (3) 161 — — 158 — 36 36 — 72
Alternatives
Total fixed income 7,235 19,115 13 — 26,363 61 15,277 297 — 15,635
Hedge funds — — — 3,603 3,603 — — — 906 906
Alternatives
Private equity — — — 1,093 1,093 — — — 477 477
Hedge funds — — — 3,603 3,603 — — — 906 906
Real estate — — — 1,406 1,406 — — — 381 381
Private equity — — — 1,093 1,093 — — — 477 477
Total alternatives — — — 6,102 6,102 — — — 1,764 1,764
Real estate — — — 1,406 1,406 — — — 381 381
Cash, cash equivalents,
Total
and alternatives
repurchase — — — 6,102 6,102 — — — 1,764 1,764
agreements (b) (1,779) — — — (1,779) (1,364) — — — (1,364)
Cash, cash equivalents,
Other (c)
and repurchase (649) — — — (649) (236) — 3,841 — 3,605
agreements (b) (1,779) — — — (1,779) (1,364) — — — (1,364)
Total assets at fair
value
Other (c) $ 6,155
(649) $ 19,145
— $ 21
— $ 6,102
— $ 31,423
(649) $ 1,722
(236) $ 15,334
— $ 4,138
3,841 $ 1,764
— $ 22,958
3,605
Total assets at fair
__________
value assets that are measured
(a) Certain $ 6,155 at $fair19,145 $ the21
value using NAV$per share
6,102(or$its31,423 $ practical
equivalent) 1,722 expedient
$ 15,334 have
$ not
4,138been $classified
1,764in the
$ 22,958
fair
value hierarchy.
__________
(b)
(a) Primarily short-term
Certain assets investment
that are measured funds to value
at fair provide liquidity
using to plan
the NAV perinvestment managers,
share (or its cash
equivalent) held toexpedient
practical pay benefits,
haveand
not repurchase agreements
been classified in the fair
valued at $2.7 billion in U.S. plans and $1.8 billion in non-U.S. plans.
value hierarchy.
(c) Primarily
(b) For U.S. plans, amounts
short-term relatedfunds
investment to nettopending
providesecurity
liquidity(purchases)/sales
to plan investmentand net pending
managers, cashforeign
held tocurrency purchases/(sales).
pay benefits, and repurchase For non-U.S plans,
agreements
$3.0 billion
valued of insurance
at $2.7 contracts,
billion in U.S. primarily
plans and $1.8 Ford-Werke, and amounts
billion in non-U.S. plans. related to net pending security (purchases)/sales and net pending foreign
(c) currency purchases/(sales).
For U.S. plans, amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). For non-U.S plans,
$3.0 billion of insurance contracts, primarily Ford-Werke, and amounts related to net pending security (purchases)/sales and net pending foreign
currency purchases/(sales).

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 17. RETIREMENT BENEFITS NOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTEThe17. RETIREMENT
following BENEFITS
table summarizes the(Continued)
changes in Level 3 defined benefit pension plan assets measured at fair value on
a recurring basis for the years ended December 31 (in millions):
The following table summarizes the changes in Level 3 defined benefit pension
2022 plan assets measured at fair value on
a recurring basis for the years ended December 31 (in millions):
Return on plan assets
Attributable 2022
Fair toReturn
Assetson plan Attributable
assets Fair
Value Held to Net Transfers Value
at Attributable
at Assets Purchases/ Into/ (Out of) at
Fair 1
January to Assets31
December Attributable
Sold (Settlements) Level 3 Fair 31
December
Value Held to Net Transfers Value
U.S. Plans $ at 20 $ at — $ Assets (4) $ (8)
Purchases/ $Into/ (Out of)1 $ at 9
Non-U.S. Plans (a) January 1
6,020 December 31
(1,732) Sold 26 (Settlements)(722) Level 3217 December 31
3,809
U.S. Plans $ 20 $ — $ (4) $ (8) $ 1 $ 9
Non-U.S. Plans (a) 6,020 (1,732) 262023 (722) 217 3,809
Return on plan assets
Attributable 2023
Fair to Return
Assets on plan Attributable
assets Fair
Value Held to Net Transfers Value
at Attributable
at Assets Purchases/ Into/ (Out of) at
Fair 1
January to Assets31
December Attributable
Sold (Settlements) Level 3 Fair 31
December
Value Held to Net Transfers Value
U.S. Plans $ at 9 $ at (6) $ Assets — $ Purchases/ 9 $Into/ (Out of)9 $ at 21
Non-U.S. Plans (a) January 1
3,809 December 31 44 Sold (8) (Settlements) 410 Level 3(117) December 31
4,138
U.S. Plans $ 9 $ (6) $ — $ 9 $ 9 $ 21
__________
Non-U.S. Plans (a) 3,809 44 (8) 410 (117) 4,138
(a) Includes insurance contracts, primarily the Ford-Werke plan, valued at $2.5 billion and $3.0 billion at year-end 2022 and 2023, respectively. In the
fourth quarter of 2022, we transferred a non-U.S. pension obligation and related plan assets to an insurance company. There were no gains or
__________
(a) losses recognized
Includes insuranceupon settlement.
contracts, primarily the Ford-Werke plan, valued at $2.5 billion and $3.0 billion at year-end 2022 and 2023, respectively. In the
fourth quarter of 2022, we transferred a non-U.S. pension obligation and related plan assets to an insurance company. There were no gains or
NOTE [Link]
losses LEASE uponCOMMITMENTS
settlement.

NOTE We18. leaseLEASE

land, COMMITMENTS
dealership facilities, offices, distribution centers, warehouses, and equipment under agreements with
contractual periods ranging from less than one year to 40 years. Many of our leases contain one or more options to
We lease
extend. land,dealership
In certain dealershiplease
facilities, offices, distribution
agreements, we are thecenters, warehouses,
tenant and we sublease andthe equipment under agreements
site to a dealer. In the eventwiththe
contractual periods ranging from less than one year to 40 years. Many of our leases contain
sublease is terminated, we have the option to terminate the head lease. We include options that we are reasonably one or more options to
extend.
certain toInexercise
certain dealership lease agreements,
in our evaluation we are
of the lease term theconsidering
after tenant and all
werelevant
sublease the site to
economic anda dealer.
financialInfactors.
the event the
sublease is terminated, we have the option to terminate the head lease. We include options that we are reasonably
certain to exercise
Leases that areineconomically
our evaluation of thetolease
similar term afterofconsidering
the purchase an asset areallclassified
relevant economic
as financeand financial
leases. The factors.
leased (“right-
of-use”) assets in finance lease arrangements are reported in Net property on our consolidated balance sheets.
Leasesthe
Otherwise, thatleases
are economically
are classified similar to the purchase
as operating leases and of an asset are
reported classified
in Other assetsas infinance leases. The
the non-current leased
assets (“right-
section of
of-use”) assets in finance lease arrangements are reported in Net property on our consolidated
our consolidated balance sheets. We have also entered into manufacturing contracts where Ford’s portion of the output is balance sheets.
Otherwise,
expected tothe be leases are classified
significant. As a result,as there
operating leases andleases,
are embedded reported in Other
and relatedassets in the
liabilities, thatnon-current
are reported assets section
as part of
of our
our consolidated balance sheets. We have also
financial statements, typically upon commencement of production. entered into manufacturing contracts where Ford’s portion of the output is
expected to be significant. As a result, there are embedded leases, and related liabilities, that are reported as part of our
financial
For the statements,
majority oftypically uponwe
our leases, commencement
do not separate of the
production.
non-lease components (e.g., maintenance and operating
services) from the lease components to which they relate. Instead, non-lease components are included in the
For the majority
measurement of the of our liabilities.
lease leases, weHowever,
do not separate the non-lease
we do separate leasecomponents
and non-lease (e.g., maintenance
components and operating
for contracts containing
services) from the lease components to which they relate. Instead, non-lease components
a significant service component (e.g., energy performance contracts). We calculate the initial lease liability are included in the
as the present
measurement of the lease
value of fixed payments notliabilities.
yet paid andHowever,
variablewepayments
do separate thatlease and non-lease
are based on a market components
rate or anfor contracts
index containing
(e.g., CPI),
a significant service component (e.g., energy performance contracts). We calculate the
measured at commencement. The majority of our leases are discounted using our incremental borrowing rate because initial lease liability as the present
value
the of implicit
rate fixed payments not is
in the lease yetnot
paid and variable
readily payments
determinable. that are
All other basedpayments
variable on a market are rate or an index
expensed (e.g., CPI),
as incurred.
measured at commencement. The majority of our leases are discounted using our incremental borrowing rate because
the rate implicit in the lease is not readily determinable. All other variable payments are expensed as incurred.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 18. LEASE COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18. right-of-use
Lease LEASE COMMITMENTS (Continued)
assets and liabilities at December 31 were as follows (in millions):
2022 2023
Lease right-of-use assets and liabilities at December 31 were as follows (in millions):
Operating leases
2022 2023
Other assets, non-current $ 1,447 $ 1,833
Operating leases
Other assets, non-current $ 1,447 $ 1,833
Other liabilities and deferred revenue, current $ 404 $ 481
Other liabilities and deferred revenue, non-current 1,101 1,395
Other liabilities and deferred revenue, current $ 404 $ 481
Total operating lease liabilities $ 1,505 $ 1,876
Other liabilities and deferred revenue, non-current 1,101 1,395
Total operating lease liabilities $ 1,505 $ 1,876
Finance leases
Property and equipment, gross $ 791 $ 897
Finance leases
Accumulated depreciation (109) (114)
Property and equipment, gross $ 791 $ 897
Property and equipment, net $ 682 $ 783
Accumulated depreciation (109) (114)
Property and equipment, net $ 682 $ 783
Company excluding Ford Credit debt payable within one year $ 86 $ 32
Company excluding Ford Credit long-term debt 488 606
Company excluding Ford Credit debt payable within one year $ 86 $ 32
Total finance lease liabilities $ 574 $ 638
Company excluding Ford Credit long-term debt 488 606
Total finance lease liabilities $ 574 $ 638
The amounts contractually due on our lease liabilities as of December 31, 2023 were as follows (in millions):
Operating Finance
The amounts contractually due on our lease liabilities as of December 31, 2023 were as follows (in(a)millions):Leases
Leases
2024 $ Operating558 $ Finance 67
Leases (a) Leases
2025 457 102
2024 $ 558 $ 67
2026 346 81
2025 457 102
2027 264 76
2026 346 81
2028 176 68
2027 264 76
Thereafter 335 498
2028 176 68
Total 2,136 892
Thereafter 335 498
Less: Present value discount 260 254
Total 2,136 892
Total lease liabilities $ 1,876 $ 638
Less: Present value discount 260 254
__________
(a) Total lease approximately
Excludes liabilities $449 million in future lease payments for various leases commencing in future periods.$ 1,876 $ 638
__________
(a) Excludes approximately $449 million in future lease payments for various leases commencing in future periods.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 18. LEASE COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18. LEASEcash
Supplemental COMMITMENTS (Continued)
flow information related to leases for the years ended December 31 was as follows (in millions):
2021 2022 2023
Supplemental cash flow information related to leases for the years ended December 31 was as follows (in millions):
Cash paid for amounts included in the measurement of lease liabilities
2021 2022 2023
Operating cash flows from operating leases $ 424 $ 459 $ 581
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases 14 22 32
Operating cash flows from operating leases $ 424 $ 459 $ 581
Financing cash flows from finance leases 52 83 91
Operating cash flows from finance leases 14 22 32
Right-of-use assets obtained in exchange for lease liabilities
Financing cash flows from finance leases 52 83 91
Operating leases $ 441 $ 528 $ 889
Right-of-use assets obtained in exchange for lease liabilities
Finance leases 192 95 165
Operating leases $ 441 $ 528 $ 889
Finance leases 192 95 165
The components of lease expense for the years ended December 31 were as follows (in millions):
2021 2022 2023
The components of lease expense for the years ended December 31 were as follows (in millions):
Operating lease expense $ 444 $ 463 $ 580
2021 2022 2023
Variable lease expense 49 62 109
Operating lease expense $ 444 $ 463 $ 580
Sublease income (16) (15) (18)
Variable lease expense 49 62 109
Finance lease expense
Sublease income (16) (15) (18)
Amortization of right-of-use assets 34 60 64
Finance lease expense
Interest on lease liabilities 14 22 32
Amortization of right-of-use assets 34 60 64
Total lease expense $ 525 $ 592 $ 767
Interest on lease liabilities 14 22 32
Total lease expense $ 525 $ 592 $ 767
The weighted-average remaining lease term and weighted-average discount rate at December 31 were as follows:
2021 2022 2023
The weighted-average remaining lease term and weighted-average discount rate at December 31 were as follows:
Weighted-average remaining lease term (in years)
2021 2022 2023
Operating leases 6.0 5.5 5.4
Weighted-average remaining lease term (in years)
Finance leases 12.1 12.2 11.9
Operating leases 6.0 5.5 5.4
Weighted-average discount rate
Finance leases 12.1 12.2 11.9
Operating leases 3.3 % 3.7 % 4.7 %
Weighted-average discount rate
Finance leases 3.3 3.9 5.3
Operating leases 3.3 % 3.7 % 4.7 %
Finance leases 3.3 3.9 5.3
NOTE 19. DEBT AND COMMITMENTS

NOTE Our19. DEBT

debt ANDofCOMMITMENTS
consists short-term and long-term secured and unsecured debt securities, and secured and unsecured
borrowings from banks and other lenders. Debt issuances are placed directly by us or through securities dealers or
Our debt and
underwriters consists of short-term
are held and long-term
by institutional and retailsecured andInunsecured
investors. debtCredit
addition, Ford securities, and secured
sponsors and unsecured
securitization programs
borrowings
that providefrom banks and
short-term and long-term
other lenders. Debt issuances
asset-backed arethrough
financing placed institutional
directly by us or through
investors securities
in the U.S. anddealers or
international
underwriters
capital and are held by institutional and retail investors. In addition, Ford Credit sponsors securitization programs
markets.
that provide short-term and long-term asset-backed financing through institutional investors in the U.S. and international
capital markets.
Debt is reported on our consolidated balance sheets at par value adjusted for unamortized discount or premium,
unamortized issuance costs, and adjustments related to designated fair value hedging (see Note 20). Discounts,
Debt is and
premiums, reported
costson our consolidated
directly balance
related to the issuancesheets at par
of debt arevalue adjusted
capitalized andfor unamortized
amortized over discount
the life oforthe
premium,
debt or to
unamortized issuance costs, and adjustments related to designated fair value hedging (see Note 20).
the put date and are recorded in interest expense using the effective interest method. Gains and losses on theDiscounts,
premiums, and costs
extinguishment directly
of debt related to
are recorded the issuance
in Other of debt are
income/(loss), net. capitalized and amortized over the life of the debt or to
the put date and are recorded in interest expense using the effective interest method. Gains and losses on the
extinguishment of debt are recorded in Other income/(loss), net.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 19. DEBT AND COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE The19. DEBTvalue
carrying AND of
COMMITMENTS (Continued)
Company debt excluding Ford Credit and Ford Credit debt at December 31 was as follows (in
millions):
The carrying value of Company debt excluding Ford Credit and Ford Credit debt at December 31 was as follows (in
Interest Rates
millions): Average Contractual Average Effective (a)
Company excluding Ford Credit 2022 2023 2022 Interest Rates
2023 2022 2023
Debt payable within one year Average Contractual Average Effective (a)
Company excluding Ford Credit
Short-term $ 2022 359 $ 2023 362 2022
2.8 % 2023
3.2 % 2022
2.8 % 2023
3.2 %
Debt payable
Long-term within
payable oneone
within yearyear
Short-term
Other debt (including finance leases) $ 359 $
372 362
117 2.8 % 3.2 % 2.8 % 3.2 %
Long-term payable
Unamortized within one year
(discount)/premium (1) (2)
Other
Total debt
debt (including finance
payable within oneleases)
year 372
730 117
477
Unamortized (discount)/premium
Long-term debt payable after one year (1) (2)
Total
Public debt payable
unsecured debtwithin one year
securities 730
14,935 477
14,935
Long-term debt
Convertible notespayable after one year 2,300 2,300
Public
U.K. unsecured
Export Finance debt securities
Program 14,935
1,654 14,935
1,749
Convertible
Other notes
debt (including finance leases) 2,300
682 2,300
811
U.K. Export Finance
Unamortized Program
(discount)/premium 1,654
(180) 1,749
(155)
Other debt (including
Unamortized issuancefinance
costs leases) 682
(191) 811
(173)
Unamortized (discount)/premium
Total long-term debt payable after one year (180)
19,200 (155)
19,467 4.9 % (b) 5.1 % (b) 5.1 % (b) 5.3 % (b)
Unamortized issuance
Total Company costs Ford Credit
excluding $ (191) $
19,930 (173)
19,944
Total long-term debt payable after one year 19,200 19,467 4.9 % (b) 5.1 % (b) 5.1 % (b) 5.3 % (b)
Fair value of Company debt excluding Ford Credit (c) $ 18,557 $ 19,775
Total Company excluding Ford Credit $ 19,930 $ 19,944
Ford Credit
Fair value of Company debt excluding Ford Credit (c) $ 18,557 $ 19,775
Debt payable within one year
Ford Credit
Short-term $ 19,624 $ 18,658 3.8 % 5.3 % 3.8 % 5.3 %
Debt payable
Long-term within
payable oneone
within yearyear
Short-term
Unsecured debt $ 19,624
7,980 $ 18,658
11,755 3.8 % 5.3 % 3.8 % 5.3 %
Long-term payable
Asset-backed debt within one year 21,839 18,851
Unsecured debt
Unamortized (discount)/premium 7,980— 11,755(1)
Asset-backed debt
Unamortized issuance costs 21,839
(13) 18,851
(13)
Unamortized
Fair (discount)/premium
value adjustments (d) —4 (1)
(58)
Unamortized issuance
Total debt payable costs
within one year (13)
49,434 (13)
49,192
Fair valuedebt
Long-term adjustments
payable(d) after one year 4 (58)
Total debt
Unsecured payable within one year
debt 49,434
39,620 49,192
45,435
Long-term debt
Asset-backed debtpayable after one year 31,840 36,074
Unsecured debt
Unamortized (discount)/premium 39,620
23 45,43510
Asset-backedissuance
Unamortized debt costs 31,840
(184) 36,074
(224)
Unamortized
Fair (discount)/premium
value adjustments (d) 23
(1,694) 10
(1,200)
Unamortized issuance costs
Total long-term debt payable after one year (184)
69,605 (224)
80,095 3.6 % (b) 4.7 % (b) 3.6 % (b) 4.7 % (b)
FairTotal
value adjustments
Ford Credit (d) $ (1,694) $
119,039 (1,200)
129,287
Total long-term debt payable after one year 69,605 80,095 3.6 % (b) 4.7 % (b) 3.6 % (b) 4.7 % (b)
Fair value of Ford Credit debt (c) $ 117,214 $ 130,533
Total Ford Credit $ 119,039 $ 129,287
__________
Fair Average
(a) value of Ford Credit
effective ratesdebt (c) the average contractual
reflect $ interest
117,214 $ amortization
rate plus 130,533 of discounts, premiums, and issuance costs.
(b) Includes
__________ interest on long-term debt payable within one year and after one year.
(c)
(a) At December
Average 31, 2022
effective rates and 2023,
reflect the the fair value
average of debt interest
contractual includesrate
$359 million
plus and $362ofmillion
amortization of Company
discounts, excluding
premiums, Ford Credit
and issuance [Link]-term debt
(b) and $16.9interest
Includes billion and $15.5 billion
on long-term debtofpayable
Ford Credit
withinshort-term
one year debt, respectively,
and after one [Link] at cost, which approximates fair value. All other debt is
(c) categorized
At Decemberwithin Leveland
31, 2022 2 of2023,
the fair
thevalue hierarchy.
fair value of debt includes $359 million and $362 million of Company excluding Ford Credit short-term debt
(d) These adjustments
and $16.9 billion and are related
$15.5 to hedging
billion activityshort-term
of Ford Credit and include discontinued
debt, hedging
respectively, carriedrelationship adjustments
at cost, which of $31fair
approximates million and
value. All$(681) million
other debt is at
December
categorized31, 2022
within and 2
Level 2023,
of therespectively. The carrying value of hedged debt was $33.3 billion and $38.7 billion at December 31, 2022 and 2023,
fair value hierarchy.
(d) respectively.
These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $31 million and $(681) million at
December 31, 2022 and 2023, respectively. The carrying value of hedged debt was $33.3 billion and $38.7 billion at December 31, 2022 and 2023,
respectively.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 19. DEBT AND COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE [Link]
Cash DEBT
for AND COMMITMENTS
interest was $1.9 billion,(Continued)
$1.2 billion, and $1.3 billion in 2021, 2022, and 2023, respectively, on
Company excluding Ford Credit debt. Cash paid for interest was $2.8 billion, $3.2 billion, and $5.8 billion in 2021, 2022,
and Cash
2023,paid for interest
respectively, onwas
Ford$1.9 billion,
Credit debt.$1.2 billion, and $1.3 billion in 2021, 2022, and 2023, respectively, on
Company excluding Ford Credit debt. Cash paid for interest was $2.8 billion, $3.2 billion, and $5.8 billion in 2021, 2022,
and 2023, respectively, on Ford Credit debt.
Maturities

Maturities
Debt maturities at December 31, 2023 were as follows (in millions):
Total Debt
Debt maturities at December 31, 2023 were
2024 as follows
2025 (in millions):
2026 2027 2028 Thereafter Adjustments Maturities
Company excluding Ford Credit Total Debt
2024 2025 2026 2027 2028 Thereafter Adjustments Maturities
Public unsecured debt securities $ — $ 176 $ 3,972 $ — $ 550 $ 12,537 $ (238) $ 16,997
Company excluding Ford Credit
Short-term and other debt 479 896 78 1,015 54 517 (92) 2,947
Public unsecured debt securities $ — $ 176 $ 3,972 $ — $ 550 $ 12,537 $ (238) $ 16,997
Total $ 479 $ 1,072 $ 4,050 $ 1,015 $ 604 $ 13,054 $ (330) $ 19,944
Short-term and other debt 479 896 78 1,015 54 517 (92) 2,947
Total $ 479 $ 1,072 $ 4,050 $ 1,015 $ 604 $ 13,054 $ (330) $ 19,944
Ford Credit
Unsecured debt $ 27,255 $ 13,335 $ 10,505 $ 7,457 $ 5,035 $ 9,103 $ (1,430) $ 71,260
Ford Credit
Asset-backed debt 22,009 21,562 8,248 2,440 3,824 — (56) 58,027
Unsecured debt $ 27,255 $ 13,335 $ 10,505 $ 7,457 $ 5,035 $ 9,103 $ (1,430) $ 71,260
Total $ 49,264 $ 34,897 $ 18,753 $ 9,897 $ 8,859 $ 9,103 $ (1,486) $ 129,287
Asset-backed debt 22,009 21,562 8,248 2,440 3,824 — (56) 58,027
Total $ 49,264 $ 34,897 $ 18,753 $ 9,897 $ 8,859 $ 9,103 $ (1,486) $ 129,287

157

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 19. DEBT AND COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 19. excluding
Company DEBT ANDFord
COMMITMENTS (Continued)
Credit Segment

Company
Public excluding
Unsecured Ford
Debt Credit Segment
Securities

Public
OurUnsecured Debt Securities
public unsecured debt securities outstanding at December 31 were as follows (in millions):
Aggregate Principal Amount
Our public unsecured debt securities outstanding at December 31 were as follows (in millions): Outstanding
Title of Security Aggregate
2022 Principal Amount
2023
Outstanding
7 1/8% Debentures due November 15, 2025 $ 176 $ 176
Title of Security 2022 2023
0.00% Notes due March 15, 2026 2,300 2,300
7 1/8% Debentures due November 15, 2025 $ 176 $ 176
7 1/2% Debentures due August 1, 2026 172 172
0.00% Notes due March 15, 2026 2,300 2,300
4.346% Notes due December 8, 2026 1,500 1,500
7 1/2% Debentures due August 1, 2026 172 172
6 5/8% Debentures due February 15, 2028 104 104
4.346% Notes due December 8, 2026 1,500 1,500
6 5/8% Debentures due October 1, 2028 (a) 446 446
6 5/8% Debentures due February 15, 2028 104 104
6 3/8% Debentures due February 1, 2029 (a) 202 202
6 5/8% Debentures due October 1, 2028 (a) 446 446
9.30% Notes due March 1, 2030 294 294
6 3/8% Debentures due February 1, 2029 (a) 202 202
9.625% Notes due April 22, 2030 432 432
9.30% Notes due March 1, 2030 294 294
7.45% GLOBLS due July 16, 2031 (a) 1,070 1,070
9.625% Notes due April 22, 2030 432 432
8.900% Debentures due January 15, 2032 108 108
7.45% GLOBLS due July 16, 2031 (a) 1,070 1,070
3.25% Notes due February 12, 2032 2,500 2,500
8.900% Debentures due January 15, 2032 108 108
9.95% Debentures due February 15, 2032 4 4
3.25% Notes due February 12, 2032 2,500 2,500
6.10% Notes due August 19, 2032 1,750 1,750
9.95% Debentures due February 15, 2032 4 4
4.75% Notes due January 15, 2043 2,000 2,000
6.10% Notes due August 19, 2032 1,750 1,750
7.75% Debentures due June 15, 2043 73 73
4.75% Notes due January 15, 2043 2,000 2,000
7.40% Debentures due November 1, 2046 398 398
7.75% Debentures due June 15, 2043 73 73
5.291% Notes due December 8, 2046 1,300 1,300
7.40% Debentures due November 1, 2046 398 398
9.980% Debentures due February 15, 2047 114 114
5.291% Notes due December 8, 2046 1,300 1,300
6.20% Notes due June 1, 2059 750 750
9.980% Debentures due February 15, 2047 114 114
6.00% Notes due December 1, 2059 800 800
6.20% Notes due June 1, 2059 750 750
6.50% Notes due August 15, 2062 600 600
6.00% Notes due December 1, 2059 800 800
7.70% Debentures due May 15, 2097 142 142
6.50% Notes due August 15, 2062 600 600
Total public unsecured debt securities $ 17,235 $ 17,235
7.70% Debentures due May 15, 2097 142 142
__________
(a)Total public
Listed on unsecured debt securities
the Luxembourg Exchange and on the Singapore Exchange. $ 17,235 $ 17,235
__________
(a) Listed on the Luxembourg Exchange and on the Singapore Exchange.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 19. DEBT AND COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTEExtinguishment
Debt 19. DEBT AND COMMITMENTS (Continued)

DebtPursuant
Extinguishment
to our November 2021 cash tender offer and December 2021 redemption, we repurchased or redeemed
$7.6 billion principal amount of our public unsecured debt securities for an aggregate cost of $9.3 billion (including
Pursuant
transaction to our
costs andNovember 2021
accrued and cash tender
unpaid interestoffer and December
payments 2021 redemption,
for such tendered we As
securities). repurchased
a result of or redeemed
these
$7.6 billion principal amount of our public unsecured debt securities for an aggregate cost of $9.3 billion (including
transactions, we recorded a pre-tax loss of $1.7 billion (net of unamortized discounts, premiums, and fees) in Other
transaction costs
income/(loss), netand accrued and unpaid interest payments for such tendered securities). As a result of these
in 2021.
transactions, we recorded a pre-tax loss of $1.7 billion (net of unamortized discounts, premiums, and fees) in Other
income/(loss),
In September in 2021.
net 2022, we redeemed approximately $1.1 billion principal amount of our public unsecured debt securities
for an aggregate cost of approximately $1.2 billion (including redemption costs and accrued and unpaid interest payments
In September
for such redeemed2022, we redeemed
securities). approximately
As a result $1.1 billion
of this transaction, we principal
recordedamount of loss
a pre-tax our public
of $135unsecured debt
million (net of securities
for an aggregate cost of approximately $1.2 billion (including redemption
unamortized discounts, premiums, and fees) in Other income/(loss), net in [Link] and accrued and unpaid interest payments
for such redeemed securities). As a result of this transaction, we recorded a pre-tax loss of $135 million (net of
unamortized
Environmental,discounts,
Social,premiums,
Governanceand(“ESG”)
fees) in Other
Bondsincome/(loss), net in 2022.

