FORD MOTOR CREDIT CO LLC, 10-K filed on 2/11/2016
Annual Report
v3.3.1.900
Document and Entity Information Document
shares in Millions
 12 Months Ended
Dec. 31, 2015
USD ($)
shares
Entity Registrant Name FORD MOTOR CREDIT CO LLC
Entity Central Index Key 0000038009
Current Fiscal Year End Date --12-31
Entity Filer Category Non-accelerated Filer
Document Type 10-K
Document Period End Date Dec. 31, 2015
Document Fiscal Year Focus 2015
Document Fiscal Period Focus FY
Amendment Flag false
Entity Common Stock, Shares Outstanding | shares 0
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Public Float | $ $ 0
Membership Interests Description All of the limited liability company interests in the registrant (“Shares”) are held by an affiliate of the registrant. None of the Shares are publicly traded.
v3.3.1.900
Consolidated Income Statement - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Financing revenue      
Operating leases $ 4,865 $ 4,129 $ 3,409
Retail financing 2,819 2,776 2,785
Dealer financing 1,539 1,620 1,519
Other 57 81 92
Total financing revenue 9,280 8,606 7,805
Depreciation on vehicles subject to operating leases (3,640) (3,088) (2,397)
Interest expense (2,416) (2,656) (2,730)
Net financing margin 3,224 2,862 2,678
Other revenue      
Insurance premiums earned (Note 12) 133 125 119
Other income, net (Note 13) 284 265 258
Total financing margin and other revenue 3,641 3,252 3,055
Expenses      
Operating expenses 1,139 1,094 1,090
Provision for credit losses (Note 4) 347 197 146
Insurance expenses (Note 12) 69 107 63
Total expenses 1,555 1,398 1,299
Income before income taxes 2,086 1,854 1,756
Provision for income taxes (Note 10) 723 149 277
Net income $ 1,363 $ 1,705 $ 1,479
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Consolidated Statement of Comprehensive Income - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Net income $ 1,363 $ 1,705 $ 1,479
Other comprehensive income/(loss), net of tax (Note 11)      
Foreign currency translation (766) (547) (86)
Other comprehensive income/(loss), net of tax (766) (547) (86)
Comprehensive Income (Loss) 597 1,158 1,393
Comprehensive income/(loss) attributable to noncontrolling interests 1 0 0
Comprehensive income/(loss) attributable to Ford Motor Credit Company $ 596 $ 1,158 $ 1,393
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Consolidated Balance Sheet - USD ($)
$ in Millions
Dec. 31, 2015
Dec. 31, 2014
ASSETS    
Cash and cash equivalents $ 8,886 $ 6,179
Marketable securities 2,723 3,258
Finance receivables, net (Note 2) 96,823 86,915
Net investment in operating leases (Note 3) 25,079 21,518
Notes and accounts receivable from affiliated companies 727 778
Derivative financial instruments (Note 7) 924 859
Other assets (Note 8) 2,286 2,601
Total assets 137,448 122,108
Liabilities    
Customer deposits, dealer reserves, and other 1,104 1,148
Affiliated companies 313 330
Total accounts payable 1,417 1,478
Debt (Note 9) 119,601 105,037
Deferred income taxes 2,808 1,849
Derivative financial instruments (Note 7) 243 167
Other liabilities and deferred income (Note 8) 1,665 2,210
Total liabilities 125,734 110,741
Shareholder's interest    
Shareholder's interest 5,227 5,227
Accumulated other comprehensive income (Note 11) (607) 160
Retained earnings 7,093 5,980
Total shareholder's interest attributable to Ford Motor Credit Company 11,713 11,367
Stockholders' interest attributable to noncontrolling interest 1 0
Total shareholder’s interest 11,714 11,367
Total liabilities and shareholder's interest 137,448 122,108
Variable Interest Entity, Primary Beneficiary [Member]    
ASSETS    
Cash and cash equivalents 3,949 2,094
Finance receivables, net (Note 2) 45,902 39,522
Net investment in operating leases (Note 3) 13,309 9,631
Derivative financial instruments (Note 7) 85 27
Liabilities    
Debt (Note 9) 43,086 37,156
Derivative financial instruments (Note 7) $ 19 $ 22
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Consolidated Statement of Shareholder's Interest - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2015
Mar. 31, 2015
Dec. 31, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Stockholders' interest attributable to noncontrolling interest $ 1   $ 0   $ 1 $ 0 $ 0
Total shareholder’s interest 11,714   11,367   11,714 11,367 10,604
Shareholder's Interest [Roll Forward]              
Balance at beginning of period   $ 11,367   $ 10,604 11,367 10,604 9,653
Net income 352 306 411 312 1,363 1,705 1,479
Net Income (Loss) Attributable to Noncontrolling Interest         0 0 0
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest         1,363 1,705 1,479
Condolidation, Wholly Owned Subsidiary, Parent Ownership Interest, Purchase of Interest by Parent             3
Other comprehensive income/(loss), net of tax         (766) (547) (86)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent         (767) (547) (86)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest         1 0 0
Distributions         (250) (395) (445)
Balance at end of period 11,713   11,367   11,713 11,367 10,604
Shareholder's Interest [Member]              
Shareholder's Interest [Roll Forward]              
Balance at beginning of period   5,227   5,217 5,227 5,217 5,274
Net income         0 0 0
Condolidation, Wholly Owned Subsidiary, Parent Ownership Interest, Purchase of Interest by Parent             3
Other comprehensive income/(loss), net of tax         0 10 (60)
Distributions         0 0 0
Balance at end of period 5,227   5,227   5,227 5,227 5,217
Accumulated Other Comprehensive Income/(Loss) (Note11) [Member]              
Shareholder's Interest [Roll Forward]              
Balance at beginning of period   160   717 160 717 743
Net income         0 0 0
Condolidation, Wholly Owned Subsidiary, Parent Ownership Interest, Purchase of Interest by Parent             0
Other comprehensive income/(loss), net of tax         (767) (557) (26)
Distributions         0 0 0
Balance at end of period (607)   160   (607) 160 717
Retained Earnings [Member]              
Shareholder's Interest [Roll Forward]              
Balance at beginning of period   $ 5,980   $ 4,670 5,980 4,670 3,636
Net income         1,363 1,705 1,479
Condolidation, Wholly Owned Subsidiary, Parent Ownership Interest, Purchase of Interest by Parent             0
Other comprehensive income/(loss), net of tax         0 0 0
Distributions         (250) (395) (445)
Balance at end of period $ 7,093   $ 5,980   7,093 5,980 4,670
Noncontrolling Interest [Member]              
Shareholder's Interest [Roll Forward]              
Condolidation, Wholly Owned Subsidiary, Parent Ownership Interest, Purchase of Interest by Parent             0
Distributions         0 0 0
Parent [Member]              
Shareholder's Interest [Roll Forward]              
Condolidation, Wholly Owned Subsidiary, Parent Ownership Interest, Purchase of Interest by Parent             3
Distributions         $ (250) $ (395) $ (445)
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Consolidated Statement of Cash Flows - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Cash flows from operating activities      
Net income $ 1,363 $ 1,705 $ 1,479
Adjustments to reconcile net income/(loss) to net cash provided by operations      
Provision for credit losses 347 197 146
Depreciation and amortization 4,465 3,955 3,198
Amortization of upfront interest supplements (1,078) (1,021) (993)
Net change in deferred income taxes 1,042 230 (22)
Net change in other assets 129 106 (814)
Net change in other liabilities (348) (294) 827
All other operating activities (210) (63) (283)
Net cash provided by/(used in) operating activities 5,710 4,815 3,538
Cash flows from investing activities      
Purchases of finance receivables (excluding wholesale and other) (39,512) (35,818) (32,296)
Collections of finance receivables (excluding wholesale and other) 31,560 30,341 29,155
Purchases of operating lease vehicles (14,355) (12,694) (11,640)
Liquidations of operating lease vehicles 6,570 6,152 4,428
Net change in wholesale receivables and other (5,126) (2,189) (3,219)
Net change in notes receivable from affiliated companies (1) 29 302
Purchases of marketable securities (12,199) (13,598) (30,317)
Proceeds from sales and maturities of marketable securities 12,704 12,236 30,448
Settlements of derivatives 210 34 65
All other investing activities 21 4 (22)
Net cash provided by/(used in) investing activities (20,128) (15,503) (13,096)
Cash flows from financing activities      
Proceeds from issuances of long-term debt 48,124 39,858 38,293
Principal payments on long-term debt (31,474) (27,801) (25,642)
Change in short-term debt, net 1,229 (3,757) (2,401)
Cash distributions to parent (250) (395) (445)
All other financing activities (101) (109) (29)
Net cash provided by/(used in) financing activities 17,528 7,796 9,776
Effect of exchange rate changes on cash and cash equivalents (403) (353) 17
Net increase/(decrease) in cash and cash equivalents 2,707 (3,245) 235
Cash and cash equivalents at January 1 6,179 9,424 9,189
Net increase/(decrease) in cash and cash equivalents 2,707 (3,245) 235
Cash and cash equivalents at December 31 8,886 6,179 9,424
Supplementary cash flow information for continuing operations      
Interest paid 2,239 2,652 2,623
Income taxes paid $ 74 $ 314 $ 206
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Accounting Policies
 12 Months Ended
Dec. 31, 2015
Accounting Policies [Abstract]  
ACCOUNTING POLICIES
ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include Ford Motor Credit Company LLC, its controlled domestic and foreign subsidiaries and joint ventures, and consolidated VIEs in which Ford Motor Credit Company LLC is the primary beneficiary (collectively referred to herein as “Ford Credit,” “we,” “our,” or “us”). Affiliates that we do not consolidate, but for which we have significant influence over operating and financial policies, are accounted for using the equity method. We are an indirect, wholly owned subsidiary of Ford Motor Company (“Ford”).

