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

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

COMPANY KEY METRICS

The table below shows our third quarter and first nine months of 2025 key metrics for the Company, compared to a year ago.

Third QuarterFirst Nine Months
20242025H / (L)20242025H / (L)
GAAP Financial Measures
Cash Flows from Operating Activities ($B)$5.5$7.4$1.9$12.4$17.4$5.0
Revenue ($M)46,19650,5349%136,781141,3773%
Net Income/(Loss) ($M)8922,447$1,5554,0552,882$(1,173)
Net Income/(Loss) Margin (%)1.9%4.8%2.9 ppts3.0%2.0%(0.9) ppts
EPS (Diluted)$0.22$0.60$0.38$1.01$0.72$(0.29)
Non-GAAP Financial Measures (a)
Company Adj. Free Cash Flow ($B)$3.2$4.3$1.1$5.9$5.7$(0.3)
Company Adj. EBIT ($M)2,5502,586368,0705,745(2,325)
Company Adj. EBIT Margin (%)5.5%5.1%(0.4) ppts5.9%4.1%(1.8) ppts
Adjusted EPS (Diluted)$0.49$0.45$(0.04)$1.46$0.96$(0.50)
Adjusted ROIC (Trailing Four Quarters)11.4%10.1%(1.3) ppts

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

In the third quarter of 2025, our diluted earnings per share of Common and Class B Stock was $0.60, and our diluted adjusted earnings per share was $0.45.

Net income/(loss) margin was 4.8% in the third quarter of 2025, up 2.9 percentage points from a year ago. Company adjusted EBIT margin was 5.1% in the third quarter of 2025, down 0.4 percentage points from a year ago.

The table below shows the details of our third quarter and first nine months 2025 net income/(loss) attributable to Ford and Company adjusted EBIT (in millions).

Third QuarterFirst Nine Months
20242025H / (L)20242025H / (L)
Ford Blue$1,624$1,540$(84)$3,692$2,297$(1,395)
Ford Model e(1,231)(1,410)(179)(3,708)(3,588)120
Ford Pro1,8131,9851727,3815,612(1,769)
Ford Credit544631871,2131,856643
Corporate Other(200)(160)40(508)(432)76
Company Adjusted EBIT (a)2,5502,586368,0705,745(2,325)
Interest on Debt(272)(321)(49)(820)(906)(86)
Special Items(1,409)(447)962(2,331)(1,859)472
Taxes / Noncontrolling Interests23629606(864)(98)766
Net Income/(Loss)$892$2,447$1,555$4,055$2,882$(1,173)

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

The year-over-year increase of $1,555 million in net income is primarily explained by lower special item charges, including lower charges related to the cancellation of a previously planned all-electric three-row SUV program, and increased tax benefits, including the tax special items described on page 37. The increase of $36 million in Company adjusted EBIT in the third quarter of 2025 primarily reflects higher Ford Pro EBIT and Ford Credit EBT, offset partially by lower Model e and Ford Blue EBIT.

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

The tables below and on the following pages provide third quarter and first nine months of 2025 key metrics and the change in third quarter 2025 EBIT compared with third quarter 2024 by causal factor for each of our Ford Blue, Ford Model e, and Ford Pro segments. For a description of these causal factors, see Definitions and Information Regarding Ford Blue, Ford Model e, and Ford Pro Causal Factors.

Ford Blue Segment

Third QuarterFirst Nine Months
Key Metrics20242025H / (L)20242025H / (L)
Wholesale Units (000) (a)721733122,0882,016(72)
Revenue ($M)$26,238$28,018$1,780$74,662$74,799$137
EBIT ($M)1,6241,540(84)3,6922,297(1,395)
EBIT Margin (%)6.2%5.5%(0.7) ppts4.9%3.1%(1.9) ppts

(a)Includes Ford and Lincoln brand and JMC brand vehicles produced and sold in China by our unconsolidated affiliates (about 101,000 units in Q3 2024 and 90,000 units in Q3 2025).

Change in EBIT by Causal Factor (in millions)
Third Quarter 2024 EBIT$1,624
Volume / Mix331
Net Pricing435
Cost(555)
Exchange(155)
Other(140)
Third Quarter 2025 EBIT$1,540

In the third quarter of 2025, Ford Blue’s wholesales increased 2% from a year ago. The increase primarily reflects higher sales of vehicles manufactured and sold to other OEMs through existing alliance agreements and higher wholesales in North America, offset partially by lower passenger vehicle sales in Europe and lower sales at our joint ventures in China. Third quarter 2025 revenue increased 7%, driven primarily by higher wholesales, favorable net pricing, and improved mix.

Ford Blue’s third quarter 2025 EBIT was $1,540 million, a decrease of $84 million from a year ago, with an EBIT margin of 5.5%. The lower EBIT primarily reflects higher costs, including tariffs, and adverse exchange, offset partially by favorable net pricing and higher volume and mix. Excluding tariffs, cost improved year-over-year, reflecting ongoing cost reduction initiatives, including lower material and warranty costs.

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

Ford Model e Segment

Third QuarterFirst Nine Months
Key Metrics20242025H / (L)20242025H / (L)
Wholesale Units (000)3250186814173
Revenue ($M)$1,175$1,783$608$2,441$5,382$2,941
EBIT ($M)(1,231)(1,410)(179)(3,708)(3,588)120
EBIT Margin (%)(104.8)%(79.1)%25.7 ppts(151.9)%(66.7)%85.2 ppts
Change in EBIT by Causal Factor (in millions)
Third Quarter 2024 EBIT$(1,231)
Volume / Mix61
Net Pricing(128)
Cost41
Exchange(32)
Other(121)
Third Quarter 2025 EBIT$(1,410)

In the third quarter of 2025, Ford Model e’s wholesales increased significantly from a year ago, primarily reflecting the introduction of EV products in Europe, including the Puma Gen-E and Capri, and higher F-150 Lightning wholesales in North America. Third quarter 2025 revenue increased by $608 million, primarily reflecting higher wholesales.

Ford Model e’s third quarter 2025 EBIT loss was $1,410 million, a $179 million higher loss than a year ago, with an EBIT margin of negative 79.1%. The increased EBIT loss was primarily driven by adverse net pricing, a one-time charge related to the Louisville Assembly Plant changeover (included in Other), and unfavorable exchange, offset partially by higher volume and lower costs. The lower costs include lower material and warranty costs, which more than offset increased tariff-related costs.

Ford Pro Segment

Third QuarterFirst Nine Months
Key Metrics20242025H / (L)20242025H / (L)
Wholesale Units (000) (a)342373311,1251,15429
Revenue ($M)$15,655$17,378$1,723$50,662$51,356$694
EBIT ($M)1,8131,9851727,3815,612(1,769)
EBIT Margin (%)11.6%11.4%(0.2) ppts14.6%10.9%(3.6) ppts

(a)Includes Ford brand vehicles produced and sold by our unconsolidated affiliate Ford Otosan in Türkiye (about 21,000 units in Q3 2024 and 23,000 in Q3 2025).

Change in EBIT by Causal Factor (in millions)
Third Quarter 2024 EBIT$1,813
Volume / Mix475
Net Pricing(254)
Cost(50)
Exchange41
Other(40)
Third Quarter 2025 EBIT$1,985

In the third quarter of 2025, Ford Pro’s wholesales increased 9% from a year ago, driven by higher daily rental volume in North America and higher sales of the Transit family of vehicles, including the introduction of the E-Transit Custom and E-Transit Courier in Europe. Third quarter 2025 revenue increased 11%, primarily reflecting higher wholesales and favorable exchange, offset partially by moderated pricing across fleets (including daily rental).

