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DELIVERING Ford Motor Company
2014 Annual Report
PROFITABLE GROWTH FOR ALL

Table of contents

  • Page 1
    DELIVERING Ford Motor Compmny 2014 Annuml Report PROFITABLE GROWTH FOR ALL

  • Page 2
    ... With about 187,000 employees and 62 plants worldwide, the company's automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford and its products worldwide, please visit www.corporate.ford.com. Automotive...

  • Page 3
    ... 15(d) of the Securities Exchange Act of 1934 For the transition period from _____ to _____ Commission file number 1-3950 Ford Motor Company (Exact name of Registrant as specified in its charter) Delaware (State of incorporation) One American Road, Dearborn, Michigan (Address of principal executive...

  • Page 4
    ... is a shell company (as defined in Rule 12b-2 of the Act). No Yes As of June 30, 2014, Ford had outstanding 3,837,638,073 shares of Common Stock and 70,852,076 shares of Class B Stock. Based on the New York Stock Exchange Composite Transaction closing price of the Common Stock on that date...

  • Page 5
    ... Services Sector Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Part III Directors, Executive Officers of Ford, and Corporate Governance Executive Compensation Security...

  • Page 6
    ...and Financial Statement Schedules Signatures Ford Motor Company and Subsidiaries Financial Statements Report of Independent Registered Public Accounting Firm Consolidated Income Statement Consolidated Statement of Comprehensive Income Sector Income Statement Consolidated Balance Sheet Sector Balance...

  • Page 7
    ... employees and 62 plants worldwide, our automotive brands include Ford and Lincoln. We provide financial services through Ford Motor Credit Company. In addition to the information about Ford and our subsidiaries contained in this Annual Report on Form 10-K for the year ended December 31, 2014 ("2014...

  • Page 8
    ...related financing and leasing. Includes a variety of businesses, including holding companies and real estaterelated activities. South America Europe Middle East & Africa Asia Pacific Financial Services: Ford Credit Other Financial Services AUTOMOTIVE SECTOR General Our vehicle brands are Ford...

  • Page 9
    ...in Item 7 for additional discussion of revenue recognition practices. We manage our vehicle production schedule based on a number of factors, including retail sales (i.e., units sold by our dealerships to their customers at retail) and dealer stock levels (i.e., the number of units held in inventory...

  • Page 10
    ... of field service actions (i.e., safety recalls, emission recalls, and other product campaigns), and for customer satisfaction actions. For additional information regarding warranty and related costs, see "Critical Accounting Estimates" in Item 7 and Note 27 of the Notes to the Financial Statements...

  • Page 11
    ... in certain key markets within each region during the past three years were as follows (in millions of units): Industry Sales Volume (a) 2014 United States Canada Mexico North America Brazil Argentina South America Britain Germany Russia Turkey Europe (b) Middle East & Africa China Australia India...

  • Page 12
    ... venture Jiangling Motors Corporation, Ltd. ("JMC") that are sold to dealerships. 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...

  • Page 13
    ...Share Our market share in each region and in certain key markets within each region during the past three years was as follows: Market Share (a) 2014 United States Canada Mexico North America Brazil Argentina South America Britain Germany Russia Turkey Europe (b) Middle East & Africa China Australia...

  • Page 14
    ... the sale of parts and accessories to dealers, receivables from Ford-related loans, and certain used vehicles from daily rental fleet companies. Ford Credit does business in the United States and Canada through business centers. Outside of the United States, Europe is Ford Credit's largest operation...

  • Page 15
    ... by other states. The California Air Resources Board has adopted "LEV III" standards, which took effect with the 2015 model year and impose increasingly stringent tailpipe and evaporative emissions requirements for light and medium duty vehicles. Thirteen states, primarily located in the Northeast...

  • Page 16
    ... model years and expected credits for the five succeeding model years. The law requires NHTSA to promulgate and enforce separate CAFE standards applicable to each manufacturer's fleet of domestic passenger cars, imported passenger cars, and light trucks, respectively. The EPA also regulates vehicle...

  • Page 17
    ... and popular options; increasing market support programs for our most fuel-efficient cars and light trucks; and ultimately curtailing the production and sale of certain vehicles such as high-performance cars, utilities, and/or full-size light trucks, in order to maintain compliance. California has...

  • Page 18
    ... with the 2011 model year. The standards track the new U.S. CAFE standards for the 2011 model year and U.S. EPA GHG regulations for the 2012-2016 model years. In October, 2014, the Canadian federal government published the final changes to the regulation for light duty vehicles, which maintain...

  • Page 19
    .... In 2015, we will negotiate collective bargaining agreements (covering wages, benefits and/or other employment provisions) with labor unions in Brazil, China, France, Germany, Italy, Mexico, Romania, Russia, Thailand, United Kingdom, and United States. ENGINEERING, RESEARCH, AND DEVELOPMENT We...

  • Page 20
    ... If industry vehicle sales were to decline to levels significantly below our planning assumption, particularly in the United States, Europe, or China, due to financial crisis, recession, geopolitical events, or other factors, such as occurred during 2008 and 2009, our financial condition and results...

  • Page 21
    ...a resourceintensive manufacturing operation, we are exposed to a variety of market and asset risks, including the effects of changes in foreign currency exchange rates, commodity prices, and interest rates. These risks affect our Automotive and Financial Services sectors. We monitor and manage these...

  • Page 22
    ... price, quality, warranty claims, or other terms relating to a component. Labor or other constraints on Ford's ability to maintain competitive cost structure. Substantially all of the hourly employees in our Automotive operations in the United States and Canada are represented by unions and covered...

  • Page 23
    ... the United States the CAFE standards for light duty vehicles are 35.5 mpg by the 2016 model year, 45 mpg by the 2021 model year, and 54.5 mpg by the 2025 model year; EPA's parallel CO2 emission regulations impose similar standards. California's ZEV rules also mandate steep increases in the sale of...

  • Page 24
    ... are located in Brazil, where the state or federal governments have historically offered, and continue to offer, significant incentives to manufacturers to encourage capital investment, increase manufacturing production, and create jobs. As a result, the performance of our South American operations...

