8. Move on to the Accumulated Other Comprehensive Income/ (Loss) column. The total change is $407 mil Comprehensive Income. To find the break-down of the $407 mil go to the Consolidated Statement of Comprehensive Income. Remember there are four items that are charged to Other I'll do the foreign currency translation adjustment Date Accounts Debit Credit Other comprehensive loss-foreign currency Payables-(accounts payable) 523 523 You do the marketable securities adjustment. (4 points) Date Accounts Debit Credit I'll take the derivatives adjustment as well, although we are just 2 weeks away from learning this. I will make the adjustment to marketable securities Date Accounts Debit Credit 183 Marketable Securities Other comprehensive income-Derivatives 183 Lastly, we have the pension adjustment. The pension liability is included under "Other liabilities and deferred revenue." Date Accounts Debit Credit The accompanying notes are part of the consolidated financial statements. FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT (in millions, except per share amounts) For the years ended December 31, 2016 2017 2018 Revenues Automotive 145,653 141,546 148,294 12,018 Ford Credit 10,253 11,113 Mobility 26 10 151,800 160,338 Total revenues (Note 4) 156,776 Costs and expenses 131,321 Cost of sales 136,269 126,195 Selling, administrative, and other expenses 11,527 11,403 10,972 Ford Credit interest, operating, and other expenses 9,047 8,847 9,463 157,135 146,014 151,895 Total costs and expenses 1,133 Interest expense on Automotive debt 1,171 894 57 57 57 Interest expense on Other debt Other income/(loss), net (Note 5) 3,267 169 2,247 Equity in net income of affiliated companies 123 1,780 1,201 4,345 Income before income taxes 6,784 8,159 2,184 650 Provision for/(Benefit from) income taxes (Note 7) 402 3.695 4,600 7,757 Net income 18 Less: Income/(Loss) attributable to noncontrolling interests 11 26 3,677 4,589 S Net income attributable to Ford Motor Company 7,731 EARNINGS PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 8) S 0.93 Basic income 1.16 S 1.94 0.92 Diluted income 1.15 1.93 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in millions) For the years ended December 31, 2018 2016 2017 is 7,757 3,695 4,600 S Net income Other comprehensive income/(loss), net of tax (Note 21) (1,024) 314 (523) Foreign currency translation (8) (34) (11) Marketable securities (265) Derivative instruments 183 219 56 (56) Pension and other postretirement benefits 37 (407) (757) Total other comprehensive income/(loss), net of tax 52 3,843 7,809 Comprehensive income 3,288 ess: Comprehensive income/(loss) attributable to noncontralling interests 24 10 18 Comprehensive income attributable to Ford Motor Company 3,833 7,785 3,270 FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (in millions) December 31 2018 December 31, 2017 ASSETS Cash and cash equivalents (Note 9) $ 18,492 16,718 17,233 Marketable securities (Note 9) 20,435 Ford Credit finance receivables, net (Note 10) 52,210 54,353 10.598 11.195 11,220 Trade and other receivables. less allowances of S412 and S94 11,17e Inventories (Note 12) Other assets 3,88 3,930 116.801 Total current assets Ford Credit finance receivables, net (Note 10) 114.649 56,182 55,544 29,115 Net investment in operating leases (Note 13) 28,235 Net oropertv (Note 14) Equity in net assets of affiliated companies (Note 15) 35.327 3,085 36.178 2,709 10,412 Deferred income taxes (Note 7) 10,782 8,104 7,929 Other assets 258.496 256.540 Total assets LIABILITIES 23.282 21.520 Pavables 19,897 20,556 Other liabilities and deferred revenue (Note 18) 3,35 2,314 Automotive debt payable within one vear (Note 18) Ford Credit debt pavable within one vear (Note 18) 48.265 51.179 95,569 94,800 Total current liabilities 24,711 Other liabilities and deferred revenue (Note 18) 23,588 11.233 Automotive lona-term debt (Note 18) Ford Credit long-term debt (Note 18) Other long-term debt (Note 18) 12.575 88,887 89,492 590 600 815 Deferred income taxes (Note 7) 597 220,474 222,792 Total liabilities Redeemable noncontrollina interest (Note 2011 100 EQUITY Common Stock, par value $.01 per share (4,000 million shares issued of 8 billion authorized) 40 40 Class B Stock. oar value $.01 Der share (71 million shares issued of 530 million authorized) 