PRESENTATION

Our financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. We show certain of our financial statements on both a consolidated and a sector basis for our Automotive and Financial Services sectors. Intercompany items have been eliminated in both the consolidated and sector balance sheets. Where the presentation of these intercompany eliminations or consolidated adjustments differs between the consolidated and sector financial statements, reconciliations of certain line items are explained below in this Note or in related footnotes.

In the opinion of management, these unaudited financial statements reflect a fair statement of the results of operations and financial condition of Ford Motor Company, its consolidated subsidiaries, and consolidated VIEs of which we are the primary beneficiary for the periods and at the dates presented. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2012 (“2012 Form 10-K Report”). For purposes of this report, “Ford,” the “Company,” “we,” “our,” “us” or similar references mean Ford Motor Company, our consolidated subsidiaries, and our consolidated VIEs of which we are the primary beneficiary, unless the context requires otherwise.

We reclassified certain prior year amounts in our consolidated financial statements to conform to current year presentation.

Adoption of New Accounting Standards

Derivatives and Hedging - Inclusion of the Fed Funds Effective Swap Rate (“OIS rate”) as a Benchmark Interest Rate for Hedge Accounting Purposes. On July 17, 2013, we adopted the new accounting standard that permits the use of the OIS rate as an acceptable U.S. benchmark interest rate for hedge accounting purposes and removes the restriction on using different benchmark rates for similar hedges. The adoption of this accounting standard did not impact our consolidated financial statements.

Balance Sheet - Offsetting. On January 1, 2013, we adopted the new accounting standard that requires disclosures about offsetting and related arrangements for derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. See Note 3 and Note 12 for further disclosure regarding balance sheet offsetting.

Intangibles - Goodwill and Other. On January 1, 2013, we adopted the new accounting standard that provides the option to evaluate qualitative factors to determine whether a calculated impairment test for indefinite-lived intangible assets is necessary. The adoption of this accounting standard did not impact our consolidated financial statements.

Comprehensive Income - Reporting of Reclassification Adjustments. During 2012, we early adopted the new accounting standard that requires us to disclose significant amounts reclassified out of each component of Accumulated other comprehensive income/(loss) (“AOCI”) and the affected income statement line item only if the item reclassified is required to be reclassified to net income in its entirety. See Note 14 for further disclosure regarding the significant amounts reclassified out of AOCI.

NOTE 1. PRESENTATION (Continued)

Reconciliations between Consolidated and Sector Financial Statements

Sector to Consolidated Deferred Tax Assets and Liabilities. The difference between the total assets and total liabilities as presented in our sector balance sheet and consolidated balance sheet is the result of netting deferred income tax assets and liabilities. The reconciliation between the totals for the sector and consolidated balance sheets was as follows (in millions):



	September 30, 2013			December 31, 2012
Sector balance sheet presentation of deferred income tax assets
Automotive sector current deferred income tax assets	$	2,943		$	3,488
Automotive sector non-current deferred income tax assets	11,583			13,325
Financial Services sector deferred income tax assets (a)	168			184
Total	14,694			16,997
Reclassification for netting of deferred income taxes	(1,671		)	(1,812		)
Consolidated balance sheet presentation of deferred income tax assets	$	13,023		$	15,185

Sector balance sheet presentation of deferred income tax liabilities
Automotive sector current deferred income tax liabilities	$	207		$	81
Automotive sector non-current deferred income tax liabilities	389			514
Financial Services sector deferred income tax liabilities	1,712			1,687
Total	2,308			2,282
Reclassification for netting of deferred income taxes	(1,671		)	(1,812		)
Consolidated balance sheet presentation of deferred income tax liabilities	$	637		$	470

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(a)	Financial Services deferred income tax assets are included in Financial Services other assets on our sector balance sheet.

