Derivative Financial Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Income Effect of Derivative Financial Instruments [Table Text Block]

The gains/(losses), by hedge designation, recorded in income for the periods ended September 30 were as follows (in millions):

	Third Quarter						First Nine Months
	2016			2015			2016			2015
Fair value hedges
Interest rate contracts
Net interest settlements and accruals excluded from the assessment of hedge effectiveness	$	95		$	94		$	292		$	271
Ineffectiveness (a)	(1		)	10			21			6
Derivatives not designated as hedging instruments
Interest rate contracts	21			(22		)	(70		)	(83		)
Foreign currency exchange contracts	37			40			129			40
Cross-currency interest rate swap contracts	128			63			463			75
Total	$	280		$	185		$	835		$	309

__________

(a) For the third quarter and first nine months of 2016, hedge ineffectiveness reflects the net change in fair value on derivatives of $228 million loss and $655 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $227 million gain and $634 million loss, respectively. For the third quarter and first nine months of 2015, hedge ineffectiveness reflects the net change in fair value on derivatives of $373 million gain and $345 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $363 million loss and $339 million loss, respectively.

Balance Sheet Effect of Derivative Financial Instruments [Table Text Block]

The fair value of our derivative instruments and the associated notional amounts, presented gross, were as follows (in millions):

	September 30, 2016						December 31, 2015
	Notional		Fair Value of Assets		Fair Value of Liabilities		Notional		Fair Value of Assets		Fair Value of Liabilities
Fair value hedges
Interest rate contracts	$	36,215	$	1,217	$	—	$	28,964	$	670	$	16
Derivatives not designated as hedging instruments
Interest rate contracts	61,650		142		122		62,638		159		112
Foreign currency exchange contracts (a)	1,474		115		1		1,713		22		4
Cross-currency interest rate swap contracts	3,765		383		—		3,137		73		111
Total derivative financial instruments, gross (b) (c)	$	103,104	1,857		123		$	96,452	924		243

__________

(a) Includes forward contracts between Ford Credit and an affiliated company.

(b) At September 30, 2016 and December 31, 2015, the net obligation to return cash collateral was $10 million and $0, respectively.

(c) At September 30, 2016 and December 31, 2015, the fair value of assets and liabilities available for counterparty netting was $87 million and $167 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.