22,006 21,843 21,905 (6.950) Capital in excess of par value of stock Retained eamings 22,668 (7.366 Accumulated other comorehensive income/loss) (Note 21) Treasury stock (1,253) (1,417 35,932 35,578 Total equity attributable to Ford Motor Company 28 Eauitv attributable to noncontrollina interests 34 35,60 Total equity 35,966 258.496 Total liabilities and eauitv 256.540 FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (in millions) For the years ended December 31, 2018 2017 2018 Cash flows from operating activities 7.757 9.122 Net income 4.800 3,695 9.280 Deoreciation and toolina amortization 9.023 (889) 717 (972) Other amortization (308) Provision for credit and insurance losses Pension and other postretirement employee benefits (OPEB) expensel(income) 609 672 2,887 (808) 400 Eauitv investment fearninasWlosses in excess of dividends received (178) 206 240 529 Foreign currency adjustments 283 (403) Net (gain)loss on changes in investments in affiliates (42) (70 (139) 246 191 Stock compensation Net change in wholesale and other receivables 210 (836) (1,449 (2,408 (350) 1,473 (1971 Provision for deferred income taxes (2,855 (2,297 (970) (2,239) Decrease/(Increase) in accounts receivable and other assets (828 Decrease/Increasel in inventor (803) 8.08 8,595 6,781 Increase/(Decrease) in accounts payable and accrued and other liabilities Other 57 85 17 18.09 Net cash provided bv/(used in) operatina activities 19.850 15.022 Cash flows from investing activities Caoital soendina (8.992 (7.040 (7.785) (50,354) Acquisitions of finance receivables and operating leases (58,007 (62,924) 38,834 44,84 50,880 Collections of finance receivables and operating leases (31,428) Purchases of marketable and other securities (27,587 (17.140 20.527 29.354 Sales and maturities of marketable and other securities 29.898 358 Settlements of derivatives 100 825 Other (177) (29) 112 (16.261) (19.360 Net cash provided bv/(used in) investina activities (25.302 Cash flows from financing activities Cash dividends (2.584) (2.905 (3.378 Purchases of common stock (131 (145 (164) 3,884 1,229 (2,819) Net changes in short-term debt Proceeds from issuance of long-term debt 45,801 (40.770 50,130 45,981 (38.797 (44.172) Princioal oavments on lona-term debt (192 (151 Other (107 3,394 (122) 7,400 Net cash provided by/(used in) financing activities Effect of exchanoe rate chanoes on cash. cash eouivalents. and restricted cash 489 (370) (285 1,683 (1,731) Net increase/(decrease) in cash, cash equivalents, and restricted cash 2,81 14,336 18,638 Cash, cash equivalents, and restricted cash at January 1 (Note 9) 18,019 Net increasel(decrease) in cash, cash equivalents, and restricted cash 2,819 (1,731) 1,883 Cash. cash eauivalents. and restricted cash at December 31 (INote 9 18.83 18.019 16.907 NOTE 6. SHARE-BASED COMPENSATION Under our Long-Term Incentive Plans, we may issue restricted stock units ("RSUS"), restricted stock shares (RSSS") and stock options. RSUS and RSSS consist of time-based and performance-based awards. The number of shares that may be granted in any year is limited to 2 % of our issued and outstanding Common Stock as of December 31 of the prior calendar year. The limit may be increased up to 3% in any year, with a corresponding reduction in shares available for grants in future years. Granted RSUS generally cliff vest or ratably vest over a three-year service period. Performance- based RSUS have two components: one based on internal financial performance metrics, and the other based on total shareholder return relative to an industrial and automotive peer group. At the time of vest, RSU awards are net settled (shares are withheld to cover the employee tax obligation). The fair value of both the time-based and the internal performance metrics portion of the performance-based RSUS and RSSS is determined using the closing price of our Common Stock at grant date. The weighted average per unit grant date fair value for the years ended December 31, 2016, 2017, and 2018 was $13.54, $12.37, and $9.89, respectively. The fair value of time-based RSUS and RSSS is expensed over the shorter of the vesting period, using the graded vesting method, or the time period an employee becomes eligible to retain the award at retirement. The fair value of performance-based