Ford Pro’s third quarter 2025 EBIT was $1,985 million, an increase of $172 million from a year ago, with an EBIT margin of 11.4%. The higher EBIT was primarily driven by higher volume and favorable exchange, offset partially by unfavorable fleet pricing (including daily rental) and higher cost. Excluding tariffs, cost improved year-over-year, driven by lower warranty and material costs.

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

Definitions and Information Regarding Ford Blue, Ford Model e, and Ford Pro Causal Factors

In general, we measure year-over-year change in Ford Blue, Ford Model e, and Ford Pro segment EBIT using the causal factors listed below, with net pricing and cost variances calculated at present-period volume and mix and exchange:

*•*Market Factors (exclude the impact of unconsolidated affiliate wholesale units):

*◦*Volume and Mix – primarily measures EBIT variance from changes in wholesale unit volumes (at prior-year average contribution margin per unit) driven by changes in industry volume, market share, and dealer stocks, as well as the EBIT variance resulting from changes in product mix, including mix among vehicle lines and mix of trim levels and options within a vehicle line

*◦*Net Pricing – primarily measures EBIT variance driven by changes in wholesale unit prices to dealers and marketing incentive programs such as rebate programs, low-rate financing offers, special lease offers, and stock adjustments on dealer inventory

  • Cost:

*◦*Contribution Costs – primarily measures EBIT variance driven by per-unit changes in cost categories that typically vary with volume, such as material costs (including commodity and component costs), warranty expense, and freight and duty (including tariff) costs

*◦*Structural Costs – primarily measures EBIT variance driven by absolute change in cost categories that typically do not have a directly proportionate relationship to production volume. Structural costs include the following cost categories:

*▪*Manufacturing, Including Volume-Related – consists primarily of costs for hourly and salaried manufacturing personnel, plant overhead (such as utilities and taxes), and new product launch expense. These costs could be affected by volume for operating pattern actions such as overtime, line-speed, and shift schedules

*▪*Engineering and Connectivity – consists primarily of costs for vehicle and software engineering personnel, prototype materials, testing, and outside engineering and software services

*▪*Spending-Related – consists primarily of depreciation and amortization of our manufacturing and engineering assets, but also includes asset retirements and operating leases

*▪*Advertising and Sales Promotions – includes costs for advertising, marketing programs, brand promotions, customer mailings and promotional events, and auto shows

*▪*Administrative, Information Technology, and Selling – includes primarily costs for salaried personnel and purchased services related to our staff activities, information technology, and selling functions

*•*Exchange – primarily measures EBIT variance driven by one or more of the following: (i) transactions denominated in currencies other than the functional currencies of the relevant entities, (ii) effects of converting functional currency income to U.S. dollars, (iii) effects of remeasuring monetary assets and liabilities of the relevant entities in currencies other than their functional currency, or (iv) results of our foreign currency hedging

*•*Other – includes a variety of items, such as parts and services earnings, royalties, government incentives, compensation-related changes, and regulatory compliance expenses

In addition, definitions and calculations used in this report include:

*•*Wholesales and Revenue – wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that are sold to dealerships or others, units manufactured by Ford that are sold to other manufacturers, units distributed by Ford for other manufacturers, and local brand units produced by our China joint venture, Jiangling Motors Corporation, Ltd. (“JMC”), that are sold to dealerships or others. Vehicles sold to daily rental car companies that are subject to a guaranteed repurchase option (i.e., rental repurchase), as well as other sales of finished vehicles for which the recognition of revenue is deferred (e.g., consignments), also are included in wholesale unit volumes. Revenue from certain vehicles in wholesale unit volumes (specifically, Ford badged vehicles produced and distributed by our unconsolidated affiliates, as well as JMC brand vehicles) are not included in our revenue. Excludes transactions between Ford Blue, Ford Model e, and Ford Pro segments

*•*Industry Volume and Market Share – based, in part, on estimated vehicle registrations; includes medium and heavy duty trucks

  • SAAR – seasonally adjusted annual rate

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

Ford Credit Segment

Ford Credit files periodic reports with the SEC that contain additional information regarding Ford Credit. The reports are available through Ford Credit’s website located at www.ford.com/finance/investor-center and can also be found on the SEC’s website located at www.sec.gov. The foregoing information regarding Ford Credit’s website and its content is for convenience only and not deemed to be incorporated by reference into this Report nor filed with the SEC.

The tables below provide third quarter and first nine months of 2025 key metrics and the change in third quarter 2025 EBT compared with third quarter 2024 by causal factor for the Ford Credit segment. For a description of these causal factors, see Definitions and Information Regarding Ford Credit Causal Factors.

Third QuarterFirst Nine Months
Key Metrics20242025H / (L)20242025H / (L)
Total Net Receivables ($B)$142.2$145.7$3.5
Loss-to-Receivables (bps) (a)57625485810
Auction Values (b)$31,245$32,1953%$30,595$31,7154%
EBT ($M)544631$871,2131,856$643
ROE (%)14.1%15.1%1.0 ppts9.6%14.1%4.5 ppts
Other Balance Sheet Metrics
Debt ($B)$136.7$140.2$3.5
Net Liquidity ($B)29.628.1(1.5)
Financial Statement Leverage (to 1)9.79.5(0.2)

(a)U.S. retail financing only.

(b)U.S. portfolio off-lease third quarter auction values at Q3 2025 mix and YTD amounts at YTD 2025 mix.

Change in EBT by Causal Factor (in millions)
Third Quarter 2024 EBT$544
Volume / Mix20
Financing Margin194
Credit Loss(36)
Lease Residual(4)
Exchange7
Other(94)
Third Quarter 2025 EBT$631

Ford Credit’s total net receivables of $145.7 billion were 2% higher than a year ago, explained primarily by a larger operating lease portfolio. The third quarter 2025 U.S. loss-to-receivables (“LTR”) ratio of 62 basis points increased from a year ago, reflecting increased loss severity and higher repossessions. U.S. auction values increased 3% year over year, reflecting industrywide low used vehicle supply and high demand.

Ford Credit’s third quarter 2025 EBT of $631 million was $87 million higher than a year ago, explained primarily by higher financing margin and receivables, offset partially by Other and higher credit losses. Other reflects a charge related to an industrywide review by the U.K. Financial Conduct Authority into the historical use of dealer commissions and the non-recurrence of a realized gain on accumulated foreign currency translation related to Europe restructuring in third quarter 2024, offset partially by the non-recurrence of a negative derivative market valuation adjustment.

