Item 16. Form 10-K Summary.

None.

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 Office of the Chair and Chief Executive, and Chair of the Finance Committee						February 6, 2024
William Clay Ford, Jr.
/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 Policy Committee						February 6, 2024
William W. Helman IV
JON M. HUNTSMAN, JR.*						Director						February 6, 2024
Jon M. Huntsman, Jr.
WILLIAM E. KENNARD*						Director and Chair of the Nominating and Governance Committee						February 6, 2024
William E. Kennard
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 Culture Committee						February 6, 2024
Lynn Vojvodich Radakovich
JOHN L. THORNTON*						Director						February 6, 2024
John L. Thornton

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

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Ford Motor Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Ford Motor Company and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited 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 the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present 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 of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The 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, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our 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 material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the 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 respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

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 reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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 that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters 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

As described in Note 10 to the consolidated financial statements, the Company had consumer finance receivables of $78,274 million, for which a consumer allowance for credit losses of $879 million was recorded as of December 31, 2023. The consumer allowance for credit losses represents management’s estimate of the lifetime expected credit losses inherent in the consumer finance receivables as of the balance sheet date. For consumer receivables that share similar risk characteristics, management estimates the lifetime expected credit losses based on a collective assessment using measurement models and management judgment. The lifetime expected credit losses for the receivables is determined by applying probability of default and loss given default assumptions to monthly expected exposures, then discounting these cash flows to present value using the receivable’s original effective interest rate or the current effective interest rate for a variable rate receivable. If management does not believe the models reflect lifetime expected credit losses for the portfolio, an adjustment is made to reflect management judgment regarding qualitative 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 receivables allowance for credit losses is a critical audit matter are (i) the significant judgment by management in determining the consumer finance receivables allowance for credit losses; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the probability of default and loss given default assumptions and management’s judgment regarding qualitative factors; 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 overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s determination of the consumer finance receivables allowance for credit losses. These procedures also included, among others (i) testing management’s process for determining the consumer finance receivables allowance for credit losses; (ii) evaluating the appropriateness of the models used to determine the allowance; (iii) evaluating the reasonableness of the probability of default and loss given default assumptions; (iv) testing the data used in the models; and (v) evaluating the reasonableness of management’s judgment regarding qualitative factors related to economic uncertainty, observable changes in portfolio performance, and other relevant factors. Professionals with specialized skill and knowledge were used to assist in performing the procedures described in (i) through (v).

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 warranty and field service action costs, net of estimated supplier recoveries (“warranty accrual”), of $11,504 million as of December 31, 2023, of which the United States comprises a significant portion. Management accrues the estimated cost of both base warranty coverages and field service actions at the time of sale. Management establishes their estimate of base warranty obligations using a patterned estimation model, using historical information regarding the nature, frequency, and average cost of claims for each vehicle line by model year. Management establishes their estimates of field service action obligations using a patterned estimation model, using historical information regarding the nature, frequency, severity, and average cost of claims for each model year. Management reevaluates the adequacy of their accruals on a regular basis.

The principal considerations for our determination that performing procedures relating to the warranty accrual for the United States is a critical audit matter are (i) the significant judgment by management in the estimation of the accrual and development of the patterned estimation model; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the estimation model and significant assumptions related to the 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 overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls related to the estimate of the warranty accrual for the United States. These procedures also included, among others, evaluating the reasonableness of significant assumptions used by management to develop the warranty accrual for the United States, related to the frequency and average cost of claims, in part by considering the historical experience of the Company. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the model as well as the reasonableness of significant assumptions related to the frequency and average cost of claims.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan

February 6, 2024

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

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.

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.

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions)

			December 31, 2022						December 31, 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, 2022						December 31, 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in millions)

			Equity Attributable to Ford Motor Company
			Capital Stock						Cap. in Excess of Par Value of Stock						Retained Earnings/(Accumulated Deficit)						Accumulated Other Comprehensive Income/(Loss) (Note 23)						Treasury Stock						Total						Equity Attributable to Non-controlling Interests						Total 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.

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. PRESENTATION

For purposes of this report, “Ford,” the “Company,” “we,” “our,” “us,” or similar references mean Ford Motor Company, our consolidated subsidiaries, and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise. We also make reference to Ford Motor Credit Company LLC, herein referenced to as Ford Credit. Our consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We reclassified certain prior year amounts in our consolidated financial statements to conform to the current year presentation.

Certain Transactions with Ford Credit

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, 2022						December 31, 2023
Balance Sheet
Trade and other receivables (a)			$	10.6					$	9.2
Unearned interest supplements and residual support (b)			(3.4)						(4.6)
Other (c)			1.3						1.6

---

(a)Ford Blue, Ford Model e, and Ford Pro receivables (generated primarily from vehicle and parts sales to third parties) sold to Ford Credit.

(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 and residual support.

(c)Includes a sale-leaseback agreement between Ford Blue and Ford Credit relating primarily to vehicles that we lease to our employees.

See Note 2 for additional information regarding our finance and lease incentives between Ford Credit and our other segments.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

For each accounting topic that is addressed in its own note, the description of the accounting policy may be found in the related note. Other significant accounting policies are described below.

Use of Estimates

The 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, 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

When 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 effect of this remeasurement 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, respectively.

Generally, our 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 exchange rates. Changes in the carrying value of these assets and liabilities attributable to fluctuations in exchange rates are recognized in Foreign currency translation, a component of Other comprehensive income/(Ioss), net of tax. Upon sale or upon complete or substantially complete liquidation of an investment in a foreign subsidiary, the amount of accumulated 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 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 security is classified as a cash equivalent if it meets these criteria and if it has a remaining time to maturity of three months or less from the date of purchase. Amounts on deposit and available upon demand, or negotiated to provide for daily liquidity without penalty, are classified as Cash and cash equivalents. Time deposits, certificates of deposit, and money market accounts that meet the above criteria are reported at par value on our consolidated balance sheets.

Restricted Cash

Cash and 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 Company excluding Ford Credit restricted cash balances primarily include various escrow agreements related to legal, insurance, customs, and environmental matters and cash held under the terms of certain contractual agreements. Our Ford Credit segment restricted cash balances primarily include cash held to meet certain local governmental and 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Marketable Securities

Investments 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 on withdrawal are classified and accounted for as either trading or available-for-sale marketable securities. Equity securities with a readily determinable fair value are classified and accounted for as trading marketable securities.

Realized gains and losses, interest income, and dividend income on all of our marketable securities and unrealized gains and losses on securities not classified as available for sale are recorded in Other income/(loss), net. Unrealized gains and losses on available-for-sale securities are recognized in Unrealized gains and losses on securities, a component of Other comprehensive income/(loss), net of tax. Realized gains and losses and reclassifications of accumulated other comprehensive income into net income are measured using the specific identification method.

On a quarterly basis, we review our available-for-sale debt securities for credit losses. We compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, we determine if a credit loss allowance is necessary. If a credit loss allowance is necessary, we will record an allowance, limited by the amount that fair value is 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 ratings.

Trade, Notes, and Other Receivables

Trade, notes, and other 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 receivables, net. The non-current portion of notes receivables is reported in Other assets. Trade and notes receivables are initially recorded at transaction cost. Trade receivables are typically outstanding for 30 days or less. Each reporting period, we evaluate the collectibility of the trade and notes receivables and record an allowance for credit losses representing our estimate of the expected losses that result from all possible default events over the expected life of the receivables. Additions to the allowance for credit losses are made by recording charges to bad debt expense reported in Selling, administrative, and other expenses and Cost of sales. Trade and notes receivables are written off against the allowance for credit losses when the account is deemed to be uncollectible.

The carrying value of trade, notes, and other receivables was $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 $105 million and $86 million at December 31, 2022 and 2023, respectively.

Net Intangible Assets and Goodwill

Indefinite-lived 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 following an allocation of goodwill to a business to be disposed or a change in reporting units. We test for impairment by assessing qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit allocated the goodwill is less than its carrying amount. If the qualitative assessment indicates a possible impairment, the carrying value of the asset or reporting unit is compared with its fair value. Fair value is measured relying primarily on the 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 assets over their estimated useful lives.

The carrying amount of intangible assets 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 net carrying amount of our intangible assets was $86 million and $80 million at December 31, 2022 and 2023, respectively. 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Held-and-Used Long-Lived Asset Impairment

We test long-lived 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 cash flow losses combined with a history of cash flow losses and a forecast that demonstrates significant continuing losses, significant negative industry or economic trends, a current expectation that a long-lived asset group will be disposed of significantly before the end of its useful life, a significant adverse change in the manner in which an asset group is used or in its physical condition, or when there is a change in the asset grouping. In addition, investing in new, emerging products (e.g., EVs) or services (e.g., connectivity) may require substantial upfront investment, which may result in initial forecasted negative cash flows in the near term. In these instances, near term negative cash flows on their own may not be indicative of a triggering event for evaluation of impairment. In such circumstances, we also conduct a qualitative evaluation of the business growth trajectory, which includes updating our assessment of when positive cash flows are expected to be generated, confirming whether established milestones are being achieved, and assessing our 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 flows to the carrying value of the asset group. If the undiscounted forecasted cash flows are less than the carrying value of the assets, the asset group’s fair value is measured relying primarily on a discounted cash flow method. To the extent available, we will also consider third-party valuations of our long-lived assets that were prepared for other business purposes. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. When an impairment loss is recognized for assets to be held and used, the adjusted carrying amounts of those assets are depreciated over their remaining useful life. For the periods presented, we have not recorded any material impairments.

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 have committed to an action and the action is expected to be completed within one year. We estimate fair value to approximate the expected proceeds to be received, less cost to sell, and compare it to the carrying value of the disposal group. An impairment charge is recognized when the carrying value exceeds the estimated fair value (see Note 22). We also assess fair value if circumstances arise that were considered unlikely and, as a result, we decide not to sell a disposal group previously classified as HFS upon reclassification as held and used. When there is a change to a plan of sale, and the assets are reclassified from HFS to held and used, the long-lived assets would be reported at the lower of (i) the carrying amount before HFS designation, adjusted for depreciation that would have been recognized if the assets had not been classified as HFS, or (ii) the fair value at the date the assets no longer satisfy the criteria for classification as HFS.

Fair Value Measurements

We measure fair value of our financial instruments, including those held within our pension plans, using various valuation methods and prioritize the use of observable inputs. The use of observable and unobservable inputs and their 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 2 - inputs include quoted prices 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 assumptions market participants would use in pricing the instruments

Fixed income securities, equities, commingled funds, derivative financial instruments, and alternative assets are 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 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 reporting period.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Valuation Method

Fixed Income Securities. Fixed income securities primarily include government securities, government agency securities, corporate bonds, and asset-backed securities. We generally measure fair value using prices obtained from pricing services or quotes from dealers that make markets in such securities. Pricing methods and inputs to valuation models used by the pricing services depend on the security type (i.e., asset class). Where possible, fair values are generated using market inputs, including quoted prices (the closing price in an exchange market), bid prices (the price at which a buyer stands ready to purchase), and other market information. For fixed income securities that are not actively traded, the pricing services use alternative methods to determine fair value for the securities, including quotes for similar fixed income securities, matrix pricing, discounted cash flow using benchmark curves, or other factors. In certain cases, when market data are not available, we may use broker quotes or pricing services that use proprietary pricing models to determine fair value. The proprietary models incorporate unobservable inputs primarily consisting of prepayment curves, discount rates, default assumptions, recovery rates, yield assumptions, and credit spread assumptions.

An annual review is performed on the security prices received from our pricing services, which includes discussion and analysis of the 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 price or may be valued using the last available price. Securities that are thinly traded or delisted are valued using unobservable pricing data.

Commingled 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 market or exchange on which they are traded. Over-the-counter derivatives are not exchange traded and are valued using independent pricing services or industry-standard valuation models such as a discounted cash flow. When discounted cash flow models are used, projected future cash flows are discounted to a present value using market-based expectations for interest rates, foreign exchange rates, commodity prices, and the contractual terms of the derivative instruments. The discount rate used is the relevant benchmark interest rate (e.g., SOFR, SONIA) plus an adjustment for non-performance risk. The adjustment reflects the full credit default swap (“CDS”) spread applied to a net exposure, by counterparty, considering the master netting agreements we have entered into and any posted collateral. We use our counterparty’s CDS spread when we are in a net asset position and our own CDS spread when we are in a net liability position. In cases when market data are not available, we use broker quotes and models (e.g., Black-Scholes) to determine fair value. This includes situations where there is a lack of liquidity for a particular currency or commodity, or when the instrument is longer dated. When broker quotes or models are used to determine fair value, the derivative is categorized within Level 3 of the hierarchy. All other derivatives are categorized within Level 2.

Alternative Assets. Hedge funds generally hold liquid and readily-priced securities, such as public equities, exchange-traded derivatives, and corporate bonds. Private equity and real estate investments are less liquid. External investment managers typically report valuations reflecting initial cost or updated appraisals, which are adjusted for cash flows, and realized and unrealized gains/losses. All alternative assets are valued at the NAV provided by the investment sponsor or third party administrator, as they do not have readily-available market quotations. 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

We may hold annuity contracts within some of our non-U.S. 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 measure the fair value of the insurance asset by projecting expected future 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 estimates. We include all annuity contracts within Level 3 of the hierarchy.

