Item 1. Financial Statements.

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Item 1. Financial Statements.

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	For the periods ended March 31,
	2021		2022
	First Quarter
	(unaudited)
Cash flows from operating activities
Net income/(loss)	$	3,262	$	(3,119)
Depreciation and tooling amortization	2,103		1,857
Other amortization	(361)		(310)
Provision for/(Benefit from) credit and insurance losses	(36)		(66)
Pension and other post-retirement employee benefits (“OPEB”) expense/(income) (Note 13)	(318)		(213)
Equity method investment dividends received in excess of (earnings)/losses and impairments	68		199
Foreign currency adjustments	350		32
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments (Note 4)	(899)		5,454
Net (gain)/loss on changes in investments in affiliates (Note 4)	(166)		125
Stock compensation	41		67
Provision for deferred income taxes	427		(1,053)
Decrease/(Increase) in finance receivables (wholesale and other)	2,699		(2,192)
Decrease/(Increase) in accounts receivable and other assets	(588)		(956)
Decrease/(Increase) in inventory	(2,176)		(2,755)
Increase/(Decrease) in accounts payable and accrued and other liabilities	193		1,714
Other	(107)		132
Net cash provided by/(used in) operating activities	4,492		(1,084)

Cash flows from investing activities
Capital spending	(1,368)		(1,370)
Acquisitions of finance receivables and operating leases	(11,695)		(10,278)
Collections of finance receivables and operating leases	12,482		11,988

Purchases of marketable securities and other investments	(11,580)		(4,319)
Sales and maturities of marketable securities and other investments	11,686		7,115
Settlements of derivatives	31		212
Other	(47)		(33)
Net cash provided by/(used in) investing activities	(491)		3,315

Cash flows from financing activities
Cash payments for dividends and dividend equivalents	(3)		(405)
Purchases of common stock	—		—
Net changes in short-term debt	273		(614)
Proceeds from issuance of long-term debt	6,931		12,489
Payments of long-term debt	(14,892)		(12,975)
Other	(102)		(156)
Net cash provided by/(used in) financing activities	(7,793)		(1,661)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(93)		(24)

Net increase/(decrease) in cash, cash equivalents, and restricted cash	$	(3,885)	$	546

Cash, cash equivalents, and restricted cash at beginning of period (Note 7)	$	25,935	$	20,737
Net increase/(decrease) in cash, cash equivalents, and restricted cash	(3,885)		546
Cash, cash equivalents, and restricted cash at end of period (Note 7)	$	22,050	$	21,283

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(in millions, except per share amounts)


	For the periods ended March 31,
	2021		2022
	First Quarter
	(unaudited)
Revenues
Automotive	$	33,554	$	32,111
Ford Credit	2,663		2,281
Mobility	11		84
Total revenues (Note 3)	36,228		34,476

Costs and expenses
Cost of sales	29,297		29,036
Selling, administrative, and other expenses	2,843		2,740
Ford Credit interest, operating, and other expenses	1,624		1,357
Total costs and expenses	33,764		33,133
Operating income/(loss)	2,464		1,343
Interest expense on Company debt excluding Ford Credit	473		308
Other income/(loss), net (Note 4 and Note 17)	1,872		(4,850)
Equity in net income/(loss) of affiliated companies	79		(33)
Income/(Loss) before income taxes	3,942		(3,848)
Provision for/(Benefit from) income taxes	680		(729)
Net income/(loss)	3,262		(3,119)
Less: Income/(Loss) attributable to noncontrolling interests	—		(9)
Net income/(loss) attributable to Ford Motor Company	$	3,262	$	(3,110)

EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 6)
Basic income/(loss)	$	0.82	$	(0.78)
Diluted income/(loss)	0.81		(0.78)

Weighted-average shares used in computation of earnings/(loss) per share
Basic shares	3,980		4,008
Diluted shares	4,016		4,008

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)


	For the periods ended March 31,
	2021		2022
	First Quarter
	(unaudited)
Net income/(loss)	$	3,262	$	(3,119)
Other comprehensive income/(loss), net of tax (Note 18)
Foreign currency translation	289		146
Marketable securities	(65)		(253)
Derivative instruments	(301)		144
Pension and other postretirement benefits	1		8
Total other comprehensive income/(loss), net of tax	(76)		45
Comprehensive income/(loss)	3,186		(3,074)
Less: Comprehensive income/(loss) attributable to noncontrolling interests	—		(9)
Comprehensive income/(loss) attributable to Ford Motor Company	$	3,186	$	(3,065)

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions)


	December 31, 2021		March 31, 2022
	(unaudited)
ASSETS
Cash and cash equivalents (Note 7)	$	20,540	$	21,013
Marketable securities (Note 7)	29,053		20,215
Ford Credit finance receivables, net of allowance for credit losses of $282 and $262 (Note 8)	32,543		32,775
Trade and other receivables, less allowances of $48 and $77	11,370		13,031
Inventories (Note 9)	12,065		14,647
Assets held for sale (Note 17)	—		826
Other assets	3,425		3,635
Total current assets	108,996		106,142
Ford Credit finance receivables, net of allowance for credit losses of $643 and $583 (Note 8)	51,256		50,000
Net investment in operating leases	26,361		25,546
Net property	37,139		36,625
Equity in net assets of affiliated companies	4,545		4,306
Deferred income taxes	13,796		14,991
Other assets	14,942		15,376
Total assets	$	257,035	$	252,986

LIABILITIES
Payables	$	22,349	$	23,256
Other liabilities and deferred revenue (Note 12 and Note 20)	18,686		18,263
Debt payable within one year (Note 14)
Company excluding Ford Credit	3,175		2,927
Ford Credit	46,517		45,359
Liabilities held for sale (Note 17)	—		547
Total current liabilities	90,727		90,352
Other liabilities and deferred revenue (Note 12 and Note 20)	27,705		28,501
Long-term debt (Note 14)
Company excluding Ford Credit	17,200		17,158
Ford Credit	71,200		70,157
Deferred income taxes	1,581		1,734
Total liabilities	208,413		207,902