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

Definitions and Information Regarding Ford Credit Causal Factors

In general, we measure year-over-year changes in Ford Credit’s EBT using the causal factors listed below:

*•*Volume and Mix:

◦Volume primarily measures changes in net financing margin driven by changes in average net receivables excluding the allowance for credit losses at prior period financing margin yield (defined below in financing margin) at prior period exchange rates. Volume changes are primarily driven by the volume of new and used vehicles sold and leased, the extent to which Ford Credit purchases retail financing and operating lease contracts, the extent to which Ford Credit provides wholesale financing, the sales price of the vehicles financed, the level of dealer inventories, Ford-sponsored special financing programs available exclusively through Ford Credit, and the availability of cost-effective funding

◦Mix primarily measures changes in net financing margin driven by period-over-period changes in the composition of Ford Credit’s average net receivables excluding the allowance for credit losses by product within each region

*•*Financing Margin:

◦Financing margin variance is the period-over-period change in financing margin yield multiplied by the present period average net receivables excluding the allowance for credit losses at prior period exchange rates. This calculation is performed at the product and country level and then aggregated. Financing margin yield equals revenue, less interest expense and scheduled depreciation for the period, divided by average net receivables excluding the allowance for credit losses for the same period

◦Financing margin changes are driven by changes in revenue and interest expense. Changes in revenue are primarily driven by the level of market interest rates, cost assumptions in pricing, mix of business, and competitive environment. Changes in interest expense are primarily driven by the level of market interest rates, borrowing spreads, and asset-liability management

*•*Credit Loss:

◦Credit loss is the change in the provision for credit losses at prior period exchange rates. For analysis purposes, management splits the provision for credit losses into net charge-offs and the change in the allowance for credit losses

◦Net charge-off changes are primarily driven by the number of repossessions, severity per repossession, and recoveries. Changes in the allowance for credit losses are primarily driven by changes in historical trends in credit losses and recoveries, changes in the composition and size of Ford Credit’s present portfolio, changes in trends in historical used vehicle values, and changes in forward looking macroeconomic conditions. For additional information, refer to the “Critical Accounting Estimates - Allowance for Credit Losses” section of Item 7 of Part II of our 2024 Form 10-K Report

*•*Lease Residual:

◦Lease residual measures changes to residual performance at prior period exchange rates. For analysis purposes, management splits residual performance primarily into residual gains and losses, and the change in accumulated supplemental depreciation

◦Residual gain and loss changes are primarily driven by the number of vehicles returned to Ford Credit and sold, and the difference between the auction value and the depreciated value (which includes both base and accumulated supplemental depreciation) of the vehicles sold. Changes in accumulated supplemental depreciation are primarily driven by changes in Ford Credit’s estimate of the expected auction value at the end of the lease term and changes in Ford Credit’s estimate of the number of vehicles that will be returned to it and sold. Depreciation on vehicles subject to operating leases includes early termination losses on operating leases due to customer default events. For additional information, refer to the “Critical Accounting Estimates - Accumulated Depreciation on Vehicles Subject to Operating Leases” section of Item 7 of Part II of our 2024 Form 10-K Report

  • Exchange:

◦Reflects changes in EBT driven by the effects of converting functional currency income to U.S. dollars

*•*Other:

◦Primarily includes operating expenses, other revenue, insurance expenses, and other income/(loss) at prior period exchange rates

◦Changes in operating expenses are primarily driven by salaried personnel costs, facilities costs, and costs associated with the origination and servicing of customer contracts

◦In general, other income/(loss) changes are primarily driven by changes in earnings related to market valuation adjustments to derivatives (primarily related to movements in interest rates) and other miscellaneous items

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

In addition, the following definitions and calculations apply to Ford Credit when used in this Report:

  • Cash (as shown in the Funding Structure and Liquidity tables) – Cash, cash equivalents, marketable securities, and restricted cash, excluding amounts related to insurance activities

  • Debt (as shown in the Key Metrics and Leverage tables) – Debt on Ford Credit’s balance sheets. Includes debt issued in securitizations and payable only out of collections on the underlying securitized assets and related enhancements. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions

  • Earnings Before Taxes (“EBT”) – Reflects Ford Credit’s income before income taxes

  • Loss-to-Receivables (“LTR”) Ratio – LTR ratio is calculated using net charge-offs divided by average finance receivables, excluding unearned interest supplements and the allowance for credit losses

  • Return on Equity (“ROE”) (as shown in the Key Metrics table) – Reflects return on equity calculated by annualizing net income for the period and dividing by monthly average equity for the period

  • Securitization and Restricted Cash (as shown in the Liquidity table) – Securitization cash is held for the benefit of the securitization investors (for example, a reserve fund). Restricted cash primarily includes cash held to meet certain local governmental and regulatory reserve requirements and cash held under the terms of certain contractual agreements

  • Securitizations (as shown in the Public Term Funding Plan table) – Public securitization transactions, Rule 144A offerings sponsored by Ford Credit, and widely distributed offerings by Ford Credit Canada

  • Term Asset-Backed Securities (as shown in the Funding Structure table) – Obligations issued in securitization transactions that are payable only out of collections on the underlying securitized assets and related enhancements

  • Total Net Receivables (as shown in the Key Metrics table) – Includes finance receivables (retail financing and wholesale) sold for legal purposes and net investment in operating leases included in securitization transactions that do not satisfy the requirements for accounting sale treatment. These receivables and operating leases are reported on Ford Credit’s balance sheets and are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations of Ford Credit or the claims of Ford Credit’s other creditors

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

Corporate Other

Corporate Other primarily includes corporate governance expenses, past service pension and OPEB income and expense, interest income (excluding Ford Credit interest income and interest earned on our extended service contract portfolio) and gains and losses from our cash, cash equivalents, and marketable securities, and foreign exchange derivatives gains and losses associated with intercompany lending. Corporate governance expenses are primarily administrative, delivering benefit on behalf of the global enterprise, that are not allocated to operating segments. These include expenses related to setting and directing global policy, providing oversight and stewardship, and promoting the Company’s interests. In the third quarter of 2025, Corporate Other had a $160 million EBIT loss, compared to a $200 million EBIT loss a year ago.

Interest on Debt

Interest on Debt, which consists of interest expense on Company debt excluding Ford Credit, was $321 million in the third quarter of 2025, $49 million higher than a year ago.

Taxes

Our Provision for/(Benefit from) income taxes for the third quarter and first nine months of 2025 was a benefit of $630 million and a provision of $88 million, respectively. This resulted in an effective tax rate of negative 34.7% for the third quarter and 3.0% for the first nine months. During the third quarter, these rates were impacted by a net benefit of $1.4 billion associated with the release of a valuation allowance resulting from improvements in our South American operations. The third quarter and first nine months rates were also impacted by a non-cash charge of $424 million to deferred tax assets to recognize the impact of tax legislation enacted in Germany during the quarter. In addition, the nine-month rate was impacted by a non-cash charge of $471 million to deferred tax assets recorded in the second quarter associated with resolving transfer pricing matters in certain non-U.S. operations. The foregoing were treated as special items.

Our third quarter and first nine months 2025 adjusted effective tax rates, which exclude special items, were 19.6% and 19.8%, respectively.

On July 4, 2025, P.L. 119-21 (otherwise known as the “One Big Beautiful Bill Act”) was signed into law. We have analyzed the provisions within the act and determined there was no material impact in the third quarter of 2025, nor do we expect a material impact on our 2025 consolidated financial statements.

We regularly review our organizational structure and income tax elections for affiliates in non-U.S. and U.S. tax jurisdictions, which may result in changes in affiliates that are included in or excluded from our U.S. tax return. Any future changes to our structure, as well as any changes in income tax laws in the countries that we operate, could cause increases or decreases to our deferred tax balances and related valuation allowances.

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

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2025, total cash, cash equivalents, marketable securities, and restricted cash, including Ford Credit and entities held for sale, was $42.5 billion.

We consider our key balance sheet metrics to be: (i) Company cash, which includes cash equivalents, marketable securities, and restricted cash (including cash held for sale), excluding Ford Credit’s cash, cash equivalents, marketable securities, and restricted cash; and (ii) Company liquidity, which includes Company cash, less restricted cash, and total available committed credit lines, excluding Ford Credit’s total available committed credit lines.

