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Debt and Commitments
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block] DEBT AND COMMITMENTS
We obtain short-term funding from the issuance of demand notes to retail investors through our Ford Interest Advantage and retail deposit programs. We have certain securitization programs that issue short-term asset-backed debt securities that are sold to institutional investors. Bank borrowings by several of our international affiliates in the ordinary course of business are an additional source of short-term funding. We obtain long-term debt funding through the issuance of a variety of unsecured and asset-backed debt securities in the United States and international capital markets.

Asset-backed debt issued in securitizations is the obligation of the consolidated securitization entity that issued the debt and is payable only out of collections on the underlying securitized assets and related enhancements. This asset-backed debt is not the obligation of Ford Credit or our other subsidiaries.

Debt is reported on our consolidated balance sheets at par value adjusted for unamortized discount or premium, unamortized issuance costs, and adjustments related to designated fair value hedging (see Note 7 for additional information). Debt due within one year at issuance is classified as short-term. Debt due after one year at issuance is classified as long-term. Discounts, premiums, and costs directly related to the issuance of debt are capitalized and amortized over the life of the debt or to the put date and are recorded in Interest expense using the effective interest method. Gains and losses on the extinguishment of debt are recorded in Other income/(loss), net.

Debt outstanding and interest rates at December 31 were as follows (in millions):
 Interest Rates
DebtAverage ContractualAverage Effective
 202220232022202320222023
Short-term debt
Unsecured debt
Floating rate demand notes$10,303 $10,907 
Other short-term debt6,515 4,593 
Asset-backed debt2,806 3,158 
Total short-term debt
19,624 18,658 3.8 %5.3 %3.8 %5.3 %
Long-term debt
Unsecured debt
Notes payable within one year7,980 11,755 
Notes payable after one year39,620 45,435 
Asset-backed debt
Notes payable within one year21,839 18,851 
Notes payable after one year31,840 36,074 
Unamortized (discount)/premium23 9 
Unamortized issuance costs(197)(237)
Fair value adjustments (a)(1,690)(1,258)
Total long-term debt99,415 110,629 3.6 %4.7 %3.6 %4.7 %
Total debt$119,039 $129,287 3.6 %4.8 %3.6 %4.8 %
Fair value of debt$117,214 $130,533 
Interest rate characteristics of debt payable after one year
Fixed interest rate55,711 64,655 
Variable interest rate (generally based on EURIBOR or other short-term rates)15,749 16,854 
Total payable after one year
$71,460 $81,509 
__________
(a)These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $31 million and $(681) million at December 31, 2022 and 2023, respectively. The carrying value of hedged debt was $33.3 billion and $38.7 billion at December 31, 2022 and 2023, respectively.
NOTE 9. DEBT AND COMMITMENTS (Continued)

The average contractual rates reflect the stated contractual interest rate. Average effective rates reflect the average contractual interest rate plus amortization of discounts, premiums, and issuance fees.

We measure debt at fair value for purposes of disclosure using quoted prices for our own debt with approximately the same remaining maturities. Where quoted prices are not available, we estimate fair value using discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of the debt instruments. For certain short-term debt with an original maturity date of one year or less, we assume that book value is a reasonable approximation of the debt’s fair value. The fair value of debt is categorized within Level 2 of the hierarchy. The fair value of debt includes $16.9 billion and $15.5 billion of short-term debt at December 31, 2022 and 2023, respectively, carried at cost, which approximates fair value. We paid interest of $2.8 billion, $3.2 billion, and $5.8 billion in 2021, 2022, and 2023, respectively, on debt.

Maturities

Debt maturities at December 31, 2023 were as follows (in millions):
2024 (a)2025202620272028Thereafter (b)Total
Unsecured debt $27,255 $13,335 $10,505 $7,457 $5,035 $9,103 $72,690 
Asset-backed debt22,009 21,562 8,248 2,440 3,824 — 58,083 
Total
49,264 34,897 18,753 9,897 8,859 9,103 130,773 
Unamortized (discount)/premium9 
Unamortized issuance costs
(237)
Fair value adjustments (1,258)
Total debt$129,287 
__________
(a)Includes $18,658 million for short-term and $30,606 million for long-term debt.
(b)Matures between 2029 and 2033.