EQUITY
Common Stock, par value $0.01 per share (4,066 million shares issued of 6 billion authorized)	40		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	22,611		22,550
Retained earnings	35,769		32,251
Accumulated other comprehensive income/(loss) (Note 18)	(8,339)		(8,294)
Treasury stock	(1,563)		(1,564)
Total equity attributable to Ford Motor Company	48,519		44,985
Equity attributable to noncontrolling interests	103		99
Total equity	48,622		45,084
Total liabilities and equity	$	257,035	$	252,986


The following table includes assets to be used to settle liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheets above.
	December 31, 2021		March 31, 2022
	(unaudited)
ASSETS
Cash and cash equivalents	$	3,407	$	2,473
Ford Credit finance receivables, net	43,001		42,119
Net investment in operating leases	7,540		10,191
Other assets	39		152
LIABILITIES
Other liabilities and deferred revenue	$	6	$	1
Debt	38,274		40,139

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in millions, unaudited)


	Equity Attributable to Ford Motor Company
	Capital Stock		Cap. in Excess of Par Value of Stock		Retained Earnings		Accumulated Other Comprehensive Income/(Loss) (Note 18)		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)	—		—		3,262		—		—		3,262		—		3,262
Other comprehensive income/(loss), net	—		—		—		(76)		—		(76)		—		(76)
Common Stock issued (a)	—		(50)		—		—		—		(50)		—		(50)
Treasury stock/other	—		—		—		—		5		5		25		30
Dividends and dividend equivalents declared (b)	—		—		(3)		—		—		(3)		—		(3)
Balance at March 31, 2021	$	41	$	22,240	$	21,502	$	(8,370)	$	(1,585)	$	33,828	$	146	$	33,974













Balance at December 31, 2021	$	41	$	22,611	$	35,769	$	(8,339)	$	(1,563)	$	48,519	$	103	$	48,622
Net income/(loss)	—		—		(3,110)		—		—		(3,110)		(9)		(3,119)
Other comprehensive income/(loss), net	—		—		—		45		—		45		—		45
Common Stock issued (a)	1		(61)		—		—		—		(60)		—		(60)
Treasury stock/other	—		—		—		—		(1)		(1)		5		4
Dividends and dividend equivalents declared ($0.10 per share) (b)	—		—		(408)		—		—		(408)		—		(408)
Balance at March 31, 2022	$	42	$	22,550	$	32,251	$	(8,294)	$	(1,564)	$	44,985	$	99	$	45,084

(a)Includes impacts of share-based compensation.

(b)Dividends and dividend equivalents declared for Common and Class B Stock.

The accompanying notes are part of the consolidated financial statements.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

Table of Contents


Footnote		Page
Note 1	Presentation	6
Note 2	New Accounting Standards	6
Note 3	Revenue	7
Note 4	Other Income/(Loss)	8
Note 5	Income Taxes	8
Note 6	Capital Stock and Earnings/(Loss) Per Share	8
Note 7	Cash, Cash Equivalents, and Marketable Securities	9
Note 8	Ford Credit Finance Receivables and Allowance for Credit Losses	12
Note 9	Inventories	16
Note 10	Other Investments	16
Note 11	Goodwill	16
Note 12	Other Liabilities and Deferred Revenue	17
Note 13	Retirement Benefits	18
Note 14	Debt	19
Note 15	Derivative Financial Instruments and Hedging Activities	20
Note 16	Employee Separation Actions and Exit and Disposal Activities	22
Note 17	Acquisitions and Divestitures	23
Note 18	Accumulated Other Comprehensive Income/(Loss)	25
Note 19	Variable Interest Entities	26
Note 20	Commitments and Contingencies	26
Note 21	Segment Information	29

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. PRESENTATION

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

In the opinion of management, these unaudited financial statements reflect a fair statement of our results of operations and financial condition for the periods, and at the dates, presented. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K Report”).

NOTE 2. NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

Accounting Standards Update (“ASU”) 2021-10, Government Assistance: Disclosures by Business Entities about Government Assistance. In November 2021, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update requiring entities to provide certain disclosures in annual period financial statements for those transactions with governments that are accounted for by applying a grant or contribution accounting model via analogy to other applicable accounting standards. We are assessing the effect on our annual consolidated financial statement disclosures; however, adoption will not impact our consolidated balance sheets or income statements.

We also adopted the following ASUs during 2022, none of which had a material impact to our consolidated financial statements or financial statement disclosures:


ASU		Effective Date
2021-04	Issuer’s Accounting for Certain Modifications or Exchanges of Warrants	January 1, 2022
2021-05	Lessors - Certain Leases with Variable Lease Payments	January 1, 2022
2021-08	Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers	January 1, 2022

Accounting Standards Issued But Not Yet Adopted

ASU 2022-02, Financial Instruments – Credit Losses, Troubled Debt Restructurings and Vintage Disclosures. In March 2022, the FASB issued a new accounting standard that eliminates the troubled debt recognition and measurement guidance. The new standard requires that an entity apply the loan refinancing and restructuring guidance in ASC 310 to all loan modifications and/or receivable modifications. It also enhances disclosure requirements for certain refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and requires disclosure of current-period gross charge-offs by year of origination in the vintage disclosure. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. We are assessing the effect of the new standard on our consolidated financial statements and disclosures.