Use of estimates, as determined by management, is required in the preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”). Because of the inherent uncertainty involved in making estimates, actual results reported in future periods might be based upon amounts that differ from those estimates. The accounting estimates that are most important to our business include the allowance for credit losses and accumulated depreciation on vehicles subject to operating leases.

We reclassified certain prior period amounts in our consolidated financial statements to conform to current year presentation.

Nature of Operations

We offer a wide variety of automotive financing products to and through automotive dealers throughout the world. Our portfolio consists of finance receivables and net investment in operating leases. We also service the finance receivables and net investment in operating leases we originate and purchase, make loans to Ford affiliates, and provide insurance services related to our financing programs. See Notes 2 and 3 for additional information.

We conduct our financing operations directly and indirectly through our subsidiaries and affiliates. We offer substantially similar products and services throughout many different regions, subject to local legal restrictions and market conditions. See Note 16 for key operating data on our business segments and for geographic information on our regions.

The predominant share of our business consists of financing Ford vehicles and supporting Ford dealers. Any extended reduction or suspension of Ford’s production or sale of vehicles due to a decline in consumer demand, work stoppage, governmental action, negative publicity or other event, or significant changes to marketing programs sponsored by Ford, would have an adverse effect on our business.

Certain subsidiaries are subject to regulatory capital requirements requiring maintenance of certain minimum capital levels that limit the ability of those subsidiaries to pay dividends.

Accounting Policies

For each accounting topic that is addressed in its own footnote, the description of the accompanying accounting policy may be found in the related footnote. The remaining accounting policies are described below.

Foreign Currency. We remeasure monetary assets and liabilities denominated in a currency that is different from a reporting entity’s functional currency from the transactional currency to the legal entity’s functional currency. The effect of this remeasurement process, and the results of our foreign currency hedging activities are reported in Other income, net.

Generally, our foreign subsidiaries use the local currency as their functional currency. We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies to U.S. dollars using end-of-period exchange rates. Changes in the carrying value of these assets and liabilities attributable to fluctuations in exchange rates are recognized in Accumulated other comprehensive income/(loss). Upon sale or upon complete or substantially complete liquidation of an investment in a foreign subsidiary, the amount of accumulated foreign currency translation related to the entity is reclassified to Net income and recognized as part of the gain or loss on the investment.
NOTE 1. ACCOUNTING POLICIES (Continued)

Adoption of New Accounting Standards
We adopted the following standard during 2015, which did not have a material impact to our financial statements or financial statement disclosures:

Standard
 
 
Effective Date
2015-03
Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs - see Note 9
 
December 31, 2015

Accounting Standards Issued But Not Yet Adopted

Accounting Standard Update (“ASU”) 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The new standard is effective as of January 1, 2018.  Early adoption is not permitted except for certain provisions that are not currently applicable to our financial statements and financial statement disclosures.  We are currently assessing the potential impact to our financial statements and financial statement disclosures.

ASU 2014-09, Revenue - Revenue from Contracts with Customers. In May 2014, the FASB issued a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards, as well as additional disclosures. The FASB issued ASU 2015-14 to defer the original effective date from January 1, 2017 to January 1, 2018, while allowing for early adoption as of January 1, 2017. The new accounting standard is expected to have an impact to our income statement, balance sheet, and financial statement disclosures and we are reviewing our arrangements to evaluate the impact and method of adoption.
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Finance Receivables
 12 Months Ended
Dec. 31, 2015
Receivables [Abstract]  
Financing Receivables
FINANCE RECEIVABLES

We segment finance receivables into “consumer” and “non-consumer” receivables. The receivables are generally secured by the vehicles, inventory, or other property being financed.

Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses.

Revenue from finance receivables is recognized using the interest method and includes the accretion of certain direct origination costs that are deferred and interest supplements received from Ford and affiliated companies. The unearned interest supplements on consumer finance receivables are included in Finance receivables, net on the balance sheet, and the earned interest supplements are included in Financing revenue on the income statement.