Finance Receivables. We measure finance receivables at fair value using internal valuation models (see Note 10). These models project future cash flows of financing contracts based on scheduled contract payments (including principal and interest) and assumptions regarding expected credit losses and pre-payment speed. The projected cash flows are discounted to present value at current rates that incorporate present yield curve and credit spread assumptions. The fair value of finance receivables is categorized within Level 3 of the hierarchy.

On a nonrecurring basis, we also measure at fair value retail 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 estimated costs to sell, to determine the fair value of these receivables. The collateral for a retail financing or wholesale receivable is the vehicle financed, and for dealer loans is real estate or other property.

The fair value of collateral for retail receivables is calculated as the outstanding receivable balances multiplied by the average recovery value percentage. The fair value of collateral for wholesale receivables is based on the wholesale market value or liquidation value for new and used vehicles. The fair value of collateral for dealer loans is determined by reviewing various appraisals, which include total adjusted appraised value of land and improvements, alternate use appraised value, broker’s opinion of value, and purchase offers.

Debt. We measure debt at fair value using quoted prices 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 market-based expectations for interest rates, credit risk, and the contractual terms of the debt instruments. For certain short-term debt with an original maturity date of one year or less, we assume that book value is a reasonable approximation of the debt’s fair value. The fair value of debt is categorized within Level 2 of the hierarchy.

Finance and Lease Incentives

We routinely 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 when the vehicle is sold to the dealer. Ford Credit records a reduction to the finance receivable or reduces the cost of the vehicle operating lease when it records the underlying finance contract, and we transfer to Ford Credit the amount of the incentive on behalf of the dealer’s customer. See Note 1 for additional information regarding transactions between Ford Credit and our other segments. The Ford Credit segment 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, and 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 economics, productivity, and competitive pricing. We recognize price adjustments when we reach final 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Government Incentives

We receive 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 reduction of expense or as other income. The benefit is generally recorded when all conditions attached to the incentive have been met and there is reasonable assurance of receipt. Government 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 asset as a reduction to depreciation and amortization expense.

During 2022, we were awarded incentives by the State 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. These incentives are available until December 2051. The fair value of the land in 2022 was $144 million and was 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 as a reduction to depreciation and amortization expense over the life of the related assets.

In 2022, we were also awarded incentives by the Canadian government and Province of Ontario in connection with the development of electric vehicles at our 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 as a reduction of the related expenses.

Ford may also indirectly benefit from incentives and grants awarded to companies with which we are affiliated but are not included in our consolidated financial statements.

Ford’s 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

Effective November 20, 2023, we 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 United States. The agreement established 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 was paid in the fourth quarter of 2023.

In addition, we entered into a 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 employees and C$4,000 for temporary part-time employees upon signing of the contract.

Lump-sum cash bonuses paid in connection with ratifying a union contract 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 to these bonuses 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 performed internally or when performed by a supplier if we guarantee reimbursement. Advertising costs are reported in Selling, administrative, and other expenses and are expensed as incurred. Engineering, research, development, and advertising expenses for the years ended December 31 were as follows (in billions):

			2021						2022						2023
Engineering, research, and development			$	7.6					$	7.8					$	8.2
Advertising			3.1						2.2						2.5

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3. NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

Accounting Standards Update (“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 recognition and measurement 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 disclosures.

ASU 2022-04, 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 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 non-recourse basis in order to be paid earlier than our payment terms provide. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms, the amounts we pay, or our liquidity. We have no economic interest in a supplier’s decision to participate in the SCF program, and we do not provide any guarantees in connection with it. The outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions, reported in Payables, was $253 million and $220 million at December 31, 2022 and 2023, respectively. The amount settled through the SCF program during 2023 was $1.8 billion.

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
2022-03			Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions						January 1, 2023
2018-12			Targeted Improvements to the Accounting for Long Duration Contracts (and related amendments)						January 1, 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

ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued a new accounting standard related to disclosures about a public entity’s reportable segments and provides more detailed information about a reportable segment’s expenses. The new standard is effective for fiscal years beginning after December 15, 2023 and interim periods 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 balance sheets or income statements.

ASU 2023-09, Improvements to Income Tax Disclosures. In December 2023, the FASB issued a new accounting standard to enhance the transparency and decision usefulness of income tax disclosures. The new standard is effective for fiscal years beginning after December 15, 2024, with retrospective application permitted. We are assessing the effect on our annual consolidated financial statement disclosures; however, adoption will not impact our consolidated balance sheets or income statements.

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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4. REVENUE

The following tables disaggregate our revenue by major source for the years ended December 31 (in millions):

			2021
			Company Excluding Ford Credit						Ford Credit						Consolidated
Vehicles, parts, and accessories			$	120,973					$	—					$	120,973
Used vehicles			2,358						—						2,358
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
Insurance income			—						61						61
Total revenues			$	126,268					$	10,073					$	136,341

			2022
			Company Excluding Ford Credit						Ford Credit						Consolidated
Vehicles, parts, and accessories			$	144,471					$	—					$	144,471
Used vehicles			1,719						—						1,719
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
Insurance income			—						55						55
Total revenues			$	149,079					$	8,978					$	158,057

			2023
			Company Excluding Ford Credit						Ford Credit						Consolidated
Vehicles, parts, and accessories			$	161,052					$	—					$	161,052
Used vehicles			1,873						—						1,873
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
Insurance income			—						100						100
Total revenues			$	165,901					$	10,290					$	176,191

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(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 amount of consideration we expect to receive in exchange for transferring goods or providing services. For the majority of sales, this occurs when products are shipped from our manufacturing facilities. However, we defer a portion of the consideration received when there is a separate future or stand-ready performance obligation, such as extended service contracts or ongoing vehicle connectivity. Sales, value-added, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The expected costs associated 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4. REVENUE (Continued)

Company Excluding Ford Credit

Vehicles, Parts, and 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 receive cash equal to the invoice price for most vehicle sales at the time of wholesale. When the vehicle sale is financed by our wholly-owned subsidiary Ford Credit, the dealer is obligated to pay Ford Credit when it sells the vehicle to the retail customer (see Note 10). Payment terms on part sales to dealers, distributors, and retailers range from 30 to 120 days. The amount of consideration we receive and revenue we recognize varies with changes in return rights and marketing incentives we offer to our customers and their customers. When we give our dealers the right to return eligible parts and accessories, we estimate the expected returns based on an analysis of historical experience. Estimates of marketing incentives are based on expected retail and fleet sales volumes, mix of products to be sold, and incentive programs to be offered. Customer acceptance of products and programs, as well as other market conditions, will impact these estimates. We adjust our estimate of revenue at the earlier of when the value of consideration we expect to receive changes or when the consideration becomes fixed. As a result 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 2023 related to revenue recognized in prior annual periods.

We have elected to recognize the cost for freight and shipping when control over vehicles, parts, or accessories has transferred to the customer as an expense in Cost of sales.

We sell vehicles to daily rental companies and 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 companies, we record the probable amount we will pay under the guarantee to Other liabilities and deferred revenue (see Note 25).

Used 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 to the customer, and the related vehicle carrying value is recognized in Cost of sales.

Services and other revenue. For separate or stand-ready performance obligations that are included as part of the vehicle consideration received (e.g., free extended service contracts, vehicle connectivity, over-the-air updates), we use an observable price to determine the stand-alone selling price or, when one is not available, we use a cost-plus margin approach. We also sell separately priced service contracts that extend mechanical and maintenance coverages beyond our base warranty agreements to vehicle owners. We receive payment at contract inception and the contracts generally range from 12 to 120 months. We recognize revenue for vehicle service contracts that extend mechanical and maintenance coverages beyond our base warranties over the term of the agreement in proportion to the costs we expect to incur in satisfying the contract obligations. Revenue related to other future or stand-ready performance obligations is generally recognized on a straight-line basis over the period in which services are expected to be performed.

We had a balance of $4.3 billion and $4.4 billion of unearned revenue associated primarily with outstanding extended service contracts reported in Other liabilities and deferred revenue at December 31, 2021 and 2022, respectively. We recognized $1.4 billion and $1.5 billion of the unearned amounts as revenue during the years ended December 31, 2022 and 2023, respectively. At December 31, 2023, the unearned amount was $4.8 billion. We expect to recognize approximately $1.5 billion of the unearned amount in 2024, $1.2 billion in 2025, and $2.1 billion thereafter.

We record a premium deficiency reserve to the extent we estimate the future costs associated with extended service contracts exceed the unrecognized revenue. Amounts paid to dealers to obtain these contracts are deferred and recorded as Other assets. These costs are amortized to expense consistent with how the related revenue is recognized. We had a balance of $315 million 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4. REVENUE (Continued)

We also 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 services to our customers. We have 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 we have the right to invoice.

Leasing Income. We sell 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 the transfer of vehicles to the daily rental companies, we record proceeds received in Other liabilities and deferred revenue. The difference between the proceeds received and the agreed upon repurchase amount is recorded in Company excluding Ford Credit revenues over the term of the lease using a straight-line 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 the vehicle and the estimated auction value is depreciated in Cost of sales over the term of the lease.

Ford Credit Segment

Leasing Income. Ford 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 dealer. The retail consumer makes lease payments representing the difference between Ford Credit’s purchase price of the vehicle and the contractual residual value 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 Ford Credit interest, operating, and other expenses.

Financing Income. Ford Credit 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 the interest method and includes the amortization of certain direct origination costs.

Insurance Income. Income from insurance contracts is recognized evenly 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.

NOTE 5. OTHER INCOME/(LOSS)

The amounts included in Other income/(loss), net for the years ended December 31 were as follows (in millions):

			2021						2022						2023
Net periodic pension and OPEB income/(cost), excluding service cost (Note 17)			$	5,997					$	1,336					$	(2,494)
Investment-related interest income			254						639						1,567
Interest income/(expense) on income taxes			7						(23)						(16)
Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (a)			9,159						(7,518)						(205)
Gains/(Losses) on changes in investments in affiliates (Note 21 and Note 22)			368						(147)						9
Gains/(Losses) on extinguishment of debt (Note 19)			(1,702)						(121)						—
Royalty income			619						483						477
Other			31						201						59
Total			$	14,733					$	(5,150)					$	(603)

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(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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 6. SHARE-BASED COMPENSATION

Under 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 may be granted in any year is limited to 2% of our issued and outstanding Common Stock as of December 31 of the prior calendar year. The limit may be increased up to 3% in any year, with a corresponding reduction in shares available for grants in future years. Granted RSUs generally cliff vest or ratably vest over a three-year service period. Performance-based RSUs can be based on internal financial performance metrics or total shareholder return relative to a peer group or a combination 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 date.

The 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 condition, we measure the fair value using a Monte Carlo simulation. The weighted average per unit grant date fair value for the years ended December 31, 2021, 2022, and 2023 was $13.02, $15.63, and $12.98, respectively.

Time-based RSUs generally have a graded vesting feature whereby one-third of each grant vests after the first anniversary of the grant date, one-third after the second anniversary, and one-third after the third anniversary. The graded vesting method recognizes expense over the service period for each separately-vesting tranche, which results in accelerated recognition of expense. The fair value of time-based RSUs, RSSs, and stock options is expensed over the shorter of each separate vesting period, using the graded vesting method, or the time period an employee becomes eligible to retain the award at retirement. The fair value of performance-based RSUs and RSSs is expensed when it is probable and estimable as measured against the performance metrics over the shorter of the performance or required service periods. We measure the fair value of our stock options on the date of grant using either the Black-Scholes option-pricing model (for options without a market condition) or a Monte Carlo simulation (for options with a market condition). We have elected to recognize forfeitures as an adjustment to compensation expense for all RSUs, RSSs, and stock options in the same period as the forfeitures occur. Expense is recorded in Selling, administrative, and other expenses.

Restricted Stock Units and Restricted Stock Shares

The fair value of vested RSUs and RSSs as well as the compensation cost for the years ended December 31 were as follows (in millions):

			2021						2022						2023
Fair value of vested shares			$	217					$	252					$	303
Compensation cost (a)			229						223						356

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(a) Net of tax benefit of $74 million, $113 million, and $104 million in 2021, 2022, and 2023, respectively.

As of December 31, 2023, there was approximately $372 million in unrecognized compensation cost related to non-vested RSUs. This expense will be recognized over a weighted average period of 1.9 years.

The performance-based RSUs granted in March 2021, 2022, and 2023 include a relative Total Shareholder Return (“TSR”) metric. Inputs and assumptions used to calculate the fair value at grant date through a Monte Carlo simulation were as follows:

			2021						2022						2023
Fair value per stock award			$	13.45					$	18.10					$	18.57
Grant date stock price			11.93						16.85						13.08
Assumptions:
Ford’s stock price expected volatility (a)			39.9		%				44.8		%				49.5		%
Expected average volatility of peer companies (a)			39.6						39.6						49.6
Risk-free interest rate			0.32						1.62						4.57

---

(a)Expected volatility based on three years of daily closing share price changes ending on the grant date.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 6. SHARE-BASED COMPENSATION (Continued)

During 2023, activity for RSUs and RSSs was as follows (in millions, except for weighted-average fair value):

			Shares						Weighted- Average Fair Value
Outstanding, beginning of year			63.9						$	12.90
Granted (a)			54.8						12.98
Vested (a)			(27.2)						11.11
Forfeited			(10.9)						10.62
Outstanding, end of year (b)			80.6						13.86

---

(a)Includes shares awarded to non-employee directors.