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

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3. REVENUE

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


	First Quarter 2021
	Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories	$	32,135	$	—	$	32,135
Used vehicles	745		—		745
Services and other revenue (a)	608		16		624
Revenues from sales and services	33,488		16		33,504

Leasing income	77		1,380		1,457
Financing income	—		1,243		1,243
Insurance income	—		24		24
Total revenues	$	33,565	$	2,663	$	36,228

	First Quarter 2022
	Company excluding Ford Credit		Ford Credit		Consolidated
Vehicles, parts, and accessories	$	30,991	$	—	$	30,991
Used vehicles	429		—		429
Services and other revenue (a)	722		19		741
Revenues from sales and services	32,142		19		32,161

Leasing income	53		1,211		1,264
Financing income	—		1,040		1,040
Insurance income	—		11		11
Total revenues	$	32,195	$	2,281	$	34,476

(a)Includes extended service contract revenue.

The amount of consideration we receive and revenue we recognize on our vehicles, parts, and accessories varies with changes in return rights and marketing incentives we offer to our customers and their customers. 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. As a result of changes in our estimate of marketing incentives, we recorded an increase related to revenue recognized in prior periods of $359 million and $211 million in the first quarter of 2021 and 2022, respectively.

We had a balance of $4.3 billion of unearned revenue associated primarily with outstanding extended service contracts reported in Other liabilities and deferred revenue at December 31, 2021 and March 31, 2022*.* We expect to recognize approximately $1 billion of the unearned amount in the remainder of 2022, $1.2 billion in 2023, and $2.1 billion thereafter. We recognized $342 million and $365 million of unearned amounts as revenue during the first quarter of 2021 and 2022, respectively.

Amounts paid to dealers to obtain extended service contracts are deferred and recorded as Other assets. We had a balance of $309 million and $317 million in deferred costs as of December 31, 2021 and March 31, 2022, respectively. We recognized $20 million and $22 million of amortization during the first quarter of 2021 and 2022, respectively.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4. OTHER INCOME/(LOSS)

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


	First Quarter
	2021		2022
Net periodic pension and OPEB income/(cost), excluding service cost (a)	$	612	$	459
Investment-related interest income	72		61
Interest income/(expense) on income taxes	(3)		5
Realized and unrealized gains/(losses) on cash equivalents, marketable securities, and other investments (b)	899		(5,454)
Gains/(Losses) on changes in investments in affiliates (c)	166		(125)
Royalty income	171		144
Other	(45)		60
Total	$	1,872	$	(4,850)

(a) See Note 13 for additional information relating to our pension and OPEB remeasurements.

(b) Includes a $0.9 billion unrealized gain and a $5.4 billion unrealized loss on our Rivian equity investment in the first quarter of 2021 and 2022, respectively.

(c) Primarily reflects a gain on Getrag Ford Transmission GmbH in first quarter 2021 (see Note 17), and a loss on the Ford Credit Brazil liquidation in first quarter 2022 (see Note 16).

NOTE 5. INCOME TAXES

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

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

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

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


	First Quarter
	2021		2022
Net income/(loss) attributable to Ford Motor Company	$	3,262	$	(3,110)

Basic and Diluted Shares
Basic shares (average shares outstanding)	3,980		4,008
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt (a)	36		—
Diluted shares	4,016		4,008

(a) In the first quarter of 2022, there were 56 million shares excluded from the calculation of diluted earnings/(loss) per share, due to their anti-dilutive effect.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES

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


		December 31, 2021
	Fair Value Level	Company excluding Ford Credit		Ford Credit		Consolidated
Cash and cash equivalents
U.S. government	1	$	2,877	$	711	$	3,588
U.S. government agencies	2	355		240		595
Non-U.S. government and agencies	2	55		152		207
Corporate debt	2	105		940		1,045
Total marketable securities classified as cash equivalents		3,392		2,043		5,435
Cash, time deposits, and money market funds		6,185		8,920		15,105
Total cash and cash equivalents		$	9,577	$	10,963	$	20,540

Marketable securities
U.S. government	1	$	4,018	$	864	$	4,882
U.S. government agencies	2	2,270		75		2,345
Non-U.S. government and agencies	2	3,373		697		4,070
Corporate debt	2	6,299		304		6,603
Equities (a)	1	10,673		—		10,673
Other marketable securities	2	247		233		480
Total marketable securities		$	26,880	$	2,173	$	29,053

Restricted cash		$	69	$	128	$	197

Cash, cash equivalents, and restricted cash in held-for-sale assets		$	—	$	—	$	—
		March 31, 2022
	Fair Value Level	Company excluding Ford Credit		Ford Credit		Consolidated
Cash and cash equivalents
U.S. government	1	$	1,723	$	615	$	2,338
U.S. government agencies	2	1,072		200		1,272
Non-U.S. government and agencies	2	830		436		1,266
Corporate debt	2	50		889		939
Total marketable securities classified as cash equivalents		3,675		2,140		5,815
Cash, time deposits, and money market funds		6,759		8,439		15,198
Total cash and cash equivalents		$	10,434	$	10,579	$	21,013

Marketable securities
U.S. government	1	$	2,928	$	413	$	3,341
U.S. government agencies	2	2,120		75		2,195
Non-U.S. government and agencies	2	2,486		1,036		3,522
Corporate debt	2	5,151		297		5,448
Equities (a)	1	5,223		—		5,223
Other marketable securities	2	271		215		486
Total marketable securities		$	18,179	$	2,036	$	20,215

Restricted cash		$	75	$	119	$	194

Cash, cash equivalents, and restricted cash in held-for-sale assets		$	76	$	—	$	76

(a)Includes $10.6 billion and $5.1 billion of Rivian common shares valued at $103.69 and $50.24 per share as of December 31, 2021 and March 31, 2022, respectively. During full year 2021 and first quarter 2022, we recognized an unrealized gain of $8.3 billion and an unrealized loss of $5.4 billion, respectively. At April 26, 2022, Rivian common shares were valued at $30.68 per share. Ford’s Rivian shares are subject to a contractual 180-day lock-up period that commenced with Rivian’s initial public offering (“IPO”) on November 10, 2021.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