Consumer Segment. Receivables in this portfolio segment include products offered to individuals and businesses that finance the acquisition of Ford and Lincoln vehicles from dealers for personal or commercial use. Retail financing includes retail installment contracts for new and used vehicles and direct financing leases with retail customers, government entities, daily rental companies, and fleet customers.

Non-Consumer Segment. Receivables in this portfolio segment include products offered to automotive dealers and receivables purchased from Ford and its affiliates. The products include:

•
Dealer financing – includes wholesale loans to dealers to finance the purchase of vehicle inventory, also known as floorplan financing, as well as loans to dealers to finance working capital and improvements to dealership facilities, finance the purchase of dealership real estate, and finance other dealer programs. Wholesale financing is approximately 95% of our dealer financing.

•
Other financing – purchased receivables from Ford and its affiliates, primarily related to the sale of parts and accessories to dealers, receivables from Ford related loans, and certain used vehicles from daily rental fleet companies. These receivables are excluded from our credit quality reporting since the performance of this group of receivables is generally guaranteed by Ford.

Notes and accounts receivable from affiliated companies are presented separately on the balance sheet. These receivables are based on intercompany relationships and the balances are settled regularly. We do not assess these receivables for potential credit losses, nor are they subjected to aging analysis, credit quality reviews, or other formal assessments. As a result, Notes and accounts receivable from affiliated companies are not subject to the following disclosures contained herein.

NOTE 2. FINANCE RECEIVABLES (Continued)

Finance Receivables, Net

Finance receivables, net were as follows for the years ended December 31 (in millions):
 
2015
 
2014
Consumer
 
 
 
Retail financing, gross
$
62,068

 
$
55,856

Unearned interest supplements from Ford and affiliated companies
(2,119
)
 
(1,760
)
Consumer finance receivables
59,949

 
54,096

 
 
 
 
Non-Consumer
 
 
 
Dealer financing (a)
36,037

 
31,875

Other financing
1,210

 
1,265

Non-Consumer finance receivables (b)
37,247

 
33,140

Total recorded investment (c)
$
97,196

 
$
87,236

 
 
 
 
Recorded investment in finance receivables
$
97,196

 
$
87,236

Allowance for credit losses
(373
)
 
(321
)
Finance receivables, net (a)
$
96,823

 
$
86,915

 
 
 
 
Net finance receivables subject to fair value (d)
$
95,008

 
$
85,242

Fair Value
96,180

 
86,715

__________
(a)
At December 31, 2015 and 2014, includes $4.4 billion and $4.0 billion, respectively, of receivables generated by divisions and affiliates of Ford in connection with vehicle inventories released from Ford and in delivery to the destination dealers and $508 million and $535 million, respectively, of dealer financing receivables with entities (primarily dealers) that are reported as consolidated subsidiaries of Ford. For the years ended December 31, 2015, 2014, and 2013, the interest earned on receivables from consolidated subsidiaries of Ford to which we provide financing was $6 million, $5 million, and $6 million, respectively. Consolidated subsidiaries of Ford include dealerships that are partially owned by Ford as consolidated VIEs and also certain overseas affiliates. The associated vehicles that are being financed by us are reported as inventory on Ford’s balance sheet.
(b)
The amount of interest earned from Ford and affiliated companies associated with purchased receivables and receivables from gate released vehicles in transit to dealers for the years ended December 31, 2015, 2014, and 2013, were $183 million, $171 million, and $170 million, respectively.
(c)
The amount of interest supplements from Ford and affiliated companies earned for the years ended December 31, 2015, 2014, and 2013 were $1.3 billion, $1.4 billion, and $1.5 billion, respectively, and the amount of interest supplements cash received related to consumer finance receivables totaled $1.5 billion, $1.3 billion, and $1.0 billion, respectively.
(d)
At December 31, 2015 and 2014, excludes $1.8 billion and $1.7 billion, respectively, of certain receivables (primarily direct financing leases) that are not subject to fair value disclosure requirements.

Excluded from finance receivables at December 31, 2015 and 2014 was $209 million and $192 million, respectively, of accrued uncollected interest, which we report in Other assets on our balance sheet.

Included in recorded investment in finance receivables at December 31, 2015 and 2014 were consumer receivables of $27.6 billion and $24.4 billion, respectively, and non-consumer receivables of $26.1 billion and $21.8 billion, respectively, that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables 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 the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds 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 (see Note 5 for additional information).

Included in Finance receivables, net at December 31, 2015 and 2014 was $1.8 billion and $1.7 billion, respectively, of net investment in direct financing leases.

NOTE 2. FINANCE RECEIVABLES (Continued)

Contractual maturities of total finance receivables outstanding at December 31, 2015 reflect contractual repayments due from customers or borrowers and were as follows (in millions):
 
2016
 
2017
 
2018
 
Thereafter
 
Total
Consumer
 
 
 
 
 
 
 
 
 
Retail financing, gross (a)
$
17,627

 
$
15,811

 
$
12,847

 
$
15,783

 
$
62,068

 
 
 
 
 
 
 
 
 
 
Non-Consumer
 
 
 
 
 
 
 
 
 
Dealer financing
32,899

 
1,823

 
267

 
1,048

 
36,037

Other financing
1,210

 
—

 
—

 
—

 
1,210

   Total finance receivables
$
51,736

 
$
17,634

 
$
13,114

 
$
16,831

 
$
99,315

__________
(a)
Contractual maturities of retail financing, gross include $162 million of estimated unguaranteed residual values related to direct financing leases.
Our finance receivables are generally pre-payable without penalty, so prepayments may cause actual maturities to differ from contractual maturities. The above table, therefore, is not to be regarded as a forecast of future cash collections. For wholesale receivables, which are included in dealer financing, maturities stated above are estimated based on historical trends, as maturities on outstanding amounts are scheduled upon the sale of the underlying vehicle by the dealer.
At December 31, 2015, finance receivables included $1.6 billion owed by the three customers with the largest receivables balances. These balances are included in non-consumer receivables.
Aging

For all finance receivables, we define “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date. The recorded investment of consumer receivables greater than 90 days past due and still accruing interest was $16 million and $17 million at December 31, 2015 and 2014, respectively. The recorded investment of non-consumer receivables greater than 90 days past due and still accruing interest was $1 million and $3 million at December 31, 2015 and 2014, respectively.
 
The aging analysis of finance receivables balances at December 31, 2015 was as follows (in millions):

 
2015
 
2014
Consumer
 
 
 
31-60 days past due
$
708

 
$
718

61-90 days past due
108

 
97

91-120 days past due
27

 
29

Greater than 120 days past due
38

 
52

Total past due
881

 
896

Current
59,068

 
53,200

Consumer finance receivables
59,949

 
54,096

 
 
 
 
Non-Consumer
 
 
 
Total past due
116

 
117

Current
37,131

 
33,023

Non-Consumer finance receivables
37,247

 
33,140

  Total recorded investment
$
97,196

 
$
87,236



NOTE 2. FINANCE RECEIVABLES (Continued)

Credit Quality

Consumer Segment. When originating all classes of consumer receivables, we use a proprietary scoring system that measures the credit quality of the receivables using several factors, such as credit bureau information, consumer credit risk scores (e.g., FICO score), and contract characteristics. In addition to our proprietary scoring system, we consider other individual consumer factors, such as employment history, financial stability, and capacity to pay.

