10-KPeriod: FY2022

FORD MOTOR CO Annual Report, Year Ended Dec 31, 2022

Filed February 3, 2023For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company reported a net loss of $1,981 million for the year ended December 31, 2022, a significant shift from the net income of $17,937 million in 2021. This change was largely driven by "special items," which included a substantial $7.4 billion mark-to-market loss on its Rivian investment and a $2.7 billion impairment of its Argo AI investment. Excluding these special items, Ford reported adjusted EBIT of $10,415 million and adjusted diluted earnings per share of $1.88, indicating continued operational strength despite significant one-off charges. The automotive segment saw revenue increase by 18% to $148,980 million, with EBIT rising to $9,692 million, a 32% increase year-over-year. This growth was primarily fueled by higher net pricing and increased wholesales, particularly in North America, which benefited from improved production and the full-year impact of new models like the Bronco and Maverick. Despite these operational gains, the company faced headwinds from inflationary pressures on materials, commodities, and freight, as well as increased structural costs related to strategic investments.

Financial Statements
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Key Highlights

  • 1Ford reported a net loss of $1,981 million for 2022, a significant decline from a net income of $17,937 million in 2021, primarily due to special items like Rivian investment losses and Argo AI impairment.
  • 2Adjusted EBIT was $10,415 million, and adjusted diluted EPS was $1.88, indicating underlying operational profitability.
  • 3Automotive segment revenue increased by 18% to $148,980 million, with EBIT growing 32% to $9,692 million, driven by higher net pricing and volumes.
  • 4North America remained the strongest performing region, with EBIT increasing to $9,176 million, up 24% from the prior year, supported by improved production and new model sales.
  • 5Ford Credit's EBT decreased by $2,060 million to $2,657 million, impacted by lower lease residuals, increased credit losses, and reduced financing margins.
  • 6The company declared both regular and supplemental dividends in February 2023, demonstrating a commitment to shareholder returns.
  • 7Ford is strategically investing in its "Ford+" plan, focusing on electrification and software, while managing risks associated with supply chain disruptions and macroeconomic volatility.

Frequently Asked Questions

Ford Motor Company reported a net loss of $1,981 million for the year ended December 31, 2022, a significant decline from the net income of $17,937 million in 2021. This was largely due to "special items," including a $7.4 billion mark-to-market loss on its Rivian investment and a $2.7 billion impairment on its Argo AI investment. On an adjusted basis, excluding these special items, Ford reported an adjusted EBIT of $10,415 million and adjusted diluted earnings per share of $1.88.

The Automotive segment showed strong operational performance, with revenue increasing by 18% to $148,980 million. Earnings Before Interest and Taxes (EBIT) for the segment rose by 32% to $9,692 million. This growth was driven by higher net pricing and increased wholesale volumes, particularly in North America, benefiting from improved supply chain conditions and new model launches. However, the segment also faced increased costs due to inflation in materials, commodities, and freight, as well as investments in future growth areas.

For 2023, Ford provided guidance expecting an adjusted EBIT between $9 billion and $11 billion and adjusted free cash flow of about $6 billion. The company anticipates headwinds from a potential mild U.S. recession, increased industry incentives, a strong dollar, and lower pension income, partially offset by tailwinds such as supply chain improvements, industry volume increases, and cost efficiencies. Ford Credit's EBT is expected to be around $1.3 billion, a decrease from 2022.

Ford identifies numerous risks, including operational risks like semiconductor shortages and supplier disruptions, macroeconomic risks such as economic downturns and geopolitical events, financial risks related to market volatility and credit ratings, and legal and regulatory risks associated with emissions standards and product liability. The company also emphasizes the importance of executing its 'Ford+' plan for long-term competitiveness and managing the transition to electric vehicles and new technologies.