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


	December 31, 2021
									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	$	3,821	$	12	$	(14)	$	3,819	$	1,360	$	2,435	$	24
U.S. government agencies	2,249		2		(21)		2,230		316		1,802		112
Non-U.S. government and agencies	2,599		6		(21)		2,584		854		1,708		22
Corporate debt	6,373		21		(23)		6,371		2,645		3,726		—
Other marketable securities	228		1		(1)		228		—		150		78
Total	$	15,270	$	42	$	(80)	$	15,232	$	5,175	$	9,821	$	236

	March 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	$	2,910	$	—	$	(79)	$	2,831	$	935	$	1,874	$	22
U.S. government agencies	2,220		—		(78)		2,142		427		1,629		86
Non-U.S. government and agencies	2,384		—		(82)		2,302		441		1,847		14
Corporate debt	5,290		2		(125)		5,167		1,558		3,601		8
Other marketable securities	261		—		(6)		255		—		186		69
Total	$	13,065	$	2	$	(370)	$	12,697	$	3,361	$	9,137	$	199

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


	First Quarter
	2021		2022
Company excluding Ford Credit
Sales proceeds	$	2,880	$	4,004
Gross realized gains	13		6
Gross realized losses	2		6

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

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


	December 31, 2021
	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	$	2,598	$	(14)	$	—	$	—	$	2,598	$	(14)
U.S. government agencies	1,809		(19)		73		(2)		1,882		(21)
Non-U.S. government and agencies	1,614		(20)		38		(1)		1,652		(21)
Corporate debt	3,637		(21)		71		(2)		3,708		(23)
Other marketable securities	178		(1)		15		—		193		(1)
Total	$	9,836	$	(75)	$	197	$	(5)	$	10,033	$	(80)

	March 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	$	2,788	$	(79)	$	—	$	—	$	2,788	$	(79)
U.S. government agencies	1,966		(77)		73		(1)		2,039		(78)
Non-U.S. government and agencies	2,120		(81)		38		(1)		2,158		(82)
Corporate debt	4,683		(123)		71		(2)		4,754		(125)
Other marketable securities	236		(6)		15		—		251		(6)
Total	$	11,793	$	(366)	$	197	$	(4)	$	11,990	$	(370)

We determine credit losses on AFS debt securities using the specific identification method. During the first quarter of 2022, 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, 2021		March 31, 2022
Cash and cash equivalents	$	20,540	$	21,013
Restricted cash (a)	197		194
Cash, cash equivalents, and restricted cash in held-for-sale assets	—		76
Total cash, cash equivalents, and restricted cash	$	20,737	$	21,283

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

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

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

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

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

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


	December 31, 2021		March 31, 2022
Consumer
Retail installment contracts, gross	$	69,148	$	67,699
Finance leases, gross	7,318		7,079
Retail financing, gross	76,466		74,778
Unearned interest supplements	(3,020)		(2,796)
Consumer finance receivables	73,446		71,982
Non-Consumer
Dealer financing	11,278		11,638
Non-Consumer finance receivables	11,278		11,638
Total recorded investment	$	84,724	$	83,620

Recorded investment in finance receivables	$	84,724	$	83,620
Allowance for credit losses	(925)		(845)
Total finance receivables, net	$	83,799	$	82,775

Current portion	$	32,543	$	32,775
Non-current portion	51,256		50,000
Total finance receivables, net	$	83,799	$	82,775

Net finance receivables subject to fair value (a)	$	76,796	$	76,005
Fair value (b)	77,648		75,229

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

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

Ford Credit’s finance leases are comprised of sales-type and direct financing leases. Financing revenue from finance leases for the first quarter of 2021 and 2022 was $90 million and $77 million, respectively, and is included in Ford Credit revenues on our consolidated income statements.

At December 31, 2021 and March 31, 2022, accrued interest was $125 million and $122 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, 2021 and March 31, 2022, were consumer receivables of $39 billion and $38.3 billion, respectively, and non-consumer receivables of $12 billion and $11.9 billion, respectively, (including Automotive receivables sold to Ford Credit, which we report in Trade and other receivables), that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

Credit Quality

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

*•*Pass – current to 60 days past due;

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

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

The credit quality analysis of consumer receivables at December 31, 2021 was as follows (in millions):


	Amortized Cost Basis by Origination Year
	Prior to 2017		2017		2018		2019		2020		2021		Total		Percent
Consumer
31 - 60 days past due	$	39	$	52	$	98	$	120	$	186	$	91	$	586	0.8	%
61 - 120 days past due	7		10		20		29		40		21		127		0.2
Greater than 120 days past due	10		6		6		9		11		1		43		—
Total past due	56		68		124		158		237		113		756		1.0
Current	812		2,607		6,559		12,689		22,701		27,322		72,690		99.0
Total	$	868	$	2,675	$	6,683	$	12,847	$	22,938	$	27,435	$	73,446	100.0	%

The credit quality analysis of consumer receivables at March 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	$	76	$	84	$	116	$	192	$	123	$	9	$	600	0.8	%
61 - 120 days past due	11		16		20		31		26		1		105		0.2
Greater than 120 days past due	15		6		8		13		1		—		43		—
Total past due	102		106		144		236		150		10		748		1.0
Current	2,564		5,354		10,871		20,319		25,281		6,845		71,234		99.0
Total	$	2,666	$	5,460	$	11,015	$	20,555	$	25,431	$	6,855	$	71,982	100.0	%

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

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

Group I – strong to superior financial metrics;
Group II – fair to favorable financial metrics;
Group III – marginal to weak financial metrics; and
Group IV – poor financial metrics, including dealers classified as uncollectible.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

The credit quality analysis of dealer financing receivables at December 31, 2021 was as follows (in millions):


	Amortized Cost Basis by Origination Year														Wholesale Loans
	Dealer Loans
	Prior to 2017		2017		2018		2019		2020		2021		Total				Total			Percent
Group I	$	391	$	68	$	151	$	45	$	109	$	345	$	1,109	$	6,751		$	7,860		69.7	%
Group II	11		7		26		2		4		54		104		2,689			2,793			24.8
Group III	8		—		1		—		1		20		30		529			559			4.9
Group IV	—		—		4		—		—		6		10		56			66			0.6
Total (a)	$	410	$	75	$	182	$	47	$	114	$	425	$	1,253	$	10,025		$	11,278		100.0	%

(a)Total past due dealer financing receivables at December 31, 2021 were $62 million.