Environmental, Social,
In August 2022, Governance
we issued (“ESG”)
approximately Bonds
$1.8 billion aggregate principal amount of green bonds under our
sustainable financing framework. The interest rate of this green bond was 6.1%. We allocated the net proceeds from this
In August
issuance to the2022, we development,
design, issued approximately $1.8 billion aggregate
and manufacturing principal
of our electric amount
vehicle of green bonds under our
portfolio.
sustainable financing framework. The interest rate of this green bond was 6.1%. We allocated the net proceeds from this
issuance to the
Convertible design, development, and manufacturing of our electric vehicle portfolio.
Debt

Convertible
In March Debt
2021, we issued $2.3 billion aggregate principal amount of unsecured 0% Convertible Senior Notes due
2026, including $300 million aggregate principal amount of such notes pursuant to the exercise in full of the overallotment
In March
option granted2021,
to thewe issued
initial $2.3 billionThe
purchasers. aggregate principal
notes will amount
not bear regularofinterest
unsecured
and 0% Convertible
the principal Senior
amount of Notes duewill
the notes
2026,
not including
accrete. The$300
totalmillion aggregate
net proceeds fromprincipal amount
the offering, of deducting
after such notesdebt
pursuant to the
issuance exercise
costs, wereinapproximately
full of the overallotment
option
$2.267granted
billion. to the initial purchasers. The notes will not bear regular interest and the principal amount of the notes will
not accrete. The total net proceeds from the offering, after deducting debt issuance costs, were approximately
$2.267
Each billion.
$1,000 principal amount of the notes will be convertible into 65.5824 shares of our Common Stock, which is
equivalent to a conversion price of approximately $15.25 per share, subject to adjustment upon the occurrence of
Each events.
specified $1,000 principal
The notes amount of the notes
are convertible, at will
the be convertible
option into 65.5824on
of the noteholders, shares of December
or after our Common15,Stock,
2025. which is
Prior to
equivalent to a conversion price of approximately $15.25 per share, subject
December 15, 2025, the notes are convertible only under the following circumstances:to adjustment upon the occurrence of
specified events. The notes are convertible, at the option of the noteholders, on or after December 15, 2025. Prior to
December 15, 2025,
• During the notes
any fiscal arecommencing
quarter convertible only
afterunder the quarter
the fiscal followingending
circumstances:
on September 30, 2021 (and only during
such fiscal quarter), if the last reported sale price of our Common Stock for at least 20 trading days (whether or
• During
not any fiscal during
consecutive) quarteracommencing after the fiscal
period of 30 consecutive quarter
trading ending
days on on
ending September 30, 2021
the last trading day(and only
of the during
immediately
such fiscal quarter), if the last reported sale price of our Common Stock for at least 20
preceding calendar quarter is greater than or equal to 130% of the conversion price of the notes on each trading days (whether or
not consecutive) during
applicable trading day; a period of 30 consecutive trading days ending on the last trading day of the immediately
• preceding
During the calendar quarter
five business dayisperiod
greater thanany
after or five
equal to 130% oftrading
consecutive the conversion
day period price of the the
in which notes on each
trading price per
applicable trading day;
$1,000 principal amount of the notes for each day of that five consecutive trading day period was less than 98% of
• the
During the five
product business
of the day period
last reported sale after
priceany fiveCommon
of our consecutiveStocktrading dayconversion
and the period in which
rate ofthe
thetrading price
notes on per
such
$1,000 principal
trading day; amount of the notes for each day of that five consecutive trading day period was less than 98% of
the product of the last reported sale price
• If we call any or all of the notes for redemption; orof our Common Stock and the conversion rate of the notes on such
• trading
Upon the day;
occurrence of specific corporate events such as a change in control or certain beneficial distributions to
• If we call any or all of the
common stockholders (asnotes for redemption;
set forth in the indentureor governing the notes).
• Upon the occurrence of specific corporate events such as a change in control or certain beneficial distributions to
common
Upon stockholders
conversion, (ascash
we will pay set forth
up tointhe
theaggregate
indenture principal
governingamount
the notes).
of the notes to be converted and cash,
shares of our Common Stock, or a combination of cash and shares of our Common Stock, at our election for the
Upon conversion,
remainder we will
of our obligation in pay cashifup
excess, to of
any, thethe
aggregate principal
aggregate amount
principal of of
amount thethe
notes to being
notes be converted and cash,
converted.
shares of our Common Stock, or a combination of cash and shares of our Common Stock, at our election for the
remainder
We may of not
our redeem
obligation
theinnotes
excess, if any,
prior of the20,
to March aggregate
2024. Onprincipal
or afteramount of the
March 20, notes
2024, webeing converted.
may redeem all or any portion
of the notes for cash equal to 100% of the principal amount of the notes being redeemed if the last reported sale price of
We may not
our Common redeem
Stock the notes
has been prior
at least to March
130% of the20, 2024. On
conversion or after
price thenMarch 20,for
in effect 2024, we may
at least redeem
20 trading all or
days any portion
(whether or
of the
not notes for cash
consecutive) equal
during anyto30100% of the principal
consecutive trading amount of the notes being redeemed if the last reported sale price of
day period.
our Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or
not consecutive) during any 30 consecutive trading day period.

159

159

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 19. DEBT AND COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE [Link]
If we DEBT AND COMMITMENTS
a fundamental change (Continued)
(e.g., change of control), subject to certain conditions, holders of the notes may
require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal
If weofundergo
amount a fundamental
the notes. In addition, change (e.g.,
if specific changeevents
corporate of control),
occursubject
prior to to
thecertain conditions,
maturity date or ifholders of athe
we issue notesofmay
notice
require us towe
redemption, repurchase for cash
will increase all or any portion
the conversion rate byof their notesamounts
pre-defined at a repurchase price
for holders equal
who electtoto
100% of the
convert principal
their notes in
amount of the
connection notes.
with such aIncorporate
addition, ifevent.
specific
Thecorporate events
conditions occur
allowing prior toofthe
holders thematurity
notes todate or if were
convert we issue a notice
not met of or
in 2022
redemption,
2023. we will increase the conversion rate by pre-defined amounts for holders who elect to convert their notes in
connection with such a corporate event. The conditions allowing holders of the notes to convert were not met in 2022 or
2023.
The notes were issued at par and fees associated with the issuance of these notes are amortized to Interest expense
on Company debt excluding Ford Credit over the contractual term of the notes. Amortization of issuance costs was
The notes
$5 million, were issued
$7 million, and $7atmillion
par and in fees
2021,associated
2022, andwith therespectively.
2023, issuance of these notes are
The effective amortized
interest to the
rate of Interest
notesexpense
is 0.3%.
on Company debt excluding Ford Credit over the contractual term of the notes. Amortization of issuance costs was
$5 million, $7 estimated
The total million, and
fair$7value
million
of in
the2021,
notes2022,
as of and 2023, respectively.
December 31, 2022 andThe effective31,
December interest
2023 rate
was of the notes is 0.3%.
approximately
$2.2 billion and $2.3 billion, respectively. The fair value was determined using commonly employed valuation
The total estimated
methodologies applying fair value of market
observable the notes as ofand
inputs December 31, 2022
is classified withinand December
Level 31, value
2 of the fair 2023 was approximately
hierarchy.
$2.2 billion and $2.3 billion, respectively. The fair value was determined using commonly employed valuation
methodologies applying
The notes did not haveobservable
an impactmarket
on ourinputs and2022
full year is classified
or 2023within
dilutedLevel
EPS.2 of the fair value hierarchy.

[Link] notes
Export did not Program
Finance have an impact on our full year 2022 or 2023 diluted EPS.

[Link]
2020 andFinance
2022,Program
Ford Motor Company Limited (“Ford of Britain”), our operating subsidiary in the United Kingdom,
entered into, and drew in full, £625 million and £750 million term loan credit facilities, respectively, with a syndicate of
banksIn 2020 and 2022,
to support Ford
Ford of Motorgeneral
Britain’s Company Limited
export (“Ford Accordingly,
activities. of Britain”), our operating
U.K. subsidiary
Export Finance in the United
(“UKEF”) Kingdom,
provided
entered into, and drew in full, £625 million and £750 million term loan credit facilities, respectively, with
£500 million and £600 million guarantees of the credit facilities, respectively, under its Export Development Guarantee a syndicate of
banks to support Ford of Britain’s general export activities. Accordingly, U.K. Export Finance (“UKEF”)
scheme, which supports high value commercial lending to U.K. exporters. We have also guaranteed Ford of Britain’s provided
£500 millionunder
obligations and £600 million
the credit guarantees
facilities to theoflenders.
the credit
Asfacilities, respectively,
of December 31, 2023, under its Export
the full £1,375Development
million under Guarantee
the two credit
scheme, which supports high value commercial lending to U.K. exporters. We have
facilities remained outstanding. These five-year, non-amortizing loans mature on June 30, 2025 and Junealso guaranteed Ford 30,
of Britain’s
2027.
obligations under the credit facilities to the lenders. As of December 31, 2023, the full £1,375 million under the two credit
facilities remained
Company Excludingoutstanding.
Ford Credit These five-year, non-amortizing loans mature on June 30, 2025 and June 30, 2027.
Facilities

Company Excluding
Total Company Ford Credit
committed Facilities
credit lines, excluding Ford Credit, at December 31, 2023 were $19.4 billion, consisting of
$13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $1.8 billion of our 364-
day Total Company
revolving credit committed
facility, andcredit lines, excluding
$2.2 billion Fordfacilities.
of local credit Credit, atAtDecember
December31, 31,2023
2023,werethe $19.4 billion,
utilized portion consisting
of the of
$13.5 billion
corporate of our
credit corporate
facility was $18 credit facility,
million, $2.0 billionamounts
representing of our supplemental revolving
utilized for letters credit In
of credit. facility, $1.8$1.8
addition, billion of our
billion of 364-
day revolving
committed credit facility,
Company credit and
lines,$2.2 billion of
excluding local
Ford creditwas
Credit, facilities.
utilizedAtunder
December 31, 2023,
local credit the utilized
facilities portion ofasthe
for our affiliates of
corporate credit
December facility was $18 million, representing amounts utilized for letters of credit. In addition, $1.8 billion of
31, 2023.
committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of
December
Lenders 31, 2023.
under our corporate credit facility have $3.4 billion of commitments maturing on April 26, 2026 and
$10.1 billion of commitments maturing on April 26, 2028. Lenders under our supplemental revolving credit facility have
$0.1Lenders
billion ofunder our corporate
commitments credit
maturing onfacility have $3.4
September billionand
29, 2024 of commitments
$1.9 billion of maturing on April
commitments 26, 2026
maturing and 26, 2026.
on April
$10.1
Lenders under our 364-day revolving credit facility have $1.8 billion of commitments maturing on April 24, 2024. have
billion of commitments maturing on April 26, 2028. Lenders under our supplemental revolving credit facility
$0.1 billion of commitments maturing on September 29, 2024 and $1.9 billion of commitments maturing on April 26, 2026.
Lenders under our
On August 364-day
17, 2023, werevolving credit
entered into facility
a new have $1.8
364-day billioncredit
revolving of commitments
facility, with maturing
$4 billionon
of April 24, [Link]
commitments
on August 15, 2024. At the time we entered into this credit facility, it provided additional working capital flexibility to
On August
manage through17, 2023, we entered
uncertainties into a new
in the present 364-day revolving
environment, includingcredit facility,labor
a potential with $4 billion of With
disruption. commitments maturing
the ratification of the
on August 15, 2024. At the time we entered into this credit facility, it
new UAW contract, this credit facility was terminated as of November 24, [Link] additional working capital flexibility to
manage through uncertainties in the present environment, including a potential labor disruption. With the ratification of the
new UAW contract, this credit facility was terminated as of November 24, 2023.

160

160

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 19. DEBT AND COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTEThe19. DEBT AND
corporate, COMMITMENTS
supplemental, (Continued)
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
Thetocorporate,
related supplemental,
global manufacturing and 364-day
facility greenhousecredit
gasagreements
emissions,include certain
renewable sustainability-linked
electricity consumption, targets,
and Fordpursuant
Europe to
which the applicable
CO2 tailpipe margin
emissions. Fordand facility feesthe
outperformed may be adjusted
2022 if Ford
targets for achieves,
all three or fails to achieve, the
of the sustainability-linked specified
metrics, targets
which
related to impacted
favorably global manufacturing facilityingreenhouse
pricing beginning gas emissions,
the third quarter of 2023. renewable electricity consumption, and Ford Europe
CO2 tailpipe emissions. Ford outperformed the 2022 targets for all three of the sustainability-linked metrics, which
favorably impactedcredit
The corporate pricing beginning
facility in the third
is unsecured andquarter
free of of 2023. adverse change conditions to borrowing, restrictive
material
financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and minimum net worth
The corporate
requirements), andcredit
creditfacility
rating is unsecured
triggers and free
that could limitofour
material
ability adverse
to obtainchange
fundingconditions to borrowing,
or trigger early repayment. restrictive
The
financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and
corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4 billion in aggregate minimum net worth of
requirements),
domestic cash, and cashcredit rating triggers
equivalents, that could
and loaned limit our ability
and marketable to obtain
securities funding
and/or or trigger
availability earlythe
under repayment. The
corporate credit
corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4
facility, supplemental revolving credit facility, and 364-day revolving credit facility. The terms and conditions of the billion in aggregate of
domestic cash, cash equivalents, and loaned and marketable securities and/or availability under the
supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility. Ford Credit has been corporate credit
facility,
designatedsupplemental revolving
as a subsidiary credit under
borrower facility,the
and 364-day credit
corporate revolving credit
facility andfacility. The terms
the 364-day and conditions
revolving of the
credit facility.
supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility. Ford Credit has been
designated
Each ofas thea corporate
subsidiarycredit
borrower under
facility, the corporate
supplemental credit facility
revolving and theand
credit facility, 364-day
364-dayrevolving
revolving credit facility.
credit facility include a
covenant that requires us to provide guarantees from certain of our subsidiaries in the event that our senior, unsecured,
Each of
long-term thedoes
debt corporate credit facility,
not maintain at least supplemental
two investmentrevolving
grade credit
ratingsfacility, and 364-day
from Fitch, Moody’s, revolving
and S&P. credit
On facility include a
covenant that requires us to provide guarantees from certain of our subsidiaries in the event that
October 30, 2023, following the upgrade by S&P of our senior, unsecured, long-term debt credit rating to BBB-, our senior, unsecured,
the
long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P. On
unsecured guarantees provided by the following subsidiaries to the lenders under the credit facilities were released: Ford
October
Component30, Sales,
2023, following
LLC; Ford the upgrade Holdings
European by S&P ofInc.;
ourFord
senior, unsecured,
Global long-term
Technologies, LLC;debt credit
Ford rating LLC
Holdings to BBB-, the
(the parent
unsecured guarantees provided by the following subsidiaries to the lenders under the credit facilities
company of Ford Credit); Ford International Capital LLC; Ford Mexico Holdings LLC; Ford Motor Service Company; Ford were released: Ford
Component Sales, LLC; Ford European Holdings Inc.; Ford Global
Next LLC; Ford Trading Company, LLC; and Ford Van Dyke Investment Fund, [Link], LLC; Ford Holdings LLC (the parent
company of Ford Credit); Ford International Capital LLC; Ford Mexico Holdings LLC; Ford Motor Service Company; Ford
Next
Ford LLC; Ford
Credit Trading Company, LLC; and Ford Van Dyke Investment Fund, Inc.
Segment

Ford
Debt Credit Segment
Extinguishment

DebtPursuant
Extinguishment
to Ford Credit’s June 2022 cash tender offer, Ford Credit repurchased approximately $3 billion principal
amount of its public unsecured debt securities for an aggregate cost of approximately $3 billion (including transaction
Pursuant
costs to Ford
and accrued Credit’s
and unpaidJune 2022
interest cash tender
payments offer,tendered
for such Ford Credit repurchased
securities). As a approximately
result of these$3 billion principal
transactions, Ford
amountrecorded
Credit of its public unsecured
a pre-tax debt
gain of $17securities forof
million (net anunamortized
aggregate cost of approximately
discounts, premiums,$3 billion
fees, and(including
fair valuetransaction
adjustments) in
costs and
Other accrued and
income/(loss), netunpaid interest payments for such tendered securities). As a result of these transactions, Ford
in 2022.
Credit recorded a pre-tax gain of $17 million (net of unamortized discounts, premiums, fees, and fair value adjustments) in
Other Debt net in 2022.
income/(loss),
Asset-Backed

Asset-Backed
At December Debt
31, 2023, the carrying value of our asset-backed debt was $58.0 billion. This secured debt is issued by
Ford Credit and includes asset-backed securities used to fund operations and maintain liquidity. Assets securing the
At December
related debt issued 31,
as2023, the
part of allcarrying value of our
our securitization asset-backed
transactions are debt was in
included $58.0 billion. This secured
our consolidated debtare
results and is based
issued by
Ford
upon the legal transfer of the underlying assets in order to reflect legal ownership and the beneficial ownership of the
Credit and includes asset-backed securities used to fund operations and maintain liquidity. Assets securing the debt
related
holder. debt issued as part
The third-party of all our
investors securitization
in the transactions
securitization transactionsarehave
included
legalin our consolidated
recourse only to theresults
assetsand are based
securing the debt
upon
and dothe legal
not havetransfer of the underlying
such recourse assets
to us, except forinthe
order to reflect
customary legal ownership
representation andand the beneficial
warranty provisionsownership
or whenof wethe debt
are
holder. The third-party investors in the securitization transactions have legal recourse only to the assets
counterparty to certain derivative transactions of the special purpose entities (“SPEs”). In addition, the cash flows securing the debt
and do not have such recourse to us, except for the customary representation and warranty provisions or when
generated by the assets are restricted only to pay such liabilities; Ford Credit retains the right to residual cash flows. See we are
counterparty to certaininformation.
Note 24 for additional derivative transactions of the special purpose entities (“SPEs”). In addition, the cash flows
generated by the assets are restricted only to pay such liabilities; Ford Credit retains the right to residual cash flows. See
NoteAlthough
24 for additional information.
not contractually required, we regularly support our wholesale securitization programs by repurchasing
receivables of a dealer from a SPE when the dealer’s performance is at risk, which transfers the corresponding risk of loss
fromAlthough
the SPE not contractually
to us. In order torequired,
continuewe regularly
to fund support our
the wholesale wholesale we
receivables, securitization programs additional
also may contribute by repurchasing
cash or
receivables of a dealer from a SPE when the dealer’s performance is at risk, which transfers the corresponding
wholesale receivables if the collateral falls below required levels. The balance of cash related to these contributionsrisk ofwas
loss
from the SPE to us. In order to continue to fund the wholesale receivables, we also may contribute additional
$0 at both December 31, 2022 and 2023 and ranged from $0 to $2,850 million during 2022 and from $0 to $41 million cash or
wholesale receivables if the collateral falls below required levels. The balance of cash related to these contributions was
during 2023.
$0 at both December 31, 2022 and 2023 and ranged from $0 to $2,850 million during 2022 and from $0 to $41 million
during 2023.

161

161

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 19. DEBT AND COMMITMENTS (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 19. that
SPEs DEBTareAND COMMITMENTS
exposed to interest rate(Continued)
or currency risk may reduce their risks by entering into derivative transactions.
In certain instances, we have entered into derivative transactions with the counterparty to protect the counterparty from
risksSPEs that are
absorbed exposed
through to interest
derivative rate or currency
transactions with the risk
[Link]
reduce their risks by enteringrelated
income/(expense) into derivative transactions.
to the derivative
In certain instances,
transactions we have
that support Fordentered
Credit’sinto derivative transactions
securitization programs werewith$41
themillion,
counterparty to protect
$466 million, andthe
$39counterparty from
million for the
risks absorbed through derivative transactions with the SPEs. Derivative income/(expense) related to
years ended December 31, 2021, 2022, and 2023, respectively. See Note 20 for additional information regarding thethe derivative
transactions
accounting forthat support Ford Credit’s securitization programs were $41 million, $466 million, and $39 million for the
derivatives.
years ended December 31, 2021, 2022, and 2023, respectively. See Note 20 for additional information regarding the
accounting
Interestfor derivatives.
expense on securitization debt was $0.9 billion, $1.3 billion, and $2.5 billion in 2021, 2022, and 2023,
respectively.
Interest expense on securitization debt was $0.9 billion, $1.3 billion, and $2.5 billion in 2021, 2022, and 2023,
respectively.
The assets and liabilities related to our asset-backed debt arrangements included in our consolidated financial
statements at December 31 were as follows (in billions):
The assets and liabilities related to our asset-backed debt arrangements included in our consolidated financial
2022 2023
statements at December 31 were as follows (in billions):
Assets
2022 2023
Cash and cash equivalents $ 2.8 $ 2.7
Assets
Finance receivables, net 61.6 66.8
Cash and cash equivalents $ 2.8 $ 2.7
Net investment in operating leases 12.5 11.2
Finance receivables, net 61.6 66.8
Net investment in operating leases 12.5 11.2
Liabilities
Debt (a) $ 56.4 $ 58.0
Liabilities
__________
DebtDebt
(a) (a) is net of unamortized discount and issuance costs. $ 56.4 $ 58.0
__________
(a) Debt is netCredit
Committed of unamortized discount and issuance costs.
Facilities

Committed Credit31,
At December Facilities
2023, Ford Credit’s committed capacity totaled $45.3 billion, compared with $39.7 billion at
December 31, 2022. Ford Credit’s committed capacity is primarily comprised of committed asset-backed security facilities
fromAtbank-sponsored
December 31, 2023, Ford Credit’s
commercial committed
paper conduits andcapacity totaled institutions
other financial $45.3 billion, compared
and with
unsecured $39.7
credit billion at
facilities with
December 31, 2022.
financial institutions. Ford Credit’s committed capacity is primarily comprised of committed asset-backed security facilities
from bank-sponsored commercial paper conduits and other financial institutions and unsecured credit facilities with
financial institutions.

162

162

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS
NOTES TO THE AND HEDGING
FINANCIAL ACTIVITIES
STATEMENTS
NOTE 20. normal
In the DERIVATIVE
course ofFINANCIAL INSTRUMENTS
business, our operations areAND HEDGING
exposed ACTIVITIES
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
In effective
highly the normal course of
derivative business, our operations are exposed to global market risks, including the effect of changes in
contracts:
foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into
highly
• effective
Foreignderivative contracts: contracts, including forwards, that are used to manage foreign exchange exposure;
currency exchange
• Commodity contracts, including forwards, that are used to manage commodity price risk;
•• Foreign currency
Interest rate exchange
contracts, contracts,
including including
swaps, that areforwards, that arethe
used to manage used to manage
effects foreign
of interest rateexchange exposure;
fluctuations; and
•• Commodity contracts, including forwards, that are used to manage commodity price risk;
Cross-currency interest rate swap contracts that are used to manage foreign currency and interest rate exposures
• Interest rate contracts, including
on foreign-denominated debt. swaps, that are used to manage the effects of interest rate fluctuations; and
• Cross-currency interest rate swap contracts that are used to manage foreign currency and interest rate exposures
Our on foreign-denominated
derivatives debt. customized derivative transactions and are not exchange-traded. We review our
are over-the-counter
hedging program, derivative positions, and overall risk management strategy on a regular basis.
Our derivatives are over-the-counter customized derivative transactions and are not exchange-traded. We review our
hedging program,
Derivative derivative
Financial positions,
Instruments andand overall
Hedge risk management
Accounting. strategy
Derivative onare
assets a regular basis.
reported in Other assets and
derivative liabilities are reported in Payables and Other liabilities and deferred revenue.
Derivative Financial Instruments and Hedge Accounting. Derivative assets are reported in Other assets and
derivative
We haveliabilities
elected are
toreported in Payables
apply hedge andto
accounting Other liabilities
certain and deferred
derivatives. revenue.
Derivatives that are designated in hedging
relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the
Weperiod.
hedge have elected
Some to apply hedge
derivatives accounting
do not tohedge
qualify for certainaccounting;
[Link]
others, wethat are
elect designated
not in hedging
to apply hedge accounting.
relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the
hedge
Cashperiod.
Flow Some derivatives
Hedges. We havedodesignated
not qualifycertain
for hedge accounting;
forward contractsforas
others, we elect
cash flow not of
hedges to forecasted
apply hedge accounting.
transactions
with exposure to foreign currency exchange and commodity price risks.
Cash Flow Hedges. We have designated certain forward contracts as cash flow hedges of forecasted transactions
withChanges
exposureintothe
foreign currency
fair value exchange
of cash and commodity
flow hedges price
are deferred risks.
in Accumulated other comprehensive income/(loss) and
are recognized in Cost of sales when the hedged item affects earnings. Our policy is to de-designate foreign currency
Changes
exchange in flow
cash the fair valueprior
hedges of cash flow
to the hedges
time are deferred
forecasted in Accumulated
transactions otheras
are recognized comprehensive on our and
income/(loss)
assets or liabilities
are
consolidated balance sheets and report subsequent changes in fair value through Cost of sales. If it becomescurrency
recognized in Cost of sales when the hedged item affects earnings. Our policy is to de-designate foreign probable
exchange
that cash flow
the originally hedges prior
forecasted to the time
transaction forecasted
will not transactions
occur, the related amountare recognized
included inas assets or liabilities
Accumulated on our
other comprehensive
consolidated balance
income/(loss) sheetsand
is reclassified andrecognized
report subsequent changes
in earnings. The in fair flows
cash valueassociated
through Cost sales. If
withofhedges it becomesuntil
designated probable
maturity
that reported
are the originally
in Net forecasted transaction
cash provided by/(usedwillin)
notoperating
occur, the related on
activities amount included in Accumulated
our consolidated statement of other comprehensive
cash flows. Our cash
income/(loss)
flow is reclassified
hedges mature and years.
within three recognized in earnings. The cash flows associated with hedges designated until maturity
are reported in Net cash provided by/(used in) operating activities on our consolidated statement of cash flows. Our cash
flowFair
hedges
Valuemature
[Link]
Ourthree years.
Ford Credit segment uses derivatives to reduce the risk of changes in the fair value of debt.
We have designated certain receive-fixed, pay-float interest rate and cross-currency interest rate swaps as fair value
Fair of
hedges Value Hedges.
fixed-rate [Link]
TheFord
riskCredit
beingsegment
hedged is uses
the derivatives to reduce
risk of changes in thethe
fairrisk of changes
value in thedebt
of the hedged fair value of debt.
attributable to
We have designated certain receive-fixed, pay-float interest rate and cross-currency interest
changes in the benchmark interest rate and foreign exchange. We report the change in fair value of the hedged debtrate swaps as fair value
hedges of the
related to fixed-rate
changedebt. The risk being
in benchmark hedged
interest rate inisFord
the risk of changes
Credit debt andinFordthe Credit
fair value of theoperating,
interest, hedged debt andattributable
other to
changes in the benchmark interest rate and foreign exchange. We report the change in fair value
expenses. We report the change in fair value of the hedged debt and hedging instrument related to foreign currency in of the hedged debt
related to the changenet.
Other income/(loss), in benchmark
Net interestinterest rate inand
settlements Fordaccruals and and
Credit debt Ford Credit
fair value changes interest, operating,
on hedging and other
instruments due to the
expenses. We report the change in fair value of the hedged debt and hedging instrument
benchmark interest rate change are reported in Ford Credit interest, operating, and other expenses. The cash related to foreign currency
flows in
Other income/(loss),
associated Net interest
net. hedges
with fair value settlements
are reported andcash
in Net accruals and by/(used
provided fair valuein)
changes
operatingon hedging
activitiesinstruments due to the
on our consolidated
benchmark interest
statements of cash [Link] change are reported in Ford Credit interest, operating, and other expenses. The cash flows
associated with fair value hedges are reported in Net cash provided by/(used in) operating activities on our consolidated
statements
When aoffair cash
valueflows.
hedge is de-designated, or when the derivative is terminated before maturity, the fair value
adjustment to the hedged debt continues to be reported as part of the carrying value of the debt and is recognized in Ford
When
Credit a fairoperating,
interest, value hedge
andisother
de-designated, or when
expenses over the derivative
its remaining life. is terminated before maturity, the fair value
adjustment to the hedged debt continues to be reported as part of the carrying value of the debt and is recognized in Ford
Credit interest, operating,
Derivatives and other
Not Designated expenses
as Hedging over its remaining
Instruments. life.
For total Company excluding Ford Credit, we report changes in
the fair value of derivatives not designated as hedging instruments through Cost of sales. Cash flows associated with
Derivatives Not
non-designated Designated asderivatives
or de-designated are reported For
Hedging Instruments. total
in Net Company
cash excluding
provided by/(usedFord Credit, we
in) investing report changes
activities on our in
the fair value of derivatives not designated
consolidated statements of cash flows. as hedging instruments through Cost of sales. Cash flows associated with
non-designated or de-designated derivatives are reported in Net cash provided by/(used in) investing activities on our
consolidated
Our Ford statements of cash
Credit segment flows.
reports the gains/(losses) on derivatives not designated as hedging instruments in Other
income/(loss), net. Cash flows associated with non-designated or de-designated derivatives are reported in Net cash
Our Ford
provided Credit
by/(used in)segment
investingreports the on
activities gains/(losses) on derivatives
our consolidated statementsnotofdesignated
cash [Link] hedging instruments in Other
income/(loss), net. Cash flows associated with non-designated or de-designated derivatives are reported in Net cash
provided by/(used in) investing activities on our consolidated statements of cash flows.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS
NOTES TO THE AND HEDGING
FINANCIAL ACTIVITIES (Continued)
STATEMENTS
NOTE 20. DERIVATIVE
Normal Purchases and FINANCIAL INSTRUMENTS
Normal Sales [Link]
We HEDGING ACTIVITIES
have elected (Continued)
to apply the normal purchases and normal
sales classification for physical supply contracts that are entered into for the purpose of procuring commodities to be used
Normal Purchases
in production and Normal
over a reasonable Sales
period Classification.
in the Weof
normal course have
our elected to apply the normal purchases and normal
business.
sales classification for physical supply contracts that are entered into for the purpose of procuring commodities to be used
in production
Income Effectover a reasonable
of Derivative period inInstruments
Financial the normal course of our business.