(b)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:

						Shares (millions)						Weighted Average Exercise Price						Weighted Average Remaining Contractual Life (years)						Aggregate Intrinsic Value (millions)
Outstanding, beginning of period						10.1						$	10.84
Granted						—						—
Exercised (a)						(1.3)						11.90
Forfeited (including expirations)						(0.4)						12.75
Outstanding, end of period						8.4						10.60
Exercisable, end of period						8.4						10.60						3.73						$	26.8
Options expected to vest						—						—						—						—

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(a)Exercised at option prices ranging from $6.19 to $12.75 during 2023.

We received approximately $16 million in proceeds with an equivalent of about $18 million in new issues used to settle the exercised options. For options exercised during the year ended December 31, 2023, the difference between the fair value of the Common Stock issued and the respective exercise price was $2 million. Compensation cost for stock options for the year ended December 31, 2023 was $0. As of December 31, 2023, there was no unrecognized compensation cost related to non-vested stock options. During 2023, no new stock options were granted.

NOTE 7. INCOME TAXES

We recognize income tax-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 consolidated income statements.

We account 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.

Valuation of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities are 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 bases, 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. INCOME TAXES (Continued)

Our accounting 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 assessing the need for a valuation allowance, we consider both positive 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 tax assets will not be realized, we record a valuation allowance.

Components of Income Taxes

Components 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 were as follows:

			2021						2022						2023
Income/(Loss) before income taxes (in millions)
U.S.			$	10,043					$	(6,548)					$	3,395
Non-U.S.			7,737						3,532						572
Total			$	17,780					$	(3,016)					$	3,967
Provision for/(Benefit from) income taxes (in millions)
Current
Federal			$	102					$	68					$	62
Non-U.S.			598						781						948
State and local			26						123						229
Total current			726						972						1,239
Deferred
Federal			2,290						(2,292)						(413)
Non-U.S.			(3,254)						688						(1,149)
State and local			108						(232)						(39)
Total deferred			(856)						(1,836)						(1,601)
Total			$	(130)					$	(864)					$	(362)
Reconciliation of effective tax rate
U.S. statutory tax rate			21.0		%				21.0		%				21.0		%
Non-U.S. tax rate differential			1.3						(8.7)						(3.4)
State and local income taxes			0.5						2.3						1.9
General business credits			(2.3)						13.0						(15.9)
Nontaxable foreign currency gains and losses			—						(4.2)						—
Dispositions and restructurings (a)			(18.8)						(7.0)						(14.7)
U.S. tax on non-U.S. earnings			2.4						2.8						7.7
Prior year settlements and claims			(0.3)						1.5						1.2
Tax incentives			(0.6)						2.0						(3.9)
Enacted change in tax laws			1.1						(2.0)						0.1
Valuation allowances			(4.7)						6.2						(0.7)
Other			(0.3)						1.7						(2.4)
Effective tax rate			(0.7)		%				28.6		%				(9.1)		%

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(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 $610 million associated with legal entity restructuring within our leasing operations and China.

In 2021, we reversed $918 million of previously established U.S. valuation allowances. The reversal primarily reflected a change in our intent to pursue planning actions involving cash outlays to preserve tax credits. During 2022, we reversed an additional $405 million of U.S. valuation allowances, primarily as a result of planning actions.

At December 31, 2023, $14.5 billion of non-U.S. earnings are considered indefinitely reinvested in operations outside 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. INCOME TAXES (Continued)

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities at December 31 were as follows (in millions):

			2022						2023
Deferred tax assets
Employee benefit plans			$	1,953					$	2,470
Net operating loss carryforwards			6,809						7,262
Tax credit carryforwards			9,354						8,944
Research expenditures			3,240						3,799
Dealer and dealers’ customer allowances and claims			2,192						2,752
Other foreign deferred tax assets			3,107						3,456
All other			2,201						2,299
Total gross deferred tax assets			28,856						30,982
Less: Valuation allowances			(4,052)						(4,187)
Total net deferred tax assets			24,804						26,795
Deferred tax liabilities
Leasing transactions			2,992						3,253
Depreciation and amortization (excluding leasing transactions)			3,116						3,389
Finance receivables			792						699
Carrying value of investments			487						—
Other foreign deferred tax liabilities			1,110						1,255
All other			2,304						2,219
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 expire beyond 2027. Tax credits available to offset future tax liabilities are $8.9 billion. The majority of these credits have a remaining carryforward period of nine years or more. Tax benefits of operating loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. INCOME TAXES (Continued)

Other

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 were as follows (in millions):

			2022						2023
Beginning balance			$	2,910					$	2,939
Increase – tax positions in prior periods			338						103
Increase – tax positions in current period			17						45
Decrease – tax positions in prior periods			(236)						(79)
Settlements			(2)						(115)
Lapse of statute of limitations			(1)						(33)
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.

Examinations by tax 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.

Net interest on income taxes was $7 million of income, $23 million of 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 consolidated income statements. Tax-related interest was $17 million of a net payable and $25 million of a net receivable as of December 31, 2022 and 2023, respectively.

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8. CAPITAL STOCK AND EARNINGS/(LOSS) PER SHARE

All general voting power is vested 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 will give them the remaining 40%. Shares of Common Stock and Class B Stock share equally in dividends when and as paid, with stock dividends payable in shares of stock of the class held.

If liquidated, each share of Common Stock is entitled to 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 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-average number of shares of Common and Class B Stock outstanding for the period. Diluted EPS reflects the maximum potential dilution that could 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 period.

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

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

			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
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt (a)			43						—						43
Diluted shares			4,034						4,014						4,041

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(a) In 2022, there were 42 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES

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

									December 31, 2022
			Fair Value Level						Company excluding Ford Credit						Ford Credit						Consolidated
Cash and cash equivalents
U.S. government			1						$	3,295					$	1,045					$	4,340
U.S. government agencies			2						2,245						150						2,395
Non-U.S. government and agencies			2						1,048						199						1,247
Other cash equivalents			2						10						—						10
Corporate debt			2						593						792						1,385
Total marketable securities classified as cash equivalents									7,191						2,186						9,377
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
U.S. government agencies			2						2,641						221						2,862
Non-U.S. government and agencies			2						2,625						658						3,283
Corporate debt			2						6,755						266						7,021
Equities (a)			1						223						—						223
Other marketable securities			2						252						161						413
Total marketable securities									$	17,443					$	1,493					$	18,936
Restricted cash									$	79					$	127					$	206
									December 31, 2023
			Fair Value Level						Company excluding Ford Credit						Ford Credit						Consolidated
Cash and cash equivalents
U.S. government			1						$	2,320					$	912					$	3,232
U.S. government agencies			2						2,075						625						2,700
Non-U.S. government and agencies			2						699						276						975
Corporate debt			2						1,617						101						1,718
Total marketable securities classified as cash equivalents									6,711						1,914						8,625
Cash, time deposits, and money market funds									7,493						8,744						16,237
Total cash and cash equivalents									$	14,204					$	10,658					$	24,862
Marketable securities
U.S. government			1						$	4,467					$	207					$	4,674
U.S. government agencies			2						1,774						49						1,823
Non-U.S. government and agencies			2						2,096						109						2,205
Corporate debt			2						5,807						268						6,075
Equities (a)			1						23						—						23
Other marketable securities			2						353						156						509
Total marketable securities									$	14,520					$	789					$	15,309
Restricted cash									$	111					$	137					$	248

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(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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

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

			December 31, 2022
																											Fair Value of Securities with Contractual Maturities
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Within 1 Year						After 1 Year through 5 Years						After 5 Years
Company excluding Ford Credit
U.S. government			$	4,797					$	1					$	(145)					$	4,653					$	1,008					$	3,645					$	—
U.S. government agencies			2,508						—						(119)						2,389						1,244						1,109						36
Non-U.S. government and agencies			2,248						—						(132)						2,116						294						1,810						12
Corporate debt			7,511						6						(197)						7,320						3,117						4,195						8
Other marketable securities			246						—						(9)						237						—						181						56
Total			$	17,310					$	7					$	(602)					$	16,715					$	5,663					$	10,940					$	112
			December 31, 2023
																											Fair Value of Securities with Contractual Maturities
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Within 1 Year						After 1 Year through 5 Years						After 5 Years
Company excluding Ford Credit
U.S. government			$	4,458					$	6					$	(66)					$	4,398					$	2,172					$	2,216					$	10
U.S. government agencies			2,053						4						(62)						1,995						490						1,487						18
Non-U.S. government and agencies			1,948						1						(75)						1,874						587						1,275						12
Corporate debt			7,433						27						(67)						7,393						2,830						4,558						5
Other marketable securities			322						2						(4)						320						—						247						73
Total			$	16,214					$	40					$	(274)					$	15,980					$	6,079					$	9,783					$	118

Sales proceeds and gross realized gains/losses from the sale of AFS securities for the years ended December 31 were as follows (in millions):

			2021						2022						2023
Company excluding Ford Credit
Sales proceeds			$	5,943					$	6,207					$	3,140
Gross realized gains			26						7						2
Gross realized losses			3						26						37

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES (Continued)

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

			December 31, 2022
			Less than 1 Year												1 Year or Greater												Total
			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Company excluding Ford Credit
U.S. government			$	2,860					$	(52)					$	1,570					$	(93)					$	4,430					$	(145)
U.S. government agencies			707						(14)						1,658						(105)						2,365						(119)
Non-U.S. government and agencies			751						(23)						1,271						(109)						2,022						(132)
Corporate debt			4,571						(79)						1,737						(118)						6,308						(197)
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
			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Company excluding Ford Credit
U.S. government			$	619					$	(2)					$	2,735					$	(64)					$	3,354					$	(66)
U.S. government agencies			283						(1)						1,068						(61)						1,351						(62)
Non-U.S. government and agencies			67						—						1,654						(75)						1,721						(75)
Corporate debt			2,608						(2)						2,192						(65)						4,800						(67)
Other marketable securities			26						—						122						(4)						148						(4)
Total			$	3,603					$	(5)					$	7,771					$	(269)					$	11,374					$	(274)

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 changes in interest rates and market liquidity.

Cash, Cash Equivalents, and Restricted Cash

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

			December 31, 2022						December 31, 2023
Cash and cash equivalents			$	25,134					$	24,862
Restricted cash (a)			206						248
Total cash, cash equivalents, and restricted cash			$	25,340					$	25,110

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

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

Consumer Portfolio. Receivables in this portfolio 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 installment contracts for new and used vehicles and finance leases with retail customers, government entities, daily rental companies, and fleet customers.

Non-Consumer Portfolio. Receivables 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 financing, as well as loans to dealers to finance working capital and improvements to dealership facilities, finance the 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.

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

Finance Receivables Classification

Finance receivables 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 foreseeable future is highly judgmental and 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, then the receivables are classified as HFS.

Each quarter, Ford Credit makes a 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, internal forecasts and budgets, as well as other relevant, reliable information available through the date of evaluation. For purposes of this determination, probable means at least 70% likely and, consistent with the budgeting and forecasting period, the foreseeable future means 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 receivables, excluding wholesale and other receivables, that were originally classified as HFI 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 from wholesale and other receivables are recorded as an operating activity.

Held-for-Sale. Finance receivables classified as HFS are carried at the lower of 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/(Increase) in finance receivables (wholesale and other). Once a decision has been made to sell receivables that were originally classified 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Ford Credit finance receivables, net at December 31 were as follows (in millions):

			2022						2023
Consumer
Retail installment contracts, gross			$	66,954					$	73,825
Finance leases, gross			6,765						7,793
Retail financing, gross			73,719						81,618
Unearned interest supplements			(2,305)						(3,344)
Consumer finance receivables			71,414						78,274
Non-Consumer
Dealer financing			18,054						24,683
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)
Total finance receivables, net			$	88,623					$	102,075
Current portion			$	38,720					$	46,425
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

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

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

Ford Credit’s finance leases are comprised of sales-type and direct financing leases. These financings include primarily lease plans for terms of 24 to 60 months. Financing 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 Ford Credit revenues on our consolidated income statements.

The amounts contractually due on Ford Credit’s finance leases at December 31 were as follows (in millions):

						2023
2024						$	1,488
2025						1,686
2026						1,242
2027						640
2028						87
Thereafter						2
Total future cash payments						5,145
Less: Present value discount						358
Finance lease receivables						$	4,787

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The reconciliation from finance lease receivables to finance leases, gross and finance leases, net at December 31 is as follows (in millions):

			2022						2023
Finance lease receivables			$	4,297					$	4,787
Unguaranteed residual assets			2,389						2,910
Initial direct costs			79						96
Finance leases, gross			6,765						7,793
Unearned interest supplements from Ford and affiliated companies			(307)						(408)
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.