The credit quality analysis of dealer financing receivables at March 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	$	470	$	155	$	44	$	78	$	232	$	111	$	1,090	$	7,096		$	8,186		70.3	%
Group II	12		26		1		5		13		42		99		2,845			2,944			25.3
Group III	8		—		—		—		5		11		24		423			447			3.9
Group IV	—		5		—		1		2		2		10		51			61			0.5
Total (a)	$	490	$	186	$	45	$	84	$	252	$	166	$	1,223	$	10,415		$	11,638		100.0	%

(a)Total past due dealer financing receivables at March 31, 2022 were $13 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.

Troubled Debt Restructuring (“TDR”). A restructuring of debt constitutes a TDR if Ford Credit grants a concession to a debtor for economic or legal reasons related to the debtor’s financial difficulties that Ford Credit otherwise would not consider. Consumer and non-consumer receivables that have a modified interest rate below market rate or that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code, except non-consumer receivables that are current with minimal risk of loss, are considered to be TDRs. Ford Credit does not grant concessions on 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.

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*.*

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

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

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

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


	First Quarter 2021
	Consumer		Non-Consumer		Total
Allowance for credit losses
Beginning balance	$	1,245	$	60	$	1,305
Charge-offs	(97)		—		(97)
Recoveries	53		3		56
Provision for/(Benefit from) credit losses	(30)		(10)		(40)
Other (a)	(1)		—		(1)
Ending balance	$	1,170	$	53	$	1,223


	First Quarter 2022
	Consumer		Non-Consumer		Total
Allowance for credit losses
Beginning balance	$	903	$	22	$	925
Charge-offs	(62)		—		(62)
Recoveries	43		1		44
Provision for/(Benefit from) credit losses	(59)		(5)		(64)
Other (a)	1		1		2
Ending balance	$	826	$	19	$	845

(a) Primarily represents amounts related to translation adjustments.

During the first quarter of 2022, the allowance for credit losses decreased $80 million, primarily reflecting improvement in the economic outlook that caused Ford Credit to lower its expectation of lifetime losses attributable to macroeconomic assumptions driven by COVID-19. Although net charge-offs in the quarter ended March 31, 2022 remained low, due in part to high vehicle auction values, the impact of higher inflation 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.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9. INVENTORIES

Inventories were as follows (in millions):


	December 31, 2021		March 31, 2022
Raw materials, work-in-process, and supplies	$	5,785	$	6,117
Finished products	6,280		8,530
Total inventories	$	12,065	$	14,647

Finished products at March 31, 2022 in the table above includes approximately 53,000 vehicles completed but awaiting installation of components affected by the semiconductor supply shortage, after which, they will proceed through an additional quality review process prior to being shipped to our dealers.

NOTE 10. 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 $0.9 billion and $1.2 billion at December 31, 2021 and March 31, 2022, respectively. The cumulative net unrealized gain from adjustments related to Other Investments held at March 31, 2022 is $138 million.

NOTE 11. GOODWILL

The net carrying amount of goodwill was $619 million and $617 million at December 31, 2021 and March 31, 2022, respectively, and is reported in Other assets in the non-current assets section of our consolidated balance sheets.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 12. OTHER LIABILITIES AND DEFERRED REVENUE

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


	December 31, 2021		March 31, 2022
Current
Dealer and dealers’ customer allowances and claims	$	8,300	$	8,134
Deferred revenue	2,349		2,328
Employee benefit plans	1,687		1,289
Accrued interest	888		781
OPEB (a)	332		333
Pension (a)	202		202
Operating lease liabilities	345		351
Other	4,583		4,845
Total current other liabilities and deferred revenue	$	18,686	$	18,263
Non-current
Pension (a)	$	8,658	$	8,407
OPEB (a)	5,708		5,669
Dealer and dealers’ customer allowances and claims	4,909		5,076
Deferred revenue	4,683		4,864
Operating lease liabilities	1,048		1,032
Employee benefit plans	1,007		990
Other	1,692		2,463
Total non-current other liabilities and deferred revenue	$	27,705	$	28,501

(a)Balances at March 31, 2022 reflect pension and OPEB liabilities at December 31, 2021, updated (where applicable) for service and interest cost, expected return on assets, separation expense, actual benefit payments, and cash contributions. The discount rate and rate of expected return assumptions are unchanged from year-end 2021. Included in Other assets are pension assets of $8.5 billion and $8.8 billion at December 31, 2021 and March 31, 2022, respectively.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 13. RETIREMENT BENEFITS

Defined Benefit Plans - Expense

The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the periods ended March 31 were as follows (in millions):


	First Quarter
	Pension Benefits
	U.S. Plans				Non-U.S. Plans				Worldwide OPEB
	2021		2022		2021		2022		2021		2022
Service cost	$	138	$	125	$	144	$	111	$	12	$	10
Interest cost	223		263		99		134		32		37
Expected return on assets	(702)		(642)		(285)		(268)		—		—
Amortization of prior service costs/(credits)	1		—		5		7		(3)		(1)
Net remeasurement (gain)/loss	423		—		(484)		—		—		—
Separation programs/other	2		4		37		7		—		—
Settlements and curtailments	39		—		1		—		—		—
Net periodic benefit cost/(income)	$	124	$	(250)	$	(483)	$	(9)	$	41	$	46

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.