  • Page 25
    ... condition and results of operations. In addition, Ford Credit projects expected residual values (including residual value support payments from Ford) and return volumes for the vehicles it leases. Actual proceeds realized by Ford Credit upon the sale of returned leased vehicles at lease termination...

  • Page 26
    ... banks, financial institutions, or other third parties seeking to increase their share of financing Ford vehicles. No single company is a dominant force in the automotive finance industry. Most of Ford Credit's bank competitors in the United States use credit aggregation systems that permit dealers...

  • Page 27
    ...research, and development centers, and 62 manufacturing plants as shown in the table below: Segment North America South America Europe Middle East & Africa Asia Pacific Total Plants 30 8 12 2 10 62 Included in the number of plants shown above are plants that are operated by us or our consolidated...

  • Page 28
    ... Jiangling Motors Company Group. The public investors in JMC own 27% of its total outstanding shares. JMC assembles the Ford Transit van, Ford diesel engines, and non-Ford vehicles for distribution in China and in other export markets. JMC operates two plants in Nanchang with total annual production...

  • Page 29
    ... Notes to the Financial Statements for discussion of loss contingencies. Following is a discussion of our significant pending legal proceedings: PRODUCT LIABILITY MATTERS We are a defendant in numerous actions in state and federal courts within and outside of the United States alleging damages from...

  • Page 30
    ... cost if resolved unfavorably to the Company. Medium/Heavy Truck Sales Procedure Class Action. This action pending in the Ohio state court system alleges that Ford breached its Sales and Service Agreement with Ford truck dealers by failing to publish to all Ford dealers all price concessions...

  • Page 31
    ... Officer, Ford Motor Credit Co. Group Vice President - Global Purchasing Vice President and Controller Position Held Since Sept. 2006 Jul. 2014 Jan. 2015 Dec. 2009 Dec. 2012 Jan. 2015 Apr. 2012 Mar. 2013 Apr. 2008 Apr. 2008 Apr. 2005 Apr. 2012 Jan. 2004 Dec. 2012 Jan. 2013 Aug. 2013 Apr. 2012 Age 57...

  • Page 32
    ... in the United States, and on certain stock exchanges in Belgium and France. The table below shows the high and low sales prices for our Common Stock, and the dividends we paid per share of Common and Class B Stock, for each quarterly period in 2013 and 2014: 2013 Ford Common Stock price per share...

  • Page 33
    ... to Ford Motor Company Common and Class B Stock Average number of shares of Ford Common and Class B Stock outstanding 3,912 (in millions) Basic income Diluted income Cash dividends declared Common Stock price range (NYSE Composite Intraday) High Low SECTOR BALANCE SHEET DATA AT YEAR-END Assets...

  • Page 34
    ... within selling, administrative, and other expenses labor and other costs not directly related to the development and manufacture of our products, including such expenses as advertising and sales promotion costs. Certain of our costs, such as material costs, generally vary directly with changes in...

  • Page 35
    ... costs that generally do not have a directly proportionate relationship to our production volumes, such as labor costs, including pension and health care; other costs related to the development and manufacture of our vehicles; depreciation and amortization; and advertising and sales promotion costs...

  • Page 36
    ... long-term interest rates, may still drive a higher cost of capital over our planning period. Higher interest rates and/or taxes to address the higher deficits also may impede real growth in gross domestic product and, therefore, vehicle sales over our planning period. For additional information...

  • Page 37
    ...7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Trends and Strategies Our priorities are: (1) accelerate the pace of progress of our One Ford plan, (2) deliver product excellence with passion, and (3) drive innovation in every part of our business...

  • Page 38
    ...7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Deliver Product Excellence with Passion Our second priority is to deliver product excellence with passion. Products are the lifeblood of our business and our One Ford plan has allowed us to field the...

  • Page 39
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Our One Ford global product development process utilizes global platforms to deliver customer-focused programs rapidly and efficiently across global markets. We continue to make progress on our ...

  • Page 40
    ... is to employ an "Innovation Mindset"- by asking questions, challenging customs, and taking intelligent risks-all across the Company, in every part of the business. Innovation is driven by individuals and teams that find new ways to approach existing problems in a quest to make the world a better...

  • Page 41
    ...models, products, and partnerships needed to get us there. In the near-term, we are bringing together partners and communities to think beyond the vehicles. We are researching technology and using human ingenuity to locate open parking spaces in crowded cities; make car-sharing easier; move vehicles...

  • Page 42
    ... Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Adaptive Cruise Control / Collision Warning with Brake Support - uses a radar sensor in the front of the vehicle to measure the distance and speed of vehicles ahead. Using this information, the vehicle...

  • Page 43
    ... Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) RESULTS OF OPERATIONS TOTAL COMPANY Our net income attributable to Ford Motor Company was $3.2 billion or $0.80 per share of Common and Class B Stock in 2014, a decline of $4 billion or $0.97 per share...

  • Page 44
    ..., South America, Europe, Middle East & Africa, and Asia Pacific-are since at least 2000 when we began reporting specific business unit results. The chart below shows 2014 pre-tax results by sector: Both the Automotive and Financial Services sectors contributed to the Company's 2014 pre-tax profit...

  • Page 45
    ...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 and Selling - includes primarily costs for salaried personnel and purchased services...

  • Page 46
    ... 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 2014 Compared with 2013 Total Automotive. The following two charts detail the key metrics and the change in 2014 pre-tax results compared with 2013 by causal factor. Automotive operating margin is...

  • Page 47
    ... and Analysis of Financial Condition and Results of Operations (Continued) Lower pre-tax profit was driven by the Americas; all other business units improved. Higher costs, including warranty, unfavorable exchange, and lower volume, including product launch effects and supplier parts shortages...

  • Page 48
    ... change is shown below (in billions): 2014 Lower/(Higher) 2013 Explanation of change: Volume and mix, exchange, and other Contribution costs (a) Material/Freight Warranty Other costs (a) Structural costs Other Special items Total $ 2.9 0.8 (1.3) (1.7) (0.1) 0.8 1.4 $ _____ (a) Our key cost change...