Subsequent to origination, we review the credit quality of retail financing based on customer payment activity. As each customer develops a payment history, we use an internally developed behavioral scoring model to assist in determining the best collection strategies, which allows us to focus collection activity on higher-risk accounts. These models are used to refine our risk-based staffing model to ensure collection resources are aligned with portfolio risk. Based on data from this scoring model, contracts are categorized by collection risk. Our collection models evaluate several factors, including origination characteristics, updated credit bureau data, and payment patterns.

Credit quality ratings for consumer receivables are based on our aging analysis. Refer to the aging table above. Consumer receivables credit quality ratings are as follows:

•
Pass – current to 60 days past due
•
Special Mention – 61 to 120 days past due and in intensified collection status
•
Substandard – greater than 120 days past due and for which the uncollectible portion of the receivables has already been charged off, as measured using the fair value of collateral less costs to sell

Non-Consumer Segment. We extend credit to dealers primarily in the form of lines of credit to purchase new Ford and Lincoln vehicles as well as used vehicles. Payment is required when the dealer has sold the vehicle. Each non-consumer lending request is evaluated by taking into consideration the borrower’s financial condition and the underlying collateral securing the loan. We use a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance data to identify key factors about a dealer that we consider most significant in predicting a dealer’s ability to meet its financial obligations. We also consider numerous other financial and qualitative factors of the dealer’s operations including capitalization and leverage, liquidity and cash flow, profitability, and credit history with ourselves and other creditors.

Dealers are assigned to one of four groups according to risk ratings as follows:

•
Group I – strong to superior financial metrics
•
Group II – fair to favorable financial metrics
•
Group III – marginal to weak financial metrics
•
Group IV – poor financial metrics, including dealers classified as uncollectible

We generally suspend credit lines and extend no further funding to dealers classified in Group IV.

We regularly review our model to confirm the continued business significance and statistical predictability of the factors and update the model to incorporate new factors or other information that improves its statistical predictability. In addition, we regularly audit dealer inventory and dealer sales records to verify that the dealer is in possession of the financed vehicles and is promptly paying each receivable following the sale of the financed vehicle. The frequency of on-site vehicle inventory audits depends on factors such as the dealer’s risk rating and our security position. Under our policies, on-site vehicle inventory audits of low-risk dealers are conducted only as circumstances warrant. Audits of higher-risk dealers are conducted with increased frequency based on risk ratings and our security position. We perform a credit review of each dealer at least annually and adjust the dealer’s risk rating, if necessary.

The credit quality of dealer financing receivables is evaluated based on our internal dealer risk rating analysis. A dealer has the same risk rating for its entire dealer financing regardless of the type of financing.
 
NOTE 2. FINANCE RECEIVABLES (Continued)

The credit quality analysis of our dealer financing receivables at December 31 was as follows (in millions):
 
2015
 
2014
Dealer financing
 
 
 
Group I
$
27,054

 
$
23,641

Group II
7,185

 
6,360

Group III
1,687

 
1,787

Group IV
111

 
87

Total recorded investment
$
36,037

 
$
31,875



Impaired Receivables

Impaired consumer receivables include accounts that have been rewritten or modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code that are considered to be Troubled Debt Restructurings (“TDRs”), as well as all accounts greater than 120 days past due. Impaired non-consumer receivables represent accounts with dealers that have weak or poor financial metrics or dealer financing that has been modified in TDRs. The recorded investment of consumer receivables that were impaired at December 31, 2015 and 2014 was $375 million, or 0.6% of consumer receivables, and $415 million, or 0.8% of consumer receivables, respectively. The recorded investment of non-consumer receivables that were impaired at December 31, 2015 and 2014 was $134 million, or 0.4% of non-consumer receivables, and $110 million, or 0.3% of non-consumer receivables, respectively. Impaired finance receivables are evaluated both collectively and specifically. See Note 4 for additional information related to the development of our allowance for credit losses.

The accrual of revenue is discontinued at the time a receivable is determined to be uncollectible. Accounts may be restored to accrual status only when a customer settles all past-due deficiency balances and future payments are reasonably assured. For receivables in non-accrual status, subsequent financing revenue is recognized only to the extent a payment is received. Payments are generally applied first to outstanding interest and then to the unpaid principal balance.

A restructuring of debt constitutes a TDR if we grant a concession to a debtor for economic or legal reasons related to the debtor’s financial difficulties that we otherwise would not consider. Consumer and non-consumer receivables that have a modified interest rate below market rate or that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code, except non-consumer receivables that are current with minimal risk of loss, are considered to be TDRs. We do not grant concessions on the principal balance of our receivables. If a receivable is modified in a reorganization proceeding, all payment requirements of the reorganization plan need to be met before remaining balances are forgiven. Finance receivables involved in TDRs are specifically assessed for impairment.
v3.3.1.900
Net Investments in Operating Leases
 12 Months Ended
Dec. 31, 2015
Leases, Operating [Abstract]  
NET INVESTMENT IN OPERATING LEASES
NET INVESTMENT IN OPERATING LEASES

Net investment in operating leases consist primarily of lease contracts for vehicles with retail customers, daily rental companies, government entities, and fleet customers with terms of 60 months or less.

Revenue from rental payments received on operating leases is recognized on a straight-line basis over the term of the lease. The accrual of revenue on operating leases is discontinued at the time an account is determined to be uncollectible.

We receive interest supplements and residual support payments on certain leasing transactions under agreements with Ford. We recognize these upfront collections from Ford and other vehicle acquisition costs as part of Net investment in operating leases, which are amortized to Depreciation on vehicles subject to operating leases over the term of the lease contract. The amount of unearned interest supplements and residual support included in Net investment in operating leases at December 31, 2015 and 2014 was $2.4 billion and $2.1 billion, respectively. The amount of earned interest supplements and residual support costs included in Depreciation on vehicles subject to operating lease for the years ended December 31, 2015, 2014, and 2013 was $1.5 billion, $1.3 billion, and $0.9 billion, respectively. The amount of interest supplements and residual support cash received totaled $1.9 billion, $1.8 billion, and $1.4 billion for the years ended December 31, 2015, 2014, and 2013, respectively.