RSUS and RSSS is expensed when it is probable and estimable as measured against the performance metrics over the shorter of the performance or required service periods. We have elected to recognize forfeitures as an adjustment to compensation expense for all RSUS and RSSS in the same period as the forfeitures occur. Expense is recorded in Selling, administrative, and other expenses. The fair value of vested RSUS and RSSS as well as the compensation cost for the years ended December 31 was as follows (in millions) 2016 2017 2018 Fair value of vested shares 17 187 157 135 193 182 Compensation cost (a) a Net of tax benefit of $72 million, $52 million, and $29 million in 2018, 2017, and 2018., respectively As of December 31, 2018, there was approximately $146 million in unrecognized compensation cost related to non- vested RSUS and RSSS. This expense will be recognized over a weighted average period of 1.9 years. The performance-based RSUS granted in March 2016, 2017, and 2018 include a relative Total Shareholder Return (TSR") metric. We estimate the fair value of the TSR component of the performance-based RSUS using a Monte Carlo simulation. Inputs and assumptions used to calculate the fair value at grant date were as follows: 2016 2017 2018 12.44 Fair value per stock award 9.03 15.56 12.66 13.54 10.40 Grant date stock price Assumptions: 23.1% 23.4% 22.9% Ford's stock orice expected volatilitv (a) 28.4 28.0 25.4 Expected average volatility of peer companies (a) 1.57 Risk-free interest rate 0.98 2.46 4.74 Dividend yield 4.43 5.00 a Expected volatility based on three years of daily closing share price changes ending on the grant date, During 2018, activity for RSUS and RSSS was as follows (in millions, except for weighted average fair value) Weighted Average Fair Value Shares 13.32 Outstanding. beainning of year 44.4 9.88 37.7 Granted i (13.7) 13.88 Vested 13.85 Forfeited (4.3) 10.80 Outstanding, end of year 84.1 The table above also includes shares awarded to non-employee directors. At December 31, 2018, there were 684,461 shares vested, but unissued. Stock Options As of March 31, 2017, all of our outstanding stock options were fully vested. The last of our outstanding stock options will expire in July 2024, if not exercised sooner. We measure the fair value of our stock options using the Black-Scholes option-pricing model and record expense in Selling, administrative, and other expenses. NOTE 8. CAPITAL STOCK AND EARNINGS PER SHARE All general voting power is vested in the holders of Common Stock and Class B Stock. Holders of our Common Stock have 60 % of the general voting power and holders of our Class B Stock are entitled to such number of votes per share as will give them the remaining 40 %. Shares of Common Stock and Class B Stock share equally in dividends when and as paid, with stock dividends payable in shares of stock of the class held. If liquidated, each share of Common Stock is entitled to the first $0.50 available for distribution to holders of Common Stock and Class B Stock, each share of Class B Stock is entitled to the next $1.00 so available, each share of Common Stock is entitled to the next $0.500 so available, and each share of Common and Class B Stock is entitled to an equal amount thereafter. We present both basic and diluted earnings per share ("EPS") amounts in our financial reporting. Basic EPS excludes dilution and is computed by dividing income available to Common and Class B Stock holders by the weighted-average number of Common and Class B Stock outstanding for the period. Diluted EPS reflects the maximum potential dilution that could occur from our share-based compensation, including "in-the-money" stock options, unvested restricted stock units, and unvested restricted stock shares. Potentially dilutive shares are excluded from the calculation if they have an anti-dilutive effect in the period. 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): 2018 2016 2017 Basic and Diluted Income Attributable to Ford Motor Companv Basic income 7,73 4,589 3,877 4,58 7,731 3,877 Diluted income Basic and Diluted Shares Basic shares (average shares outstandinga) 3,974 3,973 3,975 Net dilutive options, unvested restricted stock units, and unvested restricted stock shares 26 23 24 Diluted shares 3.999 3.998 3.998