Income
The Effect of Derivative
gains/(losses), Financial
by hedge Instruments
designation, reported in income for the years ended December 31 were as follows
(in millions):
The gains/(losses), by hedge designation, reported in income for the years ended December 31 were as follows
2021 2022 2023
(in millions):
Cash flow hedges
2021 2022 2023
Reclassified from AOCI to Cost of Sales
Cash flow hedges
Foreign currency exchange contracts (a) $ (412) $ (213) $ 145
Reclassified from AOCI to Cost of Sales
Commodity contracts (b) 132 133 (62)
Foreign currency exchange contracts (a) $ (412) $ (213) $ 145
Fair value hedges
Commodity contracts (b) 132 133 (62)
Interest rate contracts
Fair value hedges
Net interest settlements and accruals on hedging instruments 393 (45) (507)
Interest rate contracts
Fair value changes on hedging instruments (1,001) (1,875) 196
Net interest settlements and accruals on hedging instruments 393 (45) (507)
Fair value changes on hedged debt 957 1,893 (260)
Fair value changes on hedging instruments (1,001) (1,875) 196
Cross-currency interest rate swap contracts
Fair value changes on hedged debt 957 1,893 (260)
Net interest settlements and accruals on hedging instruments (8) (27) (79)
Cross-currency interest rate swap contracts
Fair value changes on hedging instruments (93) (111) 96
Net interest settlements and accruals on hedging instruments (8) (27) (79)
Fair value changes on hedged debt 82 113 (96)
Fair value changes on hedging instruments (93) (111) 96
Derivatives not designated as hedging instruments
Fair value changes on hedged debt 82 113 (96)
Foreign currency exchange contracts (c) 375 (3) (38)
Derivatives not designated as hedging instruments
Cross-currency interest rate swap contracts (507) (780) 127
Foreign currency exchange contracts (c) 375 (3) (38)
Interest rate contracts (3) 390 37
Cross-currency interest rate swap contracts (507) (780) 127
Commodity contracts 170 (51) (49)
Interest rate contracts (3) 390 37
Total $ 85 $ (576) $ (490)
Commodity contracts 170 (51) (49)
__________
(a) Total
For 2021, 2022, and 2023, a $453 million loss, a $448 million gain, and a $482 million loss, $respectively, were 85 reported
$ (576)comprehensive
in Other $ (490)
income/(loss), net of tax.
__________
(b)
(a) For 2021, 2022, and 2023, a $284 $453 million gain,
loss, aa $448
$102 million
million gain,
loss, and a $37
$482million
millionloss,
loss,respectively,
respectively,were
werereported
reportedininOther
Othercomprehensive
comprehensive
income/(loss), net of tax.
(c) For 2021, 2022, and 2023, a $284
(b) $230 million gain, a $102
$53 million
millionloss,
loss,and
andaa$3 million
$37 millionloss, respectively,
loss, were
respectively, reported
were in Cost
reported of sales
in Other and a
comprehensive
$145 million gain,
income/(loss), net aof$50
[Link] gain, and a $35 million loss were reported in Other income/(loss), net, respectively.
(c) For 2021, 2022, and 2023, a $230 million gain, a $53 million loss, and a $3 million loss, respectively, were reported in Cost of sales and a
$145 million gain, a $50 million gain, and a $35 million loss were reported in Other income/(loss), net, respectively.

164

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS
NOTES TO THE AND HEDGING
FINANCIAL ACTIVITIES (Continued)
STATEMENTS
NOTE [Link]
Balance DERIVATIVE
Effect of FINANCIAL INSTRUMENTS
Derivative Financial AND HEDGING ACTIVITIES (Continued)
Instruments

Balance Sheetassets
Derivative Effectand
of Derivative Financial
liabilities are reportedInstruments
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
Derivative
parties and areassets and liabilities
not a direct measureare of reported on our
our financial consolidated
exposure. balance
We also entersheets at fairagreements
into master value and are presented
with on a
counterparties
gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts
that may allow for netting of exposures in the event of default or breach of the counterparty agreement. Collateral exchanged by the
parties and are not a direct measure of our financial exposure. We also enter into master agreements
represents cash received or paid under reciprocal arrangements that we have entered into with our derivative with counterparties
that may allow for
counterparties, netting
which of exposures
we do in the our
not use to offset event of default
derivative or breach
assets of the counterparty agreement. Collateral
and liabilities.
represents cash received or paid under reciprocal arrangements that we have entered into with our derivative
counterparties, which
The fair value wederivative
of our do not useinstruments
to offset our derivative
and assets and
the associated liabilities.
notional amounts at December 31 were as follows
(in millions):
The fair value of our derivative instruments and the associated notional amounts at December 31 were as follows
2022 2023
(in millions):
Fair Value of Fair Value of Fair Value of Fair Value of
Notional Assets
2022 Liabilities Notional Assets
2023 Liabilities
Cash flow hedges Fair Value of Fair Value of Fair Value of Fair Value of
Notional Assets Liabilities Notional Assets Liabilities
Foreign currency exchange contracts $ 11,536 $ 376 $ 52 $ 19,530 $ 69 $ 385
Cash flow hedges
Commodity contracts 990 16 56 983 23 36
Foreign currency exchange contracts $ 11,536 $ 376 $ 52 $ 19,530 $ 69 $ 385
Fair value hedges
Commodity contracts 990 16 56 983 23 36
Interest rate contracts 16,883 — 1,653 12,119 106 633
Fair value hedges
Cross-currency interest rate swap
contracts
Interest rate contracts 885
16,883 — 161
1,653 2,078
12,119 69
106 104
633
Derivatives not designated
Cross-currency interest rateas hedging
swap
instruments
contracts 885 — 161 2,078 69 104
Foreign currency
Derivatives exchange as
not designated contracts
hedging 20,851 162 285 22,802 201 261
instruments
Cross-currency interest rate swap
contracts
Foreign currency exchange contracts 6,635
20,851 15
162 653
285 7,100
22,802 119
201 252
261
Interest rate contracts
Cross-currency interest rate swap 63,210 931 483 73,134 465 1,036
contracts 6,635 15 653 7,100 119 252
Commodity contracts 841 26 35 1,051 35 31
Interest rate contracts 63,210 931 483 73,134 465 1,036
Total derivative financial instruments,
gross (a) contracts
Commodity (b) $ 121,831
841 $ 1,526
26 $ 3,378
35 $ 138,797
1,051 $ 1,087
35 $ 2,738
31
Total derivative financial instruments,
gross (a) (b) $ 121,831 $ 1,526 $ 3,378 $ 138,797 $ 1,087 $ 2,738
Current portion $ 1,101 $ 1,656 $ 493 $ 1,464
Non-current portion 425 1,722 594 1,274
Current portion $ 1,101 $ 1,656 $ 493 $ 1,464
Total derivative financial instruments,
gross portion
Non-current $ 1,526
425 $ 3,378
1,722 $ 1,087
594 $ 2,738
1,274
Total derivative financial instruments,
__________
gross
(a) At December 31, 2022 and 2023, we held collateral of $210$million and 1,526 $
$40 million, 3,378
respectively, $
and we posted collateral of1,087 $
$201 million and 2,738
$185 million, respectively.
__________
(b)
(a) At
At December
December 31,31, 2022
2022 and
and 2023,
2023, the fair value
we held of assets
collateral andmillion
of $210 liabilities
andavailable for counterparty
$40 million, netting
respectively, and we was $451
posted million and
collateral $815million
of $201 million,
and
respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.
$185 million, respectively.
(b) At December 31, 2022 and 2023, the fair value of assets and liabilities available for counterparty netting was $451 million and $815 million,
respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 21. EMPLOYEE SEPARATIONNOTES
ACTIONS ANDFINANCIAL
TO THE EXIT AND DISPOSAL ACTIVITIES
STATEMENTS
NOTEWe21. EMPLOYEE
generally record SEPARATION
costs associated ACTIONS AND EXIT
with voluntary AND DISPOSAL
separations at the timeACTIVITIES
of employee acceptance. We record
costs associated with involuntary separation programs when management has approved the plan for separation, the
We generally
affected employees record costs associated
are identified, and it iswith voluntary
unlikely separations
that actions at the
required time of employee
to complete acceptance.
the separation plan willWe record
change
costs associated
significantly. with
Costs involuntary
associated separation
with programs
benefits that when management
are contingent has approved
on the employee thetoplan
continuing for separation,
provide service arethe
affected
accrued employees are identified,
over the required and it is unlikely that actions required to complete the separation plan will change
service period.
significantly. Costs associated with benefits that are contingent on the employee continuing to provide service are
accrued
Company over the required
Excluding Fordservice
Creditperiod.

Company Excluding
Employee Ford
separation Creditand exit and disposal activities include employee separation costs, facility and other
actions
asset-related charges (e.g., impairment, accelerated depreciation), dealer and supplier payments, other statutory and
Employee
contractual separation
obligations, andactions
other and exit and
expenses, disposal
which activities in
are recorded include
Cost ofemployee
sales and separation costs, facility and
Selling, administrative, andother
other
asset-related charges (e.g., impairment,
expenses. Below are actions we have initiated: 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
• Brazil. are actions
Exited we haveoperations
manufacturing initiated: in 2021 resulting in the closure of facilities in Camaçari, Taubaté, and
Troller. Sales of the Taubaté and Camaçari plants were completed in 2023
•• Brazil. Exited manufacturing
India. Ceased operations
vehicle manufacturing in 2021 resulting
in Sanand in the closure
in fourth quarter of 2021ofandfacilities
ceased in Camaçari, Taubaté,
manufacturing and in
in Chennai
Troller. Sales of the Taubaté and Camaçari plants were completed in 2023
the third quarter of 2022. A sale of the Sanand vehicle assembly and powertrain plants was completed in the first
• India.
quarterCeased
of [Link] manufacturing
See Note 22 in Sanand in fourth quarter of 2021 and ceased manufacturing in Chennai in
the third quarter of 2022. A sale
• Spain. Ceased production of the Mondeo of the Sanand
at thevehicle
Valenciaassembly
plant in and powertrain
the first quarterplants was completed in the first
of 2022
quarter of 2023. See Note 22
• China. Ceased development of certain product programs
•• Germany.
Spain. Ceased production
Production of theofFocus
the Mondeo at the
will cease Valencia
at our plantBody
Saarlouis in theand
firstAssembly
quarter ofPlant
2022in 2025. Our plan is to
• repurpose
China. Ceased development of certain product programs
the facility into a technology center, retaining 1,000 positions. We are engaged in discussions with our
• Germany.
Social PartnersProduction
relatedoftothe
theFocus will cease
remaining at our
affected Saarlouis
positions Body
at the and Assembly Plant in 2025. Our plan is to
plant
repurpose the facility into a technology center, retaining 1,000 positions. We are engaged in discussions with our
Social Partners
In addition, related to to
we are continuing thereduce
remaining affected
our global positionsand
workforce at the
takeplant
other restructuring actions, including the
separation of salaried workers as announced during 2023.
In addition, we are continuing to reduce our global workforce and take other restructuring actions, including the
separation of salaried
The following tableworkers
summarizesas announced during
the activities for 2023.
the years ended December 31, which are recorded in Other liabilities
and deferred revenue (in millions):
The following table summarizes the activities for the years ended December 31, which are recorded in Other liabilities
2022 2023
and deferred revenue (in millions):
Beginning balance $ 950 $ 588
2022 2023
Changes in accruals (a) 557 1,600
Beginning balance $ 950 $ 588
Payments (883) (1,030)
Changes in accruals (a) 557 1,600
Foreign currency translation and other (36) (72)
Payments (883) (1,030)
Ending balance $ 588 $ 1,086
Foreign currency translation and other (36) (72)
__________
Ending
(a) balance
Excludes pension costs of $57 million and $268 million in 2022 and 2023, respectively. $ 588 $ 1,086
__________
(a) In 2022,pension
Excludes we recorded $32million
costs of $57 million
andfor accelerated
$268 depreciation,
million in 2022 impairment
and 2023, respectively. of our India assets, and other non-cash
items, partially offset by tax credits and other benefits. In addition, we recognized a $38 million pre-tax net gain on sale of
In 2022,
assets we recorded
in 2022. In 2023, we $32recorded
million for accelerated
$67 million for depreciation, impairment and
accelerated depreciation of our India
other assets, and
non-cash items other
andnon-cash
recognized a
items, partially offset by tax credits and
$62 million pre-tax net gain on sale of assets. other benefits. In addition, we recognized a $38 million pre-tax net gain on sale of
assets in 2022. In 2023, we recorded $67 million for accelerated depreciation and other non-cash items and recognized a
$62 We
million pre-taxcharges
recorded net gainofon salemillion
$608 of assets.
and $1.9 billion in 2022 and 2023, 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
We recorded
employee charges
separations; of $608
some million
charges areand $1.9tobillion
related plansinthat
2022
areand 2023,
subject torespectively,
negotiations related to the council,
with a works actions above.
union, orWe
estimate that we will incur about $1 billion in total charges in 2024 related to such actions, primarily
other social partner. In addition, we continue to review our global businesses and may take additional restructuring attributable to
employee
actions where a path to sustained profitability is not feasible when considering the capital allocation required for those or
separations; some charges are related to plans that are subject to negotiations with a works council, union,
other social partner. In addition, we continue to review our global businesses and may take additional restructuring
businesses.
actions where a path to sustained profitability is not feasible when considering the capital allocation required for those
businesses.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 21. EMPLOYEE SEPARATIONNOTES
ACTIONS ANDFINANCIAL
TO THE EXIT AND DISPOSAL ACTIVITIES (Continued)
STATEMENTS
NOTE 21.
United EMPLOYEE
Automobile, SEPARATION
Aerospace, ACTIONS AND
and Agricultural EXIT AND
Implement DISPOSAL
Workers ACTIVITIES
of America (Continued)
Voluntary Separation Packages

United
We Automobile, Aerospace,
offered voluntary and
separation Agricultural
packages Implement
in 2022 to certainWorkers
of our UAWof America Voluntary
hourly workforce whoSeparation Packages
were eligible for
normal or early retirement and recorded associated costs of $19 million in Cost of sales.
We offered voluntary separation packages in 2022 to certain of our UAW hourly workforce who were eligible for
normal or early retirement and recorded associated costs of $19 million in Cost of sales.
Ford Credit

FordAccumulated
Credit foreign currency translation losses included in Accumulated other comprehensive income/(loss) at
December 31, 2023 of $223 million are associated with Ford Credit’s investments in Brazil and Argentina that have
Accumulated
ceased foreign
operations. currency
We expect translationthese
to reclassify losses included
losses in Accumulated
to income other comprehensive
upon substantially of Fordat
income/(loss)
complete liquidation
December
Credit’s investments, which may occur over multiple reporting periods. In 2022, we reclassified losses of $155have
31, 2023 of $223 million are associated with Ford Credit’s investments in Brazil and Argentina that million to
ceased operations. We
Other income/(loss), net expect to reclassify
upon the liquidationthese losses
of three to income
investments in upon substantially complete liquidation of Ford
Brazil.
Credit’s investments, which may occur over multiple reporting periods. In 2022, we reclassified losses of $155 million to
Other income/(loss),
NOTE net upon
22. ACQUISITIONS the DIVESTITURES
AND liquidation of three investments in Brazil.

NOTE 22. Excluding

Company ACQUISITIONS AND DIVESTITURES
Ford Credit

Company Excluding
Auto Motive PowerFord CreditOn November 1, 2023, we acquired AMP, a California-based energy management
(“AMP”).
startup focused on electric vehicle charging solutions. Assets acquired primarily include goodwill and technology, which
Auto Motive
are reported Power
in Other (“AMP”).
assets. TheOn November
acquisition did1,not
2023,
have wea acquired AMP, aon
material impact California-based energy management
our financial statements.
startup focused on electric vehicle charging solutions. Assets acquired primarily include goodwill and technology, which
are reported
Sanand, in Other
India assets. The
(“Sanand”) acquisition
Plants. In the thirddid not haveofa2022,
quarter material
we impact
enteredon ouranfinancial
into agreement statements.
to sell our Sanand
vehicle assembly and powertrain plants to Tata Passenger Electric Mobility Limited (“Tata”), a subsidiary of Tata Motors
Sanand,
Limited. The India includedInthe
(“Sanand”) Plants.
sale transaction theland,
thirdbuildings,
quarter ofand 2022, wefixed
other entered into(excluding
assets an agreement to sell our Sanand
the powertrain machinery and
vehicle assembly
equipment) for theand powertrain
plants. plants to Tata
We recognized, in CostPassenger
of sales,Electric
pre-taxMobility
impairment Limited (“Tata”),
charges of $32a subsidiary
million in theof Tata
thirdMotors
quarter
Limited.
of 2022 toThe salethe
adjust transaction included
carrying value theassets
of the land, buildings,
to fair valueandless
other fixed
costs to assets
sell. We (excluding
determined the fair
powertrain
value usingmachinery
the and
equipment)
market for thebased
approach, [Link] therecognized, in Costofofthe
negotiated value sales, pre-tax
assets. impairment
Accordingly, wecharges
reportedof$88 $32million
millionofinfixed
the third
assets quarter
for
of 2022
this to adjust
operation the carrying
as held for sale value
for theofperiod
the assets
ended toDecember
fair value less costs to
31, 2022, [Link]
which We determined
report in Otherfair valueinusing
assets the
the current
market section
assets approach, based
of our on the negotiated
consolidated balance value
sheets. of the assets. Accordingly, we reported $88 million of fixed assets for
this operation as held for sale for the period ended December 31, 2022, which we report in Other assets in the current
assets
On section
Januaryof10, our2023,
consolidated balance
we completed thesheets.
sale of the plants to Tata. 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
On January
recognized 10, 2023, we
the powertrain completed
facility operating thelease
sale of the plantsasset
right-of-use to Tata.
andFord continues
related to operate
lease liability in thethe powertrain
first quarter offacility
[Link]
leasing
The fair back
valuethe associated
of the land and building.
cash consideration received Asapproximated
a result of thethe sale transaction,
carrying value we derecognized
of the fixed assetsthe fixedtime
at the assets and
of sale.
recognized the powertrain facility operating lease right-of-use asset and related lease liability in the first quarter of 2023.
The Ford
fair value
Romaniaof theS.R.L.
cash (“Ford
consideration received
Romania”). approximated
On July 1, 2022, we thecompleted
carrying value
the saleof the fixedRomania,
of Ford assets at theour time of sale.
wholly-owned
Romanian manufacturing subsidiary, to Ford Otosan, a joint venture in which Ford has a 41% ownership share. The
Ford Romania
transaction resultedS.R.L. (“Ford Romania”).
in deconsolidation of our On Ford July 1, 2022,
Romania we completed
subsidiary in thethe
thirdsale of Ford
quarter Romania,
of 2022. Theourfair wholly-owned
value of
Romanian
consideration received, consisting of cash and a note receivable, approximated the carrying value of Fordshare.
manufacturing subsidiary, to Ford Otosan, a joint venture in which Ford has a 41% ownership Romania Theat the
transaction resulted in deconsolidation of our Ford Romania subsidiary in the third quarter
time of sale. The Ford Romania plant in Craiova, Romania continues to manufacture Ford-branded vehicles for Ford of 2022. The fair value of and
consideration received, consisting of cash and a note receivable, approximated the carrying
Ford Otosan. Ford’s portion of the output is expected to be significant; as a result, at the time of sale there were about value of Ford Romania at the
time of sale. The Ford Romania plant in Craiova, Romania continues to manufacture Ford-branded
$100 million of assets, such as embedded leases, and related liabilities that continue to be reported as part of our financial vehicles for Ford and
Ford Otosan.
statements. Ford’s portion of the output is expected to be significant; as a result, at the time of sale there were about
$100 million of assets, such as embedded leases, and related liabilities that continue to be reported as part of our financial
statements.
Skinny Labs Inc., dba Spin (“Spin”). On April 1, 2022, we completed the sale of Spin, our wholly-owned micro-mobility
provider, to TIER Mobility SE, a German-based micro-mobility provider, which resulted in the deconsolidation of our Spin
SkinnyinLabs
subsidiary Inc., dbaquarter
the second of [Link]
Spin (“Spin”). In April 1, 2022,
exchange we completed
for our the sale
shares of Spin, of Spin, our
we received wholly-owned
preferred equity inmicro-mobility
TIER
provider, to
Mobility SE. TIER Mobility SE, a German-based micro-mobility provider, which resulted in the deconsolidation of our Spin
subsidiary in the second quarter of 2022. In exchange for our shares of Spin, we received preferred equity in TIER
Mobility SE. Inc. (“Electriphi”). On June 18, 2021, we acquired Electriphi, a California-based provider of charging
Electriphi,
management and fleet monitoring software for electric vehicles. Assets acquired primarily include goodwill, reported in
OtherElectriphi,
assets, andInc. software,
(“Electriphi”). On June
reported in Net18, 2021, we
property. Theacquired Electriphi,
acquisition did nota have
California-based
a material impactprovideron ofourcharging
management and
financial statements. fleet monitoring software for electric vehicles. Assets acquired primarily include goodwill, reported in
Other assets, and software, reported in Net property. The acquisition did not have a material impact on our
financial statements.

167

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199174_Ford_2023_AR_1OK.indd 171 2/9/24 2:58 PM

 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 22. ACQUISITIONS AND DIVESTITURES (Continued)
NOTES TO THE FINANCIAL STATEMENTS
NOTE [Link]
Ford ACQUISITIONS
Ho Motor Co., Ltd. AND(“FLH”).
DIVESTITURES
On April 1,(Continued)
2021, we completed the sale of our controlling financial interest in
FLH and its wholly owned subsidiary FLH Marketing & Service Limited, which resulted in deconsolidation of our Ford
Fordsubsidiary
Taiwan Lio Ho Motor in theCo., quarter ofOn
Ltd. (“FLH”).
second April FLH
2021. 1, 2021, we completed
will continue the sale
to import, of our controlling
manufacture, and sellfinancial interest in
Ford-branded
FLH and through
vehicles its wholly at owned subsidiary
least 2025. FLH Marketing
We recognized & Service
a pre-tax gain ofLimited, which which
$161 million, resultedwasin reported
deconsolidation
in Otherofincome/(loss),
our Ford
Taiwan subsidiary
net in the in the second
second quarter of 2021. quarter of 2021. FLH will continue to import, manufacture, and sell Ford-branded
vehicles through at least 2025. We recognized a pre-tax gain of $161 million, which was reported in Other income/(loss),
net in the second
Getrag quarter of 2021.
Ford Transmissions GmbH (“GFT”). Prior to March 2021, Ford and Magna International Inc. (“Magna”) equally
owned and operated the GFT joint venture for the purpose of developing, manufacturing, and selling transmissions. We
Getrag for
accounted FordourTransmissions
investment in GmbH an equityPrior
GFT as(“GFT”). to March
method 2021, Ford
investment. andthe
During Magna International
first quarter of 2021Inc. (“Magna”)
and equally
prior to our
owned
acquisition, GFT recorded restructuring charges, of which our share was $40 million. These charges are included in We
and operated the GFT joint venture for the purpose of developing, manufacturing, and selling transmissions.
accounted
Equity in net forincome/(loss)
our investment in GFT ascompanies.
of affiliated an equity method investment. During the first quarter of 2021 and prior to our
acquisition, GFT recorded restructuring charges, of which our share was $40 million. These charges are included in
Equity
OninMarch
net income/(loss) of affiliated
1, 2021, we acquired companies.
Magna’s shares in the restructured GFT. The purchase price, which was subject to
post-closing revisions, was $275 million. The restructured GFT includes the Halewood, UK and Cologne, Germany
On Marchplants,
transmission 1, 2021,butwe acquired
excludes theMagna’s
Bordeaux, shares in the
France restructured
transmission GFT.
plant and The purchase
China price,
interests which by
acquired was subjectWe
Magna. to
post-closing revisions, was $275 million. The restructured GFT includes the Halewood,
concluded with Magna that these businesses would be better served under separate ownership. The Sanand, India UK and Cologne, Germany
transmission
transmission plants, but excludes
plant continues underthe Bordeaux,
joint Ford/MagnaFrance transmission
ownership. As aplant
resultand China
of the interests we
transaction, acquired by Magna.
consolidated the We
concluded with Magna that these businesses would be better served under separate ownership.
restructured GFT, remeasured our prior investment in GFT at its $275 million fair value, and recognized in Other income/ The Sanand, India
transmission plant continues
(loss), net a pre-tax gain of $178under joint during
million Ford/Magna ownership.
2021 and As a revisions
post-closing result of the transaction,
resulting we consolidated
in a pre-tax the
gain of $2 million
restructured GFT, remeasured our prior investment in GFT at its $275 million fair value, and
during the first quarter of 2022. We estimated the fair value of GFT in negotiations with Magna based on the income recognized in Other income/
(loss), net a pre-tax gain of $178 million during 2021 and post-closing revisions resulting in a
approach. The significant assumptions used in the valuation included GFT’s cash flows that reflect the approved businesspre-tax gain of $2 million
during the first quarter
plan, discounted of 2022.
at a rate typicallyWeused
estimated the fair value
for a company of GFT in negotiations with Magna based on the income
like GFT.
approach. The significant assumptions used in the valuation included GFT’s cash flows that reflect the approved business
plan, discounted at a rate typically used for a company like GFT.