Depreciation expense on vehicles subject to operating leases is provided on a straight-line basis in an amount necessary to reduce the leased vehicle value to its estimated residual value at the end of the lease term. Our policy is to promptly sell returned off-lease vehicles. We evaluate our depreciation for leased vehicles on a regular basis taking into consideration various assumptions, such as expected residual values at lease termination (including residual value support payments from Ford) and the estimated number of vehicles that will be returned to us. Adjustments to depreciation expense reflecting revised estimates of expected residual values at the end of the lease terms are recorded prospectively on a straight-line basis. Upon disposition of the vehicle, the difference between net book value and actual proceeds is recorded as an adjustment to Depreciation on vehicles subject to operating leases.

We evaluate the carrying value of held-and-used long-lived asset groups (such as vehicles subject to operating leases) for potential impairment when we determine a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed by comparing projected undiscounted future cash flows to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured in accordance with the fair value measurement framework. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. For the periods presented, we have not recorded any impairment charges.

Net investment in operating leases were as follows (in millions):
 
December 31,
2015
 
December 31,
2014
Vehicles, at cost (a)
$
29,673

 
$
24,952

Accumulated depreciation
(4,545
)
 
(3,396
)
Net investment in operating leases before allowance for credit losses
25,128

 
21,556

Allowance for credit losses
(49
)
 
(38
)
Net investment in operating leases
$
25,079

 
$
21,518

__________
(a)
Includes unearned interest supplements and residual support payments we receive on certain leasing transactions under agreements with Ford and affiliated companies, and other vehicle acquisition costs.

At December 31, 2015 and 2014, net investment in operating leases before allowance for credit losses includes $13.3 billion and $9.6 billion, respectively, of net investment in operating leases that have been included in securitization transactions but continue to be reported in our consolidated financial statements. These net investment in operating leases 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. 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 (see Note 5 for additional information).

NOTE 3. NET INVESTMENT IN OPERATING LEASES (Continued)

We have entered into a sale-leaseback agreement with Ford primarily for vehicles that Ford leases to employees of Ford and its subsidiaries. The investment in these vehicles is included in Net investment in operating leases and Ford provides a limited guarantee of the residual value of these vehicles. The amount of employee and company vehicles at December 31, 2015 and 2014 was $652 million and $645 million, respectively. For the years ended December 31, 2015, 2014, and 2013, the operating lease revenue on employee leased vehicles was $284 million, $259 million, and $228 million, respectively.

The amounts contractually due for minimum rentals on operating leases at December 31, 2015 were as follows (in millions):
 
2016
 
2017
 
2018
 
2019
 
2020
Minimum rentals on operating leases
$
4,021

 
$
2,504

 
$
919

 
$
59

 
$
3
v3.3.1.900
Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2015
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]  
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses represents our estimate of the probable credit loss inherent in finance receivables and operating leases as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly and the assumptions and models used in establishing the allowance are evaluated regularly. Because credit losses may vary substantially over time, estimating credit losses requires a number of assumptions about matters that are uncertain. The majority of credit losses are attributable to consumer receivables.

Additions to the allowance for credit losses are made by recording charges to the Provision for credit losses on the income statement. The uncollectible portion of finance receivables and operating leases are charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the customer, borrower or lessee, the value of the collateral, recourse to guarantors, and other factors.

In the event we repossess the collateral, the receivable is charged off and we record the collateral at its estimated fair value less costs to sell and report it in Other assets on the balance sheet. Charge-offs on finance receivables and operating leases include uncollected amounts related to principal, interest, rental payments, late fees, and other allowable charges. Recoveries on finance receivables and operating leases previously charged off as uncollectible are credited to the allowance for credit losses.

Consumer Segment and Operating Leases

We estimate the allowance for credit losses on consumer receivables and on operating leases using a combination of measurement models and management judgment. The models consider factors such as historical trends in credit losses and recoveries (including key metrics such as delinquencies, repossessions, and bankruptcies), the composition of the present portfolio (including vehicle brand, term, risk evaluation, and new/used vehicles), trends in historical used vehicle values, and economic conditions. Estimates from these models rely on historical information and may not fully reflect losses inherent in the present portfolio. Therefore, we may adjust the estimate to reflect management judgment regarding observable changes in recent economic trends and conditions, portfolio composition, and other relevant factors.

We make projections of two key assumptions to assist in estimating the consumer allowance for credit losses:

•
Frequency – number of finance receivables and operating lease contracts that are expected to default over the loss emergence period, measured as repossessions
•
Loss severity – expected difference between the amount a customer owes when the finance contract is charged off and the amount received, net of expenses, from selling the repossessed vehicle, including any recoveries from the customer
NOTE 4. ALLOWANCE FOR CREDIT LOSSES (Continued)

Collective Allowance for Credit Losses. The collective allowance is evaluated primarily using a collective loss-to-receivables (“LTR”) model that, based on historical experience, indicates credit losses have been incurred in the portfolio even though the particular accounts that are uncollectible cannot be specifically identified. The LTR model is based on the most recent years of history. Each LTR is calculated by dividing credit losses by average finance receivables or average operating leases, excluding unearned interest supplements and allowance for credit losses. An average LTR is calculated for each product and multiplied by the end-of-period balances for that given product.

Our largest markets also use a loss projection model to estimate losses inherent in the portfolio. The loss projection model applies recent monthly performance metrics, stratified by contract type (retail or lease), contract term (e.g., 60-month), and risk rating to our active portfolio to estimate the losses that have been incurred.

The loss emergence period (“LEP”) is a key assumption within our models and represents the average amount of time between when a loss event first occurs to when it is charged off. This time period starts when the consumer begins to experience financial difficulty. It is evidenced, typically through delinquency, before eventually resulting in a charge-off. The LEP is a multiplier in the calculation of the collective consumer allowance for credit losses.

For accounts greater than 120 days past due, the uncollectible portion is charged off, such that the remaining recorded investment is equal to the estimated fair value of the collateral less costs to sell.

Specific Allowance for Impaired Receivables. Consumer receivables involved in TDRs are specifically assessed for impairment. A specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the contract’s original effective interest rate or the fair value of any collateral adjusted for estimated costs to sell.     

After establishing the collective and specific allowance for credit losses, if management believes the allowance does not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant factors, an adjustment is made based on management judgment.

Non-Consumer Segment

We estimate the allowance for credit losses for non-consumer receivables based on historical LTR ratios, expected future cash flows, and the fair value of collateral.

Collective Allowance for Credit Losses. We estimate an allowance for non-consumer receivables that are not specifically identified as impaired using a LTR model for each financing product based on historical experience. This LTR is an average of the most recent historical experience and is calculated consistent with the consumer receivables LTR approach. All accounts that are specifically identified as impaired are excluded from the calculation of the non-specific or collective allowance.

Specific Allowance for Impaired Receivables. Dealer financing is evaluated by segmenting individual loans by the risk characteristics of the loan (such as the amount of the loan, the nature of the collateral, and the financial status of the debtor). The loans are analyzed to determine whether individual loans are impaired, and a specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the loan’s original effective interest rate or the fair value of the collateral adjusted for estimated costs to sell.