  • Page 49
    ... Analysis of Financial Condition and Results of Operations (Continued) North America Segment. The following two charts detail the key metrics and the change in 2014 pre-tax results compared with 2013 by causal factor. North America continued to benefit from robust industry sales, our strong product...

  • Page 50
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The decrease in pre-tax profit for 2014 compared with 2013 is more than explained by lower volume and higher warranty costs, including recalls. 44

  • Page 51
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) South America Segment. The following two charts detail the key metrics and the change in 2014 pre-tax results compared with 2013 by causal factor. In South America, we are continuing to execute...

  • Page 52
    ... net pricing. The higher net pricing reflects partial recovery of the adverse effects of high local inflation and weaker local currencies, along with pricing associated with our new products. The full year loss includes $426 million of adverse balance sheet exchange effects, related primarily...

  • Page 53
    ... the key metrics and the change in 2014 pre-tax results compared with 2013 by causal factor. The improvement in Europe's 2014 results, as shown above, reflect our continued implementation of our transformation plan focused on product, brand, and cost. Europe's full-year wholesale volume and revenue...

  • Page 54
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The improvement in pre-tax results is more than explained by higher volume and lower cost, offset partially by Russia and other factors, including lower component pricing and parts and ...

  • Page 55
    ... 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Middle East & Africa Segment. The following chart details the key metrics. In Middle East & Africa we are focused on building our distribution capability, expanding our One Ford product offering...

  • Page 56
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Asia Pacific Segment. The following two charts detail the key metrics and the change in 2014 pre-tax results compared with 2013 by causal factor. Our strategy in Asia Pacific is to invest in ...

  • Page 57
    ... 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The improvement in 2014 pre-tax results primarily reflects favorable market factors, offset partially by higher costs, including investments to support future growth, and unfavorable exchange. 51

  • Page 58
    ... 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 2013 Compared with 2012 Total Automotive. The following two charts detail the key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor. Automotive operating margin is...

  • Page 59
    ... 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Higher pre-tax profit primarily reflects favorable marketable factors across all regions, offset partially by higher costs, mainly structural, and unfavorable exchange, principally in South America...

  • Page 60
    ...key cost change elements are measured primarily at present-year exchange; in addition, costs that vary directly with volume, such as material, freight and warranty costs, are measured at present-year volume and mix. Excludes special items. Results by Automotive Segment. Details by segment of Income...

  • Page 61
    ... and Analysis of Financial Condition and Results of Operations (Continued) North America Segment. The following two charts detail the key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor. As shown above, North America's full-year wholesale volume and revenue both...

  • Page 62
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The increase in pre-tax profit for 2013 compared with 2012 is more than explained by favorable market factors, offset partially by higher costs, mainly structural and warranty costs. 56

  • Page 63
    ...Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) South America Segment. The following two charts detail the key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor. As shown above, full-year wholesale volume and revenue...

  • Page 64
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The decrease in pre-tax profit for 2013 compared with 2012 is more than explained by higher costs and unfavorable exchange, offset partially by favorable market factors. The higher net pricing ...

  • Page 65
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Europe Segment. The following two charts detail the key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor. Europe's full-year wholesale volume and revenue were ...

  • Page 66
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The improvement in pre-tax results is explained by favorable market factors, offset partially by higher costs and unfavorable exchange. 60

  • Page 67
    ... and Analysis of Financial Condition and Results of Operations (Continued) Asia Pacific Africa Segment. The following two charts detail the key metrics and the change in 2013 pre-tax results compared with 2012 by causal factor. As shown above, full-year wholesale volume and revenue improved...

  • Page 68
    ... and Analysis of Financial Condition and Results of Operations (Continued) The improvement in 2013 pre-tax results is explained by favorable market factors and other items, including higher royalties from our joint ventures and insurance recoveries, offset partially by higher costs associated with...

  • Page 69
    ... 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 for the purchase of retail installment sale and lease...

  • Page 70
    ... the change in 2014 pre-tax results compared with 2013 by causal factor. Ford Credit is a strategic asset and an integral part of our global growth and value creation strategy. Ford Credit provides world-class dealer and customer financial services, supported by a strong balance sheet, providing...

  • Page 71
    ... legal purposes in securitization transactions but continue to be reported in Ford Credit's financial statements. In addition, at December 31, 2014 and 2013, includes net investment in operating leases before allowance for credit losses of $9.6 billion and $8.1 billion, respectively, that have been...

  • Page 72
    Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 2013 Compared with 2012 Ford Credit. The chart below details the change in 2013 pre-tax results compared with 2012 by causal factor. The improvement of $59 million is more than explained by ...

  • Page 73
    ... December 31, 2013 $ 24.8 December 31, 2012 $ 24.3 In managing our business, we classify changes in Automotive gross cash into operating-related and other items (which includes the impact of certain special items, contributions to funded pension plans, certain tax-related transactions, acquisitions...

  • Page 74
    ... from Ford Holdings (Ford Credit's parent) and tax payments received from Ford Credit. 2014 includes one-time unfavorable cash effect associated with the accounting change for our operations in Venezuela; 2012 includes cash and marketable securities resulting from the consolidation of AAI. In 2014...

  • Page 75
    ... be guaranteed by us. The revolving 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...

  • Page 76
    ... 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Net Cash. Our Automotive sector net cash calculation as of the dates shown was as follows (in billions): December 31, 2014 Gross cash Less: Long-term debt Debt payable within one year Total debt Net...

  • Page 77
    ... Services Sector Ford Credit Funding Strategy. Ford Credit's primary funding and liquidity objective is to maintain a strong investment grade balance sheet with adequate liquidity to support its financing activities and growth under a variety of market conditions, including short-term and long-term...

  • Page 78
    ..._____ (a) Includes Rule 144A offerings. In 2014, Ford Credit completed $28 billion of public term funding in the United States, Canada, Europe, Brazil, Mexico, and China, including about $13 billion of unsecured debt. For 2015, Ford Credit projects full-year public term funding in the range of $25...

  • Page 79
    ... $26.5 billion at year-end 2014, $5.1 billion higher than year-end 2013. 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...