168

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 23. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)
NOTES TO THE FINANCIAL STATEMENTS
NOTEThe23. ACCUMULATED
changes OTHER
in the balances COMPREHENSIVE
for each INCOME/(LOSS)
component of accumulated other comprehensive income/(loss) attributable to
Ford Motor Company for the years ended December 31 were as follows (in millions):
The changes in the balances for each component of accumulated other comprehensive income/(loss) attributable to
2021 2022 2023
Ford Motor Company for the years ended December 31 were as follows (in millions):
Foreign currency translation
2021 2022 2023
Beginning balance $ (5,526) $ (5,487) $ (6,416)
Foreign currency translation
Gains/(Losses) on foreign currency translation 200 (1,199) 967
Beginning balance $ (5,526) $ (5,487) $ (6,416)
Less: Tax/(Tax benefit) (a) 143 (2) (10)
Gains/(Losses) on foreign currency translation 200 (1,199) 967
Net gains/(losses) on foreign currency translation 57 (1,197) 977
Less: Tax/(Tax benefit) (a) 143 (2) (10)
(Gains)/Losses reclassified from AOCI to net income (b) (18) 268 (4)
Net gains/(losses) on foreign currency translation 57 (1,197) 977
Other comprehensive income/(loss), net of tax (c) 39 (929) 973
(Gains)/Losses reclassified from AOCI to net income (b) (18) 268 (4)
Ending balance $ (5,487) $ (6,416) $ (5,443)
Other comprehensive income/(loss), net of tax (c) 39 (929) 973
Ending balance
Marketable securities $ (5,487) $ (6,416) $ (5,443)
Beginning balance $ 156 $ (19) $ (442)
Marketable securities
Gains/(Losses) on available for sale securities (209) (576) 326
Beginning balance $ 156 $ (19) $ (442)
Less: Tax/(Tax benefit)
Gains/(Losses) on available for sale securities (52)
(209) (139)
(576) 80
326
Net gains/(losses)
Less: on available for sale securities
Tax/(Tax benefit) (157)
(52) (437)
(139) 246
80
(Gains)/Losses reclassified from for
Net gains/(losses) on available AOCI tosecurities
sale net income (23)
(157) 19
(437) 35
246
Less: Tax/(Tax benefit)
(Gains)/Losses reclassified from AOCI to net income (5)
(23) 5
19 9
35
Net (gains)/losses
Less: reclassified from AOCI to net income (b)
Tax/(Tax benefit) (18)
(5) 14
5 26
9
Other
Net comprehensive
(gains)/losses income/(loss),
reclassified nettoofnet
from AOCI taxincome (b) (175)
(18) (423)
14 272
26
Ending balance
Other comprehensive income/(loss), net of tax $ (19) $
(175) (442) $
(423) (170)
272
Ending balance
Derivative instruments $ (19) $ (442) $ (170)

Beginning
Derivativebalance
instruments $ (266) $ (193) $ 129
Gains/(Losses)
Beginning balanceon derivative instruments $ (169)
(266) $ 346 $
(193) (519)
129
Less: Tax/(Tax benefit)
Gains/(Losses) on derivative instruments (20)
(169) 83
346 (126)
(519)
Net gains/(losses)
Less: on derivative instruments
Tax/(Tax benefit) (149)
(20) 263
83 (393)
(126)
(Gains)/Losses reclassified
Net gains/(losses) from AOCI
on derivative to net income
instruments 280
(149) 80
263 (83)
(393)
Less: Tax/(Tax benefit)
(Gains)/Losses reclassified from AOCI to net income 58
280 21
80 (16)
(83)
Net (gains)/losses
Less: reclassified from AOCI to net income (d)
Tax/(Tax benefit) 222
58 59
21 (67)
(16)
Other
Net comprehensive
(gains)/losses income/(loss),
reclassified nettoofnet
from AOCI taxincome (d) 73
222 322
59 (460)
(67)
Other
Ending comprehensive income/(loss), net of tax
balance $ 73 $
(193) 322
129 $ (460)
(331)
Ending balance $ (193) $ 129 $ (331)
Pension and other postretirement benefits
Pension and
Beginning other postretirement benefits
balance $ (2,658) $ (2,640) $ (2,610)
Beginning balance
Prior service (costs)/credits arising during the period (e) $ (2,658)
— $ (2,640)
— $ (2,610)
(659)
Prior
Less:service (costs)/credits
Tax/(Tax benefit) arising during the period (e) — — (659)
(157)
Less: Tax/(Tax benefit)
Net prior service (costs)/credits arising during the period —
— —
— (157)
(502)
Net prior service
Amortization (costs)/credits
and recognition arising
of prior during
service the period (f)
costs/(credits) —
27 —
21 (502)
25
Amortization
Less: and
Tax/(Tax recognition of prior service costs/(credits) (f)
benefit) 27
6 21
4 25
6
Less: Tax/(Tax
Net prior benefit)
service costs/(credits) reclassified from AOCI to net income 6
21 4
17 6
19
Net prior service
Translation impactcosts/(credits) reclassified from AOCI to net income
on non-U.S. plans 21
(3) 17
13 19
(5)
Translation impact on non-U.S. plans
Other comprehensive income/(loss), net of tax (3)
18 13
30 (5)
(488)
Other comprehensive
Ending balance income/(loss), net of tax $ 18
(2,640) $ 30
(2,610) $ (488)
(3,098)
Ending balance $ (2,640) $ (2,610) $ (3,098)
Total AOCI ending balance at December 31 $ (8,339) $ (9,339) $ (9,042)
Total AOCI ending balance at December 31 $ (8,339) $ (9,339) $ (9,042)
__________
__________
(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
(a) foreseeable
We do not recognize deferred we
future. However, taxes for made
have a majority of thetoforeign
elections currency
tax certain translation
non-U.S. gainssimultaneously
operations and losses because
in [Link],
not anticipate reversal
and have in the
recorded
foreseeable
deferred taxesfuture. However,differences
for temporary we have made elections
that will reverse,to tax certain non-U.S.
independent operations
of repatriation simultaneously
plans, in U.S. Taxes
in U.S. tax returns. tax returns,
or tax and haveresulting
benefits recordedfrom
deferredcurrency
foreign taxes fortranslation
temporaryofdifferences
the temporarythat differences
will reverse,are independent
recorded inofOther
repatriation plans, in U.S.
comprehensive tax returns.
income/(loss), netTaxes
of [Link] tax benefits resulting from
foreign currency
(b) Reclassified translation
to Other of the temporary
income/(loss), net. differences are recorded in Other comprehensive income/(loss), net of tax.
(b)
(c) Reclassified
Excludes a gainto Other
of $4income/(loss),
million, a loss net.
of $4 million, and a gain of $1 million related to noncontrolling interests in 2021, 2022, and 2023, respectively.
(c) Reclassified
(d) Excludes a gain of $4ofmillion,
to Cost sales. aDuring
loss ofthe
$4next
million, andmonths
twelve a gain of we$1expect
milliontorelated to noncontrolling
reclassify interests
existing net losses in 2021,
on cash flow2022,
hedges andof2023, respectively.
$151 million. See
(d) Note
Reclassified to Cost ofinformation.
20 for additional sales. During the next twelve months we expect to reclassify existing net losses on cash flow hedges of $151 million. See
(e) Note 20 for
Reflects additional
benefit information.
enhancements included in the collective bargaining agreements with the UAW and Unifor ratified in 2023.
(e) Amortization
(f) Reflects benefitandenhancements
recognition of included in the
prior service collective bargaining
costs/(credits) agreements
is included with the UAW
in the computation of netand Uniforpension
periodic ratified cost/(income).
in 2023. See Note 17 for
(f) additional
Amortization and recognition of prior service costs/(credits) is included in the computation of net periodic pension cost/(income). See Note 17 for
information.
additional information.

169
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199174_Ford_2023_AR_1OK_r1.indd 173 2/13/24 8:14 PM

 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 24. VARIABLE INTEREST ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 24. isVARIABLE
A VIE an entity thatINTEREST ENTITIES
either (i) has insufficient equity to finance its activities without additional subordinated
financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. We
A VIE is VIEs
consolidate an entity that either
of which we are(i)thehas insufficient
primary equity toWe
beneficiary. finance its activities
consider ourselves without additional
the primary subordinated
beneficiary of a VIE
financial support, or (ii) has equity investors who lack the characteristics of a controlling financial
when we have both the power to direct the activities that most significantly impact the entity’s economic performanceinterest. We
consolidate VIEs of which we are the primary beneficiary. We consider ourselves the primary beneficiary
and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant of a VIE to
when we have both the power to direct the activities that most significantly impact the entity’s economic
the VIE. Assets recognized as a result of consolidating these VIEs do not represent additional assets that could be performance
and
usedthe obligation
to satisfy to absorb
claims againstlosses or the right
our general to receive
assets. benefits
Liabilities from the
recognized as entity that
a result of could potentially
consolidating thesebe significant
VIEs do notto
the VIE. Assets recognized as a result of consolidating these VIEs do not represent additional
represent additional claims on our general assets; rather, they represent claims against the specific assets of theassets that could be
used to satisfy
consolidated claims against our general assets. Liabilities recognized as a result of consolidating these VIEs do not
VIEs.
represent additional claims on our general assets; rather, they represent claims against the specific assets of the
consolidated VIEs.
We have the power to direct the significant activities of an entity when our management has the ability to make key
operating decisions, such as decisions regarding budgets, capital investment, manufacturing, or product development.
We have the power to direct the significant activities of an entity when our management has the ability to make key
For securitization entities, we have the power to direct significant activities when we have the ability to exercise
operating decisions, such as decisions regarding budgets, capital investment, manufacturing, or product development.
discretion in the servicing of financial assets, issue additional debt, exercise a unilateral call option, add assets to
For securitization entities, we have the power to direct significant activities when we have the ability to exercise
revolving structures, or control investment decisions.
discretion in the servicing of financial assets, issue additional debt, exercise a unilateral call option, add assets to
revolving structures, or control investment decisions.
VIEs of Which We are Not the Primary Beneficiary
VIEs of Which We are Not the Primary Beneficiary
Certain of our affiliates are VIEs 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
Certain of our affiliates are VIEs in which we are not the primary beneficiary. Our maximum exposure to any
receivable, loans, and guarantees and was $1.0 billion and $3.7 billion at December 31, 2022 and 2023, respectively.
potential losses associated with these unconsolidated affiliates is limited to our equity investments, accounts
Of these amounts, guarantees
receivable, loans, and of $113
guarantees million
and was and
$1.0 $125and
billion million
$3.7atbillion
December 31, 202231,
at December and 2023,
2022 andrespectively, related
2023, respectively.
to certain obligations of our VIEs also are included in Note 25.
Of these amounts, guarantees of $113 million and $125 million at December 31, 2022 and 2023, respectively, related
to certain obligations of our VIEs also are included in Note 25.
On July 13, 2022, Ford, SK On Co., Ltd., and SK Battery America, Inc. (a wholly owned subsidiary of SK On)
completed
On Julythe
13,creation of BlueOval
2022, Ford, SK, LLC
SK On Co., Ltd., (“BOSK”), a 50/50
and SK Battery joint venture
America, Inc. (athat will owned
wholly build and operate of
subsidiary electric
SK On)vehicle
battery plants in Tennessee and Kentucky to supply batteries to Ford and Ford affiliates. BOSK is a VIE
completed the creation of BlueOval SK, LLC (“BOSK”), a 50/50 joint venture that will build and operate electric vehicle of which we
are not the primary beneficiary, and we use the equity method of accounting for our investment. As
battery plants in Tennessee and Kentucky to supply batteries to Ford and Ford affiliates. BOSK is a VIE of which we of
December
are not the 31, 2023,beneficiary,
primary Ford has contributed
and we usetotheBOSK $3.3
equity billionofofaccounting
method its agreed capital
for our contribution
investment. of Asupofto $6.6 billion
through 2026. The total amount of capital contributions is subject to adjustments agreed to by the parties.
December 31, 2023, Ford has contributed to BOSK $3.3 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.
VIEs of Which We are the Primary Beneficiary
VIEs of Which We are the Primary Beneficiary
Securitization Entities. Through Ford Credit, we securitize, transfer, and service financial assets associated with
consumer finance Entities.
Securitization receivables, operating
Through Fordleases,
Credit, and wholesaletransfer,
we securitize, loans. Ourandsecuritization
service financialtransactions typically involve
assets associated with
the legal transfer
consumer financeofreceivables,
financial assets to bankruptcy
operating leases, and remote [Link].
wholesale We generally retain a portion
Our securitization of the economic
transactions typically involve
interests
the legal in the asset-backed
transfer securitization
of financial assets transactions,
to bankruptcy remotewhichSPEs. could
We be retained
generally in thea form
retain of a
portion ofportion of the senior
the economic
interests,
interests inthe subordinated
the asset-backed interests, cash reserve
securitization accounts,
transactions, which residual interests,
could be retainedand servicing
in the form ofrights. Theoftransfers
a portion of
the senior
assets in our securitization transactions do not qualify for accounting sale treatment. In most cases,
interests, the subordinated interests, cash reserve accounts, residual interests, and servicing rights. The transfers of the bankruptcy
remote
assets inSPEs meet the definition
our securitization of VIEsdo
transactions fornot
which we are
qualify the primarysale
for accounting beneficiary
[Link],Intherefore, are the
most cases, consolidated.
bankruptcy We
account for all securitization transactions as if they were secured financing and therefore the
remote SPEs meet the definition of VIEs for which we are the primary beneficiary and, therefore, are [Link], liabilities, and We
related activity of these transactions are consolidated in our financial statements. See Note 19 for
account for all securitization transactions as if they were secured financing and therefore the assets, liabilities, andadditional
information on the
related activity accounting
of these for asset-backed
transactions debt and
are consolidated thefinancial
in our assets securing this debt.
statements. See Note 19 for additional
information on the accounting for asset-backed debt and the assets securing this debt.

170
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199174_Ford_2023_AR_1OK.indd 174 2/9/24 2:58 PM

 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 25. COMMITMENTS AND CONTINGENCIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 25. COMMITMENTS
Commitments AND CONTINGENCIES
and contingencies primarily consist of guarantees and indemnifications, litigation and claims, and
warranty and field service actions.
Commitments and contingencies primarily consist of guarantees and indemnifications, litigation and claims, and
warranty andand
Guarantees fieldIndemnifications
service actions.

Guarantees
Financialand Indemnifications
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
Financialpayments
of expected Guarantees. Financial
resulting guarantees
from possible and events
default indemnifications are recorded
over the remaining at the
life of fair guarantee.
value at theirThe inception.
maximum
Subsequent to initial recognition, the guarantee liability is adjusted at each
potential payments for financial guarantees were $518 million and $535 million at December 31, 2022 andreporting period to reflect the current
2023,estimate
of expected payments resulting from possible default events over the remaining life of the
respectively. The carrying value of recorded liabilities related to financial guarantees was $31 million and $59 million at guarantee. The maximum
potential
December payments
31, 2022for andfinancial guarantees were $518 million and $535 million at December 31, 2022 and 2023,
2023, respectively.
respectively. The carrying value of recorded liabilities related to financial guarantees was $31 million and $59 million at
December 31, 2022
Our financial and 2023,
guarantees respectively.
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
varyOur financial
through 2037,guarantees consistwill
and guarantees of debt and lease
terminate obligations
on payment of certain
and/or joint ventures,
cancellation as well as
of the underlying certain financial
obligation. A payment
obligations
by us would be triggered by failure of the joint venture or other third party to fulfill its obligation coveredExpiration
of outside third parties, including suppliers, to support our business and economic growth. dates
by the guarantee.
vary through 2037, and guarantees will terminate on payment and/or cancellation
In some circumstances, we are entitled to recover from a third party amounts paid by us under the guarantee. 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,
Non-Financial we are entitled
Guarantees. to recover
Non-financial from a third
guarantees and party amounts paid
indemnifications areby us under
recorded atthe
fairguarantee.
value at their
inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we
Non-Financial
will be Guarantees.
required to perform underNon-financial
a guarantee or guarantees
indemnity,and the indemnifications
amount of probable are payment
recorded is atrecorded.
fair value at their
The maximum
inception. We regularly review our performance risk under these arrangements,
potential payments for non-financial guarantees were $273 million and $7 million at December 31, 2022 and 2023, and in the event it becomes probable we
will be required
respectively. to carrying
The perform under
value of a guarantee or indemnity,
recorded liabilities relatedthetoamount of probable
non-financial payment
guarantees wasis $0
recorded.
at both The maximum
potential payments
December 31, 2022 and [Link] non-financial guarantees were $273 million and $7 million at December 31, 2022 and 2023,
respectively. The carrying value of recorded liabilities related to non-financial guarantees was $0 at both
December
Included 31,in2022
the $7 and [Link] maximum potential payments at December 31, 2023 are guarantees for the resale value
million
of vehicles sold in certain arrangements to daily rental companies. The maximum potential payment of $1 million as of
Included
December 31,in2023
the $7 million of the
represents maximum potentialwe
total proceeds payments
guarantee at December 31, 2023 will
the rental company arereceive
guarantees for the Reflecting
on resale. resale value our
of vehicles
present sold inofcertain
estimate proceedsarrangements to daily rental
the rental companies willcompanies. The maximum
receive on resale from thirdpotential payment
parties, we do notofexpect$1 million as have
we will of
December
to pay under 31,the
2023 represents the total proceeds we guarantee the rental company will receive on resale. Reflecting our
guarantee.
present estimate of proceeds the rental companies will receive on resale from third parties, we do not expect we will have
to pay under
In the the guarantee.
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
In the ordinary
not limited to claimscourse
relatingofto
business,
any of the wefollowing:
execute contracts involving
environmental, tax,indemnifications
and shareholderstandard matters;inintellectual
the industry and
property
indemnifications
rights; power generation contracts; governmental regulations and employment-related matters; dealer, supplier, and
specific to a transaction, such as the sale of a business. These indemnifications might include and are
other
not limited to claims relating to any of the following: environmental, tax, and shareholder
commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities matters; intellectual property
rights;
generallypowerwould generation
be triggeredcontracts; governmental
by a breach of contract regulations and employment-related
claim brought by a counterparty, including matters; adealer, supplier,
joint venture orand other
alliance
commercial contractual relationships; and financial matters, such as securitizations.
partner, or a third-party claim. While some of these indemnifications are limited in nature, many of them do not limitPerformance under these indemnities
generally would be triggered
potential payment. Therefore,bywe a breach
are unableof contract claimabrought
to estimate maximum by amount
a counterparty,
of futureincluding
payments a joint venture
that could or alliance
result from
partner, or a third-party claim. While
claims made under these unlimited indemnities. 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.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 25. COMMITMENTS AND CONTINGENCIES
NOTES TO THE(Continued)
FINANCIAL STATEMENTS
NOTE 25. and
Litigation COMMITMENTS
Claims AND CONTINGENCIES (Continued)

Litigation
Variousand Claims
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
Various governmental
warranties; legal actions, regulations
proceedings, and claims
relating (generally,
to safety, emissions,“matters”)
and fuel areeconomy
pending or or may
otherbe instituted
matters; or asserted
government
against us. These include, but are not limited to, matters arising out of alleged defects in our
incentives; tax matters, including trade and customs; alleged illegal acts resulting in fines or penalties; financial services; products; product
warranties; governmental
employment-related matters;regulations relating to
dealer, supplier, safety,
and otheremissions,
contractualand fuel economy
relationships; or otherproperty
intellectual matters; rights;
government
incentives;
environmental matters; shareholder or investor matters; and financial reporting matters. Certain of the pending services;
tax matters, including trade and customs; alleged illegal acts resulting in fines or penalties; financial legal
employment-related
actions are, or purport matters; dealer,
to be, class supplier,
actions. and other
Some of thecontractual
matters involve relationships; intellectual
or may involve claimsproperty rights;
for compensatory, punitive,
environmental matters;
or antitrust or other trebleshareholder
damages in or very
investor
largematters;
amounts, and orfinancial
demands reporting
for field matters. Certainenvironmental
service actions, of the pending legal
actions are, or
remediation purport to
programs, be, classloss
sanctions, actions. Some of the
of government matters involve
incentives, assessments, or may or involve
other claims for compensatory,
relief, which, if granted, would punitive,
or antitrust or other treble
require very large expenditures. 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
Thevery large
extent expenditures.
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
The extent
historical of our suggests
experience financial exposure
that in most to these matters
instances is difficult
the amount to estimate.
asserted is not Many matters
a reliable do not
indicator ofspecify a dollar
the ultimate
amount
outcome. 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
We the
nature, accrue for matters
specific facts and when losses are deemed
circumstances asserted, probable and reasonably
the likelihood that we willestimable.
prevail, and In the
evaluating
severitymatters for accrual
of any potential
and disclosure purposes, we take into consideration factors
loss. We reevaluate and update our accruals as matters progress over time. 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
[Link]
We reevaluate
the majority of and updatewhich
matters, our accruals
generally asarise
matters
out progress
of allegedover [Link] 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
For theinmajority
materially excess of of our
matters, which
accrual generally
for these arise out of alleged defects in our products, we establish an accrual based
matters.
on our extensive historical experience with similar matters. We do not believe there is a reasonably possible outcome
materially
For theinremaining
excess of matters,
our accrualwhere for these [Link] with similar matters is of more limited value (i.e., “non-
our historical
pattern matters”), we evaluate the matters primarily based on the individual facts and circumstances. For non-pattern
For the
matters, we remaining matters,there
evaluate whether where is our historical experience
a reasonable possibility ofwith similar matters
a material is of more
loss in excess limited
of any value
accrual (i.e.,
that can“non-
be
pattern matters”),
estimated. we evaluate
Our estimate the matters
of reasonably primarily
possible lossbased
in excesson the of individual
our accruals facts
forand circumstances.
all material For non-pattern
matters currently reflects
matters,tax
indirect weand
evaluate
customswhether there
matters, foriswhich
a reasonable possibility
we estimate of a material
the aggregate risk to loss
be in excessofofup
a range anyto accrual
about $1.4 thatbillion.
can be
estimated. Our estimate of reasonably possible loss in excess of our accruals for all material matters currently reflects
indirect tax andthe
As noted, customs
litigation matters,
processforiswhichsubject wetoestimate the aggregate
many uncertainties, andriskthetooutcome
be a range of up to about
of individual matters $1.4is billion.
not
predictable with assurance. Our assessments are based on our knowledge and experience, but the ultimate outcome of
any As noted,
matter therequire
could litigation processsubstantially
payment is subject toinmany excess uncertainties,
of the amount andthatthe we
outcome of individual
have accrued matters
and/or is not
disclosed.
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.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 25. COMMITMENTS AND CONTINGENCIES
NOTES TO THE(Continued)
FINANCIAL STATEMENTS
NOTE 25. and
Warranty COMMITMENTS
Field ServiceAND CONTINGENCIES (Continued)
Actions

Warranty and Field

We accrue Service Actions
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
We accrue
regarding the estimated
the nature, frequency,cost of both
and basecost
average warranty coverages
of claims for eachand field line
vehicle service actions
by model at the
year. We time of [Link]
establish We
establish our estimate of base warranty obligations using a patterned estimation model, using historical information
estimates of field service action obligations using a patterned estimation model, using historical information regarding the
regarding the nature,
nature, frequency, frequency,
severity, and average
and average cost
cost of of claims
claims for each
for each modelvehicle
year. line by model
In addition, year.
from time Weto establish our
time, we issue
estimates of field service action obligations using a patterned estimation model, using historical information
extended warranties at our expense, the estimated cost of which is accrued at the time of issuance. Warranty and field regarding the
nature, frequency, severity, and average cost of claims for each model year. In addition, from time to
service action obligations are reported in Other liabilities and deferred revenue. We reevaluate the adequacy of our time, we issue
extended
accruals onwarranties
a regularat our expense, the estimated cost of which is accrued at the time of issuance. Warranty and field
basis.
service action obligations are reported in Other liabilities and deferred revenue. We reevaluate the adequacy of our
accruals on a regular
We recognize the basis.
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
We recognize
are reported the and
in Trade benefit from
other a recoverynet
receivables, of and
the costs
Otherassociated
assets. 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
The estimate and
of our otherwarranty
future receivables, net and
and field Other
service assets.
action costs, net of estimated supplier recoveries, for the years
ended December 31 was as follows (in millions):
The estimate of our future warranty and field service action costs, net of estimated supplier recoveries, for the years
2022 2023
ended December 31 was as follows (in millions):
Beginning balance $ 8,451 $ 9,193
2022 2023
Payments made during the period (4,166) (4,779)
Beginning balance $ 8,451 $ 9,193
Changes in accrual related to warranties issued during the period 4,028 4,743
Payments made during the period (4,166) (4,779)
Changes in accrual related to pre-existing warranties 1,134 2,648
Changes in accrual related to warranties issued during the period 4,028 4,743
Foreign currency translation and other (254) (301)
Changes in accrual related to pre-existing warranties 1,134 2,648
Ending balance $ 9,193 $ 11,504
Foreign currency translation and other (254) (301)
Ending balance $ 9,193 $ 11,504
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
Changes
satisfaction to our is
actions estimated costs
a range of are
up to reported
about $1.3 as changes
billion in theinaggregate.
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.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 26. SEGMENT INFORMATIONNOTES TO THE FINANCIAL STATEMENTS

NOTE We26. SEGMENT

report segmentINFORMATION
information consistent with the way our chief operating decision maker (“CODM”) evaluates the
operating results and performance of the Company.
We report segment information consistent with the way our chief operating decision maker (“CODM”) evaluates the
operating results1,and
On January performance
2023, of the Company.
we implemented a new operating model and reporting structure. As a result of this change, we
analyze the results of our business through the following segments: Ford Blue, Ford Model e, and Ford Pro (combined,
On January
replacing 1, 2023,
the previous we implemented
Automotive segment),a new
Fordoperating model and
Next (previously thereporting structure. and
Mobility segment), As aFord
result of this Company
Credit. change, we
analyze the results of our business through the following segments: Ford Blue, Ford Model e, and Ford
adjusted earnings before interest and taxes (“EBIT”) includes the financial results of these five reportable segments and Pro (combined,
replacing
Corporatethe previous
Other, Automotive
and net segment),the
income comprises Ford Next (previously
financial the five
results of the Mobility segment),
reportable and Ford
segments andCredit.
Corporate Company
Other, as
adjusted earnings before interest and taxes
well as Interest on Debt, Special Items, and Taxes. (“EBIT”) includes the financial results of these five reportable segments and
Corporate Other, and net income comprises the financial results of the five reportable segments and Corporate Other, as
well Additionally,
as Interest on Debt,
past Special
service Items,and
pension andOPEB
[Link] and expense plus related assets, previously reported in the
Automotive segment, have been realigned to Corporate Other.
Additionally, past service pension and OPEB income and expense plus related assets, previously reported in the
Automotive segment,
Prior period havewere
amounts been realigned
adjusted to Corporateto
retrospectively Other.
reflect each of the above changes.

Prior
Belowperiod amounts were
is a description adjusted
of our retrospectively
reportable segments andto reflect each of the above changes.
other activities.

FordBelow
Blue is a description of our reportable segments and other activities.
Segment

FordFord
Blue Segment
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,
Ford Blueand
manufacture, primarily includes
distribution the vehicles,
of the sale of Ford andaccessories,
parts, Lincoln internal
and combustion engine
services. This (“ICE”)
segment and hybrid
focuses vehicles, Ford
on developing
service parts, accessories, and digital services for retail customers, together with the associated
and Lincoln ICE and hybrid vehicles. Additionally, this segment provides hardware engineering and manufacturing costs of development,
manufacture,
capabilities to and
Forddistribution
Model e and of the vehicles, parts,
manufactures accessories,
vehicles on behalfand services.
of Ford Thisinsegment
Pro and, focuses
certain cases, on Model
Ford developing Ford
e. Ford
and Lincoln
Blue ICE and hybrid vehicles. Additionally, this segment provides hardware engineering and manufacturing
also includes:
capabilities to Ford
• All sales forModel
marketse and
not manufactures vehicles
presently in scope on behalf
for Ford ModelofeFord ProPro
or Ford and,(as
in further
certain described
cases, Ford Model e. Ford
below)
Blue• also
Inincludes:
markets outside of the United States and Canada, sales to commercial, government, and rental customers of
• ICEAll sales for markets
and hybrid not not
vehicles presently in scope
considered corefor
to Ford
Ford Model
Pro e or Ford Pro (as further described below)
•• Sales
In markets outside
of electric of the United
vehicles (“EVs”)States
by our and Canada, sales
unconsolidated to commercial,
affiliates in China government, and rental customers of
ICEsales
• All and hybrid vehicles
of vehicles not considered
manufactured coretotoother
and sold Ford OEMs
Pro
• Sales of electric vehicles (“EVs”) by our unconsolidated affiliates in China
Ford• Model
All sales of vehicles manufactured and sold to other OEMs
e Segment

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

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

FordThe
Next Segment
Ford Next segment (formerly the Mobility segment) primarily includes expenses and investments for emerging
business initiatives aimed at creating value for Ford in vehicle-adjacent market segments.
The Ford Next segment (formerly the Mobility segment) primarily includes expenses and investments for emerging
business initiatives aimed at creating value for Ford in vehicle-adjacent market segments.
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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 26. SEGMENT INFORMATIONNOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTECredit
Ford 26. SEGMENT
Segment INFORMATION (Continued)

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

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
Corporate
portfolio) Otherand
and gains primarily
lossesincludes
from ourcorporate
cash, cashgovernance expenses,
equivalents, past service
and marketable pension
securities and OPEB
(excluding income
gains and on
and losses
expense, interest income (excluding Ford Credit interest income and interest earned on our extended
investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany service contract
portfolio) and gains governance
lending. Corporate and losses from our cash,
expenses are cash equivalents,
primarily and marketable
administrative, delivering securities
benefit on(excluding gains
behalf of the andenterprise,
global losses on
investments in equity securities), and foreign exchange derivatives gains and losses associated with intercompany
that are not allocated to operating segments. These include expenses related to setting and directing global policy,
lending.
providingCorporate governance
oversight and expenses
stewardship, are primarily
and promoting the administrative, delivering
Company’s interests. benefit on
Corporate behalf
Other of the
assets global enterprise,
include: cash,
that are not allocated to operating segments. These include expenses related to setting and directing
cash equivalents and marketable securities, tax related assets, defined benefit pension plan net assets, and other global policy,assets
providing
managed oversight
centrally. 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
Interest on centrally.
Debt

Interest on Debt
Interest on Debt is presented as a separate reconciling item and consists of interest expense on Company debt
excluding Ford Credit.
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
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 Special Items are
dealer-related presented
costs, as a separate
and facility-related reconciling
charges item. from
stemming Theyour
consist
effortsofto(i)match
pension and OPEB
production remeasurement
capacity and cost
gains andtolosses,
structure market(ii) gains and
demand andlosses
changingon investments in equity
model mix, and securities,
(iv) other (iii) significant
items that we do not personnel
necessarilyexpenses,
consider to supplier-
be
and dealer-related
indicative of earningscosts,
fromand facility-related
ongoing operatingcharges stemming
activities. from our efforts
Our management to match
ordinarily production
excludes these capacity
items from anditscost
review
structure
of to market
the results of the demand
operatingand changing
segments formodel mix, of
purposes and (iv) othersegment
measuring items that we do notand
profitability necessarily
allocatingconsider
[Link] beWe
indicative
also reportofthese
earnings from
special ongoing
items operating
separately activities.
to help Ourtrack
investors management ordinarily
amounts related excludes
to these these and
activities itemsto from
allowits review
investors
of the results
analyzing our of the operating
results to identifysegments for purposes
certain infrequent of measuring
significant segment
items that they mayprofitability
wish to and allocating
exclude when resources.
consideringWe the
also report
trend these operating
of ongoing special items separately to help investors track amounts related to these activities and to allow investors
results.
analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the
trend of ongoing operating results.