After establishing the collective and specific allowance for credit losses, if management believes the allowance does not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant factors, an adjustment is made based on management judgment.

NOTE 4. ALLOWANCE FOR CREDIT LOSSES (Continued)

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

 
2015
 
Finance Receivables
 
Net Investment in Operating Leases
 
Total Allowance
 
Consumer
 
Non-Consumer
 
Total
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
Beginning balance
$
305

 
$
16

 
$
321

 
$
38

 
$
359

Charge-offs
(333
)
 
(3
)
 
(336
)
 
(123
)
 
(459
)
Recoveries
120

 
6

 
126

 
62

 
188

Provision for credit losses
276

 
(2
)
 
274

 
73

 
347

Other (a)
(11
)
 
(1
)
 
(12
)
 
(1
)
 
(13
)
Ending balance
$
357

 
$
16

 
$
373

 
$
49

 
$
422

 
 
 
 
 
 
 
 
 
 
Analysis of ending balance of allowance for credit losses
 
 
 
 
 
 
 
 
 
Collective impairment allowance
$
338

 
$
12

 
$
350

 
$
49

 
$
399

Specific impairment allowance
19

 
4

 
23

 
—

 
23

Ending balance
357

 
16

 
373

 
49

 
$
422

 
 
 
 
 
 
 
 
 
 
Analysis of ending balance of finance receivables and net investment in operating leases
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
59,574

 
37,113

 
96,687

 
25,128

 
 
Specifically evaluated for impairment
375

 
134

 
509

 
—

 
 
Recorded investment
59,949

 
37,247

 
97,196

 
25,128

 
 
 
 
 
 
 
 
 
 
 
 
Ending balance, net of allowance for credit losses
$
59,592

 
$
37,231

 
$
96,823

 
$
25,079

 
 
__________
(a)
Primarily represents amounts related to translation adjustments.
 
2014
 
Finance Receivables
 
Net Investment in Operating Leases
 
Total Allowance
 
Consumer
 
Non-Consumer
 
Total
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
Beginning balance
$
327

 
$
30

 
$
357

 
$
23

 
$
380

Charge-offs
(294
)
 
(6
)
 
(300
)
 
(111
)
 
(411
)
Recoveries
131

 
9

 
140

 
62

 
202

Provision for credit losses
150

 
(17
)
 
133

 
64

 
197

Other (a)
(9
)
 
—

 
(9
)
 
—

 
(9
)
Ending balance
$
305

 
$
16

 
$
321

 
$
38

 
$
359

 
 
 
 
 
 
 
 
 
 
Analysis of ending balance of allowance for credit losses
 
 
 
 
 
 
 
 
 
Collective impairment allowance
$
282

 
$
16

 
$
298

 
$
38

 
$
336

Specific impairment allowance
23

 
—

 
23

 
—

 
23

Ending balance
305

 
16

 
321

 
38

 
$
359

 
 
 
 
 
 
 
 
 
 
Analysis of ending balance of finance receivables and net investment in operating leases
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
53,681

 
33,030

 
86,711

 
21,556

 
 
Specifically evaluated for impairment
415

 
110

 
525

 
—

 
 
Recorded investment
54,096

 
33,140

 
87,236

 
21,556

 
 
 
 
 
 
 
 
 
 
 
 
Ending balance, net of allowance for credit losses
$
53,791

 
$
33,124

 
$
86,915

 
$
21,518

 
 
__________
(a)
Primarily represents amounts related to translation adjustments.
v3.3.1.900
Transfers of Receivables
 12 Months Ended
Dec. 31, 2015
Transfers and Servicing [Abstract]  
TRANSFERS OF RECEIVABLES
TRANSFERS OF RECEIVABLES

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 in 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 including the United States, Canada, several European countries, Mexico, and China.

We use special purpose entities (“SPEs”) that are considered VIEs for most of our on-balance sheet securitizations. 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 may purchase subordinated notes of the VIEs in addition to the investment we make as residual interest holder of the transaction.

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.

Receivables Classification

Receivables are accounted for as held for investment (“HFI”) if management has the intent and ability to hold the receivables for the foreseeable future or until maturity or payoff. Receivables that are classified as HFI are recorded at cost. The determination of intent and ability to hold for the foreseeable future is highly judgmental and requires management to make good faith estimates based on all information available at the time of origination. Once a decision has been made to sell specific receivables not previously classified as held for sale (“HFS”), such receivables are transferred into the HFS classification and carried at the lower of cost or fair value. Any amount by which cost exceeds fair value is accounted for as a valuation allowance with the offset recorded to income. We use internally developed quantitative methods to determine fair value that incorporate appropriate funding pricing and enhancement requirements, as well as estimates concerning credit losses and prepayments.

We classify receivables on a receivable-by-receivable basis. Specific receivables included in off-balance sheet securitizations or whole-loan sale transactions are usually not identified until the month in which the sale occurs. Each quarter, we make a determination of whether it is probable that receivables originated during the quarter will be held for the foreseeable future based on historical receivables sale experience, internal forecasts and budgets, as well as other relevant, reliable information available through the date of evaluation. For purposes of this determination, we define probable to mean at least 70% likely and, consistent with our budgeting and forecasting period, we define foreseeable future to mean twelve months. We also consider off-balance sheet funding channels in connection with our quarterly receivables classification determination.

Held for Investment

Finance receivables originated during the quarter for which we determine that it is probable we will hold for the following twelve months are classified as HFI and carried at amortized cost. All retail and wholesale receivables are classified as HFI at origination during all periods presented. Cash flows resulting from the purchase of these receivables that are originally classified as HFI are recorded as an investing activity. Once a decision has been made to sell specifically identified receivables that were originally classified as HFI and the receivables are sold in the same reporting period, the receivables are reclassified as HFS and simultaneously removed from the balance sheet. The fair value adjustment is incorporated and recognized in the net gain or loss on sale of receivables and reported in Other income, net. In the event that receivables have been selected for an off-balance sheet transaction that has not occurred at the end of the reporting period, the receivables are reclassified as HFS and a valuation adjustment is recorded in Other income, net to recognize the receivables at the lower of cost or fair value. Cash flows resulting from the sale of receivables that were originally classified as HFI are recorded as an investing activity since GAAP requires the statement of cash flows presentation to be based on the original classification of the receivables.
NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

Held for Sale

Finance receivables originated during the quarter for which we determine that it is not probable we will hold for the following twelve months are classified as HFS and carried at the lower of cost or fair value. Cash flows resulting from the purchase of these receivables are recorded as an operating activity. The valuation adjustment, if applicable, is recorded in Other income, net to recognize the receivables at the lower of cost or fair value. Once specifically identified receivables that were originally classified as HFS are sold, the receivables are removed from the balance sheet and the fair value adjustment is incorporated into the book value of receivables for purposes of determining the gain or loss on sale. Cash flows resulting from the sale of receivables that were originally classified as HFS are recorded as an operating activity. At December 31, 2015 and 2014, there were no finance receivables classified as HFS.