Included in the recorded investment in finance receivables 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, respectively, (including Ford Blue, Ford Model e, and Ford Pro receivables sold to Ford Credit, which we report in Trade and other receivables) that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions (see Note 24).

Credit Quality

Consumer Portfolio

When originating consumer receivables, Ford Credit uses a proprietary scoring system that measures credit quality using information in the credit application, proposed contract terms, credit bureau data, and other information. After a proprietary risk score is generated, Ford Credit decides whether to purchase a contract using a decision process based on a judgmental evaluation of the applicant, the credit application, the proposed contract terms, credit bureau information (e.g., FICO score), proprietary risk score, and other information. The evaluation emphasizes the applicant’s ability to pay and creditworthiness focusing on payment, affordability, applicant credit history, and stability as key considerations.

After origination, Ford Credit reviews the credit quality of retail financing based on customer payment activity. As each customer develops a payment history, an internally developed behavioral scoring model is used to assist in determining the best collection strategies, which allows Ford Credit to focus collection activity on higher-risk accounts. These models are used to refine Ford Credit’s risk-based staffing model to ensure collection resources are aligned with portfolio risk. Based on data from this scoring model, contracts are categorized by collection risk. Ford Credit’s collection models evaluate several factors, including origination characteristics, updated credit bureau data, and payment patterns.

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

*•*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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The credit quality analysis of consumer receivables at December 31, 2022 was as follows (in millions):

			Amortized Cost Basis by Origination Year
			Prior to 2018						2018						2019						2020						2021						2022						Total						Percent
Consumer
31 - 60 days past due			$	41					$	60					$	91					$	181					$	150					$	126					$	649					0.9		%
61 - 120 days past due			9						12						20						39						40						29						149						0.2
Greater than 120 days past due			9						4						5						7						7						6						38						0.1
Total past due			59						76						116						227						197						161						836						1.2
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
			Prior to 2019						2019						2020						2021						2022						2023						Total						Percent
Consumer
31 - 60 days past due			$	40					$	49					$	130					$	125					$	187					$	159					$	690					0.9		%
61 - 120 days past due			9						11						30						37						58						50						195						0.2
Greater than 120 days past due			7						4						7						10						10						5						43						0.1
Total past due			56						64						167						172						255						214						928						1.2
Current			891						2,359						7,385						11,301						20,247						35,163						77,346						98.8
Total			$	947					$	2,423					$	7,552					$	11,473					$	20,502					$	35,377					$	78,274					100.0		%
Gross charge-offs			$	47					$	40					$	75					$	85					$	117					$	37					$	401

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 request is evaluated by considering the borrower’s financial condition and the underlying collateral securing the loan. Ford Credit uses a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance data to identify key factors about a dealer that are considered most significant in predicting a dealer’s ability to meet its financial obligations. Ford Credit also considers numerous other financial and qualitative factors of the dealer’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Ford Credit and other creditors.

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

• Group I – strong to superior financial metrics;

• Group II – fair to favorable financial metrics;

• Group III – marginal to weak financial metrics; and

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

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Ford Credit regularly reviews the model to confirm the continued business significance and statistical predictability of the model and may make updates to improve the performance of the model. In addition, Ford Credit regularly audits dealer inventory and dealer sales records to verify that the dealer is in possession of the financed vehicles and is promptly paying each receivable following the sale of the financed vehicle. The frequency of on-site vehicle inventory audits depends primarily on the dealer’s risk rating. Under Ford Credit’s policies, on-site vehicle inventory audits of low-risk dealers are conducted only as circumstances warrant. On-site vehicle inventory audits of higher-risk dealers are conducted with increased frequency based primarily on the dealer’s risk rating, but also considering the results of electronic monitoring of the dealer’s performance, including daily payment verifications and monthly analyses of the dealer’s financial statements, payoffs, aged inventory, over credit line, and delinquency reports. Ford Credit typically performs a credit review of each dealer annually and more frequently reviews certain dealers based on the dealer’s risk rating and total exposure. Ford Credit adjusts the 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 dealer financing regardless of the type of financing.

The credit quality analysis of dealer financing receivables at December 31, 2022 was as follows (in millions):

			Amortized Cost Basis by Origination Year																																										Wholesale Loans
			Dealer Loans
			Prior to 2018						2018						2019						2020						2021						2022						Total									Total						Percent
Group I			$	402					$	148					$	35					$	67					$	185					$	224					$	1,061					$	13,888					$	14,949					82.8		%
Group II			2						21						—						5						2						42						72						2,751						2,823						15.6
Group III			—						—						—						—						—						10						10						233						243						1.4
Group IV			—						—						1						—						—						3						4						35						39						0.2
Total (a)			$	404					$	169					$	36					$	72					$	187					$	279					$	1,147					$	16,907					$	18,054					100.0		%

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(a)Total past due dealer financing receivables at December 31, 2022 were $9 million.

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

			Amortized Cost Basis by Origination Year																																										Wholesale Loans
			Dealer Loans
			Prior to 2019						2019						2020						2021						2022						2023						Total									Total						Percent
Group I			$	383					$	30					$	58					$	156					$	61					$	331					$	1,019					$	20,419					$	21,438					86.9		%
Group II			16						—						1						3						2						44						66						2,834						2,900						11.7
Group III			—						—						—						—						1						8						9						292						301						1.2
Group IV			—						1						—						—						—						2						3						41						44						0.2
Total (a)			$	399					$	31					$	59					$	159					$	64					$	385					$	1,097					$	23,586					$	24,683					100.0		%
Gross charge-offs			$	—					$	—					$	—					$	—					$	—					$	1					$	1					$	3					$	4

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

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

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The use of interest rate modifications and term extensions helps Ford Credit mitigate financial loss. Term extensions may assist in cases where Ford Credit believes the customer will recover from short-term financial difficulty and resume regularly scheduled payments. The effect of most loan modifications made to borrowers experiencing financial difficulty is included in the historical trends used to measure the allowance for credit losses. A loan modification that improves the delinquency status of a borrower reduces the probability of default, which results in a lower allowance for credit losses. At December 31, 2023, an insignificant portion of Ford Credit's total finance receivables portfolio had been granted a loan modification, and these modifications are generally treated as a continuation of the existing loan.

Allowance for Credit Losses

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

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

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

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 collective assessment using measurement models and management judgment. The lifetime expected credit losses for the receivables is determined by applying probability of default and loss given default assumption to monthly expected exposures, then discounting these cash flows to present value using the receivable’s original effective interest rate or the current effective interest rate for a variable rate receivable. Probability of default models are developed from internal risk scoring models taking into account the expected probability of payment and time to default, adjusted for macroeconomic outlook and recent performance. The models consider factors such as risk evaluation at the time of origination, historical trends in credit losses, and the composition and recent performance of the present portfolio (including vehicle brand, term, risk evaluation, and new/used vehicles). The loss given default is the percentage of the expected balance due at default that is not recoverable, taking into 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 and interest balance.

The allowance for credit losses incorporates forward-looking macroeconomic conditions for baseline, upturn, and downturn scenarios. Three separate credit loss allowances are calculated from these scenarios. They are then probability-weighted to determine the quantitative estimate of the credit loss allowance recognized in the financial statements. Ford Credit uses forecasts from a third party that revert to a long-term historical average after a reasonable and supportable forecasting period, which is specific to the particular macroeconomic variable and which varies by market. Ford Credit updates the forward-looking macroeconomic forecasts quarterly.

If management does not believe the models reflect lifetime expected credit losses for the portfolio, an adjustment is made to reflect management judgment regarding qualitative factors, including economic uncertainty, observable changes in portfolio performance, and other relevant factors.

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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10. FORD 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 requires a specific allowance for credit loss. If 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 estimated costs to sell.

For the remaining dealer financing, Ford Credit estimates an allowance for credit losses on a collective basis.

Wholesale Loans. Ford Credit estimates the allowance for credit losses for wholesale loans based on historical loss-to-receivable (“LTR”) ratios, expected future cash flows, and the fair value of collateral. For wholesale loans with similar risk characteristics, the allowance for credit losses is estimated on a collective basis using the LTR model and management judgment. The LTR model is based on the most recent years of history. An LTR ratio is calculated by dividing credit losses (i.e., charge-offs net of 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 expected credit loss reserve.

Dealer Loans. Ford Credit uses 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, adjusted to factor in the historical credit losses for the dealer loans portfolio. The expected credit loss is calculated under different macroeconomic scenarios that are weighted to provide the total lifetime expected credit loss.

After establishing the collective and specific allowance for credit losses, if management 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

An analysis of the allowance for credit losses related to finance receivables for the years ended December 31 was as follows (in millions):

			2022
			Consumer						Non-Consumer						Total
Allowance for credit losses
Beginning balance			$	903					$	22					$	925
Charge-offs			(278)						(1)						(279)
Recoveries			165						5						170
Provision for/(Benefit from) credit losses			56						(17)						39
Other (a)			(8)						(2)						(10)
Ending balance			$	838					$	7					$	845

			2023
			Consumer						Non-Consumer						Total
Allowance for credit losses
Beginning balance			$	838					$	7					$	845
Charge-offs			(401)						(4)						(405)
Recoveries			151						2						153
Provision for/(Benefit from) credit losses			280						(2)						278
Other (a)			11						—						11
Ending balance			$	879					$	3					$	882

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(a)Primarily represents amounts related to translation adjustments.

For the year ended December 31, 2023, the allowance for credit losses increased $37 million driven by an increase in Ford Credit finance receivables, partially offset by the impact of an improved U.S. economic outlook that was reflected in the reserve balance in the fourth quarter of 2023. Net charge-offs increased from a year ago, reflecting normalization from extraordinarily low levels. The impact of inflationary pressure and high interest rates on future credit losses remains uncertain. Ford Credit will continue to monitor economic trends and conditions and portfolio performance and will adjust the reserve accordingly.

NOTE 11. INVENTORIES

All 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):

			2022						2023
Raw materials, work-in-process, and supplies			$	5,997					$	6,196
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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 12. NET INVESTMENT IN OPERATING LEASES

Net investment in operating leases consists primarily of lease contracts for vehicles with individuals, daily rental companies, government entities, and fleet customers. Assets subject to operating leases are depreciated using the straight-line method over the term of the lease to reduce the asset to its estimated residual value at the end of the scheduled lease term. Estimated residual values are based on assumptions for used vehicle prices at lease termination and the number of vehicles that are expected to be returned. Adjustments to depreciation expense reflecting revised estimates of expected residual values at the end of the lease terms are recorded prospectively on a straight-line basis.

The net investment in operating leases at December 31 was as follows (in millions):

			2022						2023
Company excluding Ford Credit
Vehicles, net of depreciation			$	951					$	1,052
Ford Credit Segment
Vehicles, at cost (a)			26,055						24,182
Accumulated depreciation			(4,234)						(3,850)
Total Ford Credit Segment			21,821						20,332
Total			$	22,772					$	21,384

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(a)Includes Ford Credit’s operating lease assets of $12.5 billion and $11.2 billion at December 31, 2022 and 2023, respectively, that have been included in securitization transactions. These net investments in operating leases are available only for payment of the debt or other obligations issued or arising in the securitization transactions; they are not available to pay other obligations or the claims of other creditors.

Ford Credit Segment

Included 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 use and excess mileage that are considered variable lease payments. Operating lease depreciation expense for the years ended December 31 was as follows (in millions):

			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
Operating lease payments			$	3,298					$	2,175					$	996					$	192					$	11					$	6,672

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 13. NET PROPERTY

Net 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 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 equipment, 8 years for software, 30 years for land improvements, and 40 years for buildings. Tooling generally is amortized over the expected life of a product program using a straight-line method.

Net property at December 31 was as follows (in millions):

			2022						2023
Land			$	371					$	367
Buildings and land improvements			11,946						12,636
Machinery, equipment, and other			38,964						41,202
Software			5,042						5,423
Construction in progress			3,203						5,308
Total land, plant and equipment, and other			59,526						64,936
Accumulated depreciation			(31,781)						(33,679)
Net land, plant and equipment, and other			27,745						31,257
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):

			2021						2022						2023
Depreciation and other amortization			$	2,986					$	2,878					$	3,041
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

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(a) Includes impairment of held-for-sale long-lived assets. See Note 22 for additional information.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 14. EQUITY IN NET ASSETS OF AFFILIATED COMPANIES

We use the equity method of accounting 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.

Our carrying value and ownership percentages of our equity method investments at December 31 were as follows (in millions, except percentages):

			Investment Balance												Ownership Percentage
			2022						2023						2023
BlueOval SK, LLC			$	690					$	3,254					50		%
Ford Otomotiv Sanayi Anonim Sirketi			479						807						41
Jiangling Motors Corporation, Limited (a)			471						495						32
Changan Ford Automobile Corporation, Limited (b)			409						225						50
AutoAlliance (Thailand) Co., Ltd.			346						344						50
Ionity Holding GmbH & Co. KG			67						96						15
FFS Finance South Africa (Pty) Limited			70						65						50
Other			266						262						Various
Total			$	2,798					$	5,548

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(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 2022 and 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) of affiliated companies.