  • Page 80
    ... manages its business. Ford Credit deducts cash, cash equivalents, and marketable securities (excluding marketable securities related to insurance activities) because they generally correspond to excess debt beyond the amount required to support its operations and amounts to support on-balance sheet...

  • Page 81
    ... compensation-related equity issuances; offset partially by favorable changes in Retained earnings of $1.2 billion related to full-year 2014 Net income attributable to Ford Motor Company of $3.2 billion, net of cash dividends declared of $2 billion. Credit Ratings. Our short-term and long-term debt...

  • Page 82
    ... Key Metrics Automotive (Compared with 2013): - Revenue (Bils.) - Operating Margin (b) - Operating-Related Cash Flow (Bils.) (c) Ford Credit (Compared with 2013): - Pre-Tax Profit (Bils.) Total Company: - Pre-Tax Profit (Bils.) (c) $ 8.6 $7 - $8 $ 6.3 _____ (a) Based, in part, on estimated vehicle...

  • Page 83
    ...supportive of our projection for higher global industry volume this year. Total Company Our 2015 profit outlook by segment is as follows: 2014 Full Year Results Automotive (Mils.) North America - Operating Margin South America Europe Middle East & Africa Asia Pacific Net Interest Expense Ford Credit...

  • Page 84
    ... Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Middle East & Africa Middle East & Africa is expected to deliver a loss somewhat larger than 2014 as we invest for future growth. Asia Pacific In Asia Pacific, we expect wholesale volume, market share...

  • Page 85
    ... U.S. -- Europe 20 -- China Key Metrics Automotive (Compared with 2014): - Revenue (Bils.) - Operating Margin (b) - Operating-Related Cash Flow (Bils.) (c) Ford Credit (Compared with 2014): - Pre-Tax Profit (Bils.) Total Company: - Pre-Tax Profit (Bils.) (c) _____ 2015 Full Year Plan 17.0 - 17.5 14...

  • Page 86
    ... care and life insurance liabilities impairing liquidity or financial condition; • Worse-than-assumed economic and demographic experience for postretirement benefit plans (e.g., discount rates or investment returns); • Restriction on use of tax attributes from tax law "ownership change;" • The...

  • Page 87
    ...of these factors, changes in our assumptions could materially affect our financial condition and results of operations. See Note 27 of the Notes to the Financial Statements for information regarding warranty and product recall related costs. Pensions and Other Postretirement Employee Benefits Nature...

  • Page 88
    ...rates (which directly influence changes in discount rates), in addition to other factors, have a significant impact on the value of our pension obligation and fixed income asset portfolio. As we de-risk our plans and increase the allocation to fixed income investments over time, we expect the funded...

  • Page 89
    ... management excess returns), growth asset returns and changes in value of related insurance contracts. Other factors that impact net funded status (e.g., contributions) are not reflected. Discount rates and the expected long-term rate of return on assets have the largest impact on pension expense...

  • Page 90
    ... additional information regarding income taxes, see Note 21 of the Notes to the Financial Statements. Allowance for Credit Losses The allowance for credit losses represents Ford Credit's estimate of the probable credit loss inherent in finance receivables and operating leases as of the balance sheet...

  • Page 91
    ...in Ford Credit's assumptions affect the Provision for credit losses and insurance losses on our income statement and the allowance for credit losses contained within Finance receivables, net and Net investment in operating leases on our balance sheet, in each case under the Financial Services sector...

  • Page 92
    ... on operating leases would be reflected on our balance sheet as Net investment in operating leases and on the income statement in Depreciation on vehicles subject to operating leases, in each case under the Financial Services sector. ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED For information on...

  • Page 93
    ... Operating leases Total Automotive sector Financial Services Sector On-balance sheet Long-term debt (a) (b) (excluding capital leases) Interest payments relating to long-term debt (c) Off-balance sheet Purchase obligations Operating leases Total Financial Services sector Total Company _____ 2016...

  • Page 94
    ... following: purchases and sales of finished vehicles and production parts, debt and other payables, subsidiary dividends, and investments in foreign operations. These expenditures and receipts create exposures to changes in exchange rates. We also are exposed to changes in prices of commodities used...

  • Page 95
    ... that allow netting of certain exposures in order to manage this risk. Exposures primarily relate to investments in fixed income instruments and derivative contracts used for managing interest rate, foreign currency exchange rate, and commodity price risk. We, together with Ford Credit, establish...

  • Page 96
    ...to changes in interest rates. Ford Credit's assets consist primarily of fixed-rate retail installment sale and operating lease contracts and floatingrate wholesale receivables. Fixed-rate retail installment sale and operating lease contracts generally require customers to make equal monthly payments...

  • Page 97
    ... of this policy, Ford Credit believes its market risk exposure, relating to changes in currency exchange rates at December 31, 2014, is insignificant. Derivative Fair Values. The net fair value of Ford Credit's derivative financial instruments as of December 31, 2014 was an asset of $692 million...

  • Page 98
    ...the Securities Exchange Act of 1934, as amended ("Exchange Act"), as of December 31, 2014, and each has concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed...

  • Page 99
    ... Year-End," "Option Exercises and Stock Vested in 2014," "Pension Benefits in 2014," "Nonqualified Deferred Compensation in 2014," and "Potential Payments Upon Termination or Change in Control." ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters...

  • Page 100
    PART IV. ITEM 15. Exhibits and Financial Statement Schedules. (a) 1. Financial Statements - Ford Motor Company and Subsidiaries The following are contained in this 2014 Form 10-K Report Report of Independent Registered Public Accounting Firm. Consolidated Income Statement and Sector Income ...

  • Page 101
    ...February 8, 2012.** Amendment to Description of Director Compensation as of July 1, 2013.** 2008 Long-Term Incentive Plan.** Description of Matching Gift Program and Vehicle Evaluation Program for Non-Employee Directors.** Non-Employee Directors Life Insurance and Optional Retirement Plan as amended...

  • Page 102
    ...Final Award Terms and Conditions for Performance-Based Restricted Stock Units under 2008 Long-Term Incentive Plan.** Form of Notification Letter for Time-Based Restricted Stock Units.** Agreement dated January 13, 1999 between Ford Motor Company and Edsel B. Ford II.** Amendment dated May 5, 2010 to...