Company excluding Ford Credit

December 31, 2024September 30, 2025
Balance Sheets ($B)
Company Cash$28.5$32.9
Liquidity46.754.0
Debt (excluding finance leases)(19.9)(20.9)
Cash Net of Debt (excluding finance leases)8.712.0
Pension Funded Status ($B) (a)
Funded Plans$3.4$4.0
Unfunded Plans(3.9)(3.6)
Total Global Pension$(0.5)$0.4
Total Funded Status OPEB$(4.4)$(4.4)

(a)Balances at September 30, 2025 reflect net funded status at December 31, 2024, updated for: service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. The discount rate and rate of expected return assumptions are unchanged from year-end 2024.

Liquidity. Our key priority is to maintain a strong balance sheet to withstand potential stress scenarios, while having resources available to invest in and grow our business. At September 30, 2025, we had Company cash of $32.9 billion and liquidity of $54.0 billion. At September 30, 2025, about 87% of Company cash was held by consolidated entities domiciled in the United States.

To be prepared for an economic downturn and other stress scenarios, we target an ongoing Company cash balance at or above $20 billion plus significant additional liquidity above our Company cash target. We expect to have periods when we will be above or below this amount due to: (i) future cash flow expectations, such as for investments in future opportunities, capital investments, debt maturities, pension contributions, or restructuring requirements, (ii) short-term timing differences, and (iii) changes in the global economic or operating environment.

Our Company cash investments primarily include U.S. Department of Treasury obligations, federal agency securities, bank time deposits with investment-grade institutions, investment-grade corporate securities, investment-grade commercial paper, and debt obligations of a select group of non-U.S. governments, non-U.S. governmental agencies, and supranational institutions. The average maturity of these investments is approximately one year and adjusted based on market conditions and liquidity needs. We monitor our Company cash levels and average maturity on a daily basis.

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

Material Cash Requirements. Our material cash requirements include:

  • Capital expenditures (for additional information, see the “Changes in Company Cash” section below) and other payments for engineering, software, product development, and implementation of our plans for electric vehicles

  • Purchase of raw materials and components to support the manufacturing and sale of vehicles (including electric vehicles), parts, accessories, and payment of tariffs (for additional information, see the Aggregate Contractual Obligations table and the accompanying description of our “Purchase obligations” in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 of our 2024 Form 10-K Report)

  • Purchase of regulatory compliance credits

  • Marketing incentive payments to dealers

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

  • Debt repayments including finance lease payments (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 18 of the Notes the Financial Statements in our 2024 Form 10-K Report)

  • Discretionary and mandatory payments to our global pension plans (for additional information, see the “Liquidity and Capital Resources - Total Company” section in Item 7 of our 2024 Form 10-K Report, the “Changes in Company Cash” section below, and Note 11 of the Notes to the Financial Statements herein)

  • Employee wages, benefits, and incentives

  • Operating lease payments (for additional information, see the Aggregate Contractual Obligations table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 17 of the Notes to the Financial Statements in our 2024 Form 10-K Report)

  • Cash effects related to the restructuring of our business

  • Strategic acquisitions and investments to grow our business, including electrification

Subject to approval by our Board of Directors, shareholder distributions in the form of dividend payments and/or a share repurchase program (including share repurchases to offset the anti-dilutive effect of increased share-based compensation) may require the expenditure of a material amount of cash. We target shareholder distributions of 40% to 50% of adjusted free cash flow. Moreover, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions, and other matters.

We plan to utilize our liquidity (as described above) and our cash flows from business operations to fund our material cash requirements.

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

Changes in Company Cash. In managing our business, we classify changes in Company cash into operating and non-operating items. Operating items include: Company adjusted EBIT excluding Ford Credit EBT; capital spending; depreciation and tooling amortization; changes in working capital; Ford Credit distributions; interest on debt; cash taxes; and all other and timing differences (including timing differences between accrual-based EBIT and associated cash flows). Non-operating items include: restructuring costs; changes in Company debt excluding Ford Credit and finance lease payments; finance lease payments; contributions to funded pension plans; shareholder distributions; and other items (including gains and losses on investments in equity securities, acquisitions and divestitures, equity investments, and other transactions with Ford Credit).

With respect to “Changes in working capital,” in general, the Company excluding Ford Credit carries relatively low trade receivables compared with our trade payables because the majority of our wholesales are financed (primarily by Ford Credit) immediately upon the sale of vehicles to dealers, which generally occurs shortly after being produced. In contrast, our trade payables are based primarily on industry-standard production supplier payment terms of about 45 days. As a result, our cash flow deteriorates if wholesale volumes (and the corresponding revenue) decrease while trade payables continue to become due. Conversely, our cash flow improves if wholesale volumes (and the corresponding revenue) increase while new trade payables are generally not due for about 45 days. For example, the suspension of production at most of our assembly plants and lower industry volumes due to COVID-19 in early 2020 resulted in an initial deterioration of our cash flow, while the subsequent resumption of manufacturing operations and return to pre-COVID-19 production levels at most of our assembly plants resulted in a subsequent improvement of our cash flow. Disruptions to our production due to supplier shortages or otherwise may have similar cash flow timing impacts. Even in normal economic conditions, however, these working capital balances generally are subject to seasonal changes that can impact cash flow. For example, we typically experience cash flow timing differences associated with inventories and payables due to our annual shutdown periods when production, and therefore inventories and wholesale volumes, are usually at their lowest levels, while payables continue to come due and be paid. The net impact of this typically results in cash outflows from changes in our working capital balances during these shutdown periods.

In response to, or in anticipation of, supplier disruptions, we may stockpile certain components or raw materials to help prevent disruption in our production of vehicles. Such actions could have a short-term adverse impact on our cash and increase our inventory. Moreover, in order to secure critical materials for production of electric vehicles, we have entered into and we may, in the future, enter into offtake agreements with raw material suppliers and make investments in certain raw material and battery suppliers, including contributing up to a maximum of $6.6 billion in capital to BlueOval SK, LLC (“BOSK”) over a five-year period ending in 2026. As of September 30, 2025, we have recognized contributions (net of returns of capital) to BOSK of $2.9 billion (for additional information, see Note 17 of the Notes to the Financial Statements herein). Our actual capital outlay could vary significantly based on the final project costs and potential financing opportunities. Such investments could have an additional adverse impact on our cash in the near-term.

The terms of the offtake agreements we have entered into, and those we may enter into in the future, vary by transaction, though they generally obligate us to purchase a certain percentage or minimum amount of output produced by the counterparty over an agreed upon period of time. The purchase price mechanisms included in the offtake agreements are typically based on the market price of the material at the time of delivery. The terms may also include conditions to our obligation to purchase the materials, such as quality or minimum output. Subject to satisfaction of those conditions, we will be obligated to purchase the materials or otherwise compensate the supplier in an amount determined by the contract. As of September 30, 2025, our estimated expenditures for the maximum quantity that we are committed to purchase under these offtake agreements through 2035, subject to certain conditions, consist of approximately $1.4 billion of purchase obligations and approximately $4.2 billion of contingent purchase obligations based on our present forecast; however, our forecast could fluctuate from period to period based on market prices, which may result in significant increases or decreases in our estimate. The actual price paid for these materials will be recorded on our balance sheet at the time of purchase. In the event that we do not expect to consume all of the materials we are obligated to purchase pursuant to the terms of these agreements, we may sell the excess materials back to the supplier or another party. The resale price may or may not be the same as the original purchase price, depending on then-current market conditions and negotiated terms. As a result, we have recorded, and may in the future record, accruals related to either the resale when the purchase price mechanism under our agreements is higher than the expected resale price of the excess materials or when we are required to otherwise compensate the supplier. Accruals recorded to date for such items have been immaterial.