We recorded $452 million, $452 million, and $381 million of dividends from these affiliated companies for the years ended December 31, 2021, 2022, and 2023, respectively.

An aggregate summary of the balance 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 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
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
Total liabilities			$	14,869					$	17,804
Equity attributable to noncontrolling interests			$	—					$	61

			For the years ended December 31,
Summarized Income Statement			2021						2022						2023
Total revenue			$	27,760					$	27,153					$	31,052
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)

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(a) The 2022 results reflects Argo AI’s impairment, partially offset by the net income/(loss) of our other equity method investees.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 14. EQUITY IN NET ASSETS OF AFFILIATED COMPANIES (Continued)

In the ordinary course of business, we buy/sell various products and services including vehicles, parts, and components to/from our equity method investees. In addition, we receive royalty income.

Transactions with equity method investees reported for the years ended or at December 31 were as follows (in millions):

			For the years ended December 31,
Income Statement			2021						2022						2023
Sales			$	4,777					$	4,369					$	5,237
Purchases			9,245						9,670						13,457
Royalty income			458						483						329

Balance Sheet			2022						2023
Receivables			$	1,007					$	1,070
Payables			1,676						1,766

Argo AI

In the 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 commercialization of L4 autonomy at scale in the future. We determined that Argo AI no longer had value as a going concern, and as a result, we reassessed the carrying value of our investment as of September 30, 2022. Our valuation assumed an orderly conclusion of operations at Argo AI, in which the cash required to satisfy the remaining obligations would consume all of Argo AI’s remaining capital. In addition, we assessed whether Argo AI’s technology components had value in isolation, and we concluded that the cost to integrate 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 was reported in Equity in net income/(loss) of affiliated companies.

In the fourth quarter of 2022, 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) through Argo AI. Argo AI is in the process of winding down operations, with no expected future funding required.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 15. OTHER INVESTMENTS

We have 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 transactions for the identical or a similar investment of the same issuer. We report the carrying value of these investments in Other assets in the non-current assets section of our consolidated balance sheets. These investments were $384 million and $242 million at December 31, 2022 and 2023, respectively. The cumulative net unrealized gain from adjustments related to Other Investments held at December 31, 2023 is $24 million.

NOTE 16. OTHER LIABILITIES AND DEFERRED REVENUE

Other liabilities and deferred revenue at December 31 were as follows (in millions):

			2022						2023
Current
Dealer and dealers’ customer allowances and claims			$	9,219					$	12,910
Deferred revenue			2,404						2,515
Employee benefit plans			2,020						2,282
Accrued interest			935						1,224
Operating lease liabilities			404						481
OPEB			329						331
Pension			196						205
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
Pension			5,673						6,383
OPEB			4,130						4,365
Deferred revenue			4,883						5,051
Operating lease liabilities			1,101						1,395
Employee benefit plans			834						837
Other (a)			2,781						2,877
Total non-current other liabilities and deferred revenue			$	25,497					$	28,414

---

(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).

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT BENEFITS

Defined benefit pension 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 of projected future benefits is dependent on the provisions of each specific plan, demographics of the group covered by the plan, and other key measurement assumptions. For plans that provide benefits dependent on salary assumptions, we include a projection of salary growth in our measurements. 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).

Net periodic benefit costs, including service cost, interest cost, and expected return on assets, are determined using assumptions regarding the benefit obligation and the fair value of plan assets (where applicable) as of the beginning of each year. We have elected to use a fair value of plan assets to calculate the expected return on assets in net periodic benefit cost. The funded status of the benefit plans, which represents the difference between the benefit obligation and fair value of plan assets, is calculated on a plan-by-plan basis. The benefit obligation and related funded status are determined using assumptions as of the end of each year. Actuarial gains and losses resulting from plan remeasurement are recognized in net periodic benefit cost in the period of the remeasurement. The impact of a retroactive plan amendment is recorded in Accumulated other comprehensive income/(loss), and is amortized as a component of net periodic cost, generally over the remaining service period of the 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 in Other income/(loss), net on our consolidated income statements.

A curtailment results from an event that significantly reduces 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 the employees who are entitled to a benefit terminate their employment, or when a plan suspension or amendment that results in a curtailment gain is adopted. A curtailment loss is recorded when it becomes probable a curtailment loss will occur. We recognize 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), net.

Defined 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 associated with our U.S. plans. Virtually all of our worldwide defined benefit plans are closed to new participants.

In general, our defined benefit pension plans are funded (i.e., have restricted assets from which benefits are paid). Our unfunded 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 is associated with our U.S. plans. Our OPEB plans are unfunded and the benefits are paid from general Company cash.

Defined Contribution and Savings Plans. We also have defined contribution and savings plans for hourly and salaried employees in the United States and other locations. Company contributions to these plans, if any, are made from general Company cash and are expensed as incurred. The expense for our worldwide defined contribution and savings plans was $432 million, $478 million, and $546 million for the years ended December 31, 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT BENEFITS (Continued)

Defined Benefit Plans – Expense and Status

The assumptions used to determine benefit obligation and net periodic benefit cost/(income) were as follows:

			Pension Benefits
			U.S. Plans												Non-U.S. Plans												Worldwide OPEB
			2022						2023						2022						2023						2022						2023
Weighted Average Assumptions at December 31
Discount rate			5.51		%				5.17		%				4.42		%				3.98		%				5.48		%				5.10		%
Average rate of increase in compensation			3.70						4.05						3.42						3.54						3.65						3.98
Weighted Average Assumptions Used to Determine Net Benefit Cost for the Year Ended December 31
Discount rate - Service cost			3.12		%				5.60		%				1.78		%				4.29		%				3.27		%				5.65		%
Effective interest rate on benefit obligation			2.40						5.39						1.54						4.45						2.49						5.36
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):

			Pension Benefits
			U.S. Plans																		Non-U.S. Plans																		Worldwide OPEB
			2021						2022						2023						2021						2022						2023						2021						2022						2023
Service cost			$	526					$	500					$	292					$	557					$	416					$	245					$	49					$	42					$	21
Interest cost			928						1,054						1,641						420						504						965						127						146						231
Expected return on assets			(2,728)						(2,569)						(1,897)						(1,130)						(1,006)						(890)						—						—						—
Amortization of prior service costs/(credits)			2						2						—						24						22						22						(12)						(3)						3
Net remeasurement (gain)/loss			(254)						1,720						841						(3,241)						(436)						932						(376)						(1,314)						286
Separation programs/other			19						46						20						156						63						261						—						—						1
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 non-U.S. pension plans related to ongoing restructuring programs.

In 2022, we recognized an expense of $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 of $57 million for non-U.S. pension plans related to ongoing restructuring programs.

In 2023, we recognized an expense of $360 million related 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 expenses of $268 million for non-U.S. pension plans related to ongoing restructuring programs.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT BENEFITS (Continued)

The year-end status of these plans was as follows (in millions):

						Pension Benefits
						U.S. Plans												Non-U.S. Plans												Worldwide OPEB
						2022						2023						2022						2023						2022						2023
Change in Benefit Obligation
Benefit obligation at January 1						$	44,888					$	32,867					$	34,432					$	21,605					$	6,040					$	4,459
Service cost						500						292						416						245						42						21
Interest cost						1,054						1,641						504						965						146						231
Amendments (a)						—						581						—						46						—						32
Separation programs/other						4						(18)						56						255						—						—
Curtailments						—						—						(2)						6						—						—
Settlements (b)						(1,172)						(1,479)						(674)						(21)						—						—
Plan participant contributions						18						16						12						11						1						—
Benefits paid						(2,466)						(2,417)						(1,302)						(1,257)						(363)						(359)
Foreign exchange translation						—						—						(2,877)						960						(92)						26
Actuarial (gain)/loss						(9,959)						1,193						(8,960)						1,189						(1,315)						286
Benefit obligation at December 31						32,867						32,676						21,605						24,004						4,459						4,696
Change in Plan Assets
Fair value of plan assets at January 1						45,909						32,922						33,085						21,344						—						—
Actual return on plan assets						(9,548)						2,180						(7,516)						1,145						—						—
Company contributions						223						238						722						756						—						—
Plan participant contributions						18						16						12						11						—						—
Benefits paid						(2,466)						(2,417)						(1,302)						(1,257)						—						—
Settlements (b)						(1,172)						(1,479)						(674)						(21)						—						—
Foreign exchange translation						—						—						(2,973)						990						—						—
Other						(42)						(37)						(10)						(10)						—						—
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					$	—					$	—
Other liabilities						(2,009)						(2,482)						(3,860)						(4,106)						(4,459)						(4,696)
Total						$	55					$	(1,253)					$	(261)					$	(1,046)					$	(4,459)					$	(4,696)
Amounts Recognized in Accumulated Other 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 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
Pension Plans in which Projected Benefit Obligation Exceeds Plan Assets at December 31
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

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(a) Reflects benefit enhancements included 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT BENEFITS (Continued)

The actuarial (gain)/loss for our pension benefit obligations in 2022 and 2023 was primarily related to changes in discount rates.

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.

In 2023, we contributed $592 million to our global funded pension 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 plans. We 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.

Expected Future Benefit Payments

The expected future benefit payments at December 31, 2023 were as follows (in millions):

						Benefit Payments
						Pension
						U.S. Plans						Non-U.S. Plans						Worldwide OPEB
2024						$	2,715					$	1,430					$	340
2025						2,670						1,295						340
2026						2,635						1,310						340
2027						2,600						1,325						330
2028						2,575						1,330						330
2029-2033						12,475						6,640						1,610

Pension Plan Asset Information

Investment 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 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 primarily through asset-liability matching, asset diversification, and hedging. The fixed income asset allocation matches the bond-like and long-dated nature of the pension obligations. Assets are broadly diversified within asset classes to achieve risk-adjusted returns that, in total, lower asset volatility relative 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT BENEFITS (Continued)

Derivatives are permitted for fixed 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 currency derivative instruments are used for the purpose of hedging changes in the fair value of assets that result from interest rate changes and currency fluctuations. Interest rate derivatives are also used to adjust portfolio duration. Derivatives may not be used to leverage or to alter the economic exposure to an asset class outside the scope of the mandate an investment manager has been given. Alternative investment managers are permitted to employ leverage (including through the use of derivatives or other tools) that may alter economic exposure.

Alternative investments execute diverse strategies that provide exposure to a broad range of hedge fund strategies, equity investments in private companies, and investments in private property funds.

Significant Concentrations of Risk. Significant concentrations of risk in our 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 allocated to fixed income investments which are exposed to interest rate risk. Rate increases generally will result in a decline in the value of fixed income assets, while reducing the present value of the obligations. Conversely, rate decreases generally will increase the value of fixed income assets, offsetting the related increase in the obligations.

In order to ensure assets are sufficient to pay benefits, a portion of plan assets is allocated to growth assets (primarily hedge funds, real estate, private equity, and public equity) that are expected over time to earn higher returns with more volatility 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 risks include ongoing 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 reviews to ensure adherence.

At year-end 2023, Ford securities comprised less than 1% of our plan assets.

Expected Long-Term Rate of Return on Assets. The long-term return 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% for the Canadian plans, and averages 4.53% for all non-U.S. plans. A generally consistent approach is used worldwide to develop this assumption. This approach considers inputs from advisors for long-term capital market returns adjusted 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT BENEFITS (Continued)

The fair value of our defined 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):

			2022
			U.S. Plans																														Non-U.S. Plans
			Level 1						Level 2						Level 3						Assets measured at NAV (a)						Total						Level 1						Level 2						Level 3						Assets measured at NAV (a)						Total
Asset Category
Equity
U.S. companies			$	412					$	2					$	—					$	—					$	414					$	1,426					$	33					$	—					$	—					$	1,459
International companies			269						6						8						—						283						989						13						—						—						1,002
Total equity			681						8						8						—						697						2,415						46						—						—						2,461
Fixed Income
U.S. government and agencies			7,380						1,509						—						—						8,889						36						35						—						—						71
Non-U.S. government			—						640						—						—						640						—						12,256						231						—						12,487
Corporate bonds			—						17,774						1						—						17,775						—						2,059						124						—						2,183
Mortgage/other asset-backed			—						422						—						—						422						—						265						10						—						275
Commingled funds			—						104						—						—						104						—						170						—						—						170
Derivative financial instruments, net			(2)						19						—						—						17						2						(74)						77						—						5
Total fixed income			7,378						20,468						1						—						27,847						38						14,711						442						—						15,191
Alternatives
Hedge funds			—						—						—						3,342						3,342						—						—						—						1,009						1,009
Private equity			—						—						—						1,411						1,411						—						—						—						584						584
Real estate			—						—						—						1,553						1,553						—						—						—						405						405
Total alternatives			—						—						—						6,306						6,306						—						—						—						1,998						1,998
Cash, cash equivalents, and repurchase agreements (b)			(1,135)						—						—						—						(1,135)						(1,363)						—						—						—						(1,363)
Other (c)			(793)						—						—						—						(793)						(310)						—						3,367						—						3,057
Total assets at fair value			$	6,131					$	20,476					$	9					$	6,306					$	32,922					$	780					$	14,757					$	3,809					$	1,998					$	21,344

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(a)Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

(b)Primarily short-term investment funds to provide liquidity to plan investment managers, cash held to pay benefits, and repurchase agreements valued at $2.6 billion in U.S. plans and $2.1 billion in non-U.S. plans.