NOTE 1. PRESENTATION (Continued)

Sector to Consolidated Cash Flow. We present certain cash flows from wholesale receivables, finance receivables and the acquisition of intersector debt differently on our sector and consolidated statements of cash flows. The reconciliation between totals for the sector and consolidated cash flows for the periods ended September 30 was as follows (in millions):



	First Nine Months
	2013			2012
Automotive net cash provided by/(used in) operating activities	$	6,378		$	4,113
Financial Services net cash provided by/(used in) operating activities	4,928			3,624
Total sector net cash provided by/(used in) operating activities	11,306			7,737
Reclassifications from investing to operating cash flows
Wholesale receivables (a)	(1,088		)	1,671
Finance receivables (b)	(89		)	(2		)
Consolidated net cash provided by/(used in) operating activities	$	10,129		$	9,406

Automotive net cash provided by/(used in) investing activities	$	(6,633	)	$	(6,086	)
Financial Services net cash provided by/(used in) investing activities	(9,566		)	(3,873		)
Total sector net cash provided by/(used in) investing activities	(16,199		)	(9,959		)
Reclassifications from investing to operating cash flows
Wholesale receivables (a)	1,088			(1,671		)
Finance receivables (b)	89			2
Reclassifications from investing to financing cash flows
Maturity of Financial Services sector debt held by Automotive sector (c)	—			(201		)
Elimination of investing activity to/(from) Financial Services in consolidation	(298		)	(794		)
Consolidated net cash provided by/(used in) investing activities	$	(15,320	)	$	(12,623	)

Automotive net cash provided by/(used in) financing activities	$	(254	)	$	233
Financial Services net cash provided by/(used in) financing activities	4,298			(1,610		)
Total sector net cash provided by/(used in) financing activities	4,044			(1,377		)
Reclassifications from investing to financing cash flows
Maturity of Financial Services sector debt held by Automotive sector (c)	—			201
Elimination of investing activity to/(from) Financial Services in consolidation	298			794
Consolidated net cash provided by/(used in) financing activities	$	4,342		$	(382	)

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(a)

In addition to the cash flow from vehicles sold by us, the cash flow from wholesale finance receivables (being reclassified from investing to operating) includes dealer financing by Ford Credit of used and non-Ford vehicles. One hundred percent of cash flows from these wholesale finance receivables have been reclassified for consolidated presentation as the portion of these cash flows from used and non-Ford vehicles is impracticable to separate.


(b)	Includes cash flows of finance receivables purchased/collected by the Financial Services sector from certain divisions and subsidiaries of the Automotive sector.


(c)	Cash inflows related to these transactions are reported as financing activities on the consolidated statement of cash flows and investing activities on the sector statement of cash flows.

NOTE 1. PRESENTATION (Continued)

Venezuelan Operations

In February 2013, the Venezuelan government announced a devaluation of the bolivar, effective February 13, 2013. The devaluation, from an exchange rate of 4.3 bolivars to the U.S. dollar to an exchange rate of 6.3 bolivars to the U.S. dollar, resulted in a remeasurement loss of $186 million in the first quarter. For periods subsequent to the date of the devaluation, assets, liabilities, and results of operations from our Venezuelan subsidiary are remeasured at this new exchange rate, including $704 million of cash and cash equivalents at the end of the third quarter of 2013. At September 30, 2013, our investment in our Venezuelan subsidiary (which includes undistributed earnings) was $802 million. Also, at September 30, 2013, it had $283 million of U.S. dollar currency exchange requests pending with and in transit to the Commission for Administration of Foreign Exchange (“CADIVI”), including $274 million payable to other Ford consolidated affiliates.

The operating environment in Venezuela continues to be challenging, reflecting economic uncertainty and our limited ability to convert bolivars to U.S. dollars through CADIVI. Various restrictions on our ability to manage our operations, including restrictions on the distribution of foreign exchange by the authorities, have affected our Venezuelan operation’s ability to pay obligations denominated in U.S. dollars and are constraining parts availability and our ability to maintain normal production, thereby restricting our ability to benefit from our investment in this operation.