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

As market conditions dictate, we have entered, and may in the future enter, into additional offtake agreements with raw material suppliers or renegotiate existing agreements. In addition, as mentioned above, we may seek to resell excess materials. See Item 1A. Risk Factors in our 2024 Form 10-K Report and as updated by our subsequent filings with the SEC for a discussion of the risks related to our offtake agreements and other long-term purchase contracts.

Financial institutions participate in a supply chain finance (“SCF”) program that enables our suppliers, at their sole discretion, to sell their Ford receivables (i.e., our payment obligations to the suppliers) to the financial institutions on a non-recourse basis in order to be paid earlier than our payment terms provide. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms, the amounts we pay, or our liquidity. We have no economic interest in a supplier’s decision to participate in the SCF program, and we do not provide any guarantees in connection with it. As of September 30, 2025, the outstanding amount of Ford receivables that suppliers elected to sell to the SCF financial institutions was $188 million. The amount settled through the SCF program during the first nine months of 2025 was $951 million.

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

Third QuarterFirst Nine Months
2024202520242025
Company Excluding Ford Credit
Company Adjusted EBIT excluding Ford Credit (a)$2.0$2.0$6.9$3.9
Capital spending$(2.0)$(2.1)$(6.1)$(5.9)
Depreciation and tooling amortization1.21.33.83.8
Net spending$(0.7)$(0.8)$(2.3)$(2.1)
Receivables$0.2$0.1$—$(2.1)
Inventory(0.5)0.7(2.3)(0.7)
Trade Payables1.10.41.93.7
Changes in working capital$0.8$1.2$(0.4)$0.9
Ford Credit distributions$0.2$0.4$0.3$1.1
Interest on debt and cash taxes(0.5)(0.4)(1.7)(1.3)
All other and timing differences1.42.03.23.2
Company adjusted free cash flow (a)$3.2$4.3$5.9$5.7
Restructuring$(0.2)$—$(0.7)$0.1
Changes in debt excluding finance lease payments—1.50.40.8
Finance lease payments——(0.1)(0.1)
Funded pension contributions(0.3)(0.2)(1.0)(0.7)
Shareholder distributions(0.6)(0.6)(2.8)(2.4)
All other(0.7)(0.5)(2.7)1.0
Change in cash$1.3$4.4$(1.0)$4.3

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

Note: Numbers may not sum due to rounding.

Our third quarter 2025 Net cash provided by/(used in) operating activities was $7.4 billion, $1.9 billion higher than a year ago (see page 62 for additional information). The increase primarily reflects higher net income and higher Ford Credit operating cash flows. Company adjusted free cash flow was $4.3 billion, $1.1 billion higher than a year ago, primarily driven by timing differences, improved working capital, higher Ford Credit distributions, and lower cash taxes.

Capital spending was $2.1 billion in the third quarter of 2025, about flat compared to a year ago. We continue to expect full year 2025 capital spending to be about $9 billion.

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

Third quarter 2025 working capital impact was $1.2 billion, driven by lower inventory, higher payables, and lower receivables, each compared to June 30, 2025. All other and timing differences were $2.0 billion. Timing differences include differences between accrual-based EBIT and the associated cash flows (e.g., marketing incentive and warranty payments to dealers, JV equity income, compensation payments, and pension and OPEB income or expense). Cash outflows related to our warranty accruals are expected to occur over several years.

In the third quarter of 2025, we contributed $187 million to our global funded pension plans. We now expect to contribute about $750 million to our global funded pension plans in 2025.

Shareholder distributions were $0.6 billion in the third quarter of 2025, all of which was attributable to our regular dividend.

Available Credit Lines. Total Company committed credit lines, excluding Ford Credit, at September 30, 2025 were $23.6 billion, consisting of $13.5 billion of our corporate credit facility, $2.0 billion of our supplemental revolving credit facility, $2.5 billion of our 364-day revolving credit facility, $3.0 billion of our delayed draw term loan facility (as discussed below), and $2.6 billion of local credit facilities. At September 30, 2025, $2.4 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates, and the full amount under each of our corporate, supplemental, 364-day, and delayed draw term loan credit facilities was available.

Lenders under our corporate credit facility have $3.4 billion of commitments maturing on April 17, 2028 and $10.1 billion of commitments maturing on April 17, 2030. Lenders under our supplemental revolving credit facility have $2.0 billion of commitments maturing on April 17, 2028. Lenders under our 364-day revolving credit facility have $2.5 billion of commitments maturing on April 16, 2026.

As previously reported, on July 28, 2025, we closed on a $3 billion delayed draw term loan facility, further strengthening our liquidity and providing additional financial flexibility. The commitments under the delayed draw term loan facility are available through July 28, 2026. Any unused commitments shall automatically terminate after July 28, 2026, and any loans drawn under the facility will mature on December 31, 2028.

The corporate, supplemental, and 364-day credit agreements include certain sustainability-linked targets, pursuant to which the applicable margin and facility fees may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, carbon-free electricity consumption, and Ford Europe CO2 tailpipe emissions. For the most recent performance period, Ford outperformed the global manufacturing facility greenhouse gas emissions and carbon-free electricity consumption metrics, and it was on target for the Ford Europe CO2 tailpipe emissions metric.

The corporate credit facility is unsecured and free of material adverse change conditions to borrowing, restrictive financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and minimum net worth requirements), and credit rating triggers that could limit our ability to obtain funding or trigger early repayment. The corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4 billion in aggregate of domestic cash, cash equivalents, and loaned and marketable securities and/or availability under the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility. If our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P, the guarantees of certain subsidiaries will be required. The terms and conditions of the supplemental and 364-day revolving credit facilities and the delayed draw term loan facility 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.

As previously reported, on July 23, 2025, Ford Motor Company Limited, our operating subsidiary in the United Kingdom (“Ford of Britain”), entered into a £1 billion term loan credit facility with a syndicate of banks to support Ford of Britain’s general export activities. Accordingly, U.K. Export Finance (“UKEF”) provided an £800 million guarantee of the credit facility 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 facility to the lenders. On July 28, 2025, Ford of Britain drew the full £1 billion available under the facility. This seven-year, partially amortizing loan matures on July 23, 2032.

Debt. As shown in Note 12 of the Notes to the Financial Statements, at September 30, 2025, Company debt excluding Ford Credit was $21.8 billion (including $0.9 billion of finance leases). This balance is $1.1 billion higher than at December 31, 2024.

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

Leverage. We manage Company debt (excluding Ford Credit) levels with a leverage framework that targets investment grade credit ratings through a normal business cycle. The leverage framework includes a ratio of total Company debt (excluding Ford Credit), underfunded pension liabilities, operating leases, and other adjustments, divided by Company adjusted EBIT (excluding Ford Credit EBT), and further adjusted to exclude depreciation and tooling amortization (excluding Ford Credit).

Ford Credit’s leverage is calculated separately as described in the ”Liquidity and Capital Resources - Ford Credit Segment” section of Item 2. Ford Credit is self-funding and its debt, which is used to fund its operations, is separate from our Company debt excluding Ford Credit.

Ford Credit Segment

Ford Credit remains well capitalized with a strong balance sheet and funding diversified across platforms and markets. Ford Credit ended the third quarter of 2025 with $28.1 billion of liquidity, up $2.9 billion from year-end. Ford Credit completed $23 billion of public term issuances through October 22, 2025.