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 26. SEGMENT INFORMATIONNOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTE 26. Revenue,
Segment SEGMENT INFORMATION
Cost, (Continued)
and Asset Principles for Ford Blue, Ford Model e, and Ford Pro

SegmentExternal Revenue,
vehicle andCost, and services
digital Asset Principles
revenue isfor Ford Blue,
generally Ford Modeland
vehicle-specific e, and Ford in
included Pro the segment responsible for
the external vehicle sale. A majority of parts and accessories revenue and cost is attributed to customer sales channels or
vehicleExternal vehicleon
lines based and digital
recent endservices
customerrevenue
salesisand
generally vehicle-specific
is included and included
in the respective segment. 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
In the based
normal on recent
course end customer
of business, salesFord
Ford Blue, and Model
is included
e, andin Ford
the respective
Pro transactsegment.
between segments and cooperate
to leverage synergies, including developing and manufacturing vehicles on behalf of another segment. When one
segmentIn theproduces
normal course of business,
a vehicle that is soldFord Blue, Ford
externally Model e,
by another and FordanPro
segment, transact between
intersegment transactionsegments
[Link]
to leverage synergies, including developing and manufacturing vehicles on behalf of another
producing segment will report intersegment revenue to recoup the costs associated with the unit produced. This includes segment. When one
segment
material cost, produces
labor aand
vehicle that is(including
overhead sold externally by another
depreciation and segment,
amortization),an intersegment
inbound freight,transaction occurs. The markup.
and an intersegment
producing segment will report intersegment revenue to recoup the costs associated with
The intersegment markup amount is set to deliver a competitive return to the producing segment for its manufacturing the unit produced. This includesand
material
distribution service. Costs are reflected in the associated segment externally reporting the vehicle sale, as detailedmarkup.
cost, labor and overhead (including depreciation and amortization), inbound freight, and an intersegment in the
The
tableintersegment
below: 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 Reported in the segment externally
Income Statement Elements Examples
accrual Segment
selling theReporting
vehicle
Costs identifiable
Costs specific to aby particular
product vehicle
line Bill of material cost
Manufacturing and initial
and logistics warranty Typically
costs, Reportedidentifiable
in the segmentto theexternally
product line
accrual
depreciation & amortization expense, selling the vehicle
or production location. Reported in the
Costs identifiable by product line direct researchand
Manufacturing & development
logistics costs, costs segment externally selling
Typically identifiable to the the vehicle,
product line
depreciation & amortization expense, based on relative
or production volume
location. Reported in the
Shared costs direct research
Selling, general&&development
administrativecosts segment shared
Typically externally selling
across all the vehicle,
segments,
expense, and indirect/cross product based
generallyon based
relativeon volume
relative volume.
Shared costs line research
Selling, general & development
& administrative costs Certain
Typicallycosts
shared clearly linked
across to a
all segments,
expense, and indirect/cross product segment
generally arebased reported in thevolume.
on relative specific
line research & development costs segment
Certain costs clearly linked to a
Intersegment markup for intersegment Contract manufacturing and distribution segment Reportedare reported
in the segment in the specific
externally
vehicle transactions fees segment
selling the vehicle, for each applicable
Intersegment markup for intersegment Contract manufacturing and distribution vehicle Reported transaction
in the segment externally
vehicle transactions fees 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.
Assets are assets
Manufacturing reported in each segment,
producing aligned EVs
only, or primarily, to theandappropriate operational are
related components responsibility.
reflected in Manufacturing
Ford Model e. assets,
e.g., our plants and the machinery and equipment therein, are included in our
Manufacturing assets that support the production of ICE and hybrid vehicles, including those producing Ford Blue and Ford ModelICE e segments.
and electric in
Manufacturing assets producing only, or primarily, EVs and related components are reflected
the same facility, are included in Ford Blue. Vendor tooling dedicated to producing EV parts is reported in Ford in Ford Model e. Model e.
Manufacturing
There are no Ford assets that supportor
manufacturing the production
vendor toolingofassets
ICE and hybrid in
reported vehicles,
Ford [Link] those of
Regardless producing
the segmentICE and electric
reporting thein
the same facility, are included in Ford Blue. Vendor tooling dedicated to producing EV parts
asset, depreciation and amortization expense is reflected on the basis of production volume and reported in the segment is reported in Ford Model e.
There are no Ford manufacturing
that reports the external vehicle sale. 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 Equity
reportsinthenetexternal vehicleofsale.
income/(loss) 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
segmentEquityreporting
in net income/(loss)
for our most of companies is included
affiliated unconsolidated
significant entities: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 ∘ BlueOval SK, LLC ∘ Ford Otomotiv Sanayi Anonim Sirketi
Ford Blue
Corporation, Ltd. (“CAF”) Ford Model e Ford ProOtosan”)
(“Ford
∘∘ Changan Ford Automobile
Jiangling Motors Corporation, Ltd. ∘ BlueOval SK, LLC ∘ Ford Otomotiv Sanayi Anonim Sirketi
Corporation,
(“JMC”) Ltd. (“CAF”) (“Ford Otosan”)
∘∘ AutoAlliance
Jiangling Motors Corporation,
(Thailand) Ltd.
Co., Ltd.
(“JMC”)
(“AAT”)
∘ AutoAlliance (Thailand) Co., Ltd.
(“AAT”)

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 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 26. SEGMENT INFORMATIONNOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTE
Key26. SEGMENT
financial INFORMATION
information (Continued)
for the years ended or at December 31 was as follows (in millions):
Ford Ford Ford Ford Ford Corporate Interest Special Eliminations/
Key financial information
Bluefor the years
Model e ended
Pro orNext
at December
Credit 31 Other
was as follows
on Debt(in millions):
Items Adjustments Total
2021 Ford Ford Ford Ford Ford Corporate Interest Special Eliminations/
Blue Model e Pro Next Credit Other on Debt Items Adjustments Total
External Revenues $ 80,377 $ 3,098 $42,649 $ 118 $10,073 $ 26 $ — $ — $ — $136,341
2021
Intersegment Revenues (a) 30,089 88 — — — — — — (30,177) —
External Revenues $ 80,377 $ 3,098 $42,649 $ 118 $10,073 $ 26 $ — $ — $ — $136,341
Total Revenues $110,466 $ 3,186 $42,649 $ 118 $10,073 $ 26 $ — $ — $ (30,177) $136,341
Intersegment Revenues (a) 30,089 88 — — — — — — (30,177) —
Income/(Loss) before
Total Revenues
income taxes $110,466
$ 3,293 $ 3,186
$ $42,649
(892) $ 2,665 $(1,030)
$ 118 $$10,073
4,717 $
$ 26
1,247 $ (1,803)
$ — $ $ 9,583
— (b) $
$ (30,177)
— $
$136,341
17,780
Income/(Loss)
Depreciation and before
tooling
income taxes
amortization $ 3,293
3,445 $ (892)
142 $ 2,665
1,423 $(1,030)
8 $ 4,717
1,666 $ 1,247
67 $ (1,803) 567 (b) $
— $ 9,583 — $ 17,780
7,318
Depreciation
Interest and tooling
expense — — — — 2,790 — 1,803 — — 4,593
amortization 3,445 142 1,423 8 1,666 67 — 567 — 7,318
Investment-related interest
Interest expense
income —
91 — —
21 — 2,790
38 —
104 1,803
— — — 4,593
254
Investment-related
Equity interest
in net income/(loss)
income
of affiliated companies 91
302 —
(10) 21
275 —
(258) 38
31 104
2 — —
(15) — 254
327
Equityoutflow
Cash in net income/(loss)
for capital
of affiliated(c)companies
spending 302
5,214 (10)
516 275
59 (258)
46 31
44 2
348 —
— (15)
— —
— 327
6,227
Cash outflow for capital
Total assets 55,456 2,563 1,809 3,325 134,428 60,871 — — (1,417) (d) 257,035
spending (c) 5,214 516 59 46 44 348 — — — 6,227
2022 assets
Total 55,456 2,563 1,809 3,325 134,428 60,871 — — (1,417) (d) 257,035
External Revenues $ 94,762 $ 5,253 $48,939 $ 99 $ 8,978 $ 26 $ — $ — $ — $158,057
2022
Intersegment
External Revenues Revenues (a) 36,020
$ 94,762 121 $48,939
$ 5,253 — $ —
99 —
$ 8,978 $ —
26 $ —
— $ —
— $ (36,141)
— —
$158,057
Total Revenues
Intersegment Revenues (a) $130,782
36,020 $ 5,374
121 $48,939
— $ 99
— $ 8,978
— $ 26
— $ —
— $ —
— $ (36,141)
(36,141) $158,057
—
Income/(Loss)
Total Revenuesbefore $130,782 $ 5,374 $48,939 $ 99 $ 8,978 $ 26 $ — $ — $ (36,141) $158,057
income taxes $ 6,847 $ (2,133) $ 3,222 $ (926) $ 2,657 $ 748 $ (1,259) $(12,172) (e) $ — $ (3,016)
Income/(Loss)
Depreciation and before
tooling
income taxes
amortization $ 6,847
3,365 $ (2,133)
249 $ 3,222
1,522 $ (926)
5 $ 2,657
2,281 $ 748
95 $ (1,259) 157 (e) $
— $(12,172) —
— $ (3,016)
7,674
Depreciation and tooling
Interest
amortizationexpense —
3,365 —
249 —
1,522 —
5 3,334
2,281 —
95 1,259
— —
157 —
— 4,593
7,674
Investment-related
Interest expense interest — — — — 3,334 — 1,259 — — 4,593
income 59 — 16 — 178 386 — — — 639
Investment-related interest
Equity
incomein net income/(loss) 59 — 16 — 178 386 — — — 639
of affiliated companies 270 (15) 412 (315) 27 1 — (3,263) (f) — (2,883)
Equity in net income/(loss)
Cash
of outflow
affiliated for capital
companies 270 (15) 412 (315) 27 1 — (3,263) (f) — (2,883)
spending (c) 4,702 1,336 26 23 58 424 — 297 — 6,866
Cash outflow for capital
Total
spendingassets
(c) 56,023
4,702 5,285
1,336 2,177
26 392
23 137,954
58 55,580
424 — —
297 (1,527)
— (d) 255,884
6,866
Total
2023 assets 56,023 5,285 2,177 392 137,954 55,580 — — (1,527) (d) 255,884
2023
External Revenues $101,934 $ 5,897 $58,058 $ 3 $10,290 $ 9 $ — $ — $ — $176,191
External Revenues
Intersegment Revenues (a) $101,934
38,693 $ 5,897
629 $58,058
— $ 3
— $10,290
— $ 9
— $ — $ — $ —
(39,322) $176,191
—
Intersegment
Total Revenues 38,693
Revenues (a) $140,627 629
$ 6,526 —
$58,058 $ — —
3 $10,290 $ —
9 $ — $ — $ (39,322) —
$176,191
Total Revenuesbefore
Income/(Loss) $140,627 $ 6,526 $58,058 $ 3 $10,290 $ 9 $ — $ — $ (39,322) $176,191
income taxes
Income/(Loss) before $ 7,462 $ (4,701) $ 7,222 $ (138) $ 1,331 $ (760) $ (1,302) $ (5,147) (g) $ — $ 3,967
Depreciation
income taxes and tooling $ 7,462 $ (4,701) $ 7,222 $ (138) $ 1,331 $ (760) $ (1,302) $ (5,147) (g) $ — $ 3,967
amortization
Depreciation and tooling 3,378 505 1,291 12 2,354 103 — 47 — 7,690
amortization
Interest expense 3,378— 505
— 1,291
— 12
— 2,354
6,311 103
— —
1,302 47
— —
— 7,690
7,613
Investment-related
Interest expense interest — — — — 6,311 — 1,302 — — 7,613
income
Investment-related interest 110 1 32 — 522 902 — — — 1,567
incomein net income/(loss)
Equity 110 1 32 — 522 902 — — — 1,567
of affiliated
Equity in netcompanies
income/(loss) 337 (37) 589 (29) 32 1 — (479) (h) — 414
of
Cashaffiliated
outflowcompanies
for capital 337 (37) 589 (29) 32 1 — (479) (h) — 414
spending
Cash outflow (c) for capital 4,963 2,861 7 6 80 315 — 4 — 8,236
spending
Total assets(c) 4,963
58,990 2,861
13,648 2,9427 207 6 148,521 80 315
52,521 —
— —4 — (d) 273,310
(3,519) 8,236
Total assets 58,990 13,648 2,942 207 148,521 52,521 — — (3,519) (d) 273,310
__________
__________
(a) Intersegment revenues only reflect finished vehicle transactions between Ford Blue, Ford Model e, and Ford Pro where there is an intersegment
(a) markup
Intersegment revenues
and are only at
recognized reflect finished
the time vehicle
of the transactions
intersegment between Ford Blue, Ford Model e, and Ford Pro where there is an intersegment
transaction.
markup and
(b) Primarily are recognized
reflects at the
gains/(losses) ontime of the intersegment
our Rivian investment and transaction.
mark-to-market adjustments for our global pension and OPEB plans, partially offset
(b) by Primarily reflectsrelated
restructuring gains/(losses)
actions andon our
theRivian
loss oninvestment and mark-to-market
extinguishment of debt. adjustments for our global pension and OPEB plans, partially offset
(c) by Ford restructuring
Blue includesrelated
$366actions
million,and$305themillion,
loss onand extinguishment
$909 million of of spending
debt. attributable to electric vehicles at shared manufacturing plants in 2021,
(c) 2022,
Ford Blueand includes $366 million,
2023, respectively. $305
Total million,
electric and $909
vehicle millionincluding
spending, of spending
Fordattributable to electric
Blue and Ford Modelvehicles at shared
e, was $882 manufacturing
million, plants
$1,641 million, and in 2021,
2022,
$3,770and 2023,
million respectively.
in 2021, 2022, andTotal electric
2023, vehicle spending, including Ford Blue and Ford Model e, was $882 million, $1,641 million, and
respectively.
$3,770 million
(d) Primarily in 2021,
includes 2022, and
eliminations 2023, respectively.
of intersegment transactions occurring in the ordinary course of business.
(d)
(e) Primarily
Primarily includes eliminations ofonintersegment
reflects gains/(losses) transactions
our Rivian investment and occurring in the ordinary
the impairment course
of our Argo of business.
AI equity method investment.
(e) Primarily
(f) Primarily reflects
reflects the
gains/(losses)
impairmenton of our
our Rivian
Argo AIinvestment and the
equity method impairment of our Argo AI equity method investment.
investment.
(f) Primarily
(g) Primarily reflects
reflects mark-to-market
the impairment of our Argo AIfor
adjustments equity method
our global investment.
pension and OPEB plans, restructuring actions in Europe and China, and an accrual for
(g) Primarily
the Transit reflects
Connectmark-to-market
customs matter. adjustments for our global pension and OPEB plans, restructuring actions in Europe and China, and an accrual for
(h) the Transit
Primarily Connect
reflects ourcustoms
share ofmatter.
charges from an equity method investment resulting from Ford's ongoing restructuring actions in China.
(h) Primarily reflects our share of charges from an equity method investment resulting from Ford's ongoing restructuring actions in China.

177
177

199174_Ford_2023_AR_1OK_r1.indd 181 2/13/24 8:15 PM

 FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTE 26. SEGMENT INFORMATIONNOTES
(Continued)
TO THE FINANCIAL STATEMENTS
NOTE 26. SEGMENT
Geographic INFORMATION (Continued)
Information

Geographic
We reportInformation
revenue on a “where-sold” basis, which reflects the revenue within the country in which the ultimate sale or
financing is made to our external customer.
We report revenue on a “where-sold” basis, which reflects the revenue within the country in which the ultimate sale or
financing is made torevenues
Total Company our external
andcustomer.
long-lived assets, split geographically by our country of domicile (the United States) and
other countries where our major subsidiaries are domiciled, for the years ended December 31 were as follows
Total Company revenues and long-lived assets, split geographically by our country of domicile (the United States) and
(in millions):
other countries where our major subsidiaries are domiciled, for the years ended December 31 were as follows
2021 2022 2023
(in millions):
Long-Lived Long-Lived Long-Lived
Revenues2021Assets (a) Revenues2022Assets (a) Revenues2023Assets (a)
United States $ 87,012 $Long-Lived
44,271 $ 105,481 $Long-Lived
41,925 $ 116,995 $Long-Lived
42,235
Revenues Assets (a) Revenues Assets (a) Revenues Assets (a)
Canada 11,153 5,773 12,590 5,739 13,391 6,147
United States $ 87,012 $ 44,271 $ 105,481 $ 41,925 $ 116,995 $ 42,235
United Kingdom 7,607 1,383 8,220 1,264 8,968 1,868
Canada 11,153 5,773 12,590 5,739 13,391 6,147
Mexico 1,440 3,903 1,813 4,255 2,774 5,222
United Kingdom 7,607 1,383 8,220 1,264 8,968 1,868
All Other 29,129 8,170 29,953 6,854 34,063 6,733
Mexico 1,440 3,903 1,813 4,255 2,774 5,222
Total Company $ 136,341 $ 63,500 $ 158,057 $ 60,037 $ 176,191 $ 62,205
All Other 29,129 8,170 29,953 6,854 34,063 6,733
__________
(a) Total Company
Includes $ from
Net property and Net investment in operating leases 136,341 $ 63,500
our consolidated $ sheets.
balance 158,057 $ 60,037 $ 176,191 $ 62,205
__________
(a) Includes Net property and Net investment in operating leases from our consolidated balance sheets.

178

178

199174_Ford_2023_AR_1OK.indd 182 2/9/24 2:58 PM

 FORD MOTOR COMPANY AND SUBSIDIARIES
Schedule II — Valuation and Qualifying Accounts
(in millions)
Balance at Charged to
Beginning of Costs and Balance at End
Description Period Expenses Deductions of Period
For the Year Ended December 31, 2021
Allowances deducted from assets
Credit losses $ 1,332 $ (306) $ 100 (a) $ 926
Doubtful receivables 57 3 13 (b) 47
Inventories (primarily service part obsolescence) 688 36 (c) — 724
Deferred tax assets 1,981 (670) (d) 244 1,067
Deferred tax assets for U.S. branch operations (e) 2,878 390 — 3,268
Total allowances deducted from assets $ 6,936 $ (547) $ 357 $ 6,032

For the Year Ended December 31, 2022

Allowances deducted from assets
Credit losses $ 926 $ 50 $ 119 (a) $ 857
Doubtful receivables 47 57 11 (b) 93
Inventories (primarily service part obsolescence) 724 (6) (c) — 718
Deferred tax assets 1,067 (242) (d) 3 822
Deferred tax assets for U.S. branch operations (e) 3,268 (38) — 3,230
Total allowances deducted from assets $ 6,032 $ (179) $ 133 $ 5,720

For the Year Ended December 31, 2023

Allowances deducted from assets
Credit losses $ 857 $ 385 $ 343 (a) $ 899
Doubtful receivables 93 30 54 (b) 69
Inventories (primarily service part obsolescence) 718 (31) (c) — 687
Deferred tax assets 822 36 (d) 12 846
Deferred tax assets for U.S. branch operations (e) 3,230 111 — 3,341
Total allowances deducted from assets $ 5,720 $ 531 $ 409 $ 5,842
_________
(a) Finance receivables deemed to be uncollectible and other changes, principally amounts related to finance receivables sold and translation
adjustments.
(b) Accounts receivable deemed to be uncollectible as well as translation adjustments.
(c) Net change in inventory allowances, including translation adjustments.
(d) Change in valuation allowance on deferred tax assets including translation adjustments.
(e) Deferred tax assets of U.S. branch operations no longer requiring a valuation allowance would result in an increase in deferred tax liabilities.

179

199174_Ford_2023_AR_1OK.indd 183 2/9/24 2:58 PM

 Exhibit 4-B

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

As of December 31, 2023, Ford Motor Company (“Ford,” the “Company,” “we,” “our,” “us”) had four
securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):
(i) Common Stock, $0.01 par value per share (“Common Stock”), (ii) 6.200% Notes due June 1, 2059 (the “June
2059 Notes”), (iii) 6.000% Notes due December 1, 2059 (the “December 2059 Notes”), and (iv) 6.500% Notes due
August 15, 2062 (the “2062 Notes”). Each of the Company’s securities registered under Section 12 of the
Exchange Act is listed on The New York Stock Exchange.

DESCRIPTION OF CAPITAL STOCK

This section contains a description of our capital stock. This description includes not only our Common
Stock, but also our Class B Stock, par value $0.01 per share (“Class B Stock”) and preferred stock, certain terms of
which affect the Common Stock, and the preferred share purchase rights, one of which is attached to each share of
our Common Stock. The following summary of the terms of our capital stock is not meant to be complete and is
qualified by reference to our restated certificate of incorporation and the preferred share rights plan.

Our authorized capital stock currently consists of 6,000,000,000 shares of Common Stock, 530,117,376
shares of Class B Stock and 30,000,000 shares of preferred stock.

As of December 31, 2023, we had outstanding 3,902,772,122 shares of Common Stock and 70,852,076
shares of Class B Stock. No shares of preferred stock were outstanding.

Common Stock and Class B Stock

Rights to Dividends and on Liquidation. Each share of Common Stock and Class B Stock is entitled to
share equally in dividends (other than dividends declared with respect to any outstanding preferred stock) when and
as declared by our board of directors, except as stated below under the subheading “Stock Dividends.”

Upon liquidation, subject to the rights of any other class or series of stock having a preference on
liquidation, each share of Common Stock will be entitled to the first $.50 available for distribution to common and
Class B stockholders, each share of Class B Stock will be entitled to the next $1.00 so available, each share of
Common Stock will be entitled to the next $.50 available and each share of common and Class B Stock will be
entitled to an equal amount after that.

Voting — General. All general voting power is vested in the holders of Common Stock and the holders of
Class B stock, voting together without regard to class, except as stated below in the subheading “Voting by Class.”
The voting power of the shares of stock is determined as described below. However, we could in the future create a
series of preferred stock with voting rights equal to or greater than our Common Stock or Class B stock.

Each holder of Common Stock is entitled to one vote per share, and each holder of Class B Stock is entitled
to a number of votes per share derived by a formula contained in our restated certificate of incorporation. As long
as at least 60,749,880 shares of Class B Stock remain outstanding, the formula will result in holders of Class B
Stock having 40% of the general voting power and holders of Common Stock and, if issued, any preferred stock
with voting power having 60% of the general voting power.

If the number of outstanding shares of Class B Stock falls below 60,749,880, but remains at least
33,749,932, then the formula will result in the general voting power of holders of Class B Stock declining to 30% and
the general voting power of holders of Common Stock and, if issued, any preferred stock with voting power
increasing to 70%.

If the number of outstanding shares of Class B Stock falls below 33,749,932, then each holder of Class B
Stock will be entitled to only one vote per share.

199174_Ford_2023_AR_1OK.indd 184 2/9/24 2:58 PM

 Based on the number of shares of Class B Stock and Common Stock outstanding as of
December 31, 2023, each holder of Class B Stock would be entitled to 36.722 votes per share on any matter
submitted for a vote of shareholders. Of the outstanding Class B Stock as of December 31, 2023, 70,778,212
shares were held in a voting trust. The trust requires the trustee to vote all the shares in the trust as directed by
holders of a plurality of the shares in the trust.

Non-Cumulative Voting Rights. Our Common Stock and Class B stock do not and will not have
cumulative voting rights. This means that the holders who have more than 50% of the votes for the election of
directors can elect 100% of the directors if they choose to do so.

Voting by Class. If we want to take any of the following actions, we must obtain the vote of the holders of
a majority of the outstanding shares of Class B stock, voting as a class:
• issue any additional shares of Class B Stock (with certain exceptions);
• reduce the number of outstanding shares of Class B Stock other than by holders of Class B Stock
converting Class B Stock into Common Stock or selling it to the Company;
• change the capital stock provisions of our restated certificate of incorporation;
• merge or consolidate with or into another corporation;
• dispose of all or substantially all of our property and assets;
• transfer any assets to another corporation and in connection therewith distribute stock or other
securities of that corporation to our stockholders; or
• voluntarily liquidate or dissolve.

Voting Provisions of Delaware Law. In addition to the votes described above, any special requirements
of Delaware law must be met. The Delaware General Corporation Law contains provisions on the votes required to
amend certificates of incorporation, merge or consolidate, sell, lease or exchange all or substantially all assets, and
voluntarily dissolve.

Ownership and Conversion of Class B Stock. In general, only members of the Ford family or their
descendants or trusts or corporations in which they have specified interests can own or be registered as record
holders of shares of Class B stock, or can enjoy for their own benefit the special rights and powers of Class B stock.
A holder of shares of Class B Stock can convert those shares into an equal number of shares of Common Stock for
the purpose of selling or disposing of those shares. Shares of Class B Stock acquired by the Company or
converted into Common Stock cannot be reissued by the Company.

Preemptive and Other Subscription Right. Holders of Common Stock do not have any right to purchase
additional shares of Common Stock if we sell shares to others. If, however, we sell Class B Stock or obligations or
shares convertible into Class B Stock (subject to the limits on who can own Class B Stock described above), then
holders of Class B Stock will have a right to purchase, on a ratable basis and at a price just as favorable, additional
shares of Class B Stock or those obligations or shares convertible into Class B stock.

In addition, if shares of Common Stock (or shares or obligations convertible into such stock) are offered to
holders of Common Stock , then we must offer to the holders of Class B Stock shares of Class B Stock (or shares or
obligations convertible into such stock), on a ratable basis, and at the same price per share.

Stock Dividends. If we declare and pay a dividend in our stock, we must pay it in shares of Common
Stock to holders of Common Stock and in shares of Class B Stock to holders of Class B stock.

Ultimate Rights of Holders of Class B Stock. If and when the number of outstanding shares of Class B
Stock falls below 33,749,932, the Class B Stock will become freely transferable and will become substantially
equivalent to Common Stock. At that time, holders of Class B Stock will have one vote for each share held, will
have no special class vote, will be offered Common Stock if Common Stock is offered to holders of Common Stock,
will receive Common Stock if a stock dividend is declared, and will have the right to convert such shares into an
equal number of shares of Common Stock irrespective of the purpose of conversion.

199174_Ford_2023_AR_1OK.indd 185 2/9/24 2:59 PM

 Miscellaneous; Dilution. If we increase the number of outstanding shares of Class B Stock (by, for
example, doing a stock split or stock dividend), or if we consolidate or combine all outstanding shares of Class B
Stock so that the number of outstanding shares is reduced, then the threshold numbers of outstanding Class B
Stock (that is, 60,749,880 and 33,749,932) that trigger voting power changes will automatically adjust by a
proportionate amount.

Preferred Stock

We may issue preferred stock from time to time in one or more series, without stockholder approval.
Subject to limitations prescribed by law, our board of directors is authorized to fix for any series of preferred stock
the number of shares of such series and the designation, relative powers, preferences and rights, and the
qualifications, limitations, or restrictions of such series.

Preferred Share Purchase Rights

On September 11, 2009, we entered into a Tax Benefit Preservation Plan, which Tax Benefit Preservation
Plan was last amended on September 9, 2021 (as amended, the “Plan”) with Computershare Trust Company, N.A.,
as rights agent, and our Board of Directors declared a dividend of one preferred share purchase right (the “Rights”)
for each outstanding share of Common Stock, and each outstanding share of Class B Stock under the terms of the
Plan. Each share of Common Stock we issue will be accompanied by a Right. Each Right entitles the registered
holder to purchase from us one one-thousandth of a share of our Series A Junior Participating Preferred Stock, par
value $1.00 per share at a purchase price of $35.00 per one one-thousandth of a share of Preferred Stock, subject
to adjustment. The description and terms of the Rights are set forth in the Plan.

Until the earlier to occur of (i) the close of business on the tenth business day following the public
announcement that a person or group has become an “Acquiring Person” by acquiring beneficial ownership of
4.99% or more of the outstanding shares of Common Stock (or the Board becoming aware of an Acquiring Person,
as defined in the Plan) or (ii) the close of business on the tenth business day (or, except in certain circumstances,
such later date as may be specified by the Board) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a
person or group (with certain exceptions) of 4.99% or more of the outstanding shares of Common Stock (the earlier
of such dates being called the “Distribution Date”), the Rights will be evidenced, with respect to Common Stock and
Class B Stock certificates outstanding as of the Record Date (or any book-entry shares in respect thereof), by such
Common Stock or Class B Stock certificate (or registration in book-entry form) together with the summary of rights
(“Summary of Rights”) describing the Plan and mailed to stockholders of record on the Record Date, and the Rights
will be transferable only in connection with the transfer of Common Stock or Class B stock. Any person or group
that beneficially owned 4.99% or more of the outstanding shares of Common Stock on September 11, 2009 are not
deemed an Acquiring Person unless and until such person or group acquires beneficial ownership of additional
shares of Common Stock representing one-half of one percent (0.5%) or more of the shares of Common Stock
then outstanding. Under the Plan, the Board may, in its sole discretion, exempt any person or group from being
deemed an Acquiring Person for purposes of the Plan if the Board determines that such person’s or group’s
ownership of Common Stock will not jeopardize or endanger our availability, or otherwise limit in any way the use of,
our net operating losses, tax credits and other tax assets (the “Tax Attributes”).