Committed Asset-Backed Facilities

We and our subsidiaries have entered into agreements with a number of bank-sponsored asset-backed commercial paper conduits and other financial institutions. Such counterparties are contractually committed, at our option, to purchase from us eligible retail financing receivables or to purchase or make advances under asset-backed securities backed by retail financing or wholesale finance receivables or operating leases for proceeds of up to $42.9 billion ($24.9 billion of retail financing, $9.6 billion of wholesale financing, and $8.4 billion of operating leases) at December 31, 2023. In the United States, we are able to obtain funding within two days for our unutilized capacity in some of our committed asset-backed facilities. These committed facilities have varying maturity dates, with $14.5 billion having maturities within the next twelve months and the remaining balance having maturities through third quarter 2026. We plan capacity renewals to protect our global funding needs and to optimize capacity utilization.

Our ability to obtain funding under these facilities is subject to having a sufficient amount of eligible assets as well as our ability to obtain interest rate hedging arrangements for certain facilities. At December 31, 2023, $27.5 billion of these commitments were in use and we had $0.3 billion of asset-backed capacity that was in excess of eligible receivables. These programs are free of material adverse change clauses, restrictive financial covenants (for example, debt-to-equity limitations and minimum net worth requirements), and generally, credit rating triggers that could limit our ability to obtain funding. However, the unused portion of these commitments may be terminated if the performance of the underlying assets deteriorates beyond specified levels. Based on our experience and knowledge as servicer of the related assets, we do not expect any of these programs to be terminated due to such events.

As of December 31, 2023, Ford Bank had liquidity of €342 million (equivalent to $378 million) in the form of eligible collateral available for use in the monetary policy programs of the European Central Bank.
NOTE 9. DEBT AND COMMITMENTS (Continued)

Unsecured Credit Facilities

At December 31, 2023, we and our subsidiaries had $2.4 billion of contractually committed unsecured credit facilities with financial institutions, including the FCE Credit Agreement and the Ford Bank Credit Agreement. At December 31, 2023, $2.0 billion was available for use.

At December 31, 2023, all £685 million (equivalent to $872 million) was available for use under the FCE Credit Agreement and all €210 million (equivalent to $232 million) was available for use under the Ford Bank Credit Agreement. Both the FCE Credit Agreement and Ford Bank Credit Agreement mature in 2026.

Both the FCE Credit Agreement and Ford Bank Credit Agreement contain certain covenants, including an obligation for FCE and Ford Bank to maintain their ratio of regulatory capital to risk-weighted assets at no less than the applicable regulatory minimum. The FCE Credit Agreement requires the support agreement between FCE and Ford Credit to remain in effect (and enforced by FCE to ensure that its net worth is maintained at no less than $500 million). The Ford Bank Credit Agreement requires a guarantee of Ford Bank’s obligations under the agreement, provided by Ford Credit, to remain in effect. In addition, both the FCE Credit Agreement and the Ford Bank Credit Agreement include certain sustainability-linked targets, pursuant to which the applicable margin may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, renewable electricity consumption, and Ford Europe CO2 tailpipe emissions. Ford outperformed the 2022 targets for all three of the sustainability-linked metrics, which favorably impacted pricing on the FCE Credit Agreement and the Ford Bank Credit Agreement beginning in the third quarter of 2023.

2022 Debt Extinguishment

Pursuant to our June 2022 cash tender offer, we repurchased approximately $3 billion principal amount of our public unsecured debt securities for an aggregate cost of approximately $3 billion (including transaction costs and accrued and unpaid interest payments for such tendered securities). As a result of these transactions, we recorded a pre-tax gain of $17 million (net of unamortized discounts, premiums, fees, and fair value adjustments) in Other income/(loss), net in 2022.