10-QPeriod: Q2 FY2022

FORD MOTOR CO Quarterly Report for Q2 Ended Jun 30, 2022

Filed July 28, 2022For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company's second quarter 2022 results show a significant shift, with net income attributable to Ford improving to $667 million from a net loss of $2,443 million in the first half of 2021, largely influenced by a substantial loss on its Rivian investment. Total revenues for the first half of 2022 increased by 19% year-over-year to $74.7 billion, driven by strong performance in the Automotive segment, which saw revenues climb 21% to $70.0 billion, benefiting from improved wholesale volumes and pricing. Despite revenue growth, the company reported a net loss of $2,443 million for the first half of 2022, primarily due to a significant $7.9 billion loss on its Rivian investment and other special items. However, excluding these special items, Ford's adjusted EBIT showed robust growth, reaching $6.0 billion for the first half of 2022 compared to $4.9 billion in the prior year. The company maintained a solid liquidity position with $28.7 billion in Company cash at the end of June 2022, underscoring its ability to navigate ongoing industry challenges.

Financial Statements
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Key Highlights

  • 1Total revenues for the first half of 2022 increased 19% to $74.7 billion, driven by a 21% surge in Automotive segment revenue to $70.0 billion.
  • 2Net income attributable to Ford Motor Company for the first half was a loss of $2.44 billion, heavily impacted by a $7.9 billion pre-tax loss on the Rivian investment.
  • 3Adjusted EBIT for the first half of 2022 was $6.05 billion, up from $4.97 billion in the prior year, indicating strong operational performance excluding special items.
  • 4Automotive segment EBIT was significantly higher at $5.21 billion for the first half of 2022, a substantial increase from $3.30 billion in the prior year, driven by North America.
  • 5Ford Credit's EBT for the first half decreased to $1.87 billion from $2.59 billion, attributed to lower lease residual gains and unfavorable financing margin changes.
  • 6Company cash stood at $28.7 billion at June 30, 2022, providing a strong liquidity buffer. The company reiterates its target of maintaining Company cash at or above $20 billion.
  • 7The company reaffirmed its 2022 guidance for Adjusted EBIT of $11.5 billion to $12.5 billion and Adjusted Free Cash Flow of $5.5 billion to $6.5 billion.

Frequently Asked Questions

The primary driver of the net loss of $2.44 billion in the first half of 2022 was a substantial loss of $7.9 billion recognized on Ford's investment in Rivian, categorized as a 'special item' and excluded from adjusted EBIT.

Excluding special items like the Rivian investment loss, Ford's operational performance was strong. Adjusted EBIT for the first half of 2022 rose to $6.05 billion from $4.97 billion in the prior year, and Automotive segment EBIT increased to $5.21 billion from $3.30 billion, indicating healthy underlying business trends.

Ford maintained a strong liquidity position with $28.7 billion in Company cash as of June 30, 2022. The company reaffirmed its full-year 2022 guidance for Adjusted EBIT of $11.5 billion to $12.5 billion and Adjusted Free Cash Flow of $5.5 billion to $6.5 billion.

Ford Credit's EBT for the first half of 2022 decreased to $1.87 billion from $2.59 billion in the prior year. This decline was primarily due to lower lease residual gains, unfavorable changes in net financing margin, lower volume due to supply constraints, and reduced credit loss reserve releases. However, auction values for used vehicles remained strong.