  • Page 103
    ...Federal Financing Bank, Ford Motor Company, and the U.S. Secretary of Energy. Calculation of Ratio of Earnings to Fixed Charges. List of Subsidiaries of Ford as of January 31,2015. Consent of Independent Registered Public Accounting Firm. Powers of Attorney. Rule 15d-14(a) Certification of CEO. Rule...

  • Page 104
    ... 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Ford has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. FORD MOTOR COMPANY By: /s/ Stuart Rowley Stuart Rowley, Vice President and Controller (principal accounting officer) February 13...

  • Page 105
    ...February 13, 2015 Director February 13, 2015 Director and Chair of the Nominating and Governance Committee Director February 13, 2015 February 13, 2015 Executive Vice President and Chief Financial Officer (principal financial officer) Vice President and Controller (principal accounting officer...

  • Page 106
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  • Page 107
    Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Ford Motor Company In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, equity and cash flows present fairly, in all ...

  • Page 108
    FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT (in millions, except per share amounts) For the years ended December 31, 2014 Revenues Automotive Financial Services Total revenues Costs and expenses Automotive cost of sales Selling, administrative, and other expenses Financial ...

  • Page 109
    ... other income/(loss), net (Note 18) Equity in net income of affiliated companies Income before income taxes - Automotive FINANCIAL SERVICES Revenues Costs and expenses Interest expense Depreciation on vehicles subject to operating leases (Note 6) Operating and other expenses Provision for credit and...

  • Page 110
    FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (in millions) December 31, 2014 ASSETS Cash and cash equivalents Marketable securities Finance receivables, net (Note 5) Other receivables, net Net investment in operating leases (Note 6) Inventories (Note 8) Equity in net assets of ...

  • Page 111
    ... income taxes Other assets Non-current receivable from Financial Services (Note 1) Total Automotive assets Financial Services Cash and cash equivalents Marketable securities Finance receivables, net (Note 5) Net investment in operating leases (Note 6) Equity in net assets of affiliated companies...

  • Page 112
    ...gain)/loss on changes in investments in affiliates Stock compensation Net change in wholesale and other receivables Provision for deferred income taxes Decrease/(Increase) in accounts receivable and other assets Decrease/(Increase) in inventory Increase/(Decrease) in accounts payable and accrued and...

  • Page 113
    ...,096) Sales and maturities of marketable securities 38,028 (477) Change related to Venezuelan operations (Note 1) Settlements of derivatives Proceeds from sales of retail finance receivables (Note 22) Other Investing activity (to)/from Financial Services (a) Maturity of Financial Services debt held...

  • Page 114
    FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EQUITY (in millions) Equity Attributable to Ford Motor Company Cap. in Excess of Par Value of Stock $ 20,905 - - 71 - - $ 20,976 $ Capital Stock Balance at December 31, 2011 Net income Other comprehensive income/(loss), net of tax Common...

  • Page 115
    ...Loss) Other Income/(Loss) Share-Based Compensation Employee Separation Actions and Exit and Disposal Activities Income Taxes Changes in Investments in Affiliates and Assets Held for Sale Capital Stock and Earnings Per Share Segment Information Geographic Information Selected Quarterly Financial Data...

  • Page 116
    ... financial statements to conform to current year presentation. Changes in Accounting Disability Accounting. We provide medical, life, and income benefits to hourly and salary employees when they become disabled. As of January 1, 2014, we changed our accounting policy for these benefits from an event...

  • Page 117
    ... loss of $186 million in Automotive cost of sales in the first quarter of 2013. Based on changes to Venezuelan currency exchange rate mechanisms in the first quarter of 2014, we changed the exchange rate we used to remeasure the financial statements of our Venezuelan subsidiaries in U.S. dollars...

  • Page 118
    ...and residual support. (c) Primarily wholesale receivables with entities that are consolidated subsidiaries of Ford. (d) Sale-leaseback agreement between Automotive and Financial Services sectors relating to vehicles that we lease to our employees. (e) Amounts owed to the Financial Services sector by...

  • Page 119
    ...under the terms of certain contractual agreements. Restricted cash does not include required minimum balances or cash securing debt issued through securitization transactions. Trade Receivables Trade receivables, recorded on our consolidated balance sheet in Other receivables, net, consist primarily...

  • Page 120
    ...when products are shipped from our manufacturing facilities. When we give our dealers the right to return eligible parts for credit, we reduce the related revenue for expected returns. We sell vehicles to fleet customers, primarily daily rental car companies, subject to guaranteed repurchase options...

  • Page 121
    ... a below-market interest rate. The benefit of these incentives generally is recorded when all conditions as specified in the agreement are fulfilled. Selected Other Costs Engineering, research, and development costs are included in Automotive cost of sales; advertising costs are included in Selling...

  • Page 122
    ... 1, 2016 and we are assessing the potential impact to our financial statements and financial statement disclosures. Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. In June 2014...

  • Page 123
    ... generated using market inputs including quoted prices (the closing price in an exchange market), bid prices (the price at which a buyer stands ready to purchase), and other market information. For fixed income securities that are not actively traded, the pricing services use alternative methods to...

  • Page 124
    ... costs to sell, to determine the fair value of our receivables. The collateral for a retail receivable is the vehicle financed, and for dealer loans is real estate or other property. The fair value of collateral for retail receivables is calculated by multiplying the outstanding receivable balances...

  • Page 125
    ... deposit, money market accounts, and other cash equivalents reported at par value on our balance sheet totaling $3.3 billion and $2.8 billion for Automotive sector and $3.8 billion and $6.7 billion for Financial Services sector at December 31, 2014 and December 31, 2013, respectively. In addition to...

  • Page 126
    ...businesses that finance the acquisition of Ford and Lincoln vehicles from dealers for personal or commercial use. Retail financing includes retail installment contracts for new and used vehicles and direct financing leases with retail customers, government entities, daily rental companies, and fleet...

  • Page 127
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 5. FINANCIAL SERVICES SECTOR FINANCE RECEIVABLES (Continued) Included in the recorded investment in finance receivables at December 31, 2014 and 2013 were consumer receivables of $24.4 billion and $27.7 billion and non-...