In the first quarter of 2021 and 2022, we recognized expenses of $38 million and $7 million, respectively, in non-U.S. pension plans related to ongoing redesign programs. Until our Global Redesign programs are completed, we anticipate further adjustments to our plans in subsequent periods.

Pension Plan Contributions

During 2022, we expect to contribute between $700 million and $800 million of cash to our global funded pension plans. We also expect to make about $400 million of benefit payments to participants in unfunded plans. In the first quarter of 2022, we contributed $174 million to our global funded pension plans and made $98 million of benefit payments to participants in unfunded plans.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 14. DEBT

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


	December 31, 2021		March 31, 2022
Company excluding Ford Credit
Debt payable within one year
Short-term	$	286	$	275
Long-term payable within one year
Public unsecured debt securities	86		—
U.S. Department of Energy Advanced Technology Vehicles Manufacturing (“DOE ATVM”) Incentive Program	953		806
Delayed draw term loan	1,500		1,500
Other debt	348		345
Unamortized (discount)/premium	2		1
Total debt payable within one year	3,175		2,927
Long-term debt payable after one year
Public unsecured debt securities	13,643		13,643
Convertible notes (a)	2,300		2,300
U.K. Export Finance Program	843		820
Other debt	768		735
Unamortized (discount)/premium	(188)		(180)
Unamortized issuance costs	(166)		(160)
Total long-term debt payable after one year	17,200		17,158
Total Company excluding Ford Credit	$	20,375	$	20,085
Fair value of Company debt excluding Ford Credit (b)	$	24,044	$	21,395
Ford Credit
Debt payable within one year
Short-term	$	14,810	$	14,088
Long-term payable within one year
Unsecured debt	13,660		12,045
Asset-backed debt	18,049		19,219
Unamortized (discount)/premium	1		1
Unamortized issuance costs	(13)		(14)
Fair value adjustments (c)	10		20
Total debt payable within one year	46,517		45,359
Long-term debt payable after one year
Unsecured debt	44,337		43,651
Asset-backed debt	26,654		27,365
Unamortized (discount)/premium	28		26
Unamortized issuance costs	(199)		(205)
Fair value adjustments (c)	380		(680)
Total long-term debt payable after one year	71,200		70,157
Total Ford Credit	$	117,717	$	115,516
Fair value of Ford Credit debt (b)	$	120,204	$	115,576

(a)As of March 31, 2022, each $1,000 principal amount of the notes will be convertible into 57.7721 shares of our Common Stock, which is equivalent to a conversion price of approximately $17.31 per share. We recognized $0.2 million and $1.7 million of issuance cost amortization during the first quarter of 2021 and 2022, respectively.

(b)At December 31, 2021 and March 31, 2022, the fair value of debt includes $209 million and $201 million of Company excluding Ford Credit short-term debt and $14.1 billion and $13.5 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.

(c)These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $257 million and $242 million at December 31, 2021 and March 31, 2022, respectively. The carrying value of hedged debt was $37.5 billion and $36.3 billion at December 31, 2021 and March 31, 2022, respectively.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

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

Income Effect of Derivative Financial Instruments

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


	First Quarter
Cash flow hedges	2021		2022
Reclassified from AOCI to Cost of sales
Foreign currency exchange contracts (a)	$	(15)	$	(90)
Commodity contracts (b)	8		58
Fair value hedges
Interest rate contracts
Net interest settlements and accruals on hedging instruments	101		76
Fair value changes on hedging instruments	(641)		(986)
Fair value changes on hedged debt	590		991
Cross-currency interest rate swap contracts
Net interest settlements and accruals on hedging instruments	(3)		(3)
Fair value changes on hedging instruments	(50)		(37)
Fair value changes on hedged debt	44		41
Derivatives not designated as hedging instruments
Foreign currency exchange contracts (c)	233		(46)
Cross-currency interest rate swap contracts	(245)		(227)
Interest rate contracts	(31)		123
Commodity contracts	55		109
Total	$	46	$	9

(a)For the first quarter of 2021 and 2022, a $461 million loss and a $128 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax.

(b)For the first quarter of 2021 and 2022, an $80 million gain and a $284 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax.

(c)For the first quarter of 2021 and 2022, a $181 million gain and a $44 million loss, respectively, were reported in Cost of sales, and a $52 million gain and a $2 million loss, respectively, were reported in Other income/(loss), net.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Balance Sheet Effect of Derivative Financial Instruments

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

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


	December 31, 2021						March 31, 2022
	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	$	11,534	$	74	$	346	$	10,359	$	13	$	336
Commodity contracts	931		182		5		890		374		—
Fair value hedges
Interest rate contracts	23,893		544		274		21,985		41		758
Cross-currency interest rate swap contracts	885		—		49		885		—		79
Derivatives not designated as hedging instruments
Foreign currency exchange contracts	28,463		281		198		25,535		177		294
Cross-currency interest rate swap contracts	6,533		117		61		6,520		51		276
Interest rate contracts	50,060		338		126		49,854		496		195
Commodity contracts	997		54		11		823		163		11
Total derivative financial instruments, gross (a) (b)	$	123,296	$	1,590	$	1,070	$	116,851	$	1,315	$	1,949

Current portion			$	924	$	535			$	837	$	753
Non-current portion			666		535				478		1,196
Total derivative financial instruments, gross			$	1,590	$	1,070			$	1,315	$	1,949

(a)At December 31, 2021 and March 31, 2022, we held collateral of $26 million and $102 million, respectively, and we posted collateral of $71 million and $109 million, respectively.

