Ford Credit Finance Receivables and Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Net finance receivables [Table Text Block]

Ford Credit finance receivables, net at December 31 were as follows (in millions):

	2020		2021
Consumer
Retail installment contracts, gross	$	73,631	$	69,148
Finance leases, gross	8,431		7,318
Retail financing, gross	82,062		76,466
Unearned interest supplements	(3,987)		(3,020)
Consumer finance receivables	78,075		73,446
Non-Consumer
Dealer financing	20,908		11,278
Non-Consumer finance receivables	20,908		11,278
Total recorded investment	$	98,983	$	84,724
Recorded investment in finance receivables	$	98,983	$	84,724
Allowance for credit losses	(1,305)		(925)
Total finance receivables, net	$	97,678	$	83,799
Current portion	$	42,401	$	32,543
Non-current portion	55,277		51,256
Total finance receivables, net	$	97,678	$	83,799
Net finance receivables subject to fair value (a)	$	89,651	$	76,796
Fair value (b)	91,238		77,648

__________

(a)Net finance receivables subject to fair value exclude finance leases.

(b)The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy.

Sales-type and Direct Financing Leases, Lease Receivable, Maturity [Table Text Block]

The amounts contractually due on Ford Credit’s finance leases at December 31 were as follows (in millions):

	2021
2022	$	2,190
2023	1,376
2024	897
2025	322
2026	52
Thereafter	—
Total future cash payments	4,837
Less: Present value discount	(206)
Finance lease receivables	$	4,631

Sales-Type and Direct Financing Leases [Table Text Block]

The reconciliation from finance lease receivables to finance leases, gross and finance leases, net at December 31 is as follows (in millions):

	2020		2021
Finance lease receivables	$	5,436	$	4,631
Unguaranteed residual assets	2,893		2,605
Initial direct costs	102		82
Finance leases, gross	8,431		7,318
Unearned interest supplements from Ford and affiliated companies	(337)		(274)
Allowance for credit losses	(67)		(41)
Finance leases, net	$	8,027	$	7,003

Financing Receivable, Past Due

The credit quality analysis of consumer receivables at December 31, 2020 was as follows (in millions):

	Amortized Cost Basis by Origination Year
	Prior to 2016		2016		2017		2018		2019		2020		Total		Percent
Consumer
31 - 60 days past due	$	45	$	62	$	103	$	162	$	166	143		$	681	0.9	%
61 - 120 days past due	7		12		24		44		45		31		163		0.2
Greater than 120 days past due	11		6		7		8		7		2		41		—
Total past due	63		80		134		214		218		176		885		1.1
Current	782		2,518		6,648		13,704		20,822		32,716		77,190		98.9
Total	$	845	$	2,598	$	6,782	$	13,918	$	21,040	$	32,892	$	78,075	100.0	%

The credit quality analysis of consumer receivables at December 31, 2021 was as follows (in millions):

	Amortized Cost Basis by Origination Year
	Prior to 2017		2017		2018		2019		2020		2021		Total		Percent
Consumer
31 - 60 days past due	$	39	$	52	$	98	$	120	$	186	$	91	$	586	0.8	%
61 - 120 days past due	7		10		20		29		40		21		127		0.2
Greater than 120 days past due	10		6		6		9		11		1		43		—
Total past due	56		68		124		158		237		113		756		1.0
Current	812		2,607		6,559		12,689		22,701		27,322		72,690		99.0
Total	$	868	$	2,675	$	6,683	$	12,847	$	22,938	$	27,435	$	73,446	100.0	%

Financing receivable credit quality indicators [Table Text Block]

The credit quality analysis of dealer financing receivables at December 31, 2020 was as follows (in millions):

	Amortized Cost Basis by Origination Year														Wholesale Loans
	Dealer Loans
	Prior to 2016		2016		2017		2018		2019		2020		Total				Total		Percent
Group I	$	503	$	129	$	110	$	188	$	70	$	248	$	1,248	$	13,160	$	14,408	68.9	%
Group II	38		20		11		35		3		87		194		4,680		4,874		23.3
Group III	9		—		3		19		3		35		69		1,464		1,533		7.3
Group IV	2		—		—		—		2		6		10		83		93		0.5
Total (a)	$	552	$	149	$	124	$	242	$	78	$	376	$	1,521	$	19,387	$	20,908	100.0	%

__________

(a)Total past due dealer financing receivables at December 31, 2020 were $99 million.

The credit quality analysis of dealer financing receivables at December 31, 2021 was as follows (in millions):

	Amortized Cost Basis by Origination Year														Wholesale Loans
	Dealer Loans
	Prior to 2017		2017		2018		2019		2020		2021		Total				Total		Percent
Group I	$	391	$	68	$	151	$	45	$	109	$	345	$	1,109	$	6,751	$	7,860	69.7	%
Group II	11		7		26		2		4		54		104		2,689		2,793		24.8
Group III	8		—		1		—		1		20		30		529		559		4.9
Group IV	—		—		4		—		—		6		10		56		66		0.6
Total (a)	$	410	$	75	$	182	$	47	$	114	$	425	$	1,253	$	10,025	$	11,278	100.0	%

__________

(a)Total past due dealer financing receivables at December 31, 2021 were $62 million.

Allowance For Credit Losses on Financing And Loans And Leases Receivable [Table Text Block]

An analysis of the allowance for credit losses related to finance receivables for the years ended December 31 was as follows (in millions):

	2020
	Consumer		Non-Consumer		Total
Allowance for credit losses
Beginning balance	$	496	$	17	$	513
Adoption of ASU 2016-13 (a)	247		5		252
Charge-offs	(441)		(29)		(470)
Recoveries	161		8		169
Provision for/(Benefit from) credit losses	771		57		828
Other (b)	11		2		13
Ending balance	$	1,245	$	60	$	1,305

	2021
	Consumer		Non-Consumer		Total
Allowance for credit losses
Beginning balance	$	1,245	$	60	$	1,305
Charge-offs	(272)		(3)		(275)
Recoveries	202		8		210
Provision for/(Benefit from) credit losses	(270)		(40)		(310)
Other (b)	(2)		(3)		(5)
Ending balance	$	903	$	22	$	925

__________

(a)On January 1, 2020, we adopted ASU 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss impairment method with a method that reflects lifetime expected credit losses. We recognized the cumulative effect as a pre-tax adjustment to retained earnings as of January 1, 2020.

(b)Primarily represents amounts related to translation adjustments.