Key elements of Ford Credit’s funding strategy include:

  • Maintain strong liquidity and funding diversity

  • Prudently access public markets

  • Continue to leverage retail deposits in Europe

  • Flexibility to increase asset-backed securities mix as needed; preserving assets and committed capacity

  • Target financial statement leverage of 9:1 to 10:1

  • Maintain self-liquidating balance sheet

Ford Credit’s liquidity profile continues to be diverse, robust, and focused on maintaining liquidity levels that meet its business and funding requirements. Ford Credit regularly stress tests its balance sheet and liquidity to ensure that it can continue to meet its financial obligations through economic cycles.

The following table shows funding for Ford Credit’s net receivables (in billions):

September 30, 2024December 31, 2024September 30, 2025
Funding Structure
Term unsecured debt$61.7$59.2$64.8
Term asset-backed securities56.360.456.7
Retail Deposits / Ford Interest Advantage18.718.318.7
Other0.11.2(0.4)
Equity14.013.814.7
Cash(8.6)(9.3)(8.8)
Total Net Receivables$142.2$143.6$145.7
Securitized Funding as Percent of Total Debt41.2%43.8%40.4%

Net receivables of $145.7 billion at September 30, 2025 were funded primarily with term unsecured debt and term asset-backed securities. Securitized funding as a percent of total debt was 40.4% as of September 30, 2025.

Public Term Funding Plan. The following table shows Ford Credit’s issuances for full year 2023 and 2024, planned issuances for full year 2025, and its global public term funding issuances through October 22, 2025, excluding short-term funding programs (in billions):

2023 Actual2024 Actual2025 ForecastThrough October 22
Unsecured$14$17$ 11 - 13$11
Securitizations (a)141612 - 1412
Total public$28$33$ 23 - 27$23

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

For 2025, Ford Credit now projects full year public term funding in the range of $23 billion to $27 billion.

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

Liquidity. The following table shows Ford Credit’s liquidity sources and utilization (in billions):

September 30, 2024December 31, 2024September 30, 2025
Liquidity Sources (a)
Cash$8.6$9.3$8.8
Committed asset-backed facilities44.642.943.3
Other unsecured credit facilities1.81.71.6
Total liquidity sources$55.0$53.9$53.7
Utilization of Liquidity (a)
Securitization and restricted cash$(3.1)$(3.1)$(3.0)
Committed asset-backed facilities(22.5)(25.6)(22.4)
Other unsecured credit facilities(0.1)(0.5)(0.5)
Total utilization of liquidity$(25.7)$(29.2)$(25.9)
Available liquidity$29.3$24.7$27.8
Other adjustments0.30.50.3
Net liquidity available for use$29.6$25.2$28.1

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

Ford Credit’s net liquidity available for use will fluctuate quarterly based on factors including near-term debt maturities, receivable growth and decline, and timing of funding transactions. At September 30, 2025, Ford Credit’s net liquidity available for use was $28.1 billion, $2.9 billion higher than year-end 2024, reflecting strong access to public funding markets. At September 30, 2025, Ford Credit’s liquidity sources, including cash, committed asset-backed facilities, and committed unsecured credit facilities, totaled $53.7 billion, down $0.2 billion from year-end 2024.

Material Cash Requirements. Ford Credit’s material cash requirements include: (1) the purchase of retail financing and operating lease contracts from dealers and providing wholesale financing for dealers to finance new and used vehicles; and (2) debt repayments (for additional information on debt, see the “Aggregate Contractual Obligations” table in the “Liquidity and Capital Resources - Company Excluding Ford Credit” section in Item 7 and Note 18 of the Notes to the Financial Statements in our 2024 Form 10-K Report). In addition, subject to approval by Ford Credit’s Board of Directors, shareholder distributions may require the expenditure of a material amount of cash. Moreover, Ford Credit may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions, and other matters.

Ford Credit plans to utilize its liquidity (as described above) and its cash flows from business operations to fund its material cash requirements.

Funding and Liquidity Risks. Ford Credit’s funding plan is subject to risks and uncertainties, many of which are beyond its control, including disruption in the capital markets, that could impact both unsecured debt and asset-backed securities issuance and the effects of regulatory changes on the financial markets. Refer to the “Liquidity and Capital Resources - Ford Credit Segment - Funding and Liquidity Risks” section of Item 7 of Part II of our 2024 Form 10-K Report for more information.

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

Leverage. Ford Credit uses leverage, or the debt-to-equity ratio, to make various business decisions, including evaluating and establishing pricing for finance receivable and operating lease financing, and assessing its capital structure.

The table below shows the calculation of Ford Credit’s financial statement leverage (in billions):

September 30, 2024December 31, 2024September 30, 2025
Leverage Calculation
Debt$136.7$137.9$140.2
Equity (a)14.013.814.7
Financial statement leverage (to 1)9.710.09.5

(a)Total shareholder’s interest reported on Ford Credit’s balance sheets.

Ford Credit plans its leverage by considering market conditions and the risk characteristics of its business. At September 30, 2025, Ford Credit’s financial statement leverage was 9.5:1.

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

Total Company

Pension Plans - Funded Balances. As of September 30, 2025, our total Company pension overfunded status reported on our consolidated balance sheets was $382 million and reflects the net funded status at December 31, 2024, updated for: service and interest cost; expected return on assets; curtailments, settlements, and associated interim remeasurement (where applicable); separation expense; actual benefit payments; and cash contributions. For plans without interim remeasurement, the discount rate and rate of expected return assumptions are unchanged from year-end 2024.

Return on Invested Capital (“ROIC”). We analyze total Company performance using an adjusted ROIC financial metric based on an after-tax, rolling four-quarter average. The following table contains the calculation of our ROIC for the periods shown (in billions):

Four Quarters Ending
September 30, 2024September 30, 2025
Adjusted Net Operating Profit/(Loss) After Cash Tax
Net income/(loss) attributable to Ford$3.5$4.7
Add: Noncontrolling interest——
Less: Income tax0.5(0.6)
Add: Cash tax(1.3)(0.6)
Less: Interest on debt(1.2)(1.2)
Less: Total pension/OPEB income/(cost)(2.7)0.3
Add: Pension/OPEB service costs(0.6)(0.5)
Net operating profit/(loss) after cash tax$5.1$5.2
Less: Special items (excl. pension/OPEB) pre-tax(2.8)(2.0)
Adjusted net operating profit/(loss) after cash tax$8.0$7.2
Invested Capital
Equity$44.3$47.4
Debt (excl. Ford Credit)20.621.8
Net pension and OPEB liability5.94.0
Invested capital (end of period)$70.8$73.2
Average invested capital$69.7$70.9
ROIC (a)7.4%7.3%
Adjusted ROIC (Non-GAAP) (b)11.4%10.1%

(a)Calculated as the sum of net operating profit/(loss) after cash tax from the last four quarters, divided by the average invested capital over the last four quarters.

(b)Calculated as the sum of adjusted net operating profit/(loss) after cash tax from the last four quarters, divided by the average invested capital over the last four quarters.

Note: Numbers may not sum due to rounding.

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

CREDIT RATINGS

Our short-term and long-term debt is rated by four credit rating agencies designated as nationally recognized statistical rating organizations (“NRSROs”) by the U.S. Securities and Exchange Commission: DBRS, Fitch, Moody’s, and S&P.

