Ford Motor(F) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Ford's consolidated financial statements, management's analysis of operations, market risk disclosures, and internal controls ITEM 1. Financial Statements Ford Motor Company reported a net loss attributable to Ford Motor Company of $36 million for Q2 2025, a significant decrease from a net income of $1,831 million in Q2 2024, with total revenues increasing slightly but operating income seeing a substantial decline, while total assets increased to $292,725 million at June 30, 2025, driven by increases in trade and other receivables and inventories, and net cash provided by operating activities significantly increased for the first half of 2025 Net Income and EPS Summary | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Net income/(loss) attributable to Ford Motor Company | $(36) | $1,831 | $(1,867) | | Basic income/(loss) per share | $(0.01) | $0.46 | $(0.47) | | Operating income/(loss) | $511 | $1,883 | $(1,372) | Balance Sheet Summary | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :------------------- | :------------------------ | :------------------------ | :---------------- | | Total assets | $292,725 | $285,196 | $7,529 | | Total liabilities | $247,644 | $240,338 | $7,306 | | Total equity | $45,081 | $44,858 | $223 | Cash Flow Summary | Metric | First Half 2025 (Millions) | First Half 2024 (Millions) | Change (Millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | :---------------- | | Net cash provided by operating activities | $9,996 | $6,893 | $3,103 | | Net cash used in investing activities | $(3,011) | $(11,921) | $8,910 | | Net cash used in financing activities | $(7,408) | $384 | $(7,792) | Consolidated Income Statements This section presents the company's consolidated income and loss figures for the second quarters of 2025 and 2024 Consolidated Income Statement Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Total revenues | $50,184 | $47,808 | $2,376 | | Operating income/(loss) | $511 | $1,883 | $(1,372) | | Net income/(loss) attributable to Ford Motor Company | $(36) | $1,831 | $(1,867) | | Basic income/(loss) per share | $(0.01) | $0.46 | $(0.47) | Consolidated Statements of Comprehensive Income This section details the components of comprehensive income, including net income, foreign currency translation, and derivative instrument impacts Consolidated Comprehensive Income Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Net income/(loss) | $(29) | $1,833 | $(1,862) | | Foreign currency translation | $1,272 | $(521) | $1,793 | | Derivative instruments | $(410) | $43 | $(453) | | Comprehensive income/(loss) attributable to Ford Motor Company | $880 | $1,406 | $(526) | Consolidated Balance Sheets This section provides a snapshot of assets, liabilities, and equity at June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights | Asset/Liability | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Cash and cash equivalents | $23,020 | $22,935 | $85 | | Marketable securities | $14,484 | $15,413 | $(929) | | Inventories | $17,270 | $14,951 | $2,319 | | Total assets | $292,725 | $285,196 | $7,529 | | Total liabilities | $247,644 | $240,338 | $7,306 | | Total equity | $45,081 | $44,858 | $223 | Consolidated Statements of Cash Flows This section outlines cash flows from operating, investing, and financing activities for the first half of 2025 and 2024 Consolidated Cash Flow Highlights | Cash Flow Activity | First Half 2025 (Millions) | First Half 2024 (Millions) | Change (Millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | :---------------- | | Net cash provided by operating activities | $9,996 | $6,893 | $3,103 | | Net cash used in investing activities | $(3,011) | $(11,921) | $8,910 | | Net cash used in financing activities | $(7,408) | $384 | $(7,792) | | Net increase/(decrease) in cash, cash equivalents, and restricted cash | $60 | $(4,884) | $4,944 | Consolidated Statements of Equity This section presents changes in equity components, including retained earnings and accumulated other comprehensive income Consolidated Equity Highlights | Equity Component | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Retained earnings | $32,352 | $33,740 | $(1,388) | | Accumulated other comprehensive income/(loss) | $(8,242) | $(9,639) | $1,397 | | Total equity attributable to Ford Motor Company | $45,057 | $44,835 | $222 | - Dividends and dividend equivalents declared for Common and Class B Stock totaled $611 million in Q2 2025 and $1,793 million in the first half of 2025[18][19] Notes to the Financial Statements This section provides detailed explanations and disclosures supporting the consolidated financial statements Note 1. Presentation This note clarifies the scope of "Ford" in the report, including consolidated subsidiaries and VIEs where Ford is the primary beneficiary, and confirms adherence to GAAP for interim financial information - The terms "Ford," "Company," "we," "our," "us," or similar references mean Ford Motor Company, its consolidated subsidiaries, and consolidated VIEs of which it is the primary beneficiary[26] - Consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information[26] Note 