(b)At December 31, 2021 and March 31, 2022, the fair value of assets and liabilities available for counterparty netting was $719 million and $429 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 16. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES

We record costs associated with voluntary separations at the time of employee acceptance, unless the acceptance requires explicit approval by the Company. 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 initiated, primarily related to the global redesign of our business:

Ford Motor Company Brasil Ltda. exited manufacturing operations in Brazil, which resulted in the closure of facilities in Camaçari, Taubaté, and Troller in 2021
Ford Motor Company Limited ceased production at the Bridgend plant in the United Kingdom and the facility was closed in September 2020
Ford India Private Limited ceased vehicle manufacturing in Sanand in fourth quarter 2021 and plans to cease engine and vehicle manufacturing in Chennai by mid-2022
Ford Espana S.L. ceased production of the Mondeo at the Valencia plant in Spain in March 2022

In addition, we are continuing to reduce our global workforce and take other restructuring actions.

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


	First Quarter
	2021		2022
Beginning balance	$	1,732	$	950
Changes in accruals (a)	193		66
Payments	(291)		(205)
Foreign currency translation	(135)		18
Ending balance	$	1,499	$	829

(a)Excludes pension costs of $38 million and $7 million in the first quarter of 2021 and 2022, respectively.

We recorded $302 million and $23 million in the first quarter of 2021 and 2022, respectively, for accelerated depreciation and other non-cash items. In addition, we recognized a pre-tax net gain on sale of assets of $32 million in the first quarter of 2022.

We estimate that we will incur total charges in 2022 that range between $1.0 billion and $1.5 billion related to the actions above, primarily attributable to employee separations and dealer and supplier settlements. We continue to review our global businesses and may take additional restructuring actions in markets where a path to sustained profitability is not feasible when considering the capital allocation required for those markets.

Ford Credit

Accumulated foreign currency translation losses included in Accumulated other comprehensive income/(loss) at March 31, 2022 of $259 million are associated with Ford Credit’s investments in Brazil and Argentina, that it no longer plans to operate. 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 the first quarter of 2022, we recognized a $119 million loss on the liquidation of two investments in Brazil. Although the timing for the completion of the remaining actions is uncertain, we expect the majority of losses to be recognized in 2024 or later.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. ACQUISITIONS AND DIVESTITURES

Company Excluding Ford Credit

Ford Romania S.A. (“Ford Romania”). In the first quarter of 2022, we entered into an agreement to sell our wholly-owned Ford Romania subsidiary to Ford Otosan, a joint venture in which Ford has a 41% ownership share. This transaction will result in the deconsolidation of Ford Romania. Following the sale, the plant in Craiova, Romania will continue to manufacture Ford-branded vehicles for Ford and Ford Otosan. We expect to complete the sale in mid-2022.

We have reported the assets and liabilities of the Ford Romania operations as held for sale and ceased depreciation and amortization of those assets. The assets and liabilities classified as held for sale for the period ended March 31, were as follows (in millions):


	March 31, 2022
Assets

Trade and other receivables, net	$	392
Inventories	201
Other assets, current	16
Net property	433
Other assets, non-current	12
Total Company excluding Ford Credit assets of held-for-sale operations	1,054
Less: Intercompany asset balances	(357)
Total assets of held-for-sale operations (a)	$	697

Liabilities
Payables	$	538
Other liabilities and deferred revenue, current	17
Company excluding Ford Credit debt payable within one year	—
Other liabilities and deferred revenue, non-current	4
Total Company excluding Ford Credit liabilities of held-for-sale operations	559
Less: Intercompany liability balances	(40)
Total liabilities of held-for-sale operations (a)	$	519

(a) As of March 31, 2022, intercompany items and transactions have been eliminated on the consolidated balance sheets. Upon closing, the buyer will assume the intercompany assets and liabilities. Accordingly, we have presented those balances in the table for informational purposes.

Held-for-sale assets are measured at the lower of carrying amount or fair value less cost to sell. We estimated the fair value using a market approach based on the negotiated value of the assets, and determined the assets held for sale were not impaired.

Skinny Labs Inc., dba Spin (“Spin”). In the first quarter of 2022, we entered into an agreement to sell Spin, our wholly-owned micro-mobility provider. Accordingly, we have reported the $116 million of assets, including $76 million of cash, and $28 million of liabilities of this operation as held for sale for the period ended March 31, 2022. We determined the assets held for sale were not impaired.

On April 1, 2022, we completed the sale of Spin to TIER Mobility SE, a German-based micro-mobility provider, which will result 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, which we will reflect in our consolidated balance sheets in Other assets in the second quarter of 2022. We expect the fair value of the preferred equity to approximate the carrying value of Spin at the time of the transaction.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 17. ACQUISITIONS AND DIVESTITURES (Continued)

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 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 will continue 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.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 18. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

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


	First Quarter
	2021		2022
Foreign currency translation
Beginning balance	$	(5,526)	$	(5,487)
Gains/(Losses) on foreign currency translation	394		(71)
Less: Tax/(Tax benefit) (a)	97		(96)
Net gains/(losses) on foreign currency translation	297		25
(Gains)/Losses reclassified from AOCI to net income (b)	(8)		121
Other comprehensive income/(loss), net of tax	289		146
Ending balance	$	(5,237)	$	(5,341)

Marketable securities
Beginning balance	$	156	$	(19)
Gains/(Losses) on available for sale securities	(76)		(330)
Less: Tax/(Tax benefit)	(19)		(77)
Net gains/(losses) on available for sale securities	(57)		(253)
(Gains)/Losses reclassified from AOCI to net income	(11)		—
Less: Tax/(Tax benefit)	(3)		—
Net (gains)/losses reclassified from AOCI to net income	(8)		—
Other comprehensive income/(loss), net of tax	(65)		(253)
Ending balance	$	91	$	(272)