  • Page 128
    ..., such as employment history, financial stability, and capacity to pay. Subsequent to origination, we review the credit quality of retail financing based on customer payment activity. As each customer develops a payment history, we use an internally-developed behavioral scoring model to assist in...

  • Page 129
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 5. FINANCIAL SERVICES SECTOR FINANCE RECEIVABLES (Continued) The credit quality analysis of our dealer financing receivables at December 31 was as follows (in millions): 2014 Dealer Financing Group I Group II Group III Group ...

  • Page 130
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 6. NET INVESTMENT IN OPERATING LEASES (Continued) Financial Services Sector Operating lease depreciation expense (which includes gains and losses on disposal of assets) for the years ended December 31 was as follows (in ...

  • Page 131
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 7. FINANCIAL SERVICES SECTOR ALLOWANCE FOR CREDIT LOSSES (Continued) Our largest markets also use a projection model to estimate losses inherent in the portfolio. The loss projection model applies recent monthly performance ...

  • Page 132
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 7. FINANCIAL SERVICES SECTOR ALLOWANCE FOR CREDIT LOSSES (Continued) An analysis of the allowance for credit losses related to finance receivables for the years ended December 31 were as follows (in millions): Consumer ...

  • Page 133
    ... Changan Ford Mazda Engine Company, Ltd. OEConnection LLC DealerDirect LLC Percepta, LLC Automotive Fuel Cell Cooperation Corporation Blue Diamond Truck, S. de R.L. de C.V. Thirdware Solutions LTD Other Total Automotive sector Financial Services Sector Forso Nordic AB FFS Finance South Africa (Pty...

  • Page 134
    ... 31, Summarized Income Statement Total revenue Income before income taxes Net income $ 2014 40,658 4,673 4,102 $ 2013 38,736 2,815 2,587 $ 2012 33,051 1,896 1,616 Related Party Transactions In the ordinary course of business we buy/sell various products and services including vehicles, parts, and...

  • Page 135
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 10. NET PROPERTY AND LEASE COMMITMENTS Net Property Net property is recorded at cost, net of accumulated depreciation and impairments. We capitalize new assets when we expect to use the asset for more than one year. Routine ...

  • Page 136
    ...other liabilities and deferred revenue Non-current Pension OPEB Dealer and dealers' customer allowances and claims Deferred revenue Employee benefit plans Other Total Automotive other liabilities and deferred revenue Total Automotive sector Financial Services Sector Total Company $ 9,721 5,991 2,852...

  • Page 137
    ... care and life insurance benefits, in the United States, Canada, and other locations covering hourly and salaried employees. The largest portion of our worldwide obligation is associated with our U.S. plans. Our OPEB plans are unfunded and the benefits are paid from general Company cash. Defined...

  • Page 138
    ...: Pension Benefits U.S. Plans 2014 Weighted Average Assumptions at December 31 Discount rate Expected long-term rate of return on assets Average rate of increase in compensation Assumptions Used to Determine Net Benefit Cost for the Year Ended December 31 Discount rate Expected long-term rate of...

  • Page 139
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 12. RETIREMENT BENEFITS (Continued) The year-end status of these plans was as follows (in millions): Pension Benefits U.S. Plans Non-U.S. Plans 2014 2013 2014 2013 Change in Benefit Obligation Benefit obligation at January 1 ...

  • Page 140
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 12. RETIREMENT BENEFITS (Continued) Pension Plan Contributions Our policy for funded pension plans is to contribute annually, at a minimum, amounts required by applicable laws and regulations. We may make contributions beyond...

  • Page 141
    ... few years as the plans achieve full funding, are 80% fixed income and 20% growth assets (primarily alternative investments which include hedge funds, real estate, and private equity, and public equity). Our largest non-U.S. plans (United Kingdom and Canada) have similar investment objectives to the...

  • Page 142
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 12. RETIREMENT BENEFITS (Continued) Expected Long-Term Rate of Return on Assets. The long-term return assumption at year-end 2014 is 6.75% for the U.S. plans, 6.5% for the U.K. plans, and 5.94% for the Canadian plans, and ...

  • Page 143
    ... ("Ford-Werke") funded defined benefit plan is funded through a group insurance contract and exists in a pooled structure with other policy holders. The contract value represents the value of the underlying assets held by the insurance company (primarily bonds) at the guaranteed rate of return. The...

  • Page 144
    ... short-term investment funds to provide liquidity to plan investment managers and cash held to pay benefits. (h) For U.S. Plans, primarily cash related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). For primarily Ford-Werke, plan assets (insurance...

  • Page 145
    ... short-term investment funds to provide liquidity to plan investment managers and cash held to pay benefits. (h) For U.S. Plans, primarily cash related to net pending trade purchases/sales and net pending foreign exchange purchases/sales. For primarily Ford-Werke, plan assets (insurance contract...

  • Page 146
    ... MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 12. RETIREMENT BENEFITS (Continued) The following table summarizes the changes in Level 3 defined benefit pension plan assets measured at fair value on a recurring basis for the year ended December 31 (in millions): 2014 Return...

  • Page 147
    ... 2013 Sold U.S. Plans: Asset Category Equity U.S. companies International companies Total equity Fixed Income U.S. government-sponsored enterprises Non-U.S. government Corporate bonds Investment grade High yield Other credit Mortgage/other asset-backed Total fixed income Alternatives Hedge funds...

  • Page 148
    ... by institutional and retail investors. In addition, Ford Credit sponsors securitization programs that provide short-term and long-term asset-backed financing through institutional investors in the U.S. and international capital markets. Debt is recorded on our balance sheet at par value adjusted...

  • Page 149
    ...-term Long-term payable within one year U.S. Department of Energy ("DOE") Advanced Technology Vehicles Manufacturing ("ATVM") Incentive Program European Investment Bank ("EIB") loans Other debt Total debt payable within one year Long-term debt payable after one year Public unsecured debt securities...

  • Page 150
    ... Fair Value Adjustments $ 2015 Automotive Sector Public unsecured debt securities DOE ATVM Incentive Program Short-term and other debt (a) Total Financial Services Sector Unsecured debt Asset-backed debt Total Total Company $ 18,556 18,115 36,671 39,172 $ $ 161 591 1,749 2,501 $ 2016 - 591 280 871...