2. New Accounting Standards Ford adopted no material ASUs in 2025, with new standards like ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Disaggregation of Income Statement Expenses) effective in 2025 and 2026/2027 respectively, but not expected to impact consolidated financial statements, only disclosures - Accounting Standards Updates ("ASUs") adopted during 2025 did not have a material impact on consolidated financial statements or disclosures[28] - ASU 2023-09 (Improvements to Income Tax Disclosures) is effective for 2025 annual financial statements, with no impact on consolidated income statements, balance sheets, or cash flows[29] - ASU 2024-03 (Disaggregation of Income Statement Expenses) is effective for annual periods beginning after December 15, 2026, and will not impact consolidated financial statements[30] Note 3. Revenue Total revenues for Q2 2025 increased to $50,184 million, primarily driven by higher sales of vehicles, parts, and accessories, and increased leasing and financing income from Ford Credit, with changes in variable consideration (e.g., marketing incentives) increasing Q2 2025 revenue by $90 million Revenue by Source | Revenue Source | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Total revenues (Consolidated) | $50,184 | $47,808 | $2,376 | | Vehicles, parts, and accessories (Company excluding Ford Credit) | $45,202 | $43,542 | $1,660 | | Financing income (Ford Credit) | $2,008 | $1,889 | $119 | - Changes in the estimate of variable consideration (e.g., marketing incentives) resulted in a $90 million increase in revenue for Q2 2025, compared to a $256 million decrease in Q2 2024[35] - Unearned revenue associated primarily with extended service contracts was $5.8 billion at June 30, 2025, with approximately $1.0 billion expected to be recognized in the remainder of 2025[36] Note 4. Other Income/(Loss) Total other income/(loss), net, decreased to $577 million in Q2 2025 from $628 million in Q2 2024, mainly due to a significant decrease in net periodic pension and OPEB income, partially offset by stable investment-related interest income Other Income/(Loss) Components | Income/Loss Component | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Total Other income/(loss), net | $577 | $628 | $(51) | | Net periodic pension and OPEB income/(cost) | $14 | $105 | $(91) | | Investment-related interest income | $368 | $367 | $1 | Note 5. Income Taxes The effective tax rate for Q2 2025 was 105.4%, significantly higher than 24.8% in Q2 2024, primarily due to a $471 million non-cash charge to deferred tax assets related to transfer pricing matters, with a future $400 million non-cash charge expected in Q3 2025 due to German tax legislation Effective Tax Rates | Metric | Q2 2025 | Q2 2024 | | :------------------- | :------ | :------ | | Effective tax rate | 105.4% | 24.8% | | First half effective tax rate | 61.8% | 21.8% | - A non-cash charge to deferred tax assets of $471 million was recognized in Q2 2025 due to resolving transfer pricing matters in certain non-U.S. operations[42] - A non-cash charge to deferred tax assets of about $400 million is expected in Q3 2025 due to tax legislation enacted in Germany[43] Note 6. Capital Stock and Earnings/(Loss) Per Share Basic and diluted earnings per share were a loss of $0.01 in Q2 2025, down from a gain of $0.46 in Q2 2024, while the weighted-average shares used in computation remained relatively stable Earnings Per Share and Weighted-Average Shares | Metric | Q2 2025 | Q2 2024 | | :----------------------------------- | :------ | :------ | | Basic income/(loss) per share | $(0.01) | $0.46 | | Diluted income/(loss) per share | $(0.01) | $0.46 | | Weighted-average basic shares (Millions) | 3,980 | 3,985 | | Weighted-average diluted shares (Millions) | 3,980 | 4,022 | Note 7. Cash, Cash Equivalents, and Marketable Securities Total cash and cash equivalents increased slightly to $23,020 million at June 30, 2025, from $22,935 million at December 31, 2024, while marketable securities decreased to $14,484 million from $15,413 million over the same period Cash, Cash Equivalents, and Marketable Securities | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Total cash and cash equivalents | $23,020 | $22,935 | $85 | | Total marketable securities | $14,484 | $15,413 | $(929) | | Restricted cash | $230 | $208 | $22 | Note 8. Ford Credit Finance Receivables and Allowance for Credit Losses Ford Credit's total recorded investment in finance receivables decreased to $108,350 million at June 30, 2025, from $112,500 million at December 31, 2024, while the allowance for credit losses increased to $890 million, consumer receivables past due (31-60 days) decreased, and gross charge-offs for consumer receivables in H1 2025 were $313 million Ford Credit Finance Receivables and Credit Losses | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Total recorded investment in finance receivables | $108,350 | $112,500 | $(4,150) | | Allowance for credit losses | $890 | $864 | $26 | | Consumer receivables 31-60 days past due | $808 | $872 | $(64) | | Gross charge-offs (Consumer, First Half) | $313 | $260 | $53 | - Dealer financing receivables are evaluated based on Ford Credit's internal dealer risk rating analysis, categorizing dealers into four groups based on financial metrics[59][60] Note 9. Inventories Total inventories increased to $17,270 million at June 30, 2025, from $14,951 million at December 31, 2024, primarily due to higher finished products inventory reflecting increased in-transit and in-plant stock Inventory Composition | Inventory Component | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Raw materials, work-in-process, and supplies | $5,865 | $5,394 | $471 | | Finished products | $11,405 | $9,557 | $1,848 | | Total inventories | $17,270 | $14,951 | $2,319 | - The increase in finished product inventory reflects higher in-transit and in-plant inventory[70] Note 10. Other Liabilities and Deferred Revenue Total current other liabilities and deferred revenue increased to $30,360 million at June 30, 2025, from $27,782 million at December 31, 2024, driven by increases in dealer allowances and deferred revenue, with non-current liabilities also increasing Other Liabilities and Deferred Revenue | Liability Component | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Total current other liabilities and deferred revenue | $30,360 | $27,782 | $2,578 | | Dealer and dealers' customer allowances and claims (current) | $15,250 | $14,140 | $1,110 | | Deferred revenue (current) | $4,526 | $3,331 | $1,195 | | Total non-current other liabilities and deferred revenue | $30,242 | $28,832 | $1,410 | Note 11. Retirement Benefits Net periodic benefit cost for pension and OPEB plans for Q2 2025 was $15 million for U.S. Pension Benefits, $16 million for Non-U.S. Pension Benefits, and $62 million for OPEB Worldwide, and Ford expects to contribute $800 million to global funded pension plans in 2025 Net Periodic Benefit Cost by Plan | Benefit Plan | Q2 2025 Net Periodic Benefit Cost/(Income) (Millions) | | :----------------------------------- | :-------------------------------------------------- | | U.S. Pension Benefits | $15 | | Non-U.S. Pension Benefits | $16 | | OPEB Worldwide | $62 | - Ford expects to contribute about $800 million of cash to its global funded pension plans during 2025[75] - In the first half of 2025, Ford contributed $515 million to global funded pension plans and made $218 million of benefit payments to unfunded plans[75] Note 12. Debt Total Company debt excluding Ford Credit decreased to $20,333 million at June 30, 2025, from $20,654 million at December 31, 2024, Ford Credit's total debt decreased slightly to $137,394 million, and convertible notes of $2,300 million became payable within one year Company and Ford Credit Debt | Debt Category | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Total Company debt excluding Ford Credit | $20,333 | $20,654 | $(321) | | Total Ford Credit debt | $137,394 | $137,868 | $(474) | | Company excluding Ford Credit debt payable within one year | $3,591 | $1,756 | $1,835 | | Convertible notes (Company excluding Ford Credit) payable within one year | $2,300 | $0 | $2,300 | - On July 23, 2025, Ford of Britain entered into a £1 billion term loan credit facility, which was fully drawn on July 28, 2025[78] Note 13. Derivative Financial Instruments and Hedging Activities Ford uses derivative contracts to manage market risks, with derivatives not designated as hedging instruments showing a net gain of $163 million in Q2 2025, a significant change from a $2 million loss in Q2 2024, and the fair value of derivative assets increased while liabilities decreased Income Effect of Derivatives Not Designated as Hedging Instruments | Derivative Type | Q2 2025 Income Effect (Millions) | Q2 2024 Income Effect (Millions) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Derivatives not designated as hedging instruments (Total) | $163 | $(2) | | Foreign currency exchange contracts (not designated) | $(69) | $126 | | Cross-currency interest rate swap contracts (not designated) | $246 | $(30) | Fair Value of Derivative Instruments | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | | Fair value of total derivative assets (gross) | $1,924 | $1,428 | | Fair value of total derivative liabilities (gross) | $1,751 | $2,234 | Note 14. Employee Separation Actions and Exit and Disposal Activities Ford incurred $133 million in costs for employee separation actions and exit and disposal activities in the first half of 2025, down from $853 million in H1 2024, and expects to incur about $500 million in total charges in 2025, primarily for employee separations Costs and Payments for Employee Separation and Exit Activities | Metric | First Half 2025 (Millions) | First Half 2024 (Millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Costs related to initiated actions | $133 | $853 | | Payments for employee separation actions | $(245) | $(503) | - Ford plans to cease production of the Focus at its Saarlouis plant in Germany in 2025, repurposing the facility into a technology center and retaining 1,000 positions[93] - Ford estimates about $500 million in total charges in 2025 related to employee separations and other restructuring actions[95] Note 