(c)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).

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT BENEFITS (Continued)

The fair value of our defined 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):

			2023
			U.S. Plans																														Non-U.S. Plans
			Level 1						Level 2						Level 3						Assets measured at NAV (a)						Total						Level 1						Level 2						Level 3						Assets measured at NAV (a)						Total
Asset Category
Equity
U.S. companies			$	855					$	1					$	2					$	—					$	858					$	1,968					$	37					$	—					$	—					$	2,005
International companies			493						29						6						—						528						1,293						20						—						—						1,313
Total equity			1,348						30						8						—						1,386						3,261						57						—						—						3,318
Fixed Income
U.S. government and agencies			7,236						1,493						—						—						8,729						38						28						—						—						66
Non-U.S. government			2						482						2						—						486						—						12,843						184						—						13,027
Corporate bonds			—						16,470						11						—						16,481						—						1,890						66						—						1,956
Mortgage/other asset-backed			—						444						—						—						444						—						289						11						—						300
Commingled funds			—						65						—						—						65						23						191						—						—						214
Derivative financial instruments, net			(3)						161						—						—						158						—						36						36						—						72
Total fixed income			7,235						19,115						13						—						26,363						61						15,277						297						—						15,635
Alternatives
Hedge funds			—						—						—						3,603						3,603						—						—						—						906						906
Private equity			—						—						—						1,093						1,093						—						—						—						477						477
Real estate			—						—						—						1,406						1,406						—						—						—						381						381
Total alternatives			—						—						—						6,102						6,102						—						—						—						1,764						1,764
Cash, cash equivalents, and repurchase agreements (b)			(1,779)						—						—						—						(1,779)						(1,364)						—						—						—						(1,364)
Other (c)			(649)						—						—						—						(649)						(236)						—						3,841						—						3,605
Total assets at fair value			$	6,155					$	19,145					$	21					$	6,102					$	31,423					$	1,722					$	15,334					$	4,138					$	1,764					$	22,958

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(a)Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

(b)Primarily short-term investment funds to provide liquidity to plan investment managers, cash held to pay benefits, and repurchase agreements valued at $2.7 billion in U.S. plans and $1.8 billion in non-U.S. plans.

(c)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).

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. RETIREMENT BENEFITS (Continued)

The following table summarizes the 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):

			2022
									Return on plan assets
			Fair Value at January 1						Attributable to Assets Held at December 31						Attributable to Assets Sold						Net Purchases/ (Settlements)						Transfers Into/ (Out of) Level 3						Fair Value at December 31
U.S. Plans			$	20					$	—					$	(4)					$	(8)					$	1					$	9
Non-U.S. Plans (a)			6,020						(1,732)						26						(722)						217						3,809
			2023
									Return on plan assets
			Fair Value at January 1						Attributable to Assets Held at December 31						Attributable to Assets Sold						Net Purchases/ (Settlements)						Transfers Into/ (Out of) Level 3						Fair Value at December 31
U.S. Plans			$	9					$	(6)					$	—					$	9					$	9					$	21
Non-U.S. Plans (a)			3,809						44						(8)						410						(117)						4,138

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(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 losses recognized upon settlement.

NOTE 18. LEASE COMMITMENTS

We lease land, 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 extend. In certain dealership lease agreements, we are the tenant and we sublease the site to a dealer. In 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 in our evaluation of the lease term after considering all relevant economic and financial factors.

Leases that are economically similar to the purchase of an asset are classified as finance leases. The leased (“right-of-use”) assets in finance lease arrangements are reported in Net property on our consolidated balance sheets. Otherwise, the leases are classified as operating leases and reported in Other assets in the non-current assets section of our consolidated balance sheets. We have also 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 statements, typically upon commencement of production.

For the majority of our leases, we do not separate the 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 measurement of the lease liabilities. However, we do separate lease and non-lease components for contracts containing a significant service component (e.g., energy performance contracts). We calculate the initial lease liability as the present value of fixed payments not yet paid and variable payments that are based on a market rate or an index (e.g., CPI), 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 18. LEASE COMMITMENTS (Continued)

Lease right-of-use assets and liabilities at December 31 were as follows (in millions):

						2022						2023
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
Total operating lease liabilities						$	1,505					$	1,876
Finance leases
Property and equipment, gross						$	791					$	897
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
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 Leases (a)						Finance Leases
2024						$	558					$	67
2025						457						102
2026						346						81
2027						264						76
2028						176						68
Thereafter						335						498
Total						2,136						892
Less: Present value discount						260						254
Total lease liabilities						$	1,876					$	638

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(a) Excludes approximately $449 million in future lease payments for various leases commencing in future periods.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 18. LEASE COMMITMENTS (Continued)

Supplemental cash flow information related to leases for the years ended December 31 was as follows (in millions):

						2021						2022						2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases						$	424					$	459					$	581
Operating cash flows from finance leases						14						22						32
Financing cash flows from finance leases						52						83						91
Right-of-use assets obtained in exchange for lease liabilities
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
Operating lease expense						$	444					$	463					$	580
Variable lease expense						49						62						109
Sublease income						(16)						(15)						(18)
Finance lease expense
Amortization of right-of-use assets						34						60						64
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
Weighted-average remaining lease term (in years)
Operating leases						6.0						5.5						5.4
Finance leases						12.1						12.2						11.9
Weighted-average discount rate
Operating leases						3.3		%				3.7		%				4.7		%
Finance leases						3.3						3.9						5.3

NOTE 19. DEBT AND COMMITMENTS

Our debt consists of 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 underwriters and are held by institutional and retail investors. In addition, Ford Credit sponsors securitization programs 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, premiums, and costs directly related to the issuance of debt are 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. DEBT AND COMMITMENTS (Continued)

The carrying value of Company debt excluding Ford Credit and Ford Credit debt at December 31 was as follows (in millions):

															Interest Rates
															Average Contractual												Average Effective (a)
Company excluding Ford Credit			2022						2023						2022						2023						2022						2023
Debt payable within one year
Short-term			$	359					$	362					2.8		%				3.2		%				2.8		%				3.2		%
Long-term payable within one year
Other debt (including finance leases)			372						117
Unamortized (discount)/premium			(1)						(2)
Total debt payable within one year			730						477
Long-term debt payable after one year
Public unsecured debt securities			14,935						14,935
Convertible notes			2,300						2,300
U.K. Export Finance Program			1,654						1,749
Other debt (including finance leases)			682						811
Unamortized (discount)/premium			(180)						(155)
Unamortized issuance costs			(191)						(173)
Total long-term debt payable after one year			19,200						19,467						4.9		%	(b)			5.1		%	(b)			5.1		%	(b)			5.3		%	(b)
Total Company excluding Ford Credit			$	19,930					$	19,944
Fair value of Company debt excluding Ford Credit (c)			$	18,557					$	19,775
Ford Credit
Debt payable within one year
Short-term			$	19,624					$	18,658					3.8		%				5.3		%				3.8		%				5.3		%
Long-term payable within one year
Unsecured debt			7,980						11,755
Asset-backed debt			21,839						18,851
Unamortized (discount)/premium			—						(1)
Unamortized issuance costs			(13)						(13)
Fair value adjustments (d)			4						(58)
Total debt payable within one year			49,434						49,192
Long-term debt payable after one year
Unsecured debt			39,620						45,435
Asset-backed debt			31,840						36,074
Unamortized (discount)/premium			23						10
Unamortized issuance costs			(184)						(224)
Fair value adjustments (d)			(1,694)						(1,200)
Total long-term debt payable after one year			69,605						80,095						3.6		%	(b)			4.7		%	(b)			3.6		%	(b)			4.7		%	(b)
Total Ford Credit			$	119,039					$	129,287
Fair value of Ford Credit debt (c)			$	117,214					$	130,533

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(a)Average effective rates reflect the average contractual interest rate plus amortization of discounts, premiums, and issuance costs.

(b)Includes interest on long-term debt payable within one year and after one year.

(c)At December 31, 2022 and 2023, the fair value of debt includes $359 million and $362 million of Company excluding Ford Credit short-term debt and $16.9 billion and $15.5 billion of Ford Credit short-term debt, respectively, carried at cost, which approximates fair value. All other debt is categorized within Level 2 of the fair value hierarchy.

(d)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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. DEBT AND COMMITMENTS (Continued)

Cash paid for interest was $1.9 billion, $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

Debt maturities at December 31, 2023 were as follows (in millions):

			2024						2025						2026						2027						2028						Thereafter						Adjustments						Total Debt Maturities
Company excluding Ford Credit
Public unsecured debt securities			$	—					$	176					$	3,972					$	—					$	550					$	12,537					$	(238)					$	16,997
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
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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. DEBT AND COMMITMENTS (Continued)

Company excluding Ford Credit Segment

Public Unsecured Debt Securities

Our public unsecured debt securities outstanding at December 31 were as follows (in millions):

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

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(a) Listed on the Luxembourg Exchange and on the Singapore Exchange.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. DEBT AND COMMITMENTS (Continued)

Debt Extinguishment

Pursuant 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 transaction costs and accrued and unpaid interest payments for such tendered securities). As a result of these transactions, we recorded a pre-tax loss of $1.7 billion (net of unamortized discounts, premiums, and fees) in Other income/(loss), net in 2021.

In September 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 for such redeemed securities). As a result of this transaction, we recorded a pre-tax loss of $135 million (net of unamortized discounts, premiums, and fees) in Other income/(loss), net in 2022.

Environmental, Social, Governance (“ESG”) Bonds

In August 2022, we issued approximately $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 issuance to the design, development, and manufacturing of our electric vehicle portfolio.

Convertible Debt

In March 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 option granted 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 billion.

Each $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 specified events. The notes are convertible, at the option of the noteholders, on or after December 15, 2025. Prior to December 15, 2025, the notes are convertible only under the following circumstances:

• During any fiscal quarter commencing after the fiscal quarter ending 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 not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the notes on each applicable trading day;

• During the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal 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 of our Common Stock and the conversion rate of the notes on such trading day;

• If we call any or all of the notes for redemption; or

• Upon the occurrence of specific corporate events such as a change in control or certain beneficial distributions to common stockholders (as set forth in the indenture governing the notes).

Upon conversion, we will pay cash up to the aggregate principal amount 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 remainder of our obligation in excess, if any, of the aggregate principal amount of the notes being converted.

We may not redeem the notes prior to March 20, 2024. On or after March 20, 2024, we 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 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. DEBT AND COMMITMENTS (Continued)

If we undergo a fundamental change (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 amount of the notes. In addition, if specific corporate events occur prior to the maturity date or if we issue a notice of redemption, 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 $5 million, $7 million, and $7 million in 2021, 2022, and 2023, respectively. The effective interest rate of the notes is 0.3%.

The total estimated fair value of the notes as of December 31, 2022 and December 31, 2023 was approximately $2.2 billion and $2.3 billion, respectively. The fair value was determined using commonly employed valuation methodologies applying observable market inputs and is classified within Level 2 of the fair value hierarchy.

The notes did not have an impact on our full year 2022 or 2023 diluted EPS.

U.K. Export Finance Program

In 2020 and 2022, 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 banks to support Ford of Britain’s general export activities. Accordingly, U.K. Export Finance (“UKEF”) provided £500 million and £600 million guarantees of the credit facilities, respectively, under its Export Development Guarantee scheme, which supports high value commercial lending to U.K. exporters. We have also guaranteed Ford of Britain’s obligations under the credit facilities to the lenders. As of December 31, 2023, the full £1,375 million under the two credit facilities remained outstanding. These five-year, non-amortizing loans mature on June 30, 2025 and June 30, 2027.

Company Excluding Ford Credit Facilities

Total Company committed 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 revolving credit facility, and $2.2 billion of local credit facilities. At December 31, 2023, the utilized portion of the corporate 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 as of December 31, 2023.

Lenders 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 $0.1 billion of commitments maturing on September 29, 2024 and $1.9 billion of commitments maturing on April 26, 2026. Lenders under our 364-day revolving credit facility have $1.8 billion of commitments maturing on April 24, 2024.

On August 17, 2023, we entered into a new 364-day revolving credit facility, with $4 billion of commitments maturing on August 15, 2024. At the time we entered into this credit facility, it provided 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. DEBT AND COMMITMENTS (Continued)

The corporate, supplemental, and 364-day credit agreements include certain sustainability-linked targets, pursuant to which the applicable margin and facility fees may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, renewable electricity consumption, and Ford Europe CO2 tailpipe emissions. Ford outperformed the 2022 targets for all three of the sustainability-linked metrics, which favorably impacted pricing beginning in the third quarter of 2023.