On-Balance Sheet Securitization Transactions

We engage in securitization transactions to fund operations and to maintain liquidity. Our securitization transactions are recorded as asset-backed debt and the associated assets are not derecognized and continue to be included in our financial statements.

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. 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. The debt is the obligation of our consolidated securitization entities and not the obligation of Ford Credit or our other subsidiaries.


NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

Most of these securitization transactions utilize VIEs. See Note 6 for additional information concerning VIEs. The following tables show the assets and debt related to our securitization transactions that were included in our financial statements (in billions):

 
December 31, 2015
 
Cash and Cash Equivalents
 
Finance 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
$
1.4

 
$
20.9

 
$
0.1

 
$
20.8

 
$
18.9

Wholesale financing
2.0

 
25.1

 
—

 
25.1

 
15.3

Finance receivables
3.4

 
46.0

 
0.1

 
45.9

 
34.2

Net investment in operating leases
0.5

 
13.3

 
—

 
13.3

 
8.9

Total VIE
$
3.9

 
$
59.3

 
$
0.1

 
$
59.2

 
$
43.1

 
 
 
 
 
 
 
 
 
 
Non-VIE
 
 
 
 
 
 
 
 
 
Retail financing
$
0.4

 
$
6.7

 
$
—

 
$
6.7

 
$
6.1

Wholesale financing
—

 
1.0

 
—

 
1.0

 
0.8

Finance receivables
0.4

 
7.7

 
—

 
7.7

 
6.9

Net investment in operating leases
—

 
—

 
—

 
—

 
—

Total Non-VIE
$
0.4

 
$
7.7

 
$
—

 
$
7.7

 
$
6.9

 
 
 
 
 
 
 
 
 
 
Total securitization transactions
 
 
 
 
 
 
 
 
 
Retail financing
$
1.8

 
$
27.6

 
$
0.1

 
$
27.5

 
$
25.0

Wholesale financing
2.0

 
26.1

 
—

 
26.1

 
16.1

Finance receivables
3.8

 
53.7

 
0.1

 
53.6

 
41.1

Net investment in operating leases
0.5

 
13.3

 
—

 
13.3

 
8.9

Total securitization transactions
$
4.3

 
$
67.0

 
$
0.1

 
$
66.9

 
$
50.0

__________
(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 5. TRANSFERS OF RECEIVABLES (Continued)

 
December 31, 2014
 
Cash and Cash Equivalents
 
Finance Receivables and Net Investment in Operating Leases (a)
 
Related Debt
 
Before Allowance
for Credit Losses
 
Allowance for
Credit Losses
 
After Allowance
for Credit Losses
 
VIE (b)
 
 
 
 
 
 
 
 
 
Retail financing
$
1.4

 
$
18.8

 
$
0.1

 
$
18.7

 
$
17.3

Wholesale financing
0.3

 
20.8

 
—

 
20.8

 
13.3

Finance receivables
1.7

 
39.6

 
0.1

 
39.5

 
30.6

Net investment in operating leases
0.4

 
9.6

 
—

 
9.6

 
6.6

Total VIE
$
2.1

 
$
49.2

 
$
0.1

 
$
49.1

 
$
37.2

 
 
 
 
 
 
 
 
 
 
Non-VIE
 
 
 
 
 
 
 
 
 
Retail financing
$
0.3

 
$
5.6

 
$
—

 
$
5.6

 
$
5.2

Wholesale financing
—

 
1.0

 
—

 
1.0

 
0.9

Finance receivables
0.3

 
6.6

 
—

 
6.6

 
6.1

Net investment in operating leases
—

 
—

 
—

 
—

 
—

Total Non-VIE
$
0.3

 
$
6.6

 
$
—

 
$
6.6

 
$
6.1

 
 
 
 
 
 
 
 
 
 
Total securitization transactions
 
 
 
 
 
 
 
 
 
Retail financing
$
1.7

 
$
24.4

 
$
0.1

 
$
24.3

 
$
22.5

Wholesale financing
0.3

 
21.8

 
—

 
21.8

 
14.2

Finance receivables
2.0

 
46.2

 
0.1

 
46.1

 
36.7

Net investment in operating leases
0.4

 
9.6

 
—

 
9.6

 
6.6

Total securitization transactions
$
2.4

 
$
55.8

 
$
0.1

 
$
55.7

 
$
43.3

__________
(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.

Interest expense related to securitization debt for the years ended December 31 was as follows (in millions):
 
2015
 
2014
 
2013
VIE
$
541

 
$
504

 
$
563

Non-VIE
89

 
91

 
77

Total securitization transactions
$
630

 
$
595

 
$
640



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 and, in certain instances, currency exposure resulting from assets in one currency and debt in another currency. 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. Our exposures based on the fair value of derivative instruments with external counterparties related to securitization programs were as follows (in millions):
 
December 31, 2015
 
December 31, 2014
 
Derivative
Asset
 
Derivative
Liability
 
Derivative
Asset
 
Derivative
Liability
Derivatives of the VIEs
$
85

 
$
19

 
$
27

 
$
22

Derivatives related to the VIEs
19

 
29

 
16

 
7

Other securitization related derivatives
12

 
—

 
5

 
1

Total exposures related to securitization
$
116

 
$
48

 
$
48

 
$
30


NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

Derivative expense/(income) related to our securitization transactions for the years ended December 31 was as follows (in millions):
 
2015
 
2014
 
2013
Derivatives of the VIEs
$
(32
)
 
$
(9
)
 
$
3

Derivatives related to the VIEs
12

 
(16
)
 
16

Other securitization related derivatives
18

 
21

 
6

Total derivative expense/(income) related to securitization
$
(2
)
 
$
(4
)
 
$
25
v3.3.1.900
Variable Interest Entities
 12 Months Ended
Dec. 31, 2015
Variable Interest Entities [Abstract]  
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES

A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. Nearly all of our VIEs are special purpose entities used for our securitizations.

We have the power to direct the activities of our special purpose entities 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.

Assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against our general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on our general assets; rather, they represent claims against the specific assets of the consolidated VIEs.

VIEs of Which We Are the Primary Beneficiary

We use special purpose entities to issue asset-backed securities in transactions to public and private investors. We have deemed most of these special purpose entities to be VIEs. The asset-backed securities are backed by finance receivables and interests in net investments in operating leases. The assets continue to be consolidated by us. We retain interests in our securitization VIEs, including subordinated securities issued by the VIEs, rights to cash held for the benefit of the securitization investors, and rights 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.