15. Acquisitions and Divestitures Ford completed the sale of its equity interest in Ford Motor Company A/S (Denmark) on January 2, 2025, with the consideration received approximating the carrying value, resulting in no material impact - Ford completed the sale of its 100% equity interest in Ford Motor Company A/S (Denmark) on January 2, 2025[96] - The consideration received for the sale approximated the carrying value of Denmark at the time of sale, resulting in no material impact[96] Note 16. Accumulated Other Comprehensive Income/(Loss) Total Accumulated Other Comprehensive Income/(Loss) (AOCI) improved to $(8,242) million at June 30, 2025, from $(9,639) million at December 31, 2024, largely driven by net gains on foreign currency translation, partially offset by net losses on derivative instruments Accumulated Other Comprehensive Income/(Loss) Components | AOCI Component | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Total AOCI ending balance | $(8,242) | $(9,639) | $1,397 | | Foreign currency translation (First Half) | $1,798 | $(633) | $2,431 | | Derivative instruments (First Half) | $(458) | $275 | $(733) | Note 17. Variable Interest Entities Ford's maximum exposure to losses from unconsolidated VIEs decreased to $7.6 billion at June 30, 2025, from $9.3 billion at December 31, 2024, and Ford guarantees its 50% share of BlueOval SK's $9.6 billion DOE loan and has contributed $2.6 billion (net of returns) to BOSK Exposure to Losses from Unconsolidated Affiliates | Metric | June 30, 2025 (Billions) | Dec 31, 2024 (Billions) | Change (Billions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Maximum exposure to potential losses from unconsolidated affiliates | $7.6 | $9.3 | $(1.7) | | Guarantee exposure related to certain debt at unconsolidated affiliates | $4.9 | $4.9 | $0 | | Ford's contributions (net of returns) to BlueOval SK | $2.6 | N/A | N/A | - Ford has agreed to guarantee its 50% share of BlueOval SK, LLC's payment obligations under a $9.6 billion loan agreement with the United States Department of Energy[102] Note 18. Commitments and Contingencies Financial guarantees' maximum potential payments increased to $5.4 billion at June 30, 2025, Ford accrued a $571 million charge in Q2 2025 for a field service action related to fuel injectors, and the estimated reasonably possible costs in excess of accruals for material field service actions is up to $1.7 billion Financial Guarantees | Metric | June 30, 2025 (Billions) | Dec 31, 2024 (Billions) | Change (Billions) | | :----------------------------------- | :------------------------ | :------------------------ | :---------------- | | Maximum potential payments for financial guarantees | $5.4 | $5.3 | $0.1 | | Carrying value of recorded liabilities related to financial guarantees | $0.109 | $0.144 | $(0.035) | - A $571 million charge was recorded in Q2 2025 for a field service action related to fuel injectors[119] - The estimated reasonably possible costs in excess of accruals for material field service actions and customer satisfaction actions is a range of up to about $1.7 billion in the aggregate[119] - The estimated aggregate risk for indirect tax and regulatory matters is a range of up to about $0.6 billion[115] Note 19. Segment Information Ford reports results across Ford Blue, Ford Model e, Ford Pro, and Ford Credit segments, with Ford Next segment expenses reallocated beginning January 1, 2025, and Q2 2025 Segment EBIT/EBT at $661M for Ford Blue, $(1,329)M for Ford Model e, $2,318M for Ford Pro, and $645M for Ford Credit Segment EBIT/EBT Performance | Segment | Q2 2025 EBIT/EBT (Millions) | Q2 2024 EBIT/EBT (Millions) | Change (Millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | :---------------- | | Ford Blue | $661 | $1,167 | $(506) | | Ford Model e | $(1,329) | $(1,150) | $(179) | | Ford Pro | $2,318 | $2,562 | $(244) | | Ford Credit | $645 | $343 | $302 | - Beginning January 1, 2025, expenses and investments for emerging business initiatives (previously Ford Next segment) are reflected in the reportable segments that benefit or Corporate Other[122] - Ford Blue focuses on ICE and hybrid vehicles, Ford Model e on EV and digital vehicle technologies, and Ford Pro on commercial, government, and rental customers[124][125][126] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Ford's Q2 2025 results were significantly impacted by trade policies and tariffs, incurring an $800 million net EBIT headwind, and challenges in the EV market, leading to a $308 million expense for program cancellation, resulting in a net loss of $36 million and adjusted EBIT of $2,140 million, with segment performance varying as Ford Blue and Ford Pro EBIT declined, Ford Model e's loss increased, and Ford Credit's EBT improved, while liquidity remains strong with Company cash at $28.4 billion and Ford Credit liquidity at $27.0 billion, and Ford projects 2025 adjusted EBIT of $6.5-$7.5 billion and adjusted free cash flow of $3.5-$4.5 billion Key Financial Results | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Net Income/(Loss) ($M) | $(36) | $1,831 | $(1,867) | | Company Adj. EBIT ($M) | $2,140 | $2,757 | $(617) | | EPS (Diluted) | $(0.01) | $0.46 | $(0.47) | | Adjusted EPS (Diluted) | $0.37 | $0.47 | $(0.10) | - Trade policies and tariffs resulted in an approximate $800 million net EBIT impact in Q2 2025[145] - Expenses related to the cancellation of an all-electric three-row SUV program totaled $308 million in Q2 2025, with potential additional expenses of about $1.5 billion[148] Liquidity Metrics | Liquidity Metric | June 30, 2025 (Billions) | Dec 31, 2024 (Billions) | | :----------------------------------- | :------------------------ | :------------------------ | | Total cash, cash equivalents, marketable securities, and restricted cash | $37.7 | N/A | | Company Cash (excluding Ford Credit) | $28.4 | $28.5 | | Company Liquidity (excluding Ford Credit) | $46.6 | $46.7 | | Ford Credit Net Liquidity Available for Use | $27.0 | $25.2 | Recent Developments Trade policies and tariffs, particularly an $800 million net EBIT impact in Q2 2025, continue to disrupt the automotive industry, while the EV market faces lower-than-anticipated adoption rates and pricing pressures, leading Ford to adjust investments and cancel an all-electric three-row SUV program, incurring $308 million in Q2 2025 expenses, and regulatory compliance credit obligations decreased to $2.8 billion - Ford's net EBIT impact related to tariffs implemented or revised in 2025 was about $800 million in Q2 2025[145] - Lower-than-anticipated industrywide electric vehicle adoption rates and near-term pricing pressures led to the cancellation of an all-electric three-row SUV program, incurring $308 million in expenses in Q2 2025[148] - Future purchase obligations under compliance credit purchase agreements totaled about $2.8 billion as of June 30, 2025, down from $4.2 billion at December 31, 2024, due to terminations following federal legislative action[150] Results of Operations Ford reported a net loss of $36 million in Q2 2025, a significant decline from $1,831 million net income in Q2 2024, with Company adjusted EBIT decreasing by $617 million to $2,140 million, and special item charges totaling $1,302 million, primarily due to a fuel injector field service action, EV program cancellation, and asset impairments Key Operating Results | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Net income/(loss) attributable to Ford | $(36) | $1,831 | $(1,867) | | Company Adjusted EBIT | $2,140 | $2,757 | $(617) | | Diluted earnings/(loss) per share | $(0.01) | $0.46 | $(0.47) | | Company Adjusted EBIT Margin | 4.3% | 5.8% | (1.5) ppts | EBIT Special Items Breakdown | Special Item | Q2 2025 (Millions) | Q2 2024 (Millions) | | :----------------------------------- | :------------------ | :------------------ | | Total EBIT Special Items | $(1,302) | $(49) | | Fuel injector field service action | $(571) | $0 | | EV program cancellation | $(308) | $0 | | Ford share of equity method investment's asset impairments | $(201) | $0 | | Ford share of BlueOval SK's asset write down / other | $(193) | $0 | - A $233 million provision for tax special items was recorded in Q2 2025, including a $471 million non-cash charge to deferred tax assets[155] Ford Blue Segment Ford Blue's Q2 2025 EBIT decreased by $506 million to $661 million, with a margin of 2.6%, wholesale units decreased by 6% primarily due to lower F-150 sales, and the EBIT decline was driven by lower volume and adverse exchange rates, partially offset by cost reductions and favorable net pricing Ford Blue Segment Performance | Metric | Q2 2025 | Q2 2024 | Change | | :------------------- | :------ | :------ | :------ | | EBIT ($M) | $661 | $1,167 | $(506) | | EBIT Margin (%) | 2.6% | 4.4% | (1.8) ppts | | Wholesale Units (000) | 696 | 741 | (45) | | Revenue ($M) | $25,784 | $26,670 | $(886) | - The decrease in wholesale units primarily reflects lower F-150 wholesales due to the non-repeat of the stock build in 2024[166] - Lower costs, reflecting ongoing cost reduction initiatives including lower warranty costs, partially offset the EBIT decline[167] Ford Model e Segment Ford Model e reported a Q2 2025 EBIT loss of $1,329 million, an increase of $179 million from the prior year, with a negative 56.4% margin, wholesale units increased significantly due to new EV launches in Europe and higher F-150 Lightning and Mustang Mach-E sales, and the increased loss was driven by tariff-related costs, volume-related manufacturing costs, and adverse net pricing Ford Model e Segment Performance | Metric | Q2 2025 | Q2 2024 | Change | | :------------------- | :------ | :------ | :------ | | EBIT ($M) | $(1,329) | $(1,150) | $(179) | | EBIT Margin (%) | (56.4)% | (99.9)% | 43.5 ppts | | Wholesale Units (000) | 60 | 26 | 34 | | Revenue ($M) | $2,357 | $1,150 | $1,207 | - Wholesales increased significantly due to the launch of EV products in Europe (Explorer, Puma, Capri) and higher F-150 Lightning and Mustang Mach-E wholesales in North America[170] - The increased EBIT loss was primarily driven by tariff-related costs, volume-related manufacturing costs, and adverse net pricing[171] Ford Pro Segment Ford Pro's Q2 2025 EBIT decreased by $244 million to $2,318 million, with a margin of 12.3%, wholesale