The corporate credit facility is unsecured and free of material adverse change conditions to borrowing, restrictive financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and minimum net worth requirements), and credit rating triggers that could limit our ability to obtain funding or trigger early repayment. The corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4 billion in aggregate of domestic cash, cash equivalents, and loaned and marketable securities and/or availability under the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility. The terms and conditions of the supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility. Ford Credit has been designated as a subsidiary borrower under the corporate credit facility and the 364-day revolving credit facility.

Each of the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility include a covenant that requires us to provide guarantees from certain of our subsidiaries in the event that our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P. On October 30, 2023, following the upgrade by S&P of our senior, unsecured, long-term debt credit rating to BBB-, the unsecured guarantees provided by the following subsidiaries to the lenders under the credit facilities were released: Ford Component Sales, LLC; Ford European Holdings Inc.; Ford Global Technologies, LLC; Ford Holdings LLC (the parent company of Ford Credit); Ford International Capital LLC; Ford Mexico Holdings LLC; Ford Motor Service Company; Ford Next LLC; Ford Trading Company, LLC; and Ford Van Dyke Investment Fund, Inc.

Ford Credit Segment

Debt Extinguishment

Pursuant 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 costs and accrued and unpaid interest payments for such tendered securities). As a result of these transactions, Ford Credit recorded a pre-tax gain of $17 million (net of unamortized discounts, premiums, fees, and fair value adjustments) in Other income/(loss), net in 2022.

Asset-Backed Debt

At December 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 related debt issued as part of all our securitization transactions are included in our consolidated results and are based upon the legal transfer of the underlying assets in order to reflect legal ownership and the beneficial ownership of the debt holder. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt and do not have such recourse to us, except for the customary representation and warranty provisions or when we are counterparty to certain 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 Note 24 for additional information.

Although 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 from the SPE to us. In order to continue to fund the wholesale receivables, we also may contribute additional cash or wholesale receivables if the collateral falls below required levels. The balance of cash related to these contributions was $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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. DEBT AND COMMITMENTS (Continued)

SPEs that are exposed to interest rate 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 risks absorbed through derivative transactions with the SPEs. Derivative income/(expense) related to the derivative transactions that support Ford Credit’s securitization programs were $41 million, $466 million, and $39 million for the years ended December 31, 2021, 2022, and 2023, respectively. See Note 20 for additional information regarding the accounting for derivatives.

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):

			2022						2023
Assets
Cash and cash equivalents			$	2.8					$	2.7
Finance receivables, net			61.6						66.8
Net investment in operating leases			12.5						11.2
Liabilities
Debt (a)			$	56.4					$	58.0

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(a)Debt is net of unamortized discount and issuance costs.

Committed Credit Facilities

At December 31, 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 from bank-sponsored commercial paper conduits and other financial institutions and unsecured credit facilities with financial institutions.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into highly effective derivative contracts:

• Foreign currency exchange contracts, including forwards, that are used to manage foreign exchange exposure;

• Commodity contracts, including forwards, that are used to manage commodity price risk;

• Interest rate contracts, including 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 on foreign-denominated debt.

Our derivatives are over-the-counter customized derivative transactions and are not exchange-traded. We review our hedging program, derivative positions, and overall risk management strategy on a regular basis.

Derivative Financial Instruments and Hedge Accounting. Derivative assets are reported in Other assets and derivative liabilities are reported in Payables and Other liabilities and deferred revenue.

We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.

Cash Flow Hedges. We have designated certain forward contracts as cash flow hedges of forecasted transactions with exposure to foreign currency exchange and commodity price risks.

Changes in the fair value of cash flow hedges are deferred 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 exchange cash flow hedges prior to the time forecasted transactions are recognized as assets or liabilities on our consolidated balance sheets and report subsequent changes in fair value through Cost of sales. If it becomes probable that the originally forecasted transaction will not occur, the related amount included in Accumulated other comprehensive income/(loss) is reclassified and 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 flow hedges mature within three years.

Fair Value Hedges. Our 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 hedges of fixed-rate debt. The risk being hedged is the risk of changes in the fair value of the hedged debt attributable to changes in the benchmark interest rate and foreign exchange. We report the change in fair value of the hedged debt related to the change in benchmark interest rate in Ford Credit debt and Ford Credit interest, operating, and other expenses. We report the change in fair value of the hedged debt and hedging instrument related to foreign currency in Other income/(loss), net. Net interest settlements and accruals and fair value changes on hedging instruments due to the benchmark interest rate 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 of cash flows.

When a fair value 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 Credit interest, operating, and other expenses over its remaining life.

Derivatives Not Designated as Hedging Instruments. 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 non-designated or de-designated derivatives are reported in Net cash provided by/(used in) investing activities on our consolidated statements of cash flows.

Our Ford Credit segment 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 provided by/(used in) investing activities on our consolidated statements of cash flows.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Normal Purchases and Normal Sales Classification. We have elected 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 in production over a reasonable period in the normal course of our business.

Income Effect of Derivative Financial Instruments

The gains/(losses), by hedge designation, reported in income for the years ended December 31 were as follows (in millions):

			2021						2022						2023
Cash flow hedges
Reclassified from AOCI to Cost of Sales
Foreign currency exchange contracts (a)			$	(412)					$	(213)					$	145
Commodity contracts (b)			132						133						(62)
Fair value hedges
Interest rate contracts
Net interest settlements and accruals on hedging instruments			393						(45)						(507)
Fair value changes on hedging instruments			(1,001)						(1,875)						196
Fair value changes on hedged debt			957						1,893						(260)
Cross-currency interest rate swap contracts
Net interest settlements and accruals on hedging instruments			(8)						(27)						(79)
Fair value changes on hedging instruments			(93)						(111)						96
Fair value changes on hedged debt			82						113						(96)
Derivatives not designated as hedging instruments
Foreign currency exchange contracts (c)			375						(3)						(38)
Cross-currency interest rate swap contracts			(507)						(780)						127
Interest rate contracts			(3)						390						37
Commodity contracts			170						(51)						(49)
Total			$	85					$	(576)					$	(490)

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(a)For 2021, 2022, and 2023, a $453 million loss, a $448 million gain, and a $482 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax.

(b)For 2021, 2022, and 2023, a $284 million gain, a $102 million loss, and a $37 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax.

(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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Balance Sheet Effect of Derivative Financial Instruments

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

The fair value of our derivative instruments and the associated notional amounts at December 31 were as follows (in millions):

			2022																		2023
			Notional						Fair Value of Assets						Fair Value of Liabilities						Notional						Fair Value of Assets						Fair Value of Liabilities
Cash flow hedges
Foreign currency exchange contracts			$	11,536					$	376					$	52					$	19,530					$	69					$	385
Commodity contracts			990						16						56						983						23						36
Fair value hedges
Interest rate contracts			16,883						—						1,653						12,119						106						633
Cross-currency interest rate swap contracts			885						—						161						2,078						69						104
Derivatives not designated as hedging instruments
Foreign currency exchange contracts			20,851						162						285						22,802						201						261
Cross-currency interest rate swap contracts			6,635						15						653						7,100						119						252
Interest rate contracts			63,210						931						483						73,134						465						1,036
Commodity contracts			841						26						35						1,051						35						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
Total derivative financial instruments, gross									$	1,526					$	3,378											$	1,087					$	2,738

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(a)At December 31, 2022 and 2023, we held collateral of $210 million and $40 million, respectively, and we posted collateral of $201 million and $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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 21. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES

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

Company Excluding Ford Credit

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

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

• India. Ceased vehicle manufacturing in Sanand in fourth quarter of 2021 and ceased manufacturing in Chennai in the third quarter of 2022. A sale of the Sanand vehicle assembly and powertrain plants was completed in the first quarter of 2023. See Note 22

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

• China. Ceased development of certain product programs

• Germany. Production of the Focus will cease at our Saarlouis Body and Assembly Plant in 2025. Our plan is to repurpose the facility into a technology center, retaining 1,000 positions. We are engaged in discussions with our Social Partners related to the remaining affected positions at the plant

In addition, we are continuing to reduce our global workforce and take other restructuring actions, including the separation of salaried workers as announced during 2023.

The following table summarizes the activities for the years ended December 31, which are recorded in Other liabilities and deferred revenue (in millions):

						2022						2023
Beginning balance						$	950					$	588
Changes in accruals (a)						557						1,600
Payments						(883)						(1,030)
Foreign currency translation and other						(36)						(72)
Ending balance						$	588					$	1,086

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(a) Excludes pension costs of $57 million and $268 million in 2022 and 2023, respectively.

In 2022, we recorded $32 million for accelerated depreciation, impairment 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 assets in 2022. In 2023, we recorded $67 million for accelerated depreciation and other non-cash items and recognized a $62 million pre-tax net gain on sale of assets.

We recorded charges of $608 million 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 employee separations; some charges are related to plans that are subject to negotiations with a works council, union, or other social partner. In addition, we continue to review our global businesses and may take additional restructuring actions where a path to sustained profitability is not feasible when considering the capital allocation required for those businesses.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 21. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES (Continued)

United Automobile, Aerospace, and Agricultural Implement Workers of America Voluntary Separation Packages

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

Accumulated 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 ceased operations. We expect to reclassify these losses to income upon substantially complete liquidation of Ford Credit’s investments, which may occur over multiple reporting periods. In 2022, we reclassified losses of $155 million to Other income/(loss), net upon the liquidation of three investments in Brazil.

NOTE 22. ACQUISITIONS AND DIVESTITURES

Company Excluding Ford Credit

Auto Motive Power (“AMP”). On November 1, 2023, we acquired AMP, a California-based energy management startup focused on electric vehicle charging solutions. Assets acquired primarily include goodwill and technology, which are reported in Other assets. The acquisition did not have a material impact on our financial statements.

Sanand, India (“Sanand”) Plants. In the third quarter of 2022, we entered into an agreement to sell our Sanand vehicle assembly and powertrain plants to Tata Passenger Electric Mobility Limited (“Tata”), a subsidiary of Tata Motors Limited. The sale transaction included the land, buildings, and other fixed assets (excluding the powertrain machinery and equipment) for the plants. We recognized, in Cost of sales, pre-tax impairment charges of $32 million in the third quarter of 2022 to adjust the carrying value of the assets to fair value less costs to sell. We determined fair value using the market approach, based on the negotiated value 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 section of our consolidated balance sheets.

On January 10, 2023, we completed the 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 recognized the powertrain facility operating lease right-of-use asset and related lease liability in the first quarter of 2023. The fair value of the cash consideration received approximated the carrying value of the fixed assets at the time of sale.

Ford Romania S.R.L. (“Ford Romania”). On July 1, 2022, we completed the sale of Ford Romania, our wholly-owned Romanian manufacturing subsidiary, to Ford Otosan, a joint venture in which Ford has a 41% ownership share. The transaction resulted in deconsolidation of our Ford Romania subsidiary in the third quarter of 2022. The fair value of consideration received, consisting of cash and a note receivable, approximated the carrying value of Ford Romania at the time of sale. The Ford Romania plant in Craiova, Romania continues to manufacture Ford-branded vehicles for Ford and Ford Otosan. 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 subsidiary in the second quarter of 2022. In exchange for our shares of Spin, we received preferred equity in TIER Mobility SE.

Electriphi, Inc. (“Electriphi”). On June 18, 2021, we acquired Electriphi, a California-based provider of charging management and 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 22. ACQUISITIONS AND DIVESTITURES (Continued)

Ford Lio Ho Motor Co., Ltd. (“FLH”). On April 1, 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 Taiwan subsidiary in the second 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 quarter of 2021.

Getrag 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 accounted for our investment in GFT as 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 in net income/(loss) of affiliated companies.