The Plan provides that, until the Distribution Date (or earlier expiration or redemption of the Rights), the
Rights will be attached to and will be transferred with and only with the Common Stock and Class B stock. Until the
Distribution Date (or the earlier expiration or redemption of the Rights), new shares of Common Stock and Class B
Stock issued after the Record Date upon transfer or new issuances of Common Stock and Class B Stock will
contain a notation incorporating the Plan by reference (with respect to shares represented by certificates) or notice
thereof will be provided in accordance with applicable law (with respect to uncertificated shares). Until the
Distribution Date (or earlier expiration of the Rights), the surrender for transfer of any certificates representing
shares of Common Stock and Class B Stock outstanding as of the Record Date, even without such notation or a
copy of the Summary of Rights, or the transfer by book-entry of any uncertificated shares of Common Stock and
Class B stock, will also constitute the transfer of the Rights associated with such shares. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to
holders of record of the Common Stock and Class B Stock as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.

199174_Ford_2023_AR_1OK.indd 186 2/9/24 2:59 PM

 The Rights are not exercisable until the Distribution Date. The Rights will expire upon the earliest of the
close of business on September 30, 2024 (unless that date is advanced or extended by the Board), the time at
which the Rights are redeemed or exchanged under the Plan, the repeal of Section 382 of the Internal Revenue
Code of 1986, as amended, or any successor statute if the Board determines that the Plan is no longer necessary
for the preservation of our Tax Attributes, or the beginning of our taxable year to which the Board determines that no
Tax Attributes may be carried forward.

The Purchase Price payable, and the number of shares of Preferred Stock or other securities or property
issuable, upon exercise of the Rights is subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) upon the grant to
holders of the Preferred Stock of certain rights or warrants to subscribe for or purchase Preferred Stock at a price,
or securities convertible into Preferred Stock with a conversion price, less than the then-current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights or
warrants.

The number of outstanding Rights is subject to adjustment in the event of a stock dividend on the Common
Stock and Class B Stock payable in shares of Common Stock or Class B Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the Distribution Date.

Shares of Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of
Preferred Stock will be entitled, when, as and if declared, to a minimum preferential quarterly dividend payment of
the greater of (a) $10.00 per share, and (b) an amount equal to 1,000 times the dividend declared per share of
Common Stock . In the event of our liquidation, dissolution or winding up, the holders of the Preferred Stock will be
entitled to a minimum preferential payment of the greater of (a) $1.00 per share (plus any accrued but unpaid
dividends), and (b) an amount equal to 1,000 times the payment made per share of Common Stock . Each share of
Preferred Stock will have 1,000 votes, voting together with the Common Stock and Class B stock. Finally, in the
event of any merger, consolidation or other transaction in which outstanding shares of Common Stock are
converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received
per share of Common Stock. These rights are protected by customary antidilution provisions.

Because of the nature of the Preferred Stock’s dividend, liquidation and voting rights, the value of the one
one-thousandth interest in a share of Preferred Stock purchasable upon exercise of each Right should approximate
the value of one share of Common Stock.

In the event that any person or group becomes an Acquiring Person, each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereupon become null and void), will thereafter have
the right to receive upon exercise of a Right (including payment of the Purchase Price) that number of shares of
Common Stock having a market value of two times the Purchase Price.

At any time after any person or group becomes an Acquiring Person but prior to the acquisition by such
Acquiring Person of beneficial ownership of 50% or more of the voting power of the shares of Common Stock and
Class B Stock then outstanding, the Board may exchange the Rights (other than Rights owned by such Acquiring
Person, which will have become null and void), in whole or in part, for shares of Common Stock or Preferred Stock
(or a series of our preferred stock having equivalent rights, preferences and privileges), at an exchange ratio of one
share of Common Stock or Class B stock, or a fractional share of Preferred Stock (or other stock) equivalent in
value thereto, per Right (subject to adjustment for stock splits, stock dividends and similar transactions).

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional shares of Preferred Stock, Common
Stock or Class B Stock will be issued (other than fractions of Preferred Stock which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at our election, be evidenced by depositary receipts), and
in lieu thereof an adjustment in cash will be made based on the current market price of the Preferred Stock, the
Common Stock or Class B stock.

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 At any time prior to the time an Acquiring Person becomes such, the Board may redeem the Rights in
whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”) payable, at our option, in cash, shares
of Common Stock or such other form of consideration as the Board shall determine. The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the
only right of the holders of Rights will be to receive the Redemption Price.

For so long as the Rights are then redeemable, we may, except with respect to the Redemption Price,
amend the Plan in any manner. After the Rights are no longer redeemable, we may, except with respect to the
Redemption Price, amend the Plan in any manner that does not adversely affect the interests of holders of the
Rights (other than the Acquiring Person).

Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as our stockholder,
including, without limitation, the right to vote or to receive dividends.

DESCRIPTION OF DEBT SECURITIES

We issue debt securities in one or more series under an Indenture dated as of January 30, 2002 (the
“Indenture”) between us and The Bank of New York Mellon as successor trustee to JPMorgan Chase Bank. The
Indenture may be supplemented from time to time.

The Indenture is a contract between us and The Bank of New York Mellon acting as Trustee. The Trustee
has two main roles. First, the Trustee can enforce debtholders’ rights against us if an “Event of Default” described
below occurs. Second, the Trustee performs certain administrative duties for us. The Indenture is summarized
below.

The June 2059 Notes

We issued $750,000,000 aggregate principal amount of the June 2059 Notes on May 28, 2019. The
maturity date of the June 2059 Notes is June 1, 2059, and interest at a rate of 6.200% per annum is paid quarterly
on March 1, June 1, September 1, and December 1 of each year, beginning on September 1, 2019, and on the
maturity date. The June 2059 Notes are redeemable at our option on June 1, 2024 and on any day thereafter, in
whole or in part, at 100% of their principal amount plus accrued and unpaid interest. The June 2059 Notes are not
subject to repayment at the option of the holder at any time prior to maturity. As of January 31, 2024, $750,000,000
aggregate principal amount of the June 2059 Notes was outstanding.

The December 2059 Notes

We issued $800,000,000 aggregate principal amount of the December 2059 Notes on December 11, 2019.
The maturity date of the December 2059 Notes is December 1, 2059, and interest at a rate of 6.000% per annum is
paid quarterly on March 1, June 1, September 1, and December 1 of each year, beginning on March 1, 2020, and
on the maturity date. The December 2059 Notes are redeemable at our option on December 1, 2024 and on any
day thereafter, in whole or in part, at 100% of their principal amount plus accrued and unpaid interest. The
December 2059 Notes are not subject to repayment at the option of the holder at any time prior to maturity. As of
January 31, 2024, $800,000,000 aggregate principal amount of the December 2059 Notes was outstanding.

The 2062 Notes

We issued $600,000,000 aggregate principal amount of the 2062 Notes on August 15, 2022. The maturity
date of the 2062 Notes is August 15, 2062, and interest at a rate of 6.500% per annum is paid quarterly on February
15, May 15, August 15, and November 15 each year, beginning on November 15, 2022, and on the maturity date.
The 2062 Notes are redeemable at our option on August 15, 2027, and on any day thereafter, in whole or in part, at
100% of their principal amount plus accrued and unpaid interest. The 2062 Notes are not subject to repayment at
the option of the holder at any time prior to maturity. As of January 31, 2024, $600,000,000 aggregate principal
amount of 2062 Notes was outstanding.

199174_Ford_2023_AR_1OK.indd 188 2/9/24 2:59 PM

 General
The Indenture does not limit the amount of debt securities that may be issued under it. Therefore,
additional debt securities may be issued under the Indenture.

The debt securities are our unsecured obligations. Senior debt securities rank equally with our other
unsecured and unsubordinated indebtedness (parent company only).

Principal (and premium, if any) and interest, if any, will be paid by us in immediately available funds. The
Indenture does not contain any provisions that give debtholders protection in the event we issue a large amount of
debt or we are acquired by another entity.

Limitation on Liens
The Indenture restricts our ability to pledge some of our assets as security for other debt. Unless we secure
the debt securities on an equal basis, the restriction does not permit us to have or guarantee any debt that is
secured by (1) any of our principal U.S. plants or (2) the stock or debt of any of our subsidiaries that own or lease
one of these plants. This restriction does not apply until the total amount of our secured debt plus the discounted
value of the amount of rent we must pay under sale and leaseback transactions involving principal U.S. plants
exceeds 5% of our consolidated net tangible automotive assets. This restriction also does not apply to any of the
following:

• liens of a company that exist at the time such company becomes our subsidiary;
• liens in our favor or in the favor of our subsidiaries;
• certain liens given to a government;
• liens on property that exist at the time we acquire the property or liens that we give to secure our
paying for the property; and
• any extension or replacement of any of the above.

Limitation on Sales and Leasebacks

The Indenture prohibits us from selling and leasing back any principal U.S. plant for a term of more than
three years. This restriction does not apply if:

• we could create secured debt in an amount equal to the discounted value of the rent to be paid
under the lease without violating the limitation on liens provision discussed above;
• the lease is with or between any of our subsidiaries; or
• within 120 days of selling the U.S. plant, we retire our funded debt in an amount equal to the net
proceeds from the sale of the plant or the fair market value of the plant, whichever is greater.

Merger and Consolidation

The Indenture prohibits us from merging or consolidating with any company, or selling all or substantially all
of our assets to any company, if after we do so the surviving company would violate the limitation on liens or the
limitation on sales and leasebacks discussed above. This does not apply if the surviving company secures the debt
securities on an equal basis with the other secured debt of the company.

Events of Default and Notice Thereof

The Indenture defines an “Event of Default” as being any one of the following events:

• failure to pay interest for 30 days after becoming due;

• failure to pay principal or any premium for five business days after becoming due;
• failure to make a sinking fund payment for five days after becoming due;
• failure to perform any other covenant applicable to the debt securities for 90 days after notice;
• certain events of bankruptcy, insolvency or reorganization; and
• any other Event of Default provided in the prospectus supplement.

An Event of Default for a particular series of debt securities will not necessarily constitute an Event of
Default for any other series of debt securities issued under the Indenture.

199174_Ford_2023_AR_1OK.indd 189 2/9/24 2:59 PM

 If an Event of Default occurs and continues, the Trustee or the holders of at least 25% of the total principal
amount of the series may declare the entire principal amount (or, if they are Original Issue Discount Securities (as
defined in the Indenture), the portion of the principal amount as specified in the terms of such series) of all of the
debt securities of that series to be due and payable immediately. If this happens, subject to certain conditions, the
holders of a majority of the total principal amount of the debt securities of that series can void the declaration.

The Indenture provides that within 90 days after default under a series of debt securities, the Trustee will
give the holders of that series notice of all uncured defaults known to it. (The term “default” includes the events
specified above without regard to any period of grace or requirement of notice.) The Trustee may withhold notice of
any default (except a default in the payment of principal, interest or any premium) if it believes that it is in the
interest of the holders.

Annually, we must send to the Trustee a certificate describing any existing defaults under the Indenture.
Other than its duties in case of a default, the Trustee is not obligated to exercise any of its rights or powers
under the Indenture at the request, order or direction of any holders, unless the holders offer the Trustee reasonable
protection from expenses and liability. If they provide this reasonable indemnification, the holders of a majority of
the total principal amount of any series of debt securities may direct the Trustee how to act under the Indenture.

Defeasance and Covenant Defeasance

We have two options to discharge our obligations under a series of debt securities before their maturity
date. These options are known as “defeasance” and “covenant defeasance”. Defeasance means that we will be
deemed to have paid the entire amount of the applicable series of debt securities and we will be released from all of
our obligations relating to that series (except for certain obligations, such as registering transfers of the securities).
Covenant defeasance means that as to the applicable series of debt securities we will not have to comply with the
covenants described above under Limitation on Liens, Limitation on Sales and Leasebacks and Merger and
Consolidation.

To elect either defeasance or covenant defeasance for any series of debt securities, we must deposit with
the Trustee an amount of money and/or U.S. government obligations that will be sufficient to pay principal, interest
and any premium or sinking fund payments on the debt securities when those amounts are scheduled to be paid. In
addition, we must provide a legal opinion stating that as a result of the defeasance or covenant defeasance
debtholders will not be required to recognize income, gain or loss for federal income tax purposes and debtholders
will be subject to federal income tax on the same amounts, in the same manner and at the same times as if the
defeasance or covenant defeasance had not occurred. For defeasance, that opinion must be based on either an
Internal Revenue Service ruling or a change in law since the date the debt securities were issued. We must also
meet other conditions, such as there being no Events of Default. The amount deposited with the Trustee can be
decreased at a later date if in the opinion of a nationally recognized firm of independent public accountants the
deposits are greater than the amount then needed to pay principal, interest and any premium or sinking fund
payments on the debt securities when those amounts are scheduled to be paid.

Our obligations relating to the debt securities will be reinstated if the Trustee is unable to pay the debt
securities with the deposits held in trust, due to an order of any court or governmental authority. It is possible that a
series of debt securities for which we elect covenant defeasance may later be declared immediately due in full
because of an Event of Default (not relating to the covenants that were defeased). If that happens, we must pay the
debt securities in full at that time, using the deposits held in trust or other money.

Modification of the Indenture

With certain exceptions, our rights and obligations and debtholders’ rights under a particular series of debt
securities may be modified with the consent of the holders of not less than two-thirds of the total principal amount of
those debt securities. No modification of the principal or interest payment terms, and no modification reducing the
percentage required for modifications, will be effective against debtholder without debtholders’ consent.

199174_Ford_2023_AR_1OK.indd 190 2/9/24 2:59 PM

 Global Securities

The debt securities of each series has been issued in the form of one or more global certificates which have
been deposited with The Depository Trust Company, New York, New York (“DTC”), which acts as depositary for the
global certificates. Beneficial interests in global certificates will be shown on, and transfers of global certificates will
be effected only through, records maintained by DTC and its participants. Therefore, if debtholders wish to own
debt securities that are represented by one or more global certificates, debtholders can do so only indirectly or
“beneficially” through an account with a broker, bank or other financial institution that has an account with DTC (that
is, a DTC participant) or through an account directly with DTC if such debtholder is a DTC participant.

While the debt securities are represented by one or more global certificates:
• Debtholders will not be able to have the debt securities registered in their name.
• Debtholders will not be able to receive a physical certificate for the debt securities.
• Our obligations, as well as the obligations of the Trustee and any of our agents, under the debt
securities will run only to DTC as the registered owner of the debt securities. For example, once we
make payment to DTC, we will have no further responsibility for the payment even if DTC or a
debtholder’s broker, bank or other financial institution fails to pass it on so that such debtholder
receives it.
• Debtholders’ rights under the debt securities relating to payments, transfers, exchanges and other
matters will be governed by applicable law and by the contractual arrangements between the
debtholder and such debtholder’s broker, bank or other financial institution, and/or the contractual
arrangements a debtholder or any debtholder’s broker, bank or financial institution has with DTC.
Neither we nor the Trustee has any responsibility for the actions of DTC or any debtholder’s broker,
bank or financial institution.
• Debtholders may not be able to sell their interests in the debt securities to some insurance
companies and others who are required by law to own their debt securities in the form of physical
certificates.
• Because the debt securities will trade in DTC’s Same-Day Funds Settlement System, when a
debtholder buys or sells interests in the debt securities, payment for them will have to be made in
immediately available funds. This could affect the attractiveness of the debt securities to others.

A global certificate generally can be transferred only as a whole, unless it is being transferred to certain
nominees of the depositary or it is exchanged in whole or in part for debt securities in physical form. If a global
certificate is exchanged for debt securities in physical form, they will be in denominations of $1,000 and integral
multiples thereof.

199174_Ford_2023_AR_1OK.indd 191 2/9/24 2:59 PM

 Exhibit 10-L

Jim Farley
President and Chief Executive Officer

July 21, 2023

Peter Stern
Dear Peter,

On behalf of Ford Motor Company, I am pleased to offer you the position of President, Integrated Services, an at-
will, Leadership Level 1 position, Reward Band 1, reporting to me. This position will be based in Dearborn, MI. We
believe you have the personal and professional qualifications to make a significant addition to our senior leadership
team.

Included within this communication is a summary of the broader range of compensation and benefits related to this
offer.1 The main features of our offer are summarized below.

Base Salary: $900,000 per year

This amount is payable monthly, according to the Company's regular payroll practices.

Signing Bonus: $1,000,000

You will receive your signing bonus once your direct deposit has been confirmed with Payroll. Please review the
Signing Bonus Agreement (below) as part of your offer acceptance.2

Initial Stock Award: $4,000,000

As approved by the Compensation, Talent & Culture Committee, you will receive an initial stock award with a grant
date value of $4,000,000. This award will be granted in the form of time-vested restricted stock units, on or near
August 15, 2023 (assuming your effective date of hire is prior to this date). The quantity of restricted stock units will
be determined by the Fair Market Value (FMV) of Ford Common Stock using the closing price for Ford Motor
Company Common Stock (trading the regular way on the NYSE) on the grant date for this stock award.3 This
award will vest over a three-year period – 50% one year from the grant date, another 25% two years from the grant
date, and the remaining 25% three years from the grant date.

Annual Performance Bonus Target: $1,013,000

You will be eligible to participate in the Company's Annual Performance Bonus Plan with a pro- rated bonus for
service in the current year provided you have commenced your employment with Ford before the end of the current
year.2 Final Annual Performance Bonus Plan awards are dependent on Company performance and may be
adjusted by the Compensation, Talent & Culture Committee of the Board of Directors based on your individual
performance.4 In March of each performance year, employees are notified of their Annual Performance Bonus Plan
target. Your Annual Performance Bonus Plan target will be $1,013,000 for the current calendar year.

Provided the Compensation, Talent and Culture Committee of the Board approves an award for the current
performance year, it will be paid in March of the following year. More information on this plan can be found here.

Annual Long-Term Incentive Program (Stock Award): $4,000,000

You will be eligible to participate in the Company's annual stock award program beginning in the following calendar
year. The present stock award planning value for your position is $4,000,000. Awards vary year to year and are
approved by the Compensation, Talent & Culture Committee. These stock awards are usually granted in March of
each year in the form of 40% time-vested restricted stock units and 60% performance stock units.3 More
information on the Initial Stock Award and Annual Long-Term Incentive Programs can be found here.

199174_Ford_2023_AR_1OK.indd 192 2/9/24 2:59 PM

 Special Stock Awards:
In addition to the Annual Long-Term Incentive program, you will receive the following time-based restricted stock
units as outlined below.3 The awards will vest over a three-year period, 33% one year from the grant date, 33% two
years from the grant date, and the remaining 34% three years from the grant date.
· $2,500,000 on or near November 15, 2023
· $2,500,000 on or near November 15, 2024
· $3,000,000 on or near November 15, 2025
· $3,500,000 on or near November 15, 2026
· $4,000,000 on or near November 15, 2027

The quantity of restricted stock units for each grant will be determined by the Fair Market Value (FMV) of Ford
Common Stock using the closing price for Ford Motor Company Common Stock (trading the regular way on the
NYSE) on the applicable grant date for each award. You must continue to be actively employed by the Company on
the applicable date of grant to receive each of the above awards.

Performance Objectives:
Ford is committed to a pay for performance philosophy in total compensation. Each year, specific and measurable
individual performance objectives will be set and agreed upon. The measure of achievement against those
objectives, along with the overall performance of the Company, will determine future individual compensation, in
particular both the final payout of the Annual Performance Bonus and the grant amount under the Annual Long Term
Incentive Program.

Ford Benefits:
Upon your hire, you will be eligible for other Company benefits, as detailed in the benefits summary found here.1
Please refer to the summary for additional information relating to compensation and benefits.

Retirement/Savings Plans:
Upon hire, you will have the ability to determine and manage your investment elections under the following plans:
• Savings and Stock Investment Plan (SSIP): Company-sponsored 401(k) retirement and savings plan,
inclusive of Ford Retirement Plan (FRP).
o The plan provides Company retirement (FRP) contributions to an SSIP account on your behalf of 3.5%
to 5.5% of your eligible base salary, based upon your age. Vesting of the FRP contributions is on the
third anniversary of your date of hire.
o If you choose to contribute your own savings to SSIP, the plan provides Company matching
contributions of 90% on the first 5% of your own savings (4.5% maximum match). Vesting of the
Company matching contributions is on the third anniversary of your date of hire.
• Benefit Equalization Plan (BEP): The company credits notional contributions to a BEP account on your
behalf to make up for Company matching contributions and FRP contributions that would have been made to
the SSIP but were not permitted due to legal limitations on the amount of compensation and/or contributions.
This is a non-qualified unfunded plan.
• Defined Contribution Supplemental Executive Retirement Plan (DC SERP): An additional benefit provided to
certain executives where notional contributions are credited to a DC SERP account on your behalf, based
upon your age and leadership level. This is a non- qualified unfunded plan.
• The combination of FRP, BEP and DC SERP contributions total 14% of your salary.

Relocation:
You are eligible for relocation benefits as provided by Company policy for new hires.5 The Company offers a
comprehensive relocation program that provides financial assistance, professional services and administrative
support to employees who relocate at the request of the Company. A standard set of relocation provisions is offered
to help minimize disruptions and to provide efficient and reasonable assistance. Ford has established a partnership
with a Relocation Management Company (RMC) to administer the relocation policy and assist eligible employees
through the relocation process. You should not initiate any relocation activity or contact real estate Brokers/agents
prior to speaking with the RMC otherwise you may forfeit your eligibility for certain relocation benefits. For more
information on the relocation policy summary, please click here.

199174_Ford_2023_AR_1OK.indd 193 2/9/24 2:59 PM

 Vehicle Program:
You will be eligible for two free Evaluation vehicles, one of which must be an electric vehicle, for the purpose of
obtaining on-road testing and evaluation. Evaluation vehicles are provided at no cost and include maintenance,
repairs, insurance, and fuel. You will also be eligible for up to two lease vehicles under the terms of the
Management Lease Vehicle Evaluation Program.

Severance Pay:
Your employment with Ford Motor Company will be at-will, meaning that your employment may be terminated at any
time, by the Company or by you, for any reason, except as prohibited by law. Notwithstanding the forgoing, in the
event that the Company terminates your employment for any reason other than "for cause" at any time during the
duration of your employment, the Company will pay you the equivalent of one (1) year annual base salary as a
separation payment. In addition, your severance will provide for retention of previously granted time-vested
restricted stock units and performance stock units scheduled to vest within the twelve-month severance period
following termination. All other unvested time-vested restricted stock units and performance stock units, will be
forfeited. Any such separation payment will be made no later than March 15th of the calendar year following the
calendar year in which you are involuntarily terminated other than "for cause".

Should you leave Ford Motor Company under these circumstances and receive this separation payment, it is made
on the condition that you will sign and deliver an acceptable general claims release. The non-compete agreement
will remain in effect.

For the purposes of this offer letter, the term "for cause" shall mean:
a) Any material act of dishonesty or knowing and willful breach of fiduciary duty on your part which is intended
to result in your personal enrichment or gain at the expense of Ford or any of its affiliates or subsidiaries; or
b) your commission of any felony, or any misdemeanor or securities law violation, involving moral turpitude or
unlawful, dishonest, or unethical conduct that a reasonable person would consider damaging to the reputation or
image of Ford or any of its affiliates or subsidiaries; or
c) any material violation of the published standards of conduct applicable to Officers or executives of Ford or
any of its affiliates or subsidiaries that warrants termination; or
d) insubordination or refusal to perform assigned duties or to comply with the lawful directions of your
superiors; or
e) any deliberate, willful, or intentional act that causes substantial harm, loss, or injury to Ford or any of its
affiliates or subsidiaries.

Notwithstanding any provision herein to the contrary, if you are entitled upon a termination of employment to any
change of control related benefits or payments under an employment or other agreement, or a severance plan, you
shall not be entitled upon such termination to any duplicative payment or benefits under this letter but instead shall
receive only the greater payment or benefit, determined on an item by item basis.

Tax Consequences and Possible Delays in Payment to Avoid Penalties:

You are solely responsible and liable for all taxes that may arise in connection with the compensation and benefits
that you receive from Ford. This includes any tax arising under Section 409A of the Internal Revenue Code of 1986,
as amended (Code). In the event Ford determines that you are a "specified employee" under Code Section 409A,
any nonqualified deferred compensation benefit payable upon termination of employment while a "specified
employee" will be delayed until the first day of the seventh month following such termination. Please consult your
personal financial or tax advisor about the tax consequences of your compensation and benefits. No one at Ford is
authorized to provide this advice to you.

Accepting Offer of Employment:

This offer of at-will employment is subject to the following conditions:
• Producing a valid proof of identification and acceptable evidence that you are authorized to work in the
United States
• Determination, to our satisfaction, that information provided by you in your job application and/or resume is
valid. This offer is contingent upon successful completion and passing of the background check.
• Completing all other required new hire forms
• Establishment to Ford's reasonable satisfaction that your commencement of employment with Ford will not
violate any agreement (such as a non-competition agreement) between you and any prior employer

199174_Ford_2023_AR_1OK.indd 194 2/9/24 2:59 PM

 Signing Bonus Agreement
This Signing Bonus Agreement ("Agreement") is entered into the August 14, 2023, indicated below between
Ford Motor Company, a Delaware corporation ("Ford" or "the Company") and the Employee executing this
Agreement below ("Employee").

Ford has determined to provide Employee, in accordance with the terms of this Agreement, with a hiring bonus
upon Employee's acceptance of at-will employment with the Company, to be delivered to Employee subject to
the terms of this Agreement. In exchange for acceptance of this bonus, Employee agrees to comply with the
terms and conditions of this Agreement, as set forth herein.

NOW, THEREFORE, in consideration of the undertakings below, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. After Employee commences employment with the Company and the direct deposit information has been
confirmed, the signing bonus will be processed, and Ford will pay to Employee an amount equal to the
Bonus Amount indicated above ("the Signing Bonus").

2. The Signing Bonus is subject to federal, state, and local laws, and Ford will withhold from the Signing Bonus
all applicable taxes, withholdings and deductions required by such laws.

In the event that Employee voluntarily leaves the Company within two years of the date of hire or if
Employee is discharged "for cause" within the same period; Employee shall, within fourteen (14) days of
Employee's last date of employment with the Company, repay the Signing Bonus to the Company.
Employee shall repay the Signing Bonus by making a certified or personal check for the full amount of the
Signing Bonus payable to Ford Motor Company with name and social security number referenced on the
check and mail said check to:

Ford Motor Company Payroll Payroll Department 261201 Lockbox PO Box 67000 Detroit, MI 48267-2612

3. If Ford takes action to enforce its rights under this Agreement through any legal proceeding or other
collection action of any type or sort, then Employee agrees to pay, in addition to all other sums then due
under this Agreement, all reasonable expenses of collection, including, without limitation, reasonable
attorneys' fees and costs, and those incurred in any bankruptcy, reorganization, insolvency or other similar
proceeding. By executing this Agreement, Employee provides Ford with full, free, and written consent to
make deductions from Employee's wages and any other monies owed by Ford to Employee, to the extent
permitted by law, in order to recoup any unpaid portion of the Signing Bonus. In the event of untimely
repayment, Employee further agrees to repay to Ford interest on any unpaid balance of the Signing Bonus
at a rate of 10% per annum from the date of Employee's separation.

4. This Agreement may be executed in counterparts, and together, both counterparts will constitute one fully
executed Agreement. This Agreement will be governed by and interpreted under Michigan law, without
regard to conflict of law principles. Employee may not assign any rights under this Agreement to any
person without the prior written consent of Ford. Subject to the preceding sentence, this Agreement will be
binding on the parties' successors and assigns. No failure or delay by either party in exercising any right
under this Agreement will operate as a waiver, nor will exercise of any right preclude such party from
exercising any other right under this Agreement. This Agreement may not be amended or modified unless
such amendment is in writing and signed by the parties.

5. This Agreement is made with the full and free consent of Employee without intimidation or fear of discharge
or any adverse consequence for refusing to execute this Agreement and agree to its terms. Nothing in this
Agreement or any documents or instruments delivered in connection with this Agreement modifies in any
way the at-will nature of the employment relationship between Ford and Employee. This Agreement sets
forth the entire agreement between the parties concerning the subject matter of Employee's Signing Bonus
and fully supersedes any prior agreements or understandings with respect to the subject matter of
Employee's Signing Bonus. In the event of any conflict between this Agreement and any other document

199174_Ford_2023_AR_1OK.indd 195 2/9/24 2:59 PM

 that purports to affect Employee's rights or obligations with respect to the Signing Bonus, this Agreement is
controlling.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date set forth below.

