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Transfers of Receivables
 9 Months Ended
Sep. 30, 2024
Transfers and Servicing [Abstract]  
TRANSFERS OF RECEIVABLES TRANSFERS OF RECEIVABLES AND VARIABLE INTEREST ENTITIES
We securitize finance receivables and net investment in operating leases through a variety of programs using amortizing, variable funding, and revolving structures. We also sell finance receivables, or pledge them as collateral in certain transactions outside of the United States, in other types of structured financing transactions. Due to the similarities between securitization and structured financing, we refer to structured financings as securitization transactions. Our securitization programs are targeted to institutional investors in both public and private transactions in capital markets primarily in the United States, Canada, Germany, Italy, the United Kingdom, and China.

The finance receivables sold for legal purposes and net investment in operating leases included in securitization transactions are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions. They are not available to pay our other obligations or the claims of our other creditors. The debt is the obligation of our consolidated securitization entities and not the obligation of Ford Credit or our other subsidiaries. We hold the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions.

We use special purpose entities (“SPEs”) to issue asset-backed securities in our securitization transactions. We have deemed most of these SPEs to be VIEs of which we are the primary beneficiary, and therefore, are consolidated. The SPEs are established for the sole purpose of financing the securitized financial assets. The SPEs are generally financed through the issuance of notes or commercial paper into the public or private markets or directly with conduits.

We continue to recognize our financial assets related to our sales of receivables when the financial assets are sold to a consolidated VIE or a consolidated voting interest entity. We derecognize our financial assets when the financial assets are sold to a non-consolidated entity and we do not maintain control over the financial assets.

We have the power to direct significant activities of our SPEs when we have the ability to exercise discretion in the servicing of financial assets, issue additional debt, exercise a unilateral call option, add assets to revolving structures, or control investment decisions. We generally retain a portion of the economic interests in the asset-backed securitization transactions, which could be retained in the form of a portion of the senior interests, the subordinated interests, cash reserve accounts, residual interests, and servicing rights. The transfers of assets in our securitization transactions do not qualify for accounting sale treatment.

We have no obligation to repurchase or replace any securitized asset that subsequently becomes delinquent in payment or otherwise is in default, except when representations and warranties about the eligibility of the securitized assets are breached, or when certain changes are made to the underlying asset contracts. Securitization investors have no recourse to us or our other assets other than as provided above and have no right to require us to repurchase the asset-backed securities. We generally have no obligation to provide liquidity or contribute cash or additional assets to the VIEs and do not guarantee any asset-backed securities. We may be required to support the performance of certain securitization transactions, however, by increasing cash reserves.
NOTE 6. TRANSFERS OF RECEIVABLES AND VARIABLE INTEREST ENTITIES (Continued)

Certain of our securitization entities may enter into derivative transactions to mitigate interest rate exposure, primarily resulting from fixed-rate assets securing floating-rate debt. In certain instances, the counterparty enters into offsetting derivative transactions with us to mitigate its interest rate risk resulting from derivatives with our securitization entities. These related derivatives are not the obligations of our securitization entities. See Note 7 for additional information regarding the accounting for derivatives.

Most of these securitization transactions utilize VIEs. The following tables show the assets and debt related to our securitization transactions that were included in our consolidated financial statements (in billions):
December 31, 2023
Cash and Cash EquivalentsFinance Receivables and Net Investment in Operating Leases (a)Related Debt
(c)
Before Allowance
for Credit Losses		Allowance for
Credit Losses		After Allowance
for Credit Losses
VIE (b)
Retail financing$1.6 $35.7 $(0.4)$35.3 $29.1 
Wholesale financing0.2 20.8 — 20.8 11.6 
Finance receivables1.8 56.5 (0.4)56.1 40.7 
Net investment in operating leases0.5 11.2 — 11.2 7.5 
Total VIE$2.3 $67.7 $(0.4)$67.3 $48.2 
Non-VIE
Retail financing$0.4 $10.3 $(0.1)$10.2 $9.4 
Wholesale financing— 0.5 — 0.5 0.4 
Finance receivables0.4 10.8 (0.1)10.7 9.8 
Net investment in operating leases— — — — — 
Total Non-VIE$0.4 $10.8 $(0.1)$10.7 $9.8 
Total securitization transactions
Retail financing$2.0 $46.0 $(0.5)$45.5 $38.5 
Wholesale financing 0.2 21.3 — 21.3 12.0 
Finance receivables2.2 67.3 (0.5)66.8 50.5 
Net investment in operating leases0.5 11.2 — 11.2 7.5 
Total securitization transactions$2.7 $78.5 $(0.5)$78.0 $58.0 
__________
(a)Unearned interest supplements and residual support are excluded from securitization transactions.
(b)Includes assets to be used to settle the liabilities of the consolidated VIEs.
(c)Includes unamortized discount and debt issuance costs.
NOTE 6. TRANSFERS OF RECEIVABLES AND VARIABLE INTEREST ENTITIES (Continued)

September 30, 2024
Cash and Cash EquivalentsFinance Receivables and Net Investment in Operating Leases (a)Related Debt
(c)
Before Allowance
for Credit Losses		Allowance for
Credit Losses		After Allowance
for Credit Losses
VIE (b)
Retail financing$1.7 $37.4 $(0.3)$37.1 $31.4 
Wholesale financing0.2 23.3 — 23.3 6.1 
Finance receivables1.9 60.7 (0.3)60.4 37.5 
Net investment in operating leases0.6 13.3 — 13.3 8.7 
Total VIE$2.5 $74.0 $(0.3)$73.7 $46.2 
Non-VIE
Retail financing$0.5 $11.3 $(0.1)$11.2 $9.8 
Wholesale financing— 0.4 — 0.4 0.3 
Finance receivables0.5 11.7 (0.1)11.6 10.1 
Net investment in operating leases— — — — — 
Total Non-VIE$0.5 $11.7 $(0.1)$11.6 $10.1 
Total securitization transactions
Retail financing$2.2 $48.7 $(0.4)$48.3 $41.2 
Wholesale financing0.2 23.7 — 23.7 6.4 
Finance receivables2.4 72.4 (0.4)72.0 47.6 
Net investment in operating leases0.6 13.3 — 13.3 8.7 
Total securitization transactions$3.0 $85.7 $(0.4)$85.3 $56.3 
__________
(a)Unearned interest supplements and residual support are excluded from securitization transactions.
(b)Includes assets to be used to settle the liabilities of the consolidated VIEs.
(c)Includes unamortized discount and debt issuance cost.