filings.toolsItem 1. Financial Statements (Continued)
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Item 1. Financial Statements (Continued)
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 19. SEGMENT INFORMATION (Continued)
Key financial information for the periods ended or at September 30 was as follows (in millions):
| Ford Blue | Ford Model e | Ford Pro | Ford Next | Ford Credit | Corporate Other | Interest on Debt | Special Items | Eliminations/Adjustments | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Third Quarter 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| External revenues | $ | 25,587 | $ | 1,758 | $ | 13,829 | $ | 1 | $ | 2,625 | $ | 1 | $ | — | $ | — | $ | — | $ | 43,801 | |||||||||||||||||||||||||||||||||||||||
| Intersegment revenues (a) | 8,925 | 241 | — | — | — | — | — | — | (9,166) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 34,512 | $ | 1,999 | $ | 13,829 | $ | 1 | $ | 2,625 | $ | 1 | $ | — | $ | — | $ | (9,166) | $ | 43,801 | |||||||||||||||||||||||||||||||||||||||
| Income/(Loss) before income taxes | $ | 1,718 | $ | (1,329) | $ | 1,654 | $ | (17) | $ | 358 | $ | (186) | $ | (324) | $ | (487) | (b) | $ | — | $ | 1,387 | ||||||||||||||||||||||||||||||||||||||
| Equity in net income/(loss) of affiliated companies | 90 | (9) | 179 | (5) | 9 | — | — | (1) | — | 263 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | 60,282 | 10,966 | 3,137 | 235 | 142,615 | 53,097 | — | — | (2,259) | (c) | 268,073 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Third Quarter 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| External revenues | $ | 26,238 | $ | 1,173 | $ | 15,655 | $ | 2 | $ | 3,127 | $ | 1 | $ | — | $ | — | $ | — | $ | 46,196 | |||||||||||||||||||||||||||||||||||||||
| Intersegment revenues (a) | 10,577 | 74 | — | — | — | — | — | — | (10,651) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 36,815 | $ | 1,247 | $ | 15,655 | $ | 2 | $ | 3,127 | $ | 1 | $ | — | $ | — | $ | (10,651) | $ | 46,196 | |||||||||||||||||||||||||||||||||||||||
| Income/(loss) before income taxes | $ | 1,627 | $ | (1,224) | $ | 1,814 | $ | (10) | $ | 544 | $ | (201) | $ | (272) | $ | (1,409) | (d) | $ | — | $ | 869 | ||||||||||||||||||||||||||||||||||||||
| Equity in net income/(loss) of affiliated companies | 69 | (13) | 82 | — | 10 | (1) | — | — | — | 147 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | 60,477 | 17,540 | 3,833 | 157 | 156,416 | 51,884 | — | — | (3,260) | (c) | 287,047 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Ford Blue | Ford Model e | Ford Pro | Ford Next | Ford Credit | Corporate Other | Interest on Debt | Special Items | Eliminations/Adjustments | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| First Nine Months 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| External revenues | $ | 75,713 | $ | 4,299 | $ | 42,667 | $ | 2 | $ | 7,541 | $ | 7 | $ | — | $ | — | $ | — | $ | 130,229 | |||||||||||||||||||||||||||||||||||||||
| Intersegment revenues (a) | 28,308 | 422 | — | — | — | — | — | — | (28,730) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 104,021 | $ | 4,721 | $ | 42,667 | $ | 2 | $ | 7,541 | $ | 7 | $ | — | $ | — | $ | (28,730) | $ | 130,229 | |||||||||||||||||||||||||||||||||||||||
| Income/(Loss) before income taxes | $ | 6,649 | $ | (3,131) | $ | 5,411 | $ | (87) | $ | 1,051 | $ | (530) | $ | (936) | $ | (2,593) | (b) | $ | — | $ | 5,834 | ||||||||||||||||||||||||||||||||||||||
| Equity in net income/(loss) of affiliated companies | 249 | (15) | 456 | (23) | 23 | 1 | — | (422) | (e) | — | 269 | ||||||||||||||||||||||||||||||||||||||||||||||||
| First Nine Months 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| External revenues | $ | 74,662 | $ | 2,437 | $ | 50,662 | $ | 5 | $ | 9,011 | $ | 4 | $ | — | $ | — | $ | — | $ | 136,781 | |||||||||||||||||||||||||||||||||||||||
| Intersegment revenues (a) | 33,624 | 207 | — | — | — | — | — | — | (33,831) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 108,286 | $ | 2,644 | $ | 50,662 | $ | 5 | $ | 9,011 | $ | 4 | $ | — | $ | — | $ | (33,831) | $ | 136,781 | |||||||||||||||||||||||||||||||||||||||
| Income/(loss) before income taxes | $ | 3,703 | $ | (3,687) | $ | 7,386 | $ | (32) | $ | 1,213 | $ | (513) | $ | (820) | $ | (2,331) | (f) | $ | — | $ | 4,919 | ||||||||||||||||||||||||||||||||||||||
| Equity in net income/(loss) of affiliated companies | 227 | (52) | 310 | (2) | 28 | (1) | — | 1 | — | 511 |
(a)Intersegment revenues only reflect finished vehicle transactions between Ford Blue, Ford Model e, and Ford Pro where there is an intersegment markup and are recognized at the time of the intersegment transaction.
(b)Primarily reflects restructuring actions, mark-to-market adjustments for our global pension and OPEB plans, and an accrual for the Transit Connect customs matter (relating to certain Transit Connect vehicles produced between 2009 and 2013).