I agree to the terms and conditions of this employment agreement. I further acknowledge and understand that my
electronic signature shall have the same legal effect as a handwritten signature. By signing and accepting this offer,
you are also providing your signature/agreement of the following:
• Signing Bonus Agreement
• Michigan Trade Secrets Non-Compete Assignment of Invention
• Relocation – Global Personal Data Transfer Privacy Notice and Acknowledgement Form

Please review the Global Personal Identifier Data Collection and Use Statement found at this link. We will be
sending you a request for your necessary personal information soon after acceptance of this letter. Your offer
acceptance and provision to us of the information required to generate a GPID is your consent to this GPID
Statement. Upon acceptance we will assign to you (if you don't already have one) a Global Personal Identifier
(GPID) which will uniquely identify you and distinguish you from other individuals within Ford in a globally consistent
manner. This GPID is used openly to identify individuals at Ford and to help control access to Ford systems,
facilities, and services. To generate a GPID, we will require you to provide your day, month, and day of the week of
birth. Your name and partial birthdate information will be retained in the GPID system which is located in the United
States.

This offer remains in effect until July 28, 2023. We anticipate that your effective date of hire will be August 14,
2023. Michigan law will control all issues arising under this offer.

Peter, we are pleased to offer you this opportunity to join the Ford team and look forward to your favorable
response. If you have any questions, please contact June Boda at 1-313-986-3577 or JBODA@[Link].

Sincerely,

Jim Farley
President and Chief Executive Officer

I have read the foregoing offer of at-will employment. I agree with and accept this offer of employment subject to
the terms and conditions detailed above.

Signature: /s/Peter Stern Date: July 22, 2023

1 Items described in this letter and the attachments, are subject to the terms and conditions of the individual plans and programs. To the extent
this summary conflicts with the terms and conditions of the individual plan and program documents, the individual plan and program documents
will control. The Company reserves the right to amend or terminate its benefit or pension plans at any time in the future. All incentive-based
compensation (including, but not limited to, Annual Performance Bonus Plan awards and performance stock unit grants and final awards under
the Long-Term Incentive Plan) is subject to any recoupment, "clawback" or similar provision of applicable law, as well as any applicable
recoupment or "clawback" policies of the Company that may be in effect from time to time.
2 This payment will be subject to regular tax withholding. If you voluntarily leave Ford Motor Company within the time specified by the Signing
Bonus Agreement or if you are discharged 'for cause' within that period, the gross signing bonus, including taxes withheld, must be repaid in full
to the Company within two weeks of your departure.
3 Stock award grants are subject to the terms and conditions of the Company's Long Term Incentive Plan (LTIP) and approval by the
Compensation, Talent & Culture Committee of the Board of Directors, or its permitted delegates, as provided in the LTIP. Among other
provisions, the LTIP requires stock award grants to be canceled if your employment is terminated for any reason within six months of the grant
date.
4 The Annual Performance Bonus payments for each performance year are made the following March, subject to the Annual Performance Bonus
plan's terms and conditions. Please note this payment will not be made if you are discharged 'for cause' or if you terminate employment prior to
the payment being made.
5 If you voluntarily leave Ford Motor Company within one year of your hire date, you must repay the relocation expenses as indicated in the
Relocation Repayment Agreement provided with your relocation materials.

199174_Ford_2023_AR_1OK.indd 196 2/9/24 2:59 PM

 Exhibit 10-Q-7
Exhibit 10-Q-7
FORD MOTOR COMPANY
FORD MOTOR COMPANY
CORPORATE OFFICER COMPENSATION RECOUPMENT POLICY
CORPORATE OFFICER COMPENSATION RECOUPMENT POLICY
This Ford Motor Company Corporate Officer Compensation Recoupment Policy (“Policy”) has been
adopted This Ford
by the Motor Company
Compensation, Corporate
Talent Officer
and Culture Compensation
Committee Recoupment of
(the “Committee”) Policy (“Policy”)
the Board has been
of Directors (the
adopted by the Compensation, Talent and Culture Committee (the “Committee”) of the Board of
“Board”) of Ford Motor Company, a Delaware corporation (the “Company”) effective as of October 2, 2023. Directors (theThis
“Board”)
Policy of Ford
amends andMotor Company,
restates a Delaware
in its entirety corporation
the Executive (the “Company”)
Compensation effective
Recoupment as of
Policy October adopted
previously 2, 2023. by
This
Policy amends and restates in its entirety the Executive Compensation Recoupment Policy previously
the Board’s Compensation Committee on February 25, 2011. The purpose of this Policy is to help ensure the adopted by
the Board’s officers
Company’s Compensation Committee
act in the on February
best interests 25, [Link]
of the Company Theitspurpose of this Policy is to help ensure the
stockholders.
Company’s officers act in the best interests of the Company and its stockholders.
1. Policy; Administration. Any current or former Company officer must repay or return their cash bonuses
1. Policy;
and/or equity Administration.
awards Any current
if: (a) the Company or former
issues Company
a material officerofmust
restatement repay orstatements,
its financial return theirwhere
cash bonuses
the
and/or equity awards if: (a) the Company issues a material restatement of its financial
restatement was caused by such officer’s intentional misconduct; (b) such officer was found to be in violation statements, where the of any
restatement was caused
restrictive covenants, by such officer’s
including, intentionalany
without limitation, misconduct;
non-compete (b) such officerofwas
provisions anyfound to be
plan or in violation
agreement; or of any
restrictive covenants, including, without limitation, any non-compete provisions of any plan
(c) such officer has committed ethical or criminal violations resulting in significant reputational or financialorharm to or agreement;
(c)
the such officer
Company orhas
anycommitted ethicalThe
of its affiliates. or criminal
Committee violations resulting
will consider in significant
all factors it deems reputational
relevant and or exercise
financialitsharm to
the Company
business or anyinof
judgment its affiliates.
determining The
any Committee
appropriate will consider
amounts to recoup,all factors it deems
up to 100% relevant and exercise
of compensation awarded,itsand
business judgment in determining any appropriate amounts to recoup, up to 100% of
nothing herein shall require the Committee to seek recoupment of any amount. This Policy shall be administered compensation awarded, and by
nothing
the Committee. All decisions of the Committee shall be final, conclusive and binding upon the Company and the by
herein shall require the Committee to seek recoupment of any amount. This Policy shall be administered
the Committee.
affected officers,All decisions
their of the Committee
beneficiaries, shall be final, conclusive
executors, administrators and any other andlegal
binding upon the Company
representative. and the
The Committee
affected
shall haveofficers, theirand
full power beneficiaries,
authority toexecutors,
(i) administeradministrators andthis
and interpret anyPolicy;
other legal representative.
(ii) correct any defect, Thesupply
Committee
any
shall
omission and reconcile any inconsistency in this Policy; and (iii) make any other determination and take anyany
have full power and authority to (i) administer and interpret this Policy; (ii) correct any defect, supply other
omission
action thatandthereconcile
Committee anydeems
inconsistency
necessaryinor this Policy; for
desirable andthe
(iii)administration
make any other determination
of this Policy andand take anywith
to comply other
action that the Committee deems necessary or desirable for the administration of this
applicable law. The Company shall have the right to recoup compensation pursuant to this Policy regardless of Policy and to comply with
applicable
whether any law. The Company
particular shall have
compensation planthe right to recoup
or agreement compensation
references pursuant
this Policy to this provides
or otherwise Policy regardless
for such of
whether any particular compensation plan or agreement references this Policy or
recoupment. The amount of any recoupment shall be calculated on a pre-tax or post-tax basis, as determinedotherwise provides for such by the
recoupment. The amount of any recoupment shall be calculated on a pre-tax or post-tax
Committee. The Committee shall determine, in its sole discretion, the manner and timing in which any the amount basis, as determined by the
Committee. The Committee shall determine, in its sole discretion, the manner and timing
of any recoupment shall be recovered from a current or former Company officer in accordance with applicable law, in which any the amount
of any recoupment
including shall of
Section 409A bethe
recovered
Internalfrom a current
Revenue Codeorofformer
1986, Company
as amended. officer in accordanceanything
Notwithstanding with applicable
to the law,
including Section 409A of the Internal Revenue Code of 1986, as amended. Notwithstanding
contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, administer anything to the this
contrary contained herein, the Board
Policy in the same manner as the Committee. may, in its sole discretion, at any time and from time to time, administer this
Policy in the same manner as the Committee.
2. Other Compensation Clawback/Recoupment Rights. Any right of recoupment under this Policy is in
2.
additionOther
to, andCompensation
not in lieu of,Clawback/Recoupment
any other remedies, rightsRights. Any right ofwith
or requirements recoupment
respect tounder this Policyoris in
the clawback
addition to, and not in lieu of, any other remedies, rights or requirements with respect to
recoupment of any compensation that may be available to the Company pursuant to the terms of any other the clawback or
recoupment of any compensation that may be available to the Company pursuant to the terms of
recoupment or clawback policy of the Company (or any of its affiliates) that may be in effect from time to time, anyany other
recoupment
provisions inorany
clawback policyagreement,
employment of the Company (or any
offer letter, of its affiliates)
restrictive covenant that may be inequity
agreement, effect plan,
from equity
time toaward
time, any
provisions in any
agreement or employment
similar agreement,
plan or agreement andoffer
any letter, restrictive
other legal covenant
remedies agreement,
available equity plan,
to the Company, as equity
well asaward
agreement
applicable law, stock market or exchange rules, listing standards or regulations; provided, however,well
or similar plan or agreement and any other legal remedies available to the Company, as that as
any
law, stock market or exchange rules, listing standards or regulations; provided,
amounts recouped or clawed back under any other policy that would be recoupable under this Policythat
applicable however, any
shall count
amounts recouped or clawed back under any other policy that would
toward any required clawback or recoupment under this Policy and vice versa. be recoupable under this Policy shall count
toward any required clawback or recoupment under this Policy and vice versa.
3. Miscellaneous. Any applicable award agreement or other document setting forth the terms and conditions of
3. Miscellaneous.
any compensation Anybyapplicable
covered this Policyaward
shallagreement
be deemedortoother document
include setting forth
the restrictions the terms
imposed hereinand
andconditions
incorporateof
any compensation covered by this Policy shall be deemed to include the restrictions imposed herein and
this Policy by reference and, in the event of any inconsistency, the terms of this Policy will govern. This Policy shall incorporate
this Policy and
be binding by reference and,against
enforceable in the event of any inconsistency,
all Company the beneficiaries,
officers and their terms of this Policy will govern.
heirs, executors, This Policy shall
administrators or
be
other legal representatives. All issues concerning the construction, validity, enforcement and interpretation of thisor
binding and enforceable against all Company officers and their beneficiaries, heirs, executors, administrators
other
Policylegal
and representatives. All issues
all related documents, concerning
including, the limitation,
without construction,
anyvalidity,
employmentenforcement and offer
agreement, interpretation of this
letter, equity
Policy and all related documents, including, without limitation, any employment agreement, offer
award agreement or similar agreement, shall be governed by, and construed in accordance with, the laws of the letter, equity
award
State ofagreement
Delaware,orwithout
similargiving
agreement,
effectshall be choice
to any governed by, or
of law andconflict
construed in accordance
of law with, the(whether
rules or provisions laws of the
of the
State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether
State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other of the
State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction
than the State of Delaware. The Company’s officers, their beneficiaries, executors, administrators and any other other
than the State of Delaware. The Company’s officers, their beneficiaries, executors, administrators and any other

1
1

199174_Ford_2023_AR_1OK.indd 197 2/9/24 2:59 PM

 legal representative and the Company shall initially attempt to resolve all claims, disputes or controversies arising
legal
under,representative and the Company
out of or in connection with thisshall initially
Policy attempt togood
by conducting resolvefaithallnegotiations
claims, disputesamongstor controversies
themselves. To arising
ensure
under,
the timely and economical resolution of disputes that arise in connection with this Policy, any and all disputes,ensure
out of or in connection with this Policy by conducting good faith negotiations amongst themselves. To
the timely
claims and economical
or causes resolution
of action arising fromofordisputes
relatingthat arise
to the in connection
enforcement, with this Policy,
performance any and allofdisputes,
or interpretation this Policy
claims
shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, of
or causes of action arising from or relating to the enforcement, performance or interpretation bythis Policy
a single
shall be resolved to the fullest extent permitted by law by final, binding and confidential
arbitrator, in Detroit, Michigan, conducted by the American Arbitration Association (“AAA”) under the AAA’s arbitration, by a single
arbitrator, in Arbitration
Commercial Detroit, Michigan,
Rules. To conducted
the fullestbyextent
the American
permitted Arbitration
by law, the Association
Company’s(“AAA”) officers,under the AAA’s
their beneficiaries,
Commercial Arbitration Rules.
executors, administrators and any Toother
the fullest extent permitted
legal representative andbythe law, the Company’s
Company, shall waiveofficers,
(andtheir
shallbeneficiaries,
hereby be
executors,
deemed to have waived) (1) the right to resolve any such dispute through a trial by jury or judgeshall
administrators and any other legal representative and the Company, shall waive (and hereby be
or administrative
deemed to have waived) (1) the right to resolve any such dispute through a trial by jury
proceeding; and (2) any objection to arbitration taking place in Detroit, Michigan. The arbitrator shall: (i) have the or judge or administrative
proceeding; and (2) any
authority to compel objection
adequate to arbitration
discovery taking place
for the resolution in Detroit,
of the dispute Michigan.
and to award Thesucharbitrator shall:
relief as would(i) have the
otherwise
authority to compel
be permitted by law;adequate discovery
and (ii) issue for the
a written resolution
arbitration of the dispute
decision, to includeandthe to award such essential
arbitrator’s relief as would
findings otherwise
and
be
conclusions and a statement of the award. The arbitrator shall be authorized to award any or all remedies thatand
permitted by law; and (ii) issue a written arbitration decision, to include the arbitrator’s essential findings any
conclusions
party would and a statement
be entitled to seekof the
in aaward.
court ofThe [Link]
Any such shall be authorized
award rendered shall to award any or all remedies
be enforceable by any court thathaving
any
party would be entitled to seek in a court of law. Any such award rendered shall be
jurisdiction and, to the fullest extent permitted by law, the Company’s officers, their beneficiaries, executors, enforceable by any court having
jurisdiction
administratorsand,
and to any
the fullest extent
other legal permitted byand
representative law,thetheCompany
Company’s shallofficers,
waive (andtheir shall
beneficiaries,
hereby beexecutors,
deemed to have
administrators and any other legal representative and the Company
waived) the right to resolve any such dispute regarding enforcement of such award through shall waive (and shall hereby
a trialbe
bydeemed
jury. to have
waived) the right to resolve any such dispute regarding enforcement of such award through a trial by jury.
4. If any provision of this Policy is determined to be unenforceable or invalid under any applicable law, such
4.
provisionIf will
any be
provision
appliedof tothis
the Policy
maximum is determined to be unenforceable
extent permitted by applicable or lawinvalid under
and shall any applicable
automatically law, such
be deemed
provision
amended in will be applied
a manner to the maximum
consistent extent permitted
with its objectives by applicable
to the extent necessarylaw and shalltoautomatically
to conform any limitations be deemed
required
amended in a manner
under applicable law. consistent with its objectives to the extent necessary to conform to any limitations required
under applicable law.

2
2

199174_Ford_2023_AR_1OK_r1.indd 198 2/13/24 8:43 PM

 Exhibit 21
SUBSIDIARIES OF FORD MOTOR COMPANY AS OF JANUARY 31, 2024*
Organization Jurisdiction
CAB East LLC Delaware, U.S.A.
CAB West LLC Delaware, U.S.A.
FCE Bank plc England
FMC Automobiles SAS France
Ford Argentina S.C.A. Argentina
Ford Auto Securitization Trust Canada
Ford Auto Securitization Trust II Canada
Ford Automotive Finance (China) Limited China
Ford Bank GmbH Germany
Ford Component Sales, L.L.C. Delaware, U.S.A.
Ford Credit Auto Lease Two LLC Delaware, U.S.A.
Ford Credit Auto Owner Trust 2018-REV1 Delaware, U.S.A.
Ford Credit Auto Owner Trust 2019-REV1 Delaware, U.S.A.
Ford Credit Auto Owner Trust 2020-REV1 Delaware, U.S.A.
Ford Credit Auto Owner Trust 2020-REV2 Delaware, U.S.A.
Ford Credit Auto Owner Trust 2021-REV2 Delaware, U.S.A.
Ford Credit Canada Company Canada
Ford Credit CP Auto Receivables LLC Delaware, U.S.A.
Ford Credit de Mexico S.A., de C.V. Sociedad Financiera de Obieto Multiple, E.R. Mexico
Ford Credit Floorplan Corporation Delaware, U.S.A.
Ford Credit Floorplan Master Owner Trust A Delaware, U.S.A.
Ford Credit International LLC Delaware, U.S.A.
Ford Credit Italia Spa Italy
Ford CTCJ Company Canada
Ford Deutschland Holding GmbH Germany
Ford ECO GmbH Switzerland
Ford Espana S.L. Spain
Ford Holdings LLC Delaware, U.S.A.
Ford Global Technologies, LLC Delaware, U.S.A.
Ford International Capital LLC Delaware, U.S.A.
Ford International Liquidity Management Limited England
Ford Italia S.p.A. Italy
Ford Lease Trust Canada
Ford Mexico Holdings LLC Delaware, U.S.A.
Ford Motor (China) Ltd. China
Ford Motor Company Brasil Ltda. Brazil
Ford Motor Company Limited England
Ford Motor Company of Australia Pty Ltd Australia

199174_Ford_2023_AR_1OK.indd 199 2/9/24 2:59 PM

 Organization Jurisdiction
Ford Motor Company of Canada, Limited Canada
Ford Motor Company of Southern Africa (Pty) Limited South Africa
Ford Motor Company, S.A. de C.V. Mexico
Ford Motor Credit Company LLC Delaware, U.S.A.
Ford Motor Service Company Michigan, U.S.A.
Ford Nederland B.V. Netherlands
Ford Retail Group Limited England
Ford Sales and Service (Thailand) Co., Ltd. Thailand
Ford Trading Company, LLC Delaware, U.S.A.
Ford VH Limited England
Ford VHC AB Sweden
Ford Vietnam Limited Vietnam
Ford-Werke GmbH Germany
Global Investments 1 Inc. Delaware, U.S.A.
Globaldrive Italy Retail VFN 2022 S.R.L. Italy

93 Other U.S. Subsidiaries

142 Other Non-U.S. Subsidiaries
____________
* Other subsidiaries are not shown by name in the above list because, considered in the aggregate as a
single subsidiary, they would not constitute a significant subsidiary.

199174_Ford_2023_AR_1OK.indd 200 2/9/24 2:59 PM

 Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Ford Motor Company Registration Statement Nos. 33-62227, 333-02735, 333-20725, 333-31466, 333-47733,
333-56660, 333-57596, 333-65703, 333-71380, 333-74313, 333-85138, 333-87619, 333-104063, 333-113584,
333-123251, 333-138819, 333-138821, 333-149453, 333-149456, 333-153815, 333-153816, 333-156630,
333-156631, 333-157584, 333-162992, 333-162993, 333-165100, 333-172491, 333-179624, 333-186730,
333-193999, 333-194000, 333-203697, 333-210978, 333-217494, 333-226348, 333-231058, 333-240220,
333-258240, 333-266359, 333-271591 and 333-271592 on Form S-8 and 333-269685 on Form S-3.

We hereby consent to the incorporation by reference in the aforementioned Registration Statements of Ford Motor
Company of our report dated February 6, 2024 relating to the financial statements, financial statement schedule and
the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan
February 6, 2024

199174_Ford_2023_AR_1OK.indd 201 2/9/24 2:59 PM

 Exhibit 24
POWER OF ATTORNEY WITH RESPECT TO
ANNUAL REPORT OF FORD MOTOR COMPANY ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2023

Each of the undersigned, a director of Ford Motor Company (“Ford”), appoints each of S. P. Croley,
C. A. O’Callaghan, J. E. Osgood, and D. J. Witten his or her true and lawful attorney and agent to do any and all
acts and things and execute any and all instruments which the attorney and agent may deem necessary or
advisable in order to enable Ford to comply with the Securities Exchange Act of 1934, and any requirements of the
Securities and Exchange Commission, in connection with the filing of Ford’s Annual Report on Form 10-K for the
year ended December 31, 2023 and any and all amendments thereto, as authorized at a meeting of the Board of
Directors of Ford duly called and held on February 5, 2024 including, but not limited to, power and authority to sign
his or her name (whether on behalf of Ford, or as a director or officer of Ford, or by attesting the seal of Ford, or
otherwise) to such instruments and to such Annual Report and any amendments thereto, and to file them with the
Securities and Exchange Commission. Each of the undersigned ratifies and confirms all that any of the attorneys
and agents shall do or cause to be done by virtue hereof. Any one of the attorneys and agents shall have, and may
exercise, all the powers conferred by this instrument. Each of the undersigned has signed his or her name as of the
6th day of February, 2024:

/s/ Kimberly A. Casiano /s/ John C. May II

(Kimberly A. Casiano) (John C. May II)
/s/ Alexandra Ford English /s/ Beth E. Mooney
(Alexandra Ford English) (Beth E. Mooney)
/s/ Henry Ford III /s/ Lynn Vojvodich Radakovich
(Henry Ford III) (Lynn Vojvodich Radakovich)
/s/ William W. Helman IV /s/ John L. Thornton
(William W. Helman IV) (John L. Thornton)
/s/ Jon M. Huntsman, Jr. /s/ John B. Veihmeyer
(Jon M. Huntsman, Jr.) (John B. Veihmeyer)
/s/ William E. Kennard /s/ John S. Weinberg
(William E. Kennard) (John S. Weinberg)

199174_Ford_2023_AR_1OK.indd 202 2/9/24 2:59 PM

 Exhibit 31.1

CERTIFICATION

I, James D. Farley, Jr., certify that:

1. I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2023 of
Ford Motor Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.

Dated: February 6, 2024 /s/ James D. Farley, Jr.

James D. Farley, Jr.
President and Chief Executive Officer

199174_Ford_2023_AR_1OK.indd 203 2/9/24 2:59 PM

 Exhibit 31.2

CERTIFICATION

I, John T. Lawler, certify that:

1. I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2023 of
Ford Motor Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.

Dated: February 6, 2024 /s/ John T. Lawler

John T. Lawler
Chief Financial Officer

199174_Ford_2023_AR_1OK.indd 204 2/9/24 2:59 PM

 Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, James D. Farley, Jr., President and Chief Executive Officer of Ford Motor Company (the “Company”), hereby
certify pursuant to Rule 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section
1350 of Chapter 63 of Title 18 of the United States Code that to my knowledge:

1. The Company’s Annual Report on Form 10-K for the period ended December 31, 2023, to which this
statement is furnished as an exhibit (the “Report”), fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in this Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

Dated: February 6, 2024 /s/ James D. Farley, Jr.

James D. Farley, Jr.
President and Chief Executive Officer

199174_Ford_2023_AR_1OK.indd 205 2/9/24 2:59 PM

 Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, John T. Lawler, Chief Financial Officer of Ford Motor Company (the “Company”), hereby certify pursuant to Rule
13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63
of Title 18 of the United States Code that to my knowledge:

1. The Company’s Annual Report on Form 10-K for the period ended December 31, 2023, to which this
statement is furnished as an exhibit (the “Report”), fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in this Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

Dated: February 6, 2024 /s/ John T. Lawler

John T. Lawler
Chief Financial Officer

199174_Ford_2023_AR_1OK.indd 206 2/9/24 2:59 PM

 Exhibit 97
Exhibit 97
FORD MOTOR COMPANY
FORD MOTOR COMPANY
FINANCIAL STATEMENT COMPENSATION RECOUPMENT POLICY
FINANCIAL STATEMENT COMPENSATION RECOUPMENT POLICY
This Ford Motor Company Financial Statement Compensation Recoupment Policy (“Policy”) has been
adopted This Ford
by the Motor Company
Compensation, Financial
Talent Statement
and Culture Compensation
Committee Recoupment
of the Board Policy
of Directors (the(“Policy”)
“Board”) ofhasFord
been
adopted by the Compensation, Talent and Culture Committee of the Board of Directors (the
Motor Company, a Delaware corporation (the “Company”) on May 10, 2023. This Policy provides for the “Board”) of Ford
Motor Company,
recoupment a Delaware
of certain executivecorporation (the “Company”)
compensation in the event ofonanMay 10, 2023.
accounting This Policy
restatement provides
resulting for material
from the
recoupment of certain executive compensation in the event of an accounting restatement resulting from
noncompliance with financial reporting requirements under U.S. federal securities laws in accordance with the material
noncompliance
terms with financial
and conditions set forth reporting requirements
herein. This under U.S.
Policy is intended federalwith
to comply securities laws in accordance
the requirements with
of Section 10Dtheof the
terms and conditions set forth herein. This Policy is intended to comply with the
Exchange Act (as defined below) and Section 303A.14 of the NYSE Listed Company Manual. requirements of Section 10D of the
Exchange Act (as defined below) and Section 303A.14 of the NYSE Listed Company Manual.
1. Definitions. For the purposes of this Policy, the following terms shall have the meanings set forth below.
1. Definitions. For the purposes of this Policy, the following terms shall have the meanings set forth below.
(a) “Committee” means the Compensation, Talent and Culture Committee of the Board or any
(a)committee
successor “Committee”
thereof. means the Compensation, Talent and Culture Committee of the Board or any
successor committee thereof.
(b) “Covered Compensation” means any Incentive-based Compensation “received” by a Covered
(b)during“Covered
Executive Compensation”
the applicable Recoupmentmeans any
Period; Incentive-based
provided that: Compensation “received” by a Covered
Executive during the applicable Recoupment Period; provided that:
(i) such Covered Compensation was received by such Covered Executive (A) after the Effective
(i) such
Date,Covered
(B) afterCompensation was received
he or she commenced byassuch
service Covered Executive
an Executive (A)(C)
Officer and after the the
while Effective
Date, (B) after he or she commenced service as an Executive Officer and (C) while the
Company had a class of securities publicly listed on a U.S. national securities exchange; and
Company had a class of securities publicly listed on a U.S. national securities exchange; and
(ii) such Covered Executive served as an Executive Officer at any time during the performance
(ii) such
periodCovered Executive
applicable to suchserved as an Executive
Incentive-based Officer at any time during the performance
Compensation.
period applicable to such Incentive-based Compensation.
For purposes of this Policy, Incentive-based Compensation is “received” by a Covered Executive during the fiscal
For purposes
period in which of this Policy, Incentive-based
the Financial Compensation
Reporting Measure applicableisto“received” by a Covered
such Incentive-based Executive during
Compensation the fiscal
(or portion
period
thereof)iniswhich the even
attained, Financial
if theReporting
payment, Measure applicable
grant or final awardtoofsuch
suchIncentive-based
Incentive-basedCompensation
Compensation(or portion
is made
thereof) is
thereafter. attained, even if the payment, grant or final award of such Incentive-based Compensation is made
thereafter.
(c) “Covered Executive” means any current or former Executive Officer.
(c) “Covered Executive” means any current or former Executive Officer.
(d) “Effective Date” means the date on which Section 303A.14 of the NYSE Listed Company Manual
becomes(d) “Effective Date” means the date on which Section 303A.14 of the NYSE Listed Company Manual
effective.
becomes effective.
(e) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
(e) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
(f) “Executive Officer” means, with respect to the Company, (i) its president, (ii) its principal
financial officer,“Executive
(f) Officer”
(iii) its principal means, with
accounting respect
officer (or if to the is
there Company, (i) its president,
no such accounting (ii)its
officer, itscontroller),
principal
financial officer, (iii) itsinprincipal
(iv) any vice-president charge ofaccounting
a principalofficer (or unit,
business if there is no such
division accounting
or function (suchofficer,
as sales,itsadministration
controller), or
(iv) any vice-president in charge of a principal business unit, division or function (such as sales,
finance), (v) any other officer who performs a policy-making function for the Company (including any officer of administration orthe
finance),
Company’s parent(s) or subsidiaries if they perform policy-making functions for the Company), and (vi) any otherthe
(v) any other officer who performs a policy-making function for the Company (including any officer of
Company’s
person who parent(s)
performs or subsidiaries
similar if they perform
policy-making functionspolicy-making
for the [Link] for the Company),
Policy-making function and (vi)
is not any other
intended to
person
includewho performs similar
policy-making policy-making
functions that are not functions forThe
significant. the Company. Policy-making
determination function is
as to an individual’s not intended
status as an to
include policy-making functions that are not significant. The determination as to an individual’s
Executive Officer shall be made by the Committee or Board and such determination shall be final, conclusive and status as an
Executive
binding onOfficer shall be made
such individual byother
and all the Committee or Board and such determination shall be final, conclusive and
interested persons.
binding on such individual and all other interested persons.