In several markets, locally recognized rating agencies also rate us. A credit rating reflects an assessment by the rating agency of the credit risk associated with a corporate entity or particular securities issued by that entity. Rating agencies’ ratings of us are based on information provided by us and other sources. Credit ratings are not recommendations to buy, sell, or hold securities and are subject to revision or withdrawal at any time by the assigning rating agency. Each rating agency may have different criteria for evaluating company risk and, therefore, ratings should be evaluated independently for each rating agency.

There have been no rating actions taken by these NSROs since the filing of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

The following table summarizes certain of the credit ratings and outlook presently assigned by these four NRSROs:

NRSRO RATINGS
FordFord CreditNRSROs
Issuer Default / Corporate / Issuer RatingLong-Term Senior UnsecuredOutlook / TrendLong-Term Senior UnsecuredShort-Term UnsecuredOutlook / TrendMinimum Long-Term Investment Grade Rating
DBRSBBB (low)BBB (low)StableBBB (low)R-2 (low)StableBBB (low)
FitchBBB-BBB-StableBBB-F3StableBBB-
Moody’sN/ABa1StableBa1NPStableBaa3
S&PBBB-BBB-NegativeBBB-A-3NegativeBBB-

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

OUTLOOK

We provided 2025 Company guidance in our earnings release furnished on Form 8-K dated October 23, 2025. The guidance is based on our expectations and best estimates as of October 23, 2025, and assumes no material change to our current assumptions for inflation, logistics issues, production, or macroeconomic conditions. Moreover, our guidance has not factored in any new policy changes by the administration in the United States, including future or revised tariffs or related offsets, that have not been announced or tariffs or other policy changes that may be announced by other governments after the date hereof. Our actual results could differ materially from our guidance due to risks, uncertainties, and other factors, including those set forth in “Risk Factors” in Item 1A of our 2024 Form 10-K Report and as updated by our subsequent filings with the SEC.

2025 Guidance
Total Company
Adjusted EBIT (a)$6.0 - $6.5 billion
Adjusted Free Cash Flow (a)$2.0 - $3.0 billion
Capital spendingAbout $9.0 billion

(a)When we provide guidance for Adjusted EBIT and Adjusted Free Cash Flow, we do not provide guidance for the most comparable GAAP measures because, as described in more detail below in “Non-GAAP Measures That Supplement GAAP Measures,” they include items that are difficult to predict with reasonable certainty.

For full-year 2025, we now expect adjusted EBIT of $6.0 billion to $6.5 billion and adjusted free cash flow of $2.0 billion to $3.0 billion.

Our updated 2025 outlook includes the following assumptions:

  • For Novelis, an adjusted EBIT headwind of $1.5 billion to $2.0 billion and an adjusted free cash flow headwind of $2.0 billion to $3.0 billion in the fourth quarter. We currently have line of sight to mitigate at least $1.0 billion of adjusted EBIT in 2026, and we are working to improve the situation further. Between 2025 and 2026, we expect Novelis to be a headwind of $1.0 billion or less. Production disruption results in an oversized short-term impact on our working capital, which we expect will reverse in 2026.

  • Given recent policy announcements by the administration in the United States, we now expect tariffs will be an about $1.0 billion net headwind for 2025, down from about $2.0 billion.

Our outlook for 2025 also assumes:

  • U.S. industry sales of about 16.8 million units

  • Full year U.S. industry pricing up about 0.5%

  • Net cost improvement of about $1.0 billion, excluding the impact of tariffs

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

Cautionary Note on Forward-Looking Statements

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

  • Ford’s long-term success depends on delivering the Ford+ plan, including improving cost and competitiveness;

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

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

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

  • Ford may not realize the anticipated benefits of existing or pending strategic alliances, joint ventures, acquisitions, divestitures, or business strategies or the benefits may take longer than expected to materialize;

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

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

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

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

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

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

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

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

  • Ford may face increased price competition for its products and services, including pricing pressure resulting from industry excess capacity, currency fluctuations, competitive actions, or economic or other factors, particularly for electric vehicles;

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

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

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

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

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

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

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

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

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

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

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

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

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

We cannot be certain that any expectation, forecast, or assumption made in preparing forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there may be differences between projected and actual results. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake, and expressly disclaim to the extent permitted by law, any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise. For additional discussion, see “Item 1A. Risk Factors” in our 2024 Form 10-K Report, as updated by our subsequent Quarterly Reports on Form 10‑Q and Current Reports on Form 8-K.

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

NON-GAAP FINANCIAL MEASURES THAT SUPPLEMENT GAAP MEASURES

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

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

Pre-Tax Special ItemSignificance Guideline
∘ Pension and OPEB remeasurement gains and losses∘ No minimum
∘ Personnel expenses, supplier- and dealer-related costs, and facility-related charges stemming from our efforts to match production capacity and cost structure to market demand and changing model mix∘ Generally $100 million or more
∘ Other items that we do not generally consider to be indicative of earnings from ongoing operating activities∘ $500 million or more for individual field service actions; generally $100 million or more for other items

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

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

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

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

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

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

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

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

Non-GAAP Financial Measure Reconciliations

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

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

Third QuarterFirst Nine Months
2024202520242025
Net income/(loss) attributable to Ford (GAAP)$892$2,447$4,055$2,882
Income/(Loss) attributable to noncontrolling interests41810
Net income/(loss)$896$2,448$4,063$2,892
Less: (Provision for)/Benefit from income taxes27630(856)(88)
Income/(Loss) before income taxes$869$1,818$4,919$2,980
Less: Special items pre-tax(1,409)(447)(2,331)(1,859)
Income/(Loss) before special items pre-tax$2,278$2,265$7,250$4,839
Less: Interest on debt(272)(321)(820)(906)
Adjusted EBIT (Non-GAAP)$2,550$2,586$8,070$5,745
Memo:
Revenue ($B)$46.2$50.5$136.8$141.4
Net income/(loss) margin (GAAP) (%)1.9%4.8%3.0%2.0%
Adjusted EBIT margin (Non-GAAP) (%)5.5%5.1%5.9%4.1%

Earnings/(Loss) per Share Reconciliation to Adjusted Earnings/(Loss) per Share

Third QuarterFirst Nine Months
2024202520242025
Diluted After-Tax Results ($M)
Diluted after-tax results (GAAP)$892$2,447$4,055$2,882
Less: Impact of pre-tax and tax special items(1,066)627(1,798)(989)
Adjusted net income/(loss) – diluted (Non-GAAP)$1,958$1,820$5,853$3,871
Basic and Diluted Shares (M)
Basic shares (average shares outstanding)3,9763,9833,9803,977
Net dilutive options, unvested restricted stock units, unvested restricted stock shares, and convertible debt42654049
Diluted shares4,0184,0484,0204,026
Earnings/(Loss) per share – diluted (GAAP)$0.22$0.60$1.01$0.72
Less: Net impact of adjustments(0.27)0.15(0.45)(0.24)
Adjusted earnings/(loss) per share – diluted (Non-GAAP)$0.49$0.45$1.46$0.96

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

Effective Tax Rate Reconciliation to Adjusted Effective Tax Rate

Third QuarterFirst Nine Months
2024202520242025Memo: FY 2024
Pre-Tax Results ($M)
Income/(Loss) before income taxes (GAAP)$869$1,818$4,919$2,980$7,233
Less: Impact of special items(1,409)(447)(2,331)(1,859)(1,860)
Adjusted earnings before taxes (Non-GAAP)$2,278$2,265$7,250$4,839$9,093
Taxes ($M)
(Provision for)/Benefit from income taxes (GAAP)$27$630$(856)$(88)$(1,339)
Less: Impact of special items3431,074533870323
Adjusted (provision for)/benefit from income taxes (Non-GAAP)$(316)$(444)$(1,389)$(958)$(1,662)
Tax Rate (%)
Effective tax rate (GAAP)(3.1)%(34.7)%17.4%3.0%18.5%
Adjusted effective tax rate (Non-GAAP)13.9%19.6%19.2%19.8%18.3%