  • Page 151
    ...2021 with an outstanding balance at December 31, 2014 of $180 million. The proceeds from these securities were on-lent by Ford to Ford Holdings to fund Financial Services activity and are reported as Financial Services debt. Convertible Notes On January 22, 2014, we terminated the conversion rights...

  • Page 152
    ... be guaranteed by us. The revolving 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...

  • Page 153
    ...million in 2014, 2013, and 2012, respectively. The assets and liabilities related to our asset-backed debt arrangements included on our financial statements at December 31 were as follows (in billions): 2014 ASSETS Cash and cash equivalents Finance receivables, net Net investment in operating leases...

  • Page 154
    ... the specific assets of the consolidated VIEs. We have the power to direct the significant activities of an entity when our management has the ability to make key operating decisions, such as decisions regarding capital or product investment or manufacturing production schedules. For securitization...

  • Page 155
    ... of our consolidated balance sheet. See Note 13 for additional information on the accounting for asset-backed debt and the assets securing this debt. NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES In the normal course of business, our operations are exposed to global market risks...

  • Page 156
    ... on foreign exchange contracts and cross currency interest rate swaps are reported in Financial Services other income/(loss), net. Cash flows associated with non-designated or de-designated derivatives are reported in Net cash provided by/(used in) investing activities on our statements of cash...

  • Page 157
    ..., were recorded in OCI. (b) For 2014, 2013, and 2012, hedge ineffectiveness reflects the net change in fair value on derivatives of $407 million gain, $658 million loss, and $228 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rate of...

  • Page 158
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) Balance Sheet Effect of Derivative Financial Instruments Derivative financial instruments are recorded on the balance sheet at fair value, presented on a...

  • Page 159
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 17. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) The changes in the accumulated balances for each component of AOCI attributable to Ford Motor Company for the years ended December 31 were as follows (in millions): 2014 ...

  • Page 160
    ... (including officers). All share-based compensation plans are approved by our shareholders. We have share-based compensation outstanding under three Long-Term Incentive Plans ("LTIP"): the 1998 LTIP, the 2008 LTIP, and the 2014 Stock Plan for Non-Employee Directors ("2014 Plan"). No further grants...

  • Page 161
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. SHARE-BASED COMPENSATION (Continued) Under the 2014 Plan, RSUs granted to non-employee directors vest immediately at grant date and shares of Common Stock are issued either immediately or at a subsequent specified date ...

  • Page 162
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 19. SHARE-BASED COMPENSATION (Continued) As of December 31, 2014, there was approximately $68 million in unrecognized compensation cost related to RSUs. This expense will be recognized over a weighted average period of 1.8 ...

  • Page 163
    ... interest rate Expected stock option term (in years) 3% 51.5% 2.4% 7.8 3% 52.2% 1.5% 7.7 2% 53.8% 1.6% 7.2 $ 6.21 $ 2013 5.03 $ 2012 5.88 Details on various stock option exercise price ranges at December 31, 2014 were as follows (shares in millions): Outstanding Options WeightedAverage Life (years...

  • Page 164
    ... for our Europe operations. As part of this plan, we closed two manufacturing facilities in the United Kingdom in 2013 and closed our assembly plant in Genk, Belgium at the end of 2014. The Genk closure was subject to an information and consultation process with employee representatives, which was...

  • Page 165
    ... taxes on our consolidated income statement. We recognize accrued interest expense related to unrecognized tax benefits in Automotive interest income and other income/(loss), net and Financial Services other income/(loss), net on our consolidated income statement. Valuation of Deferred Tax Assets...

  • Page 166
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 21. INCOME TAXES (Continued) Components of Income Taxes Components of income taxes excluding discontinued operations, cumulative effects of changes in accounting principles, other comprehensive income, and equity in net ...

  • Page 167
    ... millions): 2014 Deferred tax assets Employee benefit plans Net operating loss carryforwards Tax credit carryforwards Research expenditures Dealer and dealers' customer allowances and claims Other foreign deferred tax assets Allowance for credit losses All other Total gross deferred tax assets Less...

  • Page 168
    ...had recorded a net receivable of $23 million and a net payable of $83 million, respectively, for tax-related interest. We paid income taxes of $467 million, $538 million, and $344 million in 2014, 2013, and 2012, respectively. NOTE 22. CHANGES IN INVESTMENTS IN AFFILIATES AND ASSETS HELD FOR SALE We...

  • Page 169
    ... executed agreements to sell certain V financing receivables in tranches to a third-party financing company. We received cash proceeds of $495 million and recognized pre-tax gains of $6 million for receivables sold in 2013. The pre-tax gains are reported in Financial Services other income(loss), net...

  • Page 170
    ... Earnings Per Share Attributable to Ford Motor Company Common and Class B Stock Basic and diluted income per share were calculated using the following (in millions): 2014 Basic and Diluted Income Attributable to Ford Motor Company Basic income Effect of dilutive 2016 Convertible Notes (a) (b) Effect...

  • Page 171
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 24. SEGMENT INFORMATION Our operating activity consists of two operating sectors, Automotive and Financial Services. Our Automotive sector includes the sale of Ford and Lincoln brand vehicles and related service parts and ...

  • Page 172
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 24. SEGMENT INFORMATION (Continued) Key operating data for our business segments for the years ended or at December 31 were as follows (in millions): Automotive Sector Operating Segments North America 2014 Revenues Income/(...

  • Page 173
    FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 24. SEGMENT INFORMATION (Continued) Financial Services Sector Reconciling Operating Segments Item Ford Credit 2014 Revenues Income/(Loss) before income taxes Other disclosures: Depreciation and tooling amortization ...

  • Page 174
    ...,216 $ 2012 Revenues $ 76,055 9,208 9,470 8,005 1,818 29,003 133,559 $ Long-Lived Assets (a) $ 22,986 1,668 2,580 2,719 1,990 6,887 38,830 _____ (a) Includes Net property from our consolidated balance sheet and Financial Services Net investment in operating leases from the sector balance sheet. FS...