On March 1, 2021, we acquired 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 transmission plants, but excludes the Bordeaux, France transmission plant and China interests acquired by Magna. We concluded with Magna that these businesses would be better served under separate ownership. The Sanand, India transmission plant continues under joint Ford/Magna ownership. As a result of the transaction, we consolidated the restructured GFT, remeasured our prior investment in GFT at its $275 million fair value, and recognized in Other income/(loss), net a pre-tax gain of $178 million during 2021 and post-closing revisions resulting in a pre-tax gain of $2 million during the first quarter of 2022. We estimated the fair value of GFT in negotiations with Magna based on the income 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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 23. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The changes in the balances for each component of accumulated other comprehensive income/(loss) attributable to Ford Motor Company for the years ended December 31 were as follows (in millions):

			2021						2022						2023
Foreign currency translation
Beginning balance			$	(5,526)					$	(5,487)					$	(6,416)
Gains/(Losses) on foreign currency translation			200						(1,199)						967
Less: Tax/(Tax benefit) (a)			143						(2)						(10)
Net gains/(losses) on foreign currency translation			57						(1,197)						977
(Gains)/Losses reclassified from AOCI to net income (b)			(18)						268						(4)
Other comprehensive income/(loss), net of tax (c)			39						(929)						973
Ending balance			$	(5,487)					$	(6,416)					$	(5,443)
Marketable securities
Beginning balance			$	156					$	(19)					$	(442)
Gains/(Losses) on available for sale securities			(209)						(576)						326
Less: Tax/(Tax benefit)			(52)						(139)						80
Net gains/(losses) on available for sale securities			(157)						(437)						246
(Gains)/Losses reclassified from AOCI to net income			(23)						19						35
Less: Tax/(Tax benefit)			(5)						5						9
Net (gains)/losses reclassified from AOCI to net income (b)			(18)						14						26
Other comprehensive income/(loss), net of tax			(175)						(423)						272
Ending balance			$	(19)					$	(442)					$	(170)
Derivative instruments
Beginning balance			$	(266)					$	(193)					$	129
Gains/(Losses) on derivative instruments			(169)						346						(519)
Less: Tax/(Tax benefit)			(20)						83						(126)
Net gains/(losses) on derivative instruments			(149)						263						(393)
(Gains)/Losses reclassified from AOCI to net income			280						80						(83)
Less: Tax/(Tax benefit)			58						21						(16)
Net (gains)/losses reclassified from AOCI to net income (d)			222						59						(67)
Other comprehensive income/(loss), net of tax			73						322						(460)
Ending balance			$	(193)					$	129					$	(331)
Pension and other postretirement benefits
Beginning balance			$	(2,658)					$	(2,640)					$	(2,610)
Prior service (costs)/credits arising during the period (e)			—						—						(659)
Less: Tax/(Tax benefit)			—						—						(157)
Net prior service (costs)/credits arising during the period			—						—						(502)
Amortization and recognition of prior service costs/(credits) (f)			27						21						25
Less: Tax/(Tax benefit)			6						4						6
Net prior service costs/(credits) reclassified from AOCI to net income			21						17						19
Translation impact on non-U.S. plans			(3)						13						(5)
Other comprehensive income/(loss), net of tax			18						30						(488)
Ending balance			$	(2,640)					$	(2,610)					$	(3,098)
Total AOCI ending balance at December 31			$	(8,339)					$	(9,339)					$	(9,042)

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

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

(c)Excludes a gain of $4 million, a loss of $4 million, and a gain of $1 million related to noncontrolling interests in 2021, 2022, and 2023, respectively.

(d)Reclassified to Cost of sales. During the next twelve months we expect to reclassify existing net losses on cash flow hedges of $151 million. See Note 20 for additional information.

(e)Reflects benefit enhancements included in the collective bargaining agreements with the UAW and Unifor ratified in 2023.

(f)Amortization and recognition of prior service costs/(credits) is included in the computation of net periodic pension cost/(income). See Note 17 for additional information.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 24. VARIABLE INTEREST ENTITIES

A VIE is an entity that 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 consolidate VIEs of which we are the primary beneficiary. We consider ourselves the primary beneficiary of a VIE when we have both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. Assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against our general assets. Liabilities recognized as a result of consolidating these VIEs do not 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. For securitization entities, we have the power to direct significant activities when we have the ability to exercise 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

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 receivable, loans, and guarantees and was $1.0 billion and $3.7 billion at December 31, 2022 and 2023, respectively. 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 the creation of BlueOval SK, LLC (“BOSK”), a 50/50 joint venture that will build and operate electric vehicle battery plants in Tennessee and Kentucky to supply batteries to Ford and Ford affiliates. BOSK is a VIE of which we are not the primary beneficiary, and we use the equity method of accounting for our investment. As of 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

Securitization Entities. Through Ford Credit, we securitize, transfer, and service financial assets associated with consumer finance receivables, operating leases, and wholesale loans. Our securitization transactions typically involve the legal transfer of financial assets to bankruptcy remote SPEs. We generally retain a portion of the economic interests in the asset-backed securitization transactions, which could be retained in the form of a portion of the senior interests, the subordinated interests, cash reserve accounts, residual interests, and servicing rights. The transfers of assets in our securitization transactions do not qualify for accounting sale treatment. In most cases, the bankruptcy remote SPEs meet the definition of VIEs for which we are the primary beneficiary and, therefore, are consolidated. We account for all securitization transactions as if they were secured financing and therefore the assets, liabilities, and related activity of these transactions are consolidated in our financial statements. See Note 19 for additional information on the accounting for asset-backed debt and the assets securing this debt.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 25. COMMITMENTS AND CONTINGENCIES

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

Guarantees and Indemnifications

Financial Guarantees. Financial guarantees and indemnifications are recorded at fair value at their inception. Subsequent to initial recognition, the guarantee liability is adjusted at each reporting period to reflect the current estimate of expected payments resulting from possible default events over the remaining life of the guarantee. The maximum potential payments for financial guarantees were $518 million and $535 million at December 31, 2022 and 2023, respectively. The carrying value of recorded liabilities related to financial guarantees was $31 million and $59 million at December 31, 2022 and 2023, respectively.

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

Non-Financial Guarantees. Non-financial guarantees and indemnifications are recorded at fair value at their inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we will be required to perform under a guarantee or indemnity, the amount of probable payment is recorded. The maximum potential payments for 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 31, 2022 and 2023.

Included in the $7 million of maximum potential payments at December 31, 2023 are guarantees for the resale value of vehicles sold in certain arrangements to daily rental companies. The maximum potential payment of $1 million as of December 31, 2023 represents the total proceeds we guarantee the rental company will receive on resale. Reflecting our present estimate of proceeds the rental companies will receive on resale from third parties, we do not expect we will have to pay under the guarantee.

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 25. COMMITMENTS AND CONTINGENCIES (Continued)

Litigation and Claims

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

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

We accrue for matters when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar

nature, the specific facts and circumstances asserted, the likelihood that we will prevail, and the severity of any potential loss. We reevaluate and update our accruals as matters progress over time.

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

For the remaining matters, where our historical experience with similar matters is of more limited value (i.e., “non-pattern matters”), we evaluate the matters primarily based on the individual facts and circumstances. For non-pattern matters, we evaluate whether there is a reasonable possibility of a material loss in excess of any accrual that can be estimated. Our estimate of reasonably possible loss in excess of our accruals for all material matters currently reflects indirect tax and customs matters, for which we estimate the aggregate risk to be a range of up to about $1.4 billion.

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 25. COMMITMENTS AND CONTINGENCIES (Continued)

Warranty and Field Service Actions

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

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

The estimate of our future warranty and field service action costs, net of estimated supplier recoveries, for the years ended December 31 was as follows (in millions):

			2022						2023
Beginning balance			$	8,451					$	9,193
Payments made during the period			(4,166)						(4,779)
Changes in accrual related to warranties issued during the period			4,028						4,743
Changes in accrual related to pre-existing warranties			1,134						2,648
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 satisfaction actions is a range of up to about $1.3 billion in the aggregate.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 26. SEGMENT INFORMATION

We report segment information consistent with the way our chief operating decision maker (“CODM”) evaluates the operating results and performance of the Company.

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, replacing the previous Automotive segment), Ford Next (previously the Mobility segment), and Ford Credit. Company adjusted earnings before interest 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 as Interest on Debt, Special Items, and Taxes.

Additionally, past service pension and OPEB income and expense plus related assets, previously reported in the Automotive segment, have been realigned to Corporate Other.

Prior period amounts were adjusted retrospectively to reflect each of the above changes.

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

Ford Blue Segment

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

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

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

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

• All sales of vehicles manufactured and sold to other OEMs

Ford Model e Segment

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

Ford Pro Segment

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

Ford Next Segment

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.

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 26. SEGMENT INFORMATION (Continued)

Ford Credit Segment

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

Corporate Other

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

Interest on Debt

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

Special Items

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 26. SEGMENT INFORMATION (Continued)

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

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

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

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

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

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

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 26. SEGMENT INFORMATION (Continued)

Key financial information for the years ended or at December 31 was as follows (in millions):

			Ford Blue						Ford Model e						Ford Pro						Ford Next						Ford Credit						Corporate Other						Interest on Debt						Special Items						Eliminations/Adjustments						Total
2021
External Revenues			$	80,377					$	3,098					$	42,649					$	118					$	10,073					$	26					$	—					$	—					$	—					$	136,341
Intersegment Revenues (a)			30,089						88						—						—						—						—						—						—						(30,177)						—
Total Revenues			$	110,466					$	3,186					$	42,649					$	118					$	10,073					$	26					$	—					$	—					$	(30,177)					$	136,341
Income/(Loss) before income taxes			$	3,293					$	(892)					$	2,665					$	(1,030)					$	4,717					$	1,247					$	(1,803)					$	9,583		(b)			$	—					$	17,780
Depreciation and tooling amortization			3,445						142						1,423						8						1,666						67						—						567						—						7,318
Interest expense			—						—						—						—						2,790						—						1,803						—						—						4,593
Investment-related interest income			91						—						21						—						38						104						—						—						—						254
Equity in net income/(loss) of affiliated companies			302						(10)						275						(258)						31						2						—						(15)						—						327
Cash outflow for capital spending (c)			5,214						516						59						46						44						348						—						—						—						6,227
Total assets			55,456						2,563						1,809						3,325						134,428						60,871						—						—						(1,417)			(d)			257,035
2022
External Revenues			$	94,762					$	5,253					$	48,939					$	99					$	8,978					$	26					$	—					$	—					$	—					$	158,057
Intersegment Revenues (a)			36,020						121						—						—						—						—						—						—						(36,141)						—
Total Revenues			$	130,782					$	5,374					$	48,939					$	99					$	8,978					$	26					$	—					$	—					$	(36,141)					$	158,057
Income/(Loss) before income taxes			$	6,847					$	(2,133)					$	3,222					$	(926)					$	2,657					$	748					$	(1,259)					$	(12,172)		(e)			$	—					$	(3,016)
Depreciation and tooling amortization			3,365						249						1,522						5						2,281						95						—						157						—						7,674
Interest expense			—						—						—						—						3,334						—						1,259						—						—						4,593
Investment-related interest income			59						—						16						—						178						386						—						—						—						639
Equity in net income/(loss) of affiliated companies			270						(15)						412						(315)						27						1						—						(3,263)			(f)			—						(2,883)
Cash outflow for capital spending (c)			4,702						1,336						26						23						58						424						—						297						—						6,866
Total 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
Intersegment Revenues (a)			38,693						629						—						—						—						—						—						—						(39,322)						—
Total Revenues			$	140,627					$	6,526					$	58,058					$	3					$	10,290					$	9					$	—					$	—					$	(39,322)					$	176,191
Income/(Loss) before income taxes			$	7,462					$	(4,701)					$	7,222					$	(138)					$	1,331					$	(760)					$	(1,302)					$	(5,147)		(g)			$	—					$	3,967
Depreciation and tooling amortization			3,378						505						1,291						12						2,354						103						—						47						—						7,690
Interest expense			—						—						—						—						6,311						—						1,302						—						—						7,613
Investment-related interest income			110						1						32						—						522						902						—						—						—						1,567
Equity in net income/(loss) of affiliated companies			337						(37)						589						(29)						32						1						—						(479)			(h)			—						414
Cash outflow for capital spending (c)			4,963						2,861						7						6						80						315						—						4						—						8,236
Total assets			58,990						13,648						2,942						207						148,521						52,521						—						—						(3,519)			(d)			273,310

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(a)Intersegment revenues only reflect finished vehicle transactions between Ford Blue, Ford Model e, and Ford Pro where there is an intersegment markup and are recognized at the time of the intersegment transaction.

(b)Primarily reflects gains/(losses) on our Rivian investment and mark-to-market adjustments for our global pension and OPEB plans, partially offset by restructuring related actions and the loss on extinguishment of debt.

(c)Ford Blue includes $366 million, $305 million, and $909 million of spending attributable to electric vehicles at shared manufacturing plants in 2021, 2022, and 2023, respectively. Total electric vehicle spending, including Ford Blue and Ford Model e, was $882 million, $1,641 million, and $3,770 million in 2021, 2022, and 2023, respectively.

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

(e)Primarily reflects gains/(losses) on our Rivian investment and the impairment of our Argo AI equity method investment.

(f)Primarily reflects the impairment of our Argo AI equity method investment.

(g)Primarily reflects mark-to-market adjustments for our global pension and OPEB plans, restructuring actions in Europe and China, and an accrual for the Transit Connect customs matter.

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

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 26. SEGMENT INFORMATION (Continued)

Geographic Information

We report 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.

Total Company revenues and 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 (in millions):

			2021												2022												2023
			Revenues						Long-Lived Assets (a)						Revenues						Long-Lived Assets (a)						Revenues						Long-Lived Assets (a)
United States			$	87,012					$	44,271					$	105,481					$	41,925					$	116,995					$	42,235
Canada			11,153						5,773						12,590						5,739						13,391						6,147
United Kingdom			7,607						1,383						8,220						1,264						8,968						1,868
Mexico			1,440						3,903						1,813						4,255						2,774						5,222
All Other			29,129						8,170						29,953						6,854						34,063						6,733
Total Company			$	136,341					$	63,500					$	158,057					$	60,037					$	176,191					$	62,205

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(a) Includes Net property and Net investment in operating leases from our consolidated balance sheets.

FORD MOTOR COMPANY AND SUBSIDIARIES

Schedule II — Valuation and Qualifying Accounts

(in millions)

Description						Balance at Beginning of Period						Charged to Costs and Expenses									Deductions									Balance at End 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

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(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.