The transactions create and pass along risks to the variable interest holders, depending on the assets securing the debt and the specific terms of the transactions. We aggregate and analyze the asset-backed securitization transactions based on the risk profile of the product and the type of funding structure, including:

•
Retail financing – consumer credit risk and pre-payment risk
•
Wholesale financing – dealer credit risk and Ford risk, as the receivables owned by the VIEs primarily arise from the financing provided by us to Ford-franchised dealers; therefore, the collections depend upon the sale of Ford vehicles
•
Net investment in operating leases – vehicle residual value risk, consumer credit risk, and pre-payment risk

As residual interest holder, we are exposed to the underlying residual and credit risk of the collateral and are exposed to interest rate risk in some transactions. The amount of risk absorbed by our residual interests generally is represented by and limited to the amount of overcollateralization of the assets securing the debt and any cash reserves.

NOTE 6. VARIABLE INTEREST ENTITIES (Continued)

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 and have no right to require us to repurchase the investments. 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.

VIEs that are exposed to interest rate or currency risk may reduce their risks by entering into derivative transactions. In certain instances, we have entered into derivative transactions with the counterparty to protect the counterparty from risks absorbed through its derivative transactions with the VIEs.

Although not contractually required, we regularly support our wholesale securitization programs by repurchasing receivables of a dealer from a VIE when the dealer’s performance is at risk, which transfers the corresponding risk of loss from the VIE to us. In order to continue to fund the wholesale receivables, we also may contribute additional cash or wholesale receivables if the collateral falls below the required levels. The balances of cash related to these contributions were $0 at December 31, 2015 and 2014, and ranged from $0 to $72 million during 2015 and $0 to $242 million during 2014.

See Note 5 for additional information on the financial position and financial performance of our VIEs and Notes 7 and 15 for additional information regarding derivatives.

VIEs of Which We Are Not the Primary Beneficiary

We have an investment in Forso Nordic AB, a joint venture determined to be a VIE of which we are not the primary beneficiary. The joint venture provides retail and dealer financing in its local markets and is financed by external debt and additional subordinated debt provided by the joint venture partner. The operating agreement indicates that the power to direct economically significant activities is shared with the joint venture partner, and the obligation to absorb losses or right to receive benefits resides primarily with the joint venture partner. Our investment in the joint venture is accounted for as an equity method investment and is included in Other assets. Our maximum exposure to any potential losses associated with this VIE is limited to our equity investment and amounted to $66 million at December 31, 2015 and 2014, respectively.
v3.3.1.900
Derivative Financial Instruments and Hedging Activities
 12 Months Ended
Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, our operations are exposed to global market risks, including the effect of changes in interest rates and foreign currency exchange rates. To manage these risks, we enter into highly effective derivative contracts:

•
Interest rate contracts, including swaps, that are used to manage the effects of interest rate fluctuations;
•
Foreign currency exchange contracts, including forwards, that are used to manage foreign exchange exposure; and
•
Cross-currency interest rate swap contracts that are used to manage foreign currency and interest rate exposures on foreign-denominated debt.

Our derivatives are over-the-counter customized derivative transactions and are not exchange traded. We review our hedging program, derivative positions, and overall risk management strategy on a regular basis.

Derivative Financial Instruments and Hedge Accounting. Derivative assets and derivative liabilities are recorded in Derivative financial instruments on our balance sheet at fair value and presented on a gross basis.

We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.

Fair Value Hedges. We use derivatives to reduce the risk of changes in the fair value of debt. We have designated certain receive-fixed, pay-float interest rate swaps as fair value hedges of fixed-rate debt. The risk being hedged is the risk of changes in the fair value of the hedged debt attributable to changes in the benchmark interest rate. If the hedge relationship is deemed to be highly effective, we record the changes in the fair value of the hedged debt related to the risk being hedged in Debt with the offset in Other income, net. The change in fair value of the related derivative (excluding accrued interest) also is recorded in Other income, net. Net interest settlements and accruals on fair value hedges are excluded from the assessment of hedge effectiveness and are reported in Interest expense. The cash flows associated with fair value hedges are reported in Net cash provided by/(used in) operating activities in our statement of cash flows.

When a fair value hedge is de-designated, or when the derivative is terminated before maturity, the fair value adjustment to the hedged debt continues to be reported as part of the carrying value of the debt and is amortized over its remaining life.

Derivatives Not Designated as Hedging Instruments. We report net interest settlements and accruals and changes in the fair value of interest rate swaps not designated as hedging instruments in Other income, net. Foreign currency revaluation on accrued interest along with gains and losses on foreign exchange contracts and cross currency interest rate swaps are reported in Other income, net. Cash flows associated with non-designated or de-designated derivatives are reported in Net cash provided by/(used in) investing activities in our statement of cash flows.


NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Income Effect of Derivative Financial Instruments

The gains/(losses), by hedge designation, recorded in income for the years ended December 31 were as follows (in millions):
 
2015
 
2014
 
2013
Fair value hedges
 
 
 
 
 
Interest rate contracts
 
 
 
 
 
Net interest settlements and accruals excluded from the assessment of hedge effectiveness
$
370

 
$
304

 
$
254

Ineffectiveness (a)
3

 
20

 
(44
)
Derivatives not designated as hedging instruments
 
 
 
 
 
Interest rate contracts
(58
)
 
(41
)
 
(28
)
Foreign currency exchange contracts (b)
66

 
68

 
12

Cross-currency interest rate swap contracts
100

 
161

 
(88
)
Total
$
481

 
$
512

 
$
106

__________
(a)
For 2015, 2014, and 2013, hedge ineffectiveness reflects the net change in fair value on derivatives of $72 million gain, $407 million gain, and $658 million loss, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $69 million loss, $387 million loss, and $614 million gain, respectively.
(b)
The gains related to forward contracts between Ford Credit and an affiliated company were $66 million, $68 million, and $10 million for the years ended December 31, 2015, 2014, and 2013, respectively.

Balance Sheet Effect of Derivative Financial Instruments

Derivative assets and liabilities are recorded on the balance sheet at fair value and are presented on a gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts exchanged by the parties and are not a direct measure of our financial exposure. We also enter into master agreements with counterparties that may allow for netting of exposures in the event of default or breach of the counterparty agreement.

The fair value of our derivative instruments and the associated notional amounts, presented gross, at December 31 were as follows (in millions):
 
2015
 
2014
 
Notional
 
Fair Value of Assets
 
Fair Value of Liabilities
 
Notional
 
Fair Value of Assets
 
Fair Value of Liabilities
Fair value hedges
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
28,964

 
$
670

 
$
16

 
$
23,203

 
$
602

 
$
38

Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
62,638

 
159

 
112

 
56,558

 
168

 
89

Foreign currency exchange contracts (a)
1,713

 
22

 
4

 
1,527

 
18

 
1

Cross-currency interest rate swap contracts
3,137

 
73

 
111

 
2,425

 
71

 
39

Total derivative financial instruments, gross
$
96,452

 
924

 
243

 
$
83,713

 
859

 
167

Counterparty netting and collateral (b)
 
 
(167
)
 
(167
)
 
 
 
(136
)
 
(136
)
Total derivative financial instruments, net


 
$
757

 
$
76

 