units increased by 15% due to higher daily rental volume and new E-Transit launches in Europe, and the EBIT decline was primarily due to unfavorable fleet pricing, tariff-related costs, and volume-related manufacturing costs, partially offset by higher volume Ford Pro Segment Performance | Metric | Q2 2025 | Q2 2024 | Change | | :------------------- | :------ | :------ | :------ | | EBIT ($M) | $2,318 | $2,562 | $(244) | | EBIT Margin (%) | 12.3% | 15.1% | (2.8) ppts | | Wholesale Units (000) | 429 | 375 | 54 | | Revenue ($M) | $18,797 | $16,988 | $1,809 | - Wholesales increased by 15% year-over-year, driven by higher daily rental volume and the launch of E-Transit Custom and E-Transit Courier in Europe[173] - The lower EBIT was primarily driven by unfavorable fleet pricing (including daily rental), tariff-related costs, and volume-related manufacturing costs[174] Ford Credit Segment Ford Credit's Q2 2025 EBT increased by $302 million to $645 million, with ROE of 14.9%, total net receivables increased by 4% to $143.7 billion, the U.S. loss-to-receivables ratio increased to 48 basis points, reflecting higher repossessions and loss severity, while U.S. auction values increased by 4% Ford Credit Segment Performance | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------------------- | :------ | :------ | :------ | | EBT ($M) | $645 | $343 | $302 | | ROE (%) | 14.9% | 7.6% | 7.3 ppts | | Total Net Receivables ($B) | $143.7 | $137.7 | $6.0 | | Loss-to-Receivables (bps) (U.S. retail financing only) | 48 | 41 | 7 | | Auction Values (U.S. portfolio off-lease) | $32,410 | $31,045 | 4% | - The increase in EBT was primarily explained by higher financing margin and receivables and a favorable derivative market valuation adjustment, partially offset by an accrual related to an industrywide review of historical U.K. discretionary dealer commissions[181] - Ford Credit's financial statement leverage was 9.4:1 at June 30, 2025[234] Corporate Other Corporate Other reported a $155 million EBIT loss in Q2 2025, an improvement from a $165 million loss a year ago, with this segment including corporate governance expenses, pension/OPEB income/expense, interest income from cash/marketable securities, and foreign exchange derivative gains/losses Corporate Other EBIT Loss | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :------------------- | :------------------ | :------------------ | :------------------ | | Corporate Other EBIT loss | $(155) | $(165) | $10 | - Corporate Other includes corporate governance expenses, past service pension and OPEB income and expense, interest income, and foreign exchange derivatives gains and losses associated with intercompany lending[185] Interest on Debt Interest expense on Company debt excluding Ford Credit increased to $297 million in Q2 2025, up $27 million from a year ago Interest Expense on Company Debt | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Interest expense on Company debt excluding Ford Credit | $297 | $270 | $27 | Taxes The provision for income taxes in Q2 2025 was $570 million, resulting in an effective tax rate of 105.4%, significantly impacted by a $471 million non-cash charge to deferred tax assets, with the adjusted effective tax rate at 18.3%, and a $400 million non-cash charge expected in Q3 2025 due to German tax legislation Income Tax Provision and Effective Rates | Metric | Q2 2025 | Q2 2024 | | :----------------------------------- | :------ | :------ | | Provision for/(Benefit from) income taxes | $570 | $605 | | Effective tax rate | 105.4% | 24.8% | | Adjusted effective tax rate | 18.3% | 23.1% | - A non-cash charge to deferred tax assets of $471 million was recognized in Q2 2025 due to resolving transfer pricing matters in certain non-U.S. operations[187] - A non-cash charge to deferred tax assets of about $400 million is expected in Q3 2025 due to tax legislation enacted in Germany[189] Liquidity and Capital Resources At June 30, 2025, total cash, cash equivalents, marketable securities, and restricted cash was $37.7 billion, Company cash was $28.4 billion and liquidity was $46.6 billion, Ford Credit's liquidity was $27.0 billion, the company targets an ongoing Company cash balance at or above $20 billion, and Ford Credit plans full-year public term funding of $22 billion to $27 billion for 2025 Liquidity and Cash Position | Metric | June 30, 2025 (Billions) | Dec 31, 2024 (Billions) | | :----------------------------------- | :------------------------ | :------------------------ | | Total cash, cash equivalents, marketable securities, and restricted cash | $37.7 | N/A | | Company Cash (excluding Ford Credit) | $28.4 | $28.5 | | Company Liquidity (excluding Ford Credit) | $46.6 | $46.7 | | Ford Credit Net Liquidity Available for Use | $27.0 | $25.2 | - Ford targets an ongoing Company cash balance at or above $20 billion plus significant additional liquidity[195] Company Adjusted Free Cash Flow and Capital Spending | Metric | Q2 2025 (Billions) | Q2 2024 (Billions) | | :----------------------------------- | :------------------ | :------------------ | | Company Adjusted Free Cash Flow | $2.8 | $3.2 | | Capital spending | $2.1 | $2.1 | | Shareholder distributions | $0.6 | $0.8 | - Ford Credit projects full year public term funding in the range of $22 billion to $27 billion for 2025[225] Adjusted Return on Invested Capital | Metric | Four Quarters Ending June 30, 2025 | Four Quarters Ending June 30, 2024 | | :----------------------------------- | :--------------------------------- | :--------------------------------- | | Adjusted ROIC | 10.1% | 11.1% | Credit Ratings Ford's short-term and long-term debt is rated by four NRSROs (DBRS, Fitch, Moody's, S&P), with ratings for Ford and Ford Credit generally in the BBB- to Ba1 range, with stable or negative outlooks, and no rating actions have occurred since the Q1 2025 report Credit Ratings Summary | NRSRO | Ford Long-Term Senior Unsecured | Ford Credit Long-Term Senior Unsecured | Outlook/Trend | | :------------------- | :------------------------------ | :------------------------------------- | :------------ | | DBRS | BBB (low) | BBB (low) | Stable | | Fitch | BBB- | BBB- | Stable | | Moody's | Ba1 | Ba1 | Stable | | S&P | BBB- | BBB- | Negative | - No rating actions have been taken by the NRSROs since the filing of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025[241] Outlook Ford projects full-year 2025 adjusted EBIT of $6.5 billion to $7.5 billion and adjusted free cash flow of $3.5 billion to $4.5 billion, with this guidance assuming U.S. industry sales of 16.0-16.5 million units, flat industry pricing, $1.0 billion net cost improvement (excluding tariffs), and a net tariff headwind of about $2.0 billion 2025 Financial Guidance | Metric | 2025 Guidance | | :----------------------------------- | :-------------- | | Adjusted EBIT | $6.5 - $7.5 billion | | Adjusted Free Cash Flow | $3.5 - $4.5 billion | | Capital spending | About $9.0 billion | - Key assumptions for 2025 include U.S. industry sales of 16.0 million to 16.5 million units, full year industry pricing about flat, and a net cost improvement target of $1.0 billion (excluding tariffs)[247] - The outlook assumes a net tariff headwind of about $2.0 billion, reflecting $3.0 billion gross adverse adjusted EBIT impact partially offset by $1.0 billion of recovery actions[246][247] Cautionary Note on Forward-Looking Statements This section highlights various risks and uncertainties that could cause actual results to differ materially from forward-looking statements, including risks related to the Ford+ plan, vehicle defects, supply chain disruptions, labor issues, EV market adoption, competition, economic conditions, and regulatory changes - Risks include failure to deliver the Ford+ plan, vehicle defects, supply chain disruptions, labor issues, and natural or man-made disasters[248] - The pace of EV adoption, pricing pressures, and regulatory compliance are significant risks that could adversely affect Ford's business[248] - Economic or geopolitical developments, including protectionist trade policies such as tariffs, and fluctuations in commodity and energy prices, foreign currency exchange rates, and interest rates can have a significant effect on results[248] Non-GAAP Financial Measures That Supplement GAAP Measures Ford uses non-GAAP measures like Company Adjusted EBIT, Company Adjusted EBIT Margin, Adjusted EPS, Adjusted Effective Tax Rate, Company Adjusted Free Cash Flow, and Adjusted ROIC to provide additional insight into underlying operating results and trends, with these measures excluding special items and other adjustments not indicative of ongoing operations - Non-GAAP measures used include Company Adjusted EBIT, Company Adjusted EBIT Margin, Adjusted Earnings/(Loss) Per Share, Adjusted Effective Tax Rate, Company Adjusted Free Cash Flow, and Adjusted ROIC[250][253][256] - These non-GAAP measures exclude 'special items' such as pension and OPEB remeasurement gains and losses, significant personnel expenses, supplier- and dealer-related costs, facility-related charges, and other items not indicative of ongoing operating activities[250][253] - Guidance for non-GAAP measures is provided without comparable GAAP guidance due to the difficulty in predicting certain significant special items with reasonable certainty[252][253][256] Non-GAAP Financial Measure Reconciliations This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including Net Income/(Loss) to Adjusted EBIT, Earnings/(Loss) per Share to Adjusted Earnings/(Loss) per Share, and Net Cash Provided by/(Used in) Operating Activities to Company Adjusted Free Cash Flow for Q2 and H1 2025 Net Income to Adjusted EBIT Reconciliation | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :----------------------------------- | :------------------ | :------------------ | | Net income/(loss) attributable to Ford (GAAP) | $(36) | $1,831 | | Adjusted EBIT (Non-GAAP) | $2,140 | $2,757 | EPS to Adjusted EPS Reconciliation | Metric | Q2 2025 | Q2 2024 | | :----------------------------------- | :------ | :------ | | Earnings/(Loss) per share – diluted (GAAP) | $(0.01) | $0.46 | | Adjusted earnings/(loss) per share – diluted (Non-GAAP) | $0.37 | $0.47 | Operating Cash Flow to Adjusted Free Cash Flow Reconciliation | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :----------------------------------- | :------------------ | :------------------ | | Net cash provided by/(used in) operating activities (GAAP) | $6,317 | $5,508 | | Company adjusted free cash flow (Non-GAAP) | $2,826 | $3,237 | Supplemental Information This section provides supplemental consolidating financial information, including income statement, balance sheet, and cash flow details, segregating Company excluding Ford Credit and Ford Credit, and also includes U.S. sales volume by vehicle type (Electric, Hybrid, ICE) for Q2 2025 U.S. Sales and Wholesales by Vehicle Type | U.S. Sales Type | Q2 2025 Sales Volume | Q2 2025 Wholesales | | :----------------------------------- | :------------------- | :------------------- | | Electric Vehicles | 16,438 | 37,916 | | Hybrid Vehicles | 66,448 | 61,412 | | Internal Combustion Vehicles | 529,209 | 477,823 | | Total Vehicles | 612,095 | 577,151 | - Total equity attributable to Ford at June 30, 2025, was $45.1 billion, an increase of $0.2 billion compared with December 31, 2024[268] Consolidated Net Income by Entity | Metric | Q2 2025 (Millions) | | :----------------------------------- | :------------------ | | Net income/(loss) attributable to Ford Motor Company (Consolidated) | $(36) | | Net income/(loss) (Company excluding Ford Credit) | $(579) | | Net income/(loss) (Ford Credit) | $543 | Accounting Standards Issued But Not Yet Adopted This section refers to Note 2 for discussion of recent accounting standards issued but not yet adopted - For a discussion of recent accounting standards issued but not yet adopted, refer to Note 2 of the Notes to the Financial Statements[270] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk Ford manages foreign currency, commodity price, and interest rate risks using derivative contracts, with the net fair value of foreign exchange forward contracts being a liability of $166 million as of June 30, 2025, with a potential $2.8 billion change from a 10% exchange rate shift, commodity forward contracts having a net asset of $9 million, and Ford Credit estimating a 1% decrease in interest rates would decrease its pre-tax cash flow by $94 million over 12 months Market Risk Exposure from Derivative Contracts | Risk Type | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :----------------------------------- | :------------------------ | :------------------------ | | Net fair value of foreign exchange forward contracts | $(166) (liability) | $410 (asset) | | Potential change from 10% exchange rate shift | $2,800 | $2,900 | | Net fair value of commodity forward contracts | $9 (asset) | $(8) (liability) | | Potential change from 10% commodity price shift | $186 | $189 | - Ford Credit estimates that a hypothetical 1% decrease in all interest rates would decrease its pre-tax cash flow by $94 million over the next 12 months[273] ITEM 4. Controls and Procedures The CEO and CFO concluded that Ford's disclosure controls and procedures were effective as of June 30, 2025, and Ford Credit began a multi-year implementation of new contract origination and receivables platforms in Q2 2025, which will lead to ongoing refinements in processes and controls - The CEO and CFO concluded that Ford's disclosure controls and procedures were effective as of June 30, 2025[274] - Ford Credit began a multi-year implementation of new contract origination and receivables platforms in Q2 2025, starting in the United Kingdom, which will lead to ongoing refinements in processes, procedures, and controls[275] PART II. OTHER INFORMATION This section covers legal proceedings, other information, exhibits, and the official signature for the report ITEM 1. Legal Proceedings Ford is involved in various legal actions, including environmental matters and Brazilian tax assessments, with the company considering the overall risk of loss for Brazilian tax matters to be remote, despite potential collateral requirements exceeding $1 billion - Ford Motor Company Brasil Ltda. faces substantial tax assessments from a Brazilian state and federal tax authority related to tax incentives[278] - Potential collateral requirements for Brazilian tax matters could exceed $1 billion, but Ford considers the overall risk of loss to be remote[279] ITEM 5. Other Information No director or officer adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" during Q2 2025 - No director or officer adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" during the quarter ended June 30, 2025[280] ITEM 6. Exhibits This section lists the exhibits filed with the 10-Q report, including corporate governance documents, credit agreements, certifications, and interactive data files - Exhibits include corporate governance documents (Restated Certificate of Incorporation, By-laws), amendments to credit agreements, and certifications from the CEO and CFO[281] - Interactive Data Files (XBRL) are submitted electronically with the report[281][282] Signature The report is signed by Mark Kosman, Chief Accounting Officer, on July 30, 2025 - The report was signed by Mark Kosman, Chief Accounting Officer, on behalf of Ford Motor Company on July 30, 2025[286]