(c)Primarily includes eliminations of intersegment transactions occurring in the ordinary course of business.
(d)Primarily reflects a write-down of certain product-specific assets of $391 million and other expenses of $588 million related to the cancellation of a previously planned all-electric three-row SUV program, all of which was recorded in Cost of sales. The remaining items consist of pension curtailment costs and remeasurement losses (primarily related to hourly buyouts in North America) and continued restructuring actions in Europe.
(e)Primarily reflects our share of charges from an equity method investment resulting from Ford’s ongoing restructuring actions in China.
(f)Includes a write-down of certain product-specific assets of $391 million and other expenses of $588 million related to the cancellation of a previously planned all-electric three-row SUV program, all of which was recorded in Cost of sales. The amount also reflects restructuring actions in Europe, buyouts for hourly employees in North America, the extended duration of the Oakville Assembly Plant changeover, and pension curtailment and separation costs in North America and Europe.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
RECENT DEVELOPMENTS
Electric Vehicle Market
Although we continue to invest in our electric vehicle strategy, we have observed lower-than-anticipated industrywide electric vehicle adoption rates and near-term pricing pressures, which has led us, and may in the future lead us, to adjust our spending, production, and/or product launches to better match the pace of electric vehicle adoption. As a result, we recorded about $1.1 billion of expenses in the third quarter of 2024 and may continue to incur expenses related to payments to our electric vehicle-related suppliers (battery, raw material, or otherwise), inventory adjustments, or other matters. The third quarter amount includes $979 million related to the cancellation of a previously announced all-electric three-row SUV program. We may incur additional expenses and cash expenditures of up to about $900 million related to the cancellation, the majority of which we expect to record by the first half of 2025. Further, significant unexpected changes in the EV demand environment have led, and may in the future lead, to incremental competitive pricing actions. These market dynamics may continue to occur, which could have a substantial impact on our business.
In addition, slower-than-anticipated development of the electric vehicle market may impact our strategy to comply with regulatory standards, and, in some cases, we plan to utilize credits purchased from third parties to demonstrate regulatory compliance or we may need to modify our product offerings. See Item 1A. Risk Factors in our 2023 Form 10‑K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to lower-than-anticipated electric vehicle volumes and our planned transition to a greater mix of electric vehicles.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
RESULTS OF OPERATIONS
In the third quarter of 2024, the net income attributable to Ford Motor Company was $892 million, and Company adjusted EBIT was $2,550 million.
Net income/(loss) includes certain items (“special items”) that are excluded from Company adjusted EBIT. These items are discussed in more detail in Note 19 of the Notes to the Financial Statements. We report special items separately to allow investors analyzing our results to identify certain infrequent significant items that they may wish to exclude when considering the trend of ongoing operating results. Our pre-tax and tax special items were as follows (in millions):
| Third Quarter | First Nine Months | ||||||||||||||||||||||
| 2023 | 2024 | 2023 | 2024 | ||||||||||||||||||||
| Restructuring (by Geography) | |||||||||||||||||||||||
| Europe | $ | (42) | $ | (120) | $ | (463) | $ | (667) | |||||||||||||||
| North America Hourly Buyouts | — | — | — | (260) | |||||||||||||||||||
| China | (126) | — | (881) | — | |||||||||||||||||||
| Other | 33 | — | (114) | — | |||||||||||||||||||
| Subtotal Restructuring | $ | (135) | $ | (120) | $ | (1,458) | $ | (927) | |||||||||||||||
| Other Items | |||||||||||||||||||||||
| EV program cancellation | $ | — | $ | (979) | $ | — | $ | (979) | |||||||||||||||
| Transit Connect customs matter | (96) | — | (396) | — | |||||||||||||||||||
| Extended Oakville Assembly Plant Changeover | — | — | — | (246) | |||||||||||||||||||
| EV program dispute | — | 19 | — | 19 | |||||||||||||||||||
| Other (including gains/(losses) on investments) | (8) | (3) | (184) | 6 | |||||||||||||||||||
| Subtotal Other Items | $ | (104) | $ | (963) | $ | (580) | $ | (1,200) | |||||||||||||||
| Pension and OPEB Gain/(Loss) | |||||||||||||||||||||||
| Pension and OPEB remeasurement | $ | (169) | $ | (168) | $ | (371) | $ | 15 | |||||||||||||||
| Pension settlements, curtailments, and separations costs | (79) | (158) | (184) | (219) | |||||||||||||||||||
| Subtotal Pension and OPEB Gain/(Loss) | $ | (248) | $ | (326) | $ | (555) | $ | (204) | |||||||||||||||
| Total EBIT Special Items | $ | (487) | $ | (1,409) | $ | (2,593) | $ | (2,331) | |||||||||||||||
| Provision for/(Benefit from) tax special items (a) | $ | (87) | $ | (343) | $ | (408) | $ | (533) |
(a)Includes related tax effect on special items and tax special items.
We recorded $1.4 billion of pre-tax special item charges in the third quarter of 2024, primarily reflecting a write-down of certain product-specific assets and other expenses related to the cancellation of a previously planned all-electric three-row SUV program, pension curtailment costs and remeasurement losses (primarily related to hourly buyouts in North America), and continued restructuring actions in Europe.
In Note 19 of the Notes to the Financial Statements, special items are reflected as a separate reconciling item, as opposed to being allocated among our segments. This reflects the fact that management excludes these items from its review of operating segment results for purposes of measuring segment profitability and allocating resources.
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