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1

199174_Ford_2023_AR_1OK_r1.indd 207 2/13/24 8:01 PM

 (g) “Financial Reporting Measure” means any (i) measure that is determined and presented in
accordance(g) with“Financial
the accountingReporting
principlesMeasure” means anythe
used in preparing (i) Company’s
measure thatfinancialis determined and presented
statements , (ii) stockinprice
accordance
measure or (iii)withtotal
the accounting
shareholderprinciples
return measureused in(and
preparing the Company’s
any measures financialwholly
that are derived statements , (ii)from
or in part stockanyprice
measure or (iii) total shareholder return measure (and any measures that are derived
measure referenced in clause (i), (ii) or (iii) above). For the avoidance of doubt, any such measure does not need to wholly or in part from any
measure referenced
be presented within in theclause (i), (ii)financial
Company’s or (iii) above). For the
statements avoidance
or included inof doubt,with
a filing any the
such measure
U.S. doesand
Securities not need to
be presented within the Company’s financial
Exchange Commission to constitute a Financial Reporting [Link] or included in a filing with the U.S. Securities and
Exchange Commission to constitute a Financial Reporting Measure.
(h) “Financial Restatement” means a restatement of the Company’s financial statements due to the
Company’s (h) material “Financial Restatement”
noncompliance with any means a restatement
financial reportingofrequirement
the Company’s underfinancial statements
U.S. federal securitiesdue laws
to thethat
Company’s
is required inmaterial
order tononcompliance
correct: with any financial reporting requirement under U.S. federal securities laws that
is required in order to correct:
(i) an error in previously issued financial statements that is material to the previously issued
(i) an error instatements;
financial previouslyorissued financial statements that is material to the previously issued
financial statements; or
(ii) an error that would result in a material misstatement if (A) the error were corrected in the
(ii) an errorperiod
current that would
or (B)result in a materialinmisstatement
left uncorrected the current period. if (A) the error were corrected in the
current period or (B) left uncorrected in the current period.
For purposes of this Policy, a Financial Restatement shall not be deemed to occur in the event of a revision of the
For purposesfinancial
Company’s of this Policy, a Financial
statements due to an Restatement shalladjustment
out-of-period not be deemed to occur
(i.e., when theinerror
the event of a revision
is immaterial to theof the
Company’s financial statements due to an out-of-period adjustment (i.e., when
previously issued financial statements and the correction of the error is also immaterial to the current period) the error is immaterial to the or a
previously
retrospective issued financial statements
(1) application of a change andinthe correction
accounting of the error
principles; (2)isrevision
also immaterial to the
to reportable currentinformation
segment period) or a
retrospective (1) application of a change in accounting principles; (2) revision to
due to a change in the structure of the Company’s internal organization; (3) reclassification due to a discontinued reportable segment information
due to a change
operation; in the structure
(4) application of the in
of a change Company’s
reporting internal
entity, suchorganization;
as from a (3) reclassification
reorganization due to under
of entities a discontinued
common
operation; (4) application of a change in reporting entity, such as from a reorganization
control; or (5) revision for stock (or other equity) splits, reverse stock (or other equity) splits, stock dividends, of entities under common other
control; or (5) revision for stock (or other
equity distributions or other changes in capital structure. equity) splits, reverse stock (or other equity) splits, stock dividends, other
equity distributions or other changes in capital structure.
(i) “Incentive-based Compensation” means any compensation (including, for the avoidance of doubt,
any cash(i)or equity or equity-based Compensation”
“Incentive-based compensation, whether means deferred
any compensation
or current)(including, for the
that is granted, avoidance
earned and/orofvested
doubt,
any cash or equity or equity-based compensation, whether deferred or current)
based wholly or in part upon the achievement of a Financial Reporting Measure. For purposes of this Policy, that is granted, earned and/or vested
based wholly or inCompensation”
“Incentive-based part upon the achievement
shall also be of a Financial
deemed Reporting
to include Measure.
any amounts For purposes
which of this Policy,
were determined based on (or
“Incentive-based Compensation” shall also be deemed to include any amounts
were otherwise calculated by reference to) Incentive-based Compensation (including, without limitation, which were determined based
any on (or
were otherwise calculated by reference to) Incentive-based Compensation (including,
amounts under any long-term disability, life insurance or supplemental retirement or severance plan or agreement or without limitation, any
amounts under
any notional any long-term
account disability,
that is based life insuranceCompensation,
on Incentive-based or supplementalasretirementwell as any orearnings
severance plan orthereon).
accrued agreement or
any notional account that is based on Incentive-based Compensation, as well as any earnings accrued thereon).
(j) “NYSE” means the New York Stock Exchange, or any successor thereof.
(j) “NYSE” means the New York Stock Exchange, or any successor thereof.
(k) “Recoupment Period” means the three fiscal years completed immediately preceding the date of
(k)
any applicable “Recoupment
Recoupment Period”
Trigger Date. means the three fiscal
Notwithstanding theyears completed
foregoing, immediatelyPeriod
the Recoupment preceding the date of
additionally
any applicable Recoupment Trigger Date. Notwithstanding the foregoing, the
includes any transition period (that results from a change in the Company’s fiscal year) within or immediately Recoupment Period additionally
includes
followingany thosetransition period (that
three completed results
fiscal years,from a change
provided thatinathe Company’s
transition period fiscal year)the
between within
last or
dayimmediately
of the
following those three completed fiscal years, provided that a transition
Company’s previous fiscal year end and the first day of its new fiscal year that comprises a period ofperiod between the last day of nine
the (9) to
Company’s previous fiscal year end and the
twelve (12) months would be deemed a completed fiscal year. first day of its new fiscal year that comprises a period of nine (9) to
twelve (12) months would be deemed a completed fiscal year.
(l) “Recoupment Trigger Date” means the earlier of (i) the date that the Board (or a committee
(l) “Recoupment
thereof or the officer(s) of the Company Trigger Date” means
authorized to the
takeearlier of (i) the
such action date that
if Board the is
action Board (or a committee
not required) concludes, or
thereof or the officer(s) of the Company authorized to take such action
reasonably should have concluded, that the Company is required to prepare a Financial Restatement, andif Board action is not required) concludes,
(ii) the or
reasonably
date on which a court, regulator or other legally authorized body causes the Company to prepare a Financial the
should have concluded, that the Company is required to prepare a Financial Restatement, and (ii)
date on which a court, regulator or other legally authorized body causes the Company to prepare a Financial
Restatement.
Restatement.

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2

199174_Ford_2023_AR_1OK_r1.indd 208 2/13/24 8:02 PM

 2. Recoupment of Erroneously Awarded Compensation.
2. Recoupment of Erroneously Awarded Compensation.
(a) In the event of a Financial Restatement, if the amount of any Covered Compensation received by a
Covered(a) Executive In the
(theevent of a Financial
“Awarded Restatement,
Compensation”) if the the
exceeds amount
amount of any Covered
of such CoveredCompensation
Compensation received
that by a
Covered Executive (the “Awarded Compensation”) exceeds the amount of such
would have otherwise been received by such Covered Executive if calculated based on the Financial Restatement Covered Compensation that
would have otherwise been received by such Covered Executive if calculated
(the “Adjusted Compensation”), the Company shall reasonably promptly recover from such Covered Executive an based on the Financial Restatement
(the
amount equal toCompensation”),
“Adjusted the excess of the Awardedthe Company shall reasonably
Compensation over the promptly
Adjusted recover from sucheach
Compensation, Covered Executive
calculated on a an
amount basis
pre-tax equal(such
to theexcess
excessamount,
of the Awarded Compensation
the “Erroneously Awarded over the Adjusted Compensation,
Compensation”), subject to eachSectioncalculated on a
(2)͏(b) hereof.
pre-tax basis (such excess amount, the “Erroneously Awarded Compensation”), subject to Section (2)͏(b) hereof.
(b) If (i) the Financial Reporting Measure applicable to the relevant Covered Compensation is stock
price or (b) If (i) the Financial
total shareholder return (orReporting
any measure Measure
derived applicable
wholly ortointhe partrelevant Covered
from either Compensation
of such measures) and is stock
(ii) the
price
amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the(ii) the
or total shareholder return (or any measure derived wholly or in part from either of such measures) and
amount of Erroneously
information in the Financial Awarded Compensation
Restatement, then the is not subject
amount to mathematical
of Erroneously recalculation
Awarded Compensationdirectlyshall
frombethe
information
determined (on a pre-tax basis) based on the Company’s reasonable estimate of the effect of the Financialbe
in the Financial Restatement, then the amount of Erroneously Awarded Compensation shall
determined
Restatement(on on athepre-tax basis) based
Company’s on theorCompany’s
stock price reasonable
total shareholder returnestimate
(or the of the effect
derivative of the Financial
measure thereof) upon
Restatement on the Company’s stock
which such Covered Compensation was received. price or total shareholder return (or the derivative measure thereof) upon
which such Covered Compensation was received.
(c) For the avoidance of doubt, the Company’s obligation to recover Erroneously Awarded
(c)
Compensation isFor
notthe avoidance
dependent on of(i)doubt, the Company’s
if or when the restatedobligation to recover are
financial statements Erroneously Awarded
filed; or (ii) any fault of any
Compensation is not dependent on (i) if or when the restated financial statements
Covered Executive for the accounting errors or other actions leading to a Financial Restatement. Further, are filed; or (ii) any faultthe of any
Covered Executive for the accounting errors or other actions leading to a Financial
Company shall have the right to recoup Erroneously Awarded Compensation pursuant to this Policy regardless of Restatement. Further, the
Company
whether any shall have thecompensation
particular right to recoup Erroneously
plan or agreement Awarded
referencesCompensation
this Policypursuant
or otherwiseto this Policy for
provides regardless
such of
whether any
recoupment. particular compensation plan or agreement references this Policy or otherwise provides for such
recoupment.
(d) Notwithstanding anything to the contrary in Sections 2(a) through (c) hereof, the Company shall not
(d) to recover
be required Notwithstanding
any Erroneouslyanything to the contrary
Awarded Compensationin Sections
if both 2(a)
(x)through (c) hereof,
the conditions the Company
set forth in either of shall
thenot
be requiredclauses
following to recover(i) orany
(ii)Erroneously
are satisfied,Awarded
and (y) the Compensation
Committee (or if both (x) theof
a majority conditions set forthdirectors
the independent in eitherserving
of the
following clauses (i) or (ii) are satisfied, and (y) the Committee (or a majority
on the Board) has determined that recovery of the Erroneously Awarded Compensation would be impracticable: of the independent directors serving
on the Board) has determined that recovery of the Erroneously Awarded Compensation would be impracticable:
(i) the direct expense paid to a third party to assist in enforcing the recovery of the Erroneously
(i) the direct Compensation
Awarded expense paid tounder a third party
this Policyto assist
wouldinexceed
enforcing the the recovery
amount of suchof the Erroneously
Erroneously
Awarded
Awarded Compensation
Compensation under this Policyprovided
to be recovered; would exceed the amount
that, before of suchthat
concluding Erroneously
it would be
Awarded Compensation to be recovered; provided that,
impracticable to recover any amount of Erroneously Awarded Compensation pursuant before concluding that it wouldtobethis
impracticable
Section 2(d), the Company shall have first made a reasonable attempt to recover such to this
to recover any amount of Erroneously Awarded Compensation pursuant
Section
Erroneously 2(d),Awarded
the Company shall have first
Compensation, made such
document a reasonable
reasonable attempt to recover
attempt(s) to make suchsuch
Erroneously
recovery andAwardedprovide that Compensation,
documentation document such reasonable
to the NYSE; or attempt(s) to make such
recovery and provide that documentation to the NYSE; or
(ii) recovery of the Erroneously Awarded Compensation would likely cause an otherwise tax-
(ii) recovery
qualified of the Erroneously
retirement plan, underAwarded
whichCompensation
benefits are broadly wouldavailable
likely cause an otherwise
to employees tax-
of the
qualified retirement plan, under which benefits are broadly available
Company, to fail to meet the requirements of Sections 401(a)(13) or 411(a) of the U.S. Internal to employees of the
Company,
Revenue Code to failof to meetasthe
1986, requirements
amended of Sections 401(a)(13) or 411(a) of the U.S. Internal
(the “Code”).
Revenue Code of 1986, as amended (the “Code”).
(e) The Company shall not indemnify any Covered Executive, directly or indirectly, for any losses that
(e) Executive
such Covered The Company shallinnot
may incur indemnifywith
connection anythe
Covered
recovery Executive, directlyAwarded
of Erroneously or indirectly, for any losses that
Compensation
such Covered
pursuant to thisExecutive may incur
Policy, including in connection
through the paymentwith the recovery of
of insurance Erroneously
premiums Awarded
or gross-up Compensation
payments.
pursuant to this Policy, including through the payment of insurance premiums or gross-up payments.
(f) The Committee shall determine, in its sole discretion, the manner and timing in which any
(f) Awarded
Erroneously The Committee
Compensation shall shall
determine, in its sole
be recovered from discretion,
a Covered theExecutive
manner and timing in which
in accordance any
with applicable
Erroneously Awarded Compensation shall be recovered from a Covered Executive
law, including, without limitation, by (i) requiring reimbursement of Covered Compensation previously paid in in accordance with applicable
law,
cash;including,
(ii) seeking without
recovery limitation, by (i)
of any gain requiring
realized reimbursement
on the vesting, exercise,of Covered Compensation
settlement, sale, transferpreviously
or otherpaid in
disposition
cash; (ii) seeking recovery of any gain realized on the vesting, exercise, settlement,
of any equity or equity-based awards; (iii) offsetting the Erroneously Awarded Compensation amount from any sale, transfer or other disposition
of any equity or
compensation equity-based
otherwise owedawards; (iii) offsetting
by the Company or any theofErroneously
its affiliatesAwarded
to the CoveredCompensation
Executive; amount from any
(iv) cancelling
compensation otherwise owed by the Company or any of its affiliates to the Covered
outstanding vested or unvested equity or equity-based awards; and/or (v) taking any other remedial and recovery Executive; (iv) cancelling
outstanding
action vested
permitted byor unvestedlaw.
applicable equity Forortheequity-based
avoidance of awards;
doubt,and/or
except(v) as taking
set forthanyinother
Sectionremedial
2(d), inandnorecovery
event may
action permitted by applicable law. For the avoidance of doubt, except as set forth in Section 2(d), in no event may

3
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199174_Ford_2023_AR_1OK_r1.indd 209 2/13/24 8:02 PM

 the Company accept an amount that is less than the amount of Erroneously Awarded Compensation; provided that,
the Company
to the accept anto
extent necessary amount
avoid anythat adverse
is less thantax the amount of to
consequences Erroneously
the Covered Awarded
Executive Compensation;
pursuant to Section provided that,
409A
to the extent necessary to avoid any adverse tax consequences to the Covered
of the Code, any offsets against amounts under any nonqualified deferred compensation plans (as defined under Executive pursuant to Section 409A
of the Code,
Section 409Aany offsets
of the Code)against
shallamounts
be madeunder any nonqualified
in compliance with Section deferred
409A compensation
of the Code. plans (as defined under
Section 409A of the Code) shall be made in compliance with Section 409A of the Code.
3. Administration. This Policy shall be administered by the Committee. All decisions of the Committee shall
3. final,Administration.
be conclusive and bindingThis Policy uponshall be administered
the Company and thebyCoveredthe Committee.
Executives, All decisions of the Committee
their beneficiaries, executors, shall
be final, conclusive and binding upon the Company and the Covered Executives,
administrators and any other legal representative. The Committee shall have full power and authority to (i) their beneficiaries, executors,
administrators
administer and and any other
interpret legal representative.
this Policy; (ii) correct any The Committee
defect, supply shall have full and
any omission power and authority
reconcile to (i)
any inconsistency in
administer
this Policy; and (iii) make any other determination and take any other action that the Committee deems necessaryinor
and interpret this Policy; (ii) correct any defect, supply any omission and reconcile any inconsistency
this Policy;
desirable forand
the(iii) make any other
administration of this determination
Policy and toand take any
comply withother action law
applicable that (including
the Committee Section deems 10Dnecessary
of the or
desirable
Exchange Act) and applicable stock market or exchange rules and regulations. Notwithstanding anythingof
for the administration of this Policy and to comply with applicable law (including Section 10D to the
the
Exchange Act) and herein,
contrary contained applicable
to thestock market
extent or exchange
permitted by Section rules10D and ofregulations.
the Exchange Notwithstanding
Act and Section anything
303A.14 to the
of the
contrary contained herein, to the extent permitted by Section 10D of the Exchange
NYSE Listed Company Manual the Board may, in its sole discretion, at any time and from time to time, administer Act and Section 303A.14 of the
NYSE Listed Company Manual the
this Policy in the same manner as the Committee. Board may, in its sole discretion, at any time and from time to time, administer
this Policy in the same manner as the Committee.
4. Amendment/Termination. Subject to Section 10D of the Exchange Act and Section 303A.14 of the NYSE
4. Amendment/Termination.
Listed Company Manual, this Policy Subject
may be to amended
Section 10D of the Exchange
or terminated by the Act and Section
Committee at any 303A.14
time. To ofthe
theextent
NYSE
Listed Company Manual, this Policy may be amended or terminated by the
that any applicable law, or stock market or exchange rules or regulations require recovery of Erroneously AwardedCommittee at any time. To the extent
that any applicable
Compensation law, or stockin
in circumstances market
additionor exchange rules or regulations
to those specified herein, nothing require recovery
in this Policyofshall Erroneously
be deemed Awarded
to limit
Compensation in circumstances in addition to those specified herein, nothing
or restrict the right or obligation of the Company to recover Erroneously Awarded Compensation to the fullest in this Policy shall be deemed to limit
or restrict
extent the right
required or obligation
by such applicable oflaw,
the Company
stock market to recover
or exchange Erroneously
rules and Awarded Compensation
regulations. Unless otherwiseto the fullest
required
extent required by such applicable law, stock market or exchange rules and
by applicable law, this Policy shall no longer be effective from and after the date that the Company no longer regulations. Unless otherwise required
has a
by applicable law, this Policy shall no longer be effective
class of securities publicly listed on a United States national securities exchange. from and after the date that the Company no longer has a
class of securities publicly listed on a United States national securities exchange.
5. Interpretation. Notwithstanding anything to the contrary herein, this Policy is intended to comply with the
5.
requirements of SectionNotwithstanding
Interpretation. 10D of the Exchange anythingActtoand theSection
contrary herein, of
303A.14 thisthePolicy
NYSE is Listed
intended to comply
Company with the
Manual (and
requirements of Section 10D of the Exchange Act and Section 303A.14 of the
any applicable regulations, administrative interpretations or stock market or exchange rules and regulations adopted NYSE Listed Company Manual (and
any applicable regulations, administrative interpretations or stock market
in connection therewith), the provisions of this Policy shall be interpreted in a manner that satisfies such or exchange rules and regulations adopted
in connection and
requirements therewith), the shall
this Policy provisions of thisaccordingly.
be operated Policy shall be interpreted
If any provision in of
a manner
this Policy thatwould
satisfies such frustrate
otherwise
requirements
or conflict with and this
this Policy
intent, theshall be operated
provision shall beaccordingly.
interpretedIfand anydeemed
provision of this so
amended Policy
as towould
avoid otherwise
such conflict. frustrate
or conflict with this intent, the provision shall be interpreted and deemed amended so as to avoid such conflict.
6. Other Compensation Clawback/Recoupment Rights. Any right of recoupment under this Policy is in
6.
additionOther
to, andCompensation
not in lieu of,Clawback/Recoupment
any other remedies, rights Rights. Any right ofwith
or requirements recoupment
respect to under this Policyoris in
the clawback
addition to, and not in lieu of, any other remedies, rights or requirements
recoupment of any compensation that may be available to the Company pursuant to the terms of any other with respect to the clawback or
recoupment
recoupment of or any compensation
clawback policy ofthat the may
Companybe available
(or anytoofthe its Company
affiliates) pursuant
that may to be the terms from
in effect of any other
time to time, any
recoupment or clawback policy of the Company (or any of its affiliates)
provisions in any employment agreement, offer letter, equity plan, equity award agreement or similar plan that may be in effect from time to time,
or any
provisions
agreement, and any other legal remedies available to the Company, as well as applicable law, stock marketor
in any employment agreement, offer letter, equity plan, equity award agreement or similar plan or
agreement,
exchange rules, and any other
listing legal remedies
standards available
or regulations; to the Company,
provided, however, as thatwell
anyasamounts
applicable law, stock
recouped marketback
or clawed or
exchange rules, listing standards or regulations; provided, however, that any
under any other policy that would be recoupable under this Policy shall count toward any required clawback or amounts recouped or clawed back
under any other
recoupment under policy that would
this Policy be recoupable
and vice versa. under this Policy shall count toward any required clawback or
recoupment under this Policy and vice versa.
7. Exempt Compensation. Notwithstanding anything to the contrary herein, the Company has no obligation to
7. Exempt Compensation.
seek recoupment of amounts paid Notwithstanding
to a Covered Executive anythingwhich to the arecontrary
granted, herein,
vested theorCompany
earned based has no obligation
solely upon the to
seek recoupment of amounts paid to a Covered Executive which are granted,
occurrence or non-occurrence of nonfinancial events. Such exempt compensation includes, without limitation, base vested or earned based solely upon the
occurrence or non-occurrence
salary, time-vesting of nonfinancial
awards, compensation [Link]
awarded exempt
the basis compensation
of the achievement includes,
of metrics without
that arelimitation, base
not Financial
salary, time-vesting awards, compensation awarded on the basis of the achievement
Reporting Measures or compensation awarded solely at the discretion of the Committee or the Board, provided that of metrics that are not Financial
Reporting
such amounts Measures
are in noor compensation
way contingentawarded on, and solely
were not at the discretion
in any of the on
way granted Committee
the basisor of,the
theBoard,
achievementprovided of that
any
such amounts are in
Financial Reporting Measure. no way contingent on, and were not in any way granted on the basis of, the achievement of any
Financial Reporting Measure.

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199174_Ford_2023_AR_1OK_r1.indd 210 2/13/24 8:04 PM

 8. Miscellaneous.
8. Miscellaneous.
(a) Any applicable award agreement or other document setting forth the terms and conditions of any
(a) covered
compensation Any applicable awardshall
by this Policy agreement
be deemedor other document
to include setting forthimposed
the restrictions the terms and conditions
herein of anythis
and incorporate
compensation
Policy by reference and, in the event of any inconsistency, the terms of this Policy will govern. For the avoidancethis
covered by this Policy shall be deemed to include the restrictions imposed herein and incorporate of
Policy by reference
doubt, this Policy appliesand, intotheall event of any inconsistency,
compensation that is received theon terms of this
or after thePolicy
Effective willDate,
govern. For the of
regardless avoidance
the date of
doubt,
on whichthisthePolicy
award applies
agreementto all or
compensation
other document that setting
is received forthon theorterms
after and
the Effective
conditionsDate, of theregardless
Coveredof the date
Executive’s
on which the award
compensation became agreement
effective,orincluding,
other document
withoutsetting forth compensation
limitation, the terms and conditions
received under of the theCovered
Company’sExecutive’s
2018
compensation became effective, including, without limitation, compensation
Long Term Incentive Plan, 2023 Long Term Incentive Plan, Annual Performance Bonus Plan, and any successor received under the Company’s 2018
Long Term Incentive
plan to each of the foregoing. Plan, 2023 Long Term Incentive Plan, Annual Performance Bonus Plan, and any successor
plan to each of the foregoing.
(b) This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries,
(b)
heirs, executors, This Policy shall
administrators orbe binding
other legaland enforceable against all Covered Executives and their beneficiaries,
representatives.
heirs, executors, administrators or other legal representatives.
(c) All issues concerning the construction, validity, enforcement and interpretation of this Policy and
(c)documents,
all related All issues concerning
including, withoutthelimitation,
construction, anyvalidity,
employment enforcement
agreement, and offer
interpretation of this
letter, equity Policy and
award
all related documents, including, without limitation, any employment agreement,
agreement or similar agreement, shall be governed by, and construed in accordance with, the laws of the State of offer letter, equity award
agreement or similar
Delaware, without agreement,
giving effect to shall
anybe governed
choice of law by,orand construed
conflict of lawinrules
accordance with, the
or provisions laws ofofthe
(whether theState
Stateofof
Delaware, without giving effect to any choice of law or conflict of law rules
Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than or provisions (whether of the State
theof
Delaware or any
State of Delaware. other jurisdiction) that would cause the application of the laws of any jurisdiction other than the
State of Delaware.
(d) The Covered Executives, their beneficiaries, executors, administrators and any other legal
(d)
representative and The theCovered
Company Executives, theirattempt
shall initially beneficiaries,
to resolveexecutors, administrators
all claims, disputes or and any other legal
controversies arising under,
representative
out of or in connection with this Policy by conducting good faith negotiations amongst themselves. Toarising
and the Company shall initially attempt to resolve all claims, disputes or controversies ensureunder,
the
out of or in connection with this Policy by conducting good faith negotiations
timely and economical resolution of disputes that arise in connection with this Policy, any and all disputes, amongst themselves. To ensure the or
claims
timely
causes of action arising from or relating to the enforcement, performance or interpretation of this Policy shall be or
and economical resolution of disputes that arise in connection with this Policy, any and all disputes, claims
causes
resolvedoftoaction arisingextent
the fullest frompermitted
or relatingbytolawthe by
enforcement,
final, binding performance or interpretation
and confidential arbitration,ofby this Policyarbitrator,
a single shall be in
resolved
Detroit, Michigan, conducted by the American Arbitration Association (“AAA”) under the AAA’s Commercial in
to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator,
Detroit, Michigan,
Arbitration Rules. To conducted
the fullestbyextent
the American
permitted Arbitration
by law, the Association (“AAA”) under
Covered Executives, their the AAA’s Commercial
beneficiaries, executors,
Arbitration Rules. To the fullest extent permitted by law, the Covered Executives,
administrators and any other legal representative and the Company, shall waive (and shall hereby be deemed their beneficiaries, executors,to have
administrators
waived) (1) the right to resolve any such dispute through a trial by jury or judge or administrative proceeding;toand
and any other legal representative and the Company, shall waive (and shall hereby be deemed have
waived) (1) the right to resolve any such dispute through a trial by jury or judge
(2) any objection to arbitration taking place in Detroit, Michigan. The arbitrator shall: (i) have the authority to or administrative proceeding; and
(2) any objection
compel to arbitration
adequate discovery for taking place inofDetroit,
the resolution the dispute Michigan.
and toThe awardarbitrator shall:as(i)
such relief have otherwise
would the authority
be to
compel
permitted by law; and (ii) issue a written arbitration decision, to include the arbitrator’s essential findingsbeand
adequate discovery for the resolution of the dispute and to award such relief as would otherwise
permitted
conclusions byandlaw;a and (ii) issue
statement a written
of the [Link]
The arbitrator decision,
shall tobeinclude the arbitrator’s
authorized to award any essential findingsthat
or all remedies and any
conclusions and a statement of the award. The arbitrator shall be authorized to
party would be entitled to seek in a court of law. Any such award rendered shall be enforceable by any court havingaward any or all remedies that any
party would be entitled to seek in a court of law. Any such award rendered shall
jurisdiction and, to the fullest extent permitted by law, the Covered Executives, their beneficiaries, executors, be enforceable by any court having
jurisdiction
administrators and,and to any
the fullest extent
other legal permitted byand
representative law,the theCompany
Covered shallExecutives,
waive (and theirshall
beneficiaries,
hereby beexecutors,
deemed to have
administrators
waived) the right to resolve any such dispute regarding enforcement of such award through a trial bydeemed
and any other legal representative and the Company shall waive (and shall hereby be jury. to have
waived) the right to resolve any such dispute regarding enforcement of such award through a trial by jury.
(e) If any provision of this Policy is determined to be unenforceable or invalid under any applicable
law, such (e)provision If anywillprovision
be applied of to
thisthe
Policy
maximumis determined to be unenforceable
extent permitted by applicable or law
invalid
and under any applicablebe
shall automatically
law,
deemedsuchamended
provision in will be applied
a manner to thewith
consistent maximum extent permitted
its objectives to the extent by applicable
necessary to law and shall
conform to automatically
any limitationsbe
deemed amended in
required under applicable law.a manner consistent with its objectives to the extent necessary to conform to any limitations
required under applicable law.

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5

199174_Ford_2023_AR_1OK_r1.indd 211 2/13/24 8:04 PM

199174_Ford_2023_AR_1OK_r1.indd 212 2/13/24 8:05 PM
 Ford Motor Company
2023
Annual

2023 Annual Report

Report
Ford Motor Company

Ford Motor Company

One American Road
Dearborn, MI 48126

[Link]

Printed in U.S.A. Please recycle.

199174_CHUB02424_23AnnualReportCover_R03.indd 1 2/9/24 4:08 PM