Derivative instruments
Beginning balance	$	(266)	$	(193)
Gains/(Losses) on derivative instruments	(381)		156
Less: Tax/(Tax benefit)	(74)		37
Net gains/(losses) on derivative instruments	(307)		119
(Gains)/Losses reclassified from AOCI to net income	7		32
Less: Tax/(Tax benefit)	1		7
Net (gains)/losses reclassified from AOCI to net income (c)	6		25
Other comprehensive income/(loss), net of tax	(301)		144
Ending balance	$	(567)	$	(49)

Pension and other postretirement benefits
Beginning balance	$	(2,658)	$	(2,640)
Amortization and recognition of prior service costs/(credits)	3		6
Less: Tax/(Tax benefit)	1		1
Net prior service costs/(credits) reclassified from AOCI to net income	2		5
Translation impact on non-U.S. plans	(1)		3
Other comprehensive income/(loss), net of tax	1		8
Ending balance	$	(2,657)	$	(2,632)

Total AOCI ending balance at March 31	$	(8,370)	$	(8,294)

(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)Reclassified to Cost of sales. During the next twelve months, we expect to reclassify existing net gains on cash flow hedges of $11 million (see Note 15).

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 19. VARIABLE INTEREST ENTITIES

Certain of our affiliates are variable interest entities in which we are not the primary beneficiary. Our maximum exposure to any potential losses associated with these affiliates is limited to our investments and loans and was $2.8 billion and $3 billion at December 31, 2021 and March 31, 2022, respectively.

NOTE 20. 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 $357 million and $358 million at December 31, 2021 and March 31, 2022, respectively. The carrying value of recorded liabilities related to financial guarantees was $36 million and $35 million at December 31, 2021 and March 31, 2022, 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 2033, 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 $453 million and $295 million at December 31, 2021 and March 31, 2022, respectively. The carrying value of recorded liabilities related to non-financial guarantees was $38 million and $16 million at December 31, 2021 and March 31, 2022, respectively.

Included in the $295 million of maximum potential payments at March 31, 2022 are guarantees for the resale value of vehicles sold in certain arrangements to daily rental companies. The maximum potential payment of $288 million as of March 31, 2022 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 have recorded $16 million as our best estimate of the amount 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.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 20. 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, customs, and regulatory matters, for which we estimate the aggregate risk to be a range of up to about $2.1 billion.

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

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 20. COMMITMENTS AND CONTINGENCIES (Continued)

Warranty and Field Service Actions

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

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

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


	First Quarter
	2021		2022
Beginning balance	$	8,172	$	8,451
Payments made during the period	(1,086)		(984)
Changes in accrual related to warranties issued during the period	1,000		793
Changes in accrual related to pre-existing warranties	(141)		21
Foreign currency translation and other	(40)		38
Ending balance	$	7,905	$	8,319

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 $700 million in the aggregate.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 21. SEGMENT INFORMATION

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

Effective with fourth quarter 2021 reporting, special items include gains and losses on investments in equity securities. Prior period amounts were adjusted retrospectively to reflect the change.

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

Automotive Segment

The Automotive segment primarily includes the sale of Ford and Lincoln vehicles, service parts, and accessories worldwide, together with the associated costs to develop, manufacture, distribute, and service the vehicles, parts, and accessories. This segment includes revenues and costs related to our electrification vehicle programs and enterprise connectivity. The segment includes the following regional business units: North America, South America, Europe, China (including Taiwan), and the International Markets Group.

Mobility Segment

The Mobility segment primarily includes development costs for Ford’s autonomous vehicles and related businesses, Ford’s equity ownership in Argo AI (a developer of autonomous driving systems), and other mobility businesses and investments.

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, interest income (excluding interest earned on our extended service contract portfolio that is included in our Automotive segment) 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; other investments; 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. The underlying liability is reported in the Automotive segment and in Corporate Other.

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, dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix, and (iv) other items that we do not necessarily consider to be indicative of earnings from ongoing operating activities. Our management ordinarily excludes these items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. We also report these special items separately to help investors track amounts related to these activities and to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results.

Item 1. Financial Statements (Continued)

FORD MOTOR COMPANY AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

NOTE 21. SEGMENT INFORMATION (Continued)

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


	Automotive		Mobility		Ford Credit		Corporate Other		Interest on Debt		Special Items			Adjustments			Total
First Quarter 2021
Revenues	$	33,554	$	11	$	2,663	$	—	$	—	$	—		$	—		$	36,228
Income/(Loss) before income taxes	3,397		(207)		962		(240)		(473)		503		(a)	—			3,942
Equity in net income/(loss) of affiliated companies	172		(60)		5		1		—		(39)		(a)	—			79
Total assets	65,633		3,612		146,349		46,492		—		—			(1,267)		(b)	260,819

First Quarter 2022
Revenues	$	32,111	$	84	$	2,281	$	—	$	—	$	—		$	—		$	34,476
Income/(Loss) before income taxes	1,891		(242)		928		(251)		(308)		(5,866)		(c)	—			(3,848)
Equity in net income/(loss) of affiliated companies	139		(75)		6		1		—		(104)		(d)	—			(33)
Total assets	72,437		3,501		132,582		45,130		—		—			(664)		(b)	252,986

(a)Primarily reflects gains/(losses) on investments in equity securities (including a $902 million unrealized gain on our Rivian equity investment) and Global Redesign actions.

(b)Includes eliminations of intersegment transactions occurring in the ordinary course of business and deferred tax netting.

(c)Primarily reflects gains/(losses) on investments in equity securities (including a $5.4 billion unrealized loss on our Rivian equity investment).

(d)Primarily reflects the full impairment of our Ford Sollers Netherlands B.V. (the parent company of our joint venture in Russia) equity method investment, resulting from the ongoing regulatory and economic uncertainty in Russia.

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