  • Page 175
    ... law, as well as changes to tax depreciation related to assets used in our Automotive export operations. Results in the fourth quarter of 2014 include an unfavorable item of $800 million for a Venezuela accounting change (see Note 1). Net income attributable to Ford Motor Company of $52 million in...

  • Page 176
    ... payment is recorded. We guarantee debt and lease obligations of certain joint ventures, as well as certain financial obligations of outside third parties, including suppliers, to support our business and economic growth. Expiration dates vary through 2033, and guarantees will terminate on payment...

  • Page 177
    ... actions are reported as Changes in accrual related to pre-existing warranties in the table below. Warranty and field service actions obligations accounted for in Other liabilities and deferred revenue for the years ended December 31 were as follows (in millions): 2014 Beginning balance Payments...

  • Page 178
    ...COMPANY AND SUBSIDIARIES Schedule II - Valuation and Qualifying Accounts (in millions) Balance at Beginning of Period Charged to Costs and Expenses Description For the Year Ended December 31, 2014 Allowances deducted from assets Credit losses Doubtful receivables Inventories (primarily service part...

  • Page 179
    ...an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company's stockholders...

  • Page 180
    ... as President and CEO of $1.75 million; (ii) grant of 710,227 stock options, which have an exercise price of $17.21; and (iii) increase in Annual Incentive Compensation Plan target to 200% of Mr. Fields' annual base salary for the 2014 performance period. In addition, Mr. Fields will be required...

  • Page 181
    ... with Mr. Mulally related to housing and travel for a period of transition through August 31, 2014. In addition, on February 11, 2015, the Compensation Committee determined that Mr. Mulally is eligible to receive a non-prorated award under the Company's Annual Incentive Compensation Plan for the...

  • Page 182
    ... performance goals and business criteria to be used for purposes of determining any future cash awards for 2015 participants, including executive officers, under the Company's shareholder-approved Annual Incentive Compensation Plan (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10...

  • Page 183
    ... Return of Ford's common stock compared to a peer group of companies over the three-year performance period. The metrics and weightings are summarized below: Financial Metrics - 75% Metrics Automotive Revenue Automotive Operating Margin* Ford Credit Profit Before Tax Automotive Operating-Related...

  • Page 184
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  • Page 185
    ...FORD MOTOR COMPANY AND SUBSIDIARIES CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES (in millions) 2014 Earnings Income before income taxes Add/(Deduct): Equity in net income of affiliated companies Dividends from affiliated companies Fixed...$ 4,342 $ 7,040 $ 7,638 $ 8,646 $ 7,069 2013 2012 2011 2010

  • Page 186
    ...LLC CAB West LLC Ford Automotive Finance (China) Limited Ford Credit Floorplan, LLC Ford Credit Floorplan Master Owner Trust A Ford Credit International, Inc. FCSH GmbH FCE Bank plc Ford Credit Canada Limited Ford CTCB Company Canadian Road Holdings Company Canadian Road Leasing Company FCC Holdings...

  • Page 187
    .... Ford Motor Company, S.A. de C.V. Ford Motor (China) Ltd. Ford Motor Company of Australia Limited Ford Motor Company of Canada, Limited Ford Motor Company of Southern Africa (Pty) Limited Ford Motor Service Company Ford Trading Company, LLC Ford Russia Holdings B.V. Global Investments 1 Inc. Ford...

  • Page 188
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  • Page 189
    ...INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ford Motor Company Registration Statement Nos. 33...Statements of Ford Motor Company of our report dated February 13, 2015 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting...

  • Page 190
    ... oversees the preparation of the Company's annual and quarterly reports. NOW, THEREFORE, BE IT: RESOLVED, That the draft Form 10-K Report presented to this meeting to be filed with the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934, as amended...

  • Page 191
    ..., and any requirements of the Securities and Exchange Commission, in connection with the filing of Ford's Annual Report on Form 10-K for the year ended December 31, 2014 and any and all amendments thereto, as authorized at a meeting of the Board of Directors of Ford duly called and held on February...

  • Page 192
    ... to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: February 13, 2015 /s/ Mark Fields Mark Fields...

  • Page 193
    ... reviewed this Annual Report on Form 10-K for the period ended December 31, 2014 of Ford Motor Company; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances...

  • Page 194
    ... Executive Officer of Ford Motor Company (the "Company"), hereby certify pursuant to Rule 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code that to my knowledge: 1. The Company's Annual Report on Form 10...

  • Page 195
    ... Chief Financial Officer of Ford Motor Company (the "Company"), hereby certify pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code that to my knowledge: 1. The Company's Annual Report on...

  • Page 196
    ... Total Return To Shareholders (Includes reinvestment of dividends) Base Period Dec. 2009 Dec. 2010 100 168 100 115 100 155 Years Ending Dec. 2012 Dec. 2013 132 161 136 180 137 274 Company / Index FORD MOTOR COMPANY S&P 500 r Dow Jones Automobiles & Parts Titans 30 Dec. 2011 108 117 116 Dec. 2014...

  • Page 197
    Shareholder Information Corporate Headquarters Ford Motor Company One American Road Dearborn, MI 48126 (313) 322-3000 Shareholder Account Assistance CompuDershare TrusD Company, our Dransfer agenD, mainDains Dhe records for our regisDered sDockholders and can help you wiDh a varieDy of sDockholder-...

  • Page 198
    ...Financial Services Operations Ford Motor Credit Company • A leading automotive financial services company founded in 1959 • Provides a wide variety of dealer and customer financing products and services globally in support of Ford Motor Company vehicle sales • As of year-end 2014, Ford Credit...

  • Page 199
    ... entire life." Mr. Ford was elected to the company's board of directors on June 4, 1948. He held key posts on Ford's board of directors and played a pivotal role in shaping the company for more than half of its 111-year history. He also was instrumental in setting the company's design direction and...

  • Page 200
    Ford Motor Compmny One Americmn Romd Demrborn, MI 48126 www.corpormte.ford.com Printed in U.S.A. 10% post-consumer wmste pmper. Ford encourmges you to plemse recycle this document.