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

Third QuarterFirst Nine Months
2024202520242025
Net cash provided by/(used in) operating activities (GAAP)$5,502$7,402$12,395$17,398
Less: Items not included in company adjusted free cash flows
Ford Credit operating cash flows$1,296$1,741$3,162$8,364
Funded pension contributions(334)(187)(967)(702)
Restructuring (including separations) (a)(226)(22)(691)(231)
Ford Credit tax payments/(refunds) under tax sharing agreement——(33)—
Other, net14(189)(590)(474)
Add: Items included in company adjusted free cash flows
Company excluding Ford Credit capital spending$(1,970)$(2,099)$(6,121)$(5,943)
Ford Credit distributions1753503251,050
Settlement of derivatives230(1)227109
Company adjusted free cash flow (Non-GAAP)$3,187$4,309$5,945$5,657

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

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

SUPPLEMENTAL INFORMATION

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

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

For the period ended September 30, 2025
Third Quarter
Company excluding Ford CreditFord CreditConsolidated
Revenues$47,185$3,349$50,534
Total costs and expenses46,1512,82548,976
Operating income/(loss)1,0345241,558
Interest expense on Company debt excluding Ford Credit321—321
Other income/(loss), net46694560
Equity in net income/(loss) of affiliated companies81321
Income/(Loss) before income taxes1,1876311,818
Provision for/(Benefit from) income taxes(695)65(630)
Net income/(loss)1,8825662,448
Less: Income/(Loss) attributable to noncontrolling interests1—1
Net income/(loss) attributable to Ford Motor Company$1,881$566$2,447
For the period ended September 30, 2025
First Nine Months
Company excluding Ford CreditFord CreditConsolidated
Revenues$131,550$9,827$141,377
Total costs and expenses130,7218,268138,989
Operating income/(loss)8291,5592,388
Interest expense on Company debt excluding Ford Credit906—906
Other income/(loss), net1,3722611,633
Equity in net income/(loss) of affiliated companies(171)36(135)
Income/(Loss) before income taxes1,1241,8562,980
Provision for/(Benefit from) income taxes(235)32388
Net income/(loss)1,3591,5332,892
Less: Income/(Loss) attributable to noncontrolling interests10—10
Net income/(loss) attributable to Ford Motor Company$1,349$1,533$2,882

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

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

September 30, 2025
AssetsCompany excluding Ford CreditFord CreditEliminationsConsolidated
Cash and cash equivalents$18,024$8,764$—$26,788
Marketable securities14,647753—15,400
Ford Credit finance receivables, net—48,214—48,214
Trade and other receivables, net8,26710,932—19,199
Inventories16,509——16,509
Other assets3,3301,280—4,610
Receivable from other segments1,0322,263(3,295)—
Total current assets61,80972,206(3,295)130,720
Ford Credit finance receivables, net—60,147—60,147
Net investment in operating leases2,06624,979—27,045
Net property44,400335—44,735
Equity in net assets of affiliated companies5,227132—5,359
Deferred income taxes17,721475—18,196
Other assets12,5032,285—14,788
Receivable from other segments84—(84)—
Total assets$143,810$160,559$(3,379)$300,990
Liabilities
Payables$26,953$915$—$27,868
Other liabilities and deferred revenue28,6132,539—31,152
Debt payable within one year3,91853,710—57,628
Payable to other segments3,295—(3,295)—
Total current liabilities62,77957,164(3,295)116,648
Other liabilities and deferred revenue29,4511,510—30,961
Long-term debt17,85786,455—104,312
Deferred income taxes1,023629—1,652
Payable to other segments—84(84)—
Total liabilities$111,110$145,842$(3,379)$253,573

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

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

For the period ended September 30, 2025
First Nine Months
Cash flows from operating activitiesCompany excluding Ford CreditFord CreditEliminationsConsolidated
Net income/(loss)$1,359$1,533$—$2,892
Depreciation and tooling amortization3,8471,875—5,722
Other amortization40(1,422)—(1,382)
Provision for credit and insurance losses2475—477
Pension and OPEB expense/(income)277——277
Equity method investment (earnings)/losses and impairments in excess of dividends received313(1)—312
Foreign currency adjustments84(86)—(2)
Net realized and unrealized (gains)/losses on cash equivalents, marketable securities, and other investments(37)(26)—(63)
Stock compensation39415—409
Provision for/(Benefit from) deferred income taxes(768)247—(521)
Decrease/(Increase) in finance receivables (wholesale and other)—2,605—2,605
Decrease/(Increase) in intersegment receivables/payables(73)73——
Decrease/(Increase) in accounts receivable and other assets(3,569)(108)—(3,677)
Decrease/(Increase) in inventory(705)——(705)
Increase/(Decrease) in accounts payable and accrued and other liabilities10,360271—10,631
Other307116—423
Interest supplements and residual value support to Ford Credit(2,797)2,797——
Net cash provided by/(used in) operating activities$9,034$8,364$—$17,398
Cash flows from investing activities
Capital spending$(5,943)$(88)$—$(6,031)
Acquisitions of finance receivables and operating leases—(40,033)—(40,033)
Collections of finance receivables and operating leases—34,307—34,307
Purchases of marketable securities and other investments(6,892)(313)—(7,205)
Sales and maturities of marketable securities and other investments7,214292—7,506
Settlements of derivatives109(450)—(341)
Capital contributions to equity method investments(442)——(442)
Returns of capital from equity method investments1,701——1,701
Other150——150
Investing activity (to)/from other segments1,050—(1,050)—
Net cash provided by/(used in) investing activities$(3,053)$(6,285)$(1,050)$(10,388)
Cash flows from financing activities
Cash payments for dividends and dividend equivalents$(2,390)$—$—$(2,390)
Purchases of common stock————
Net changes in short-term debt310(716)—(406)
Proceeds from issuance of long-term debt1,37235,607—36,979
Payments of long-term debt(965)(36,576)—(37,541)
Other(118)(82)—(200)
Financing activity to/(from) other segments—(1,050)1,050—
Net cash provided by/(used in) financing activities$(1,791)$(2,817)$1,050$(3,558)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash$193$249$—$442

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

Selected Other Information.

Equity. At September 30, 2025, total equity attributable to Ford was $47.4 billion, an increase of $2.6 billion compared with December 31, 2024. The detail for this change is shown below (in billions):

Increase/ (Decrease)
Net income/(loss)$2.9
Shareholder distributions(2.4)
Other comprehensive income/(loss), net1.8
Common stock issued (including share-based compensation impacts)0.3
Total$2.6

U.S. Sales by Type. The following table shows third quarter 2025 U.S. sales volume and U.S. wholesales segregated by electric, hybrid, and internal combustion vehicles. U.S. sales volume represents primarily sales by dealers, sales to the government, and leases to Ford management, and is based, in part, on estimated vehicle registrations and includes medium and heavy trucks.

U.S. SalesU.S. Wholesales
Electric Vehicles30,61221,690
Hybrid Vehicles55,17754,040
Internal Combustion Vehicles459,733496,158
Total Vehicles545,522571,888

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

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

Previous: Item 1. Financial Statements (Continued) · Next: Item 3. Quantitative and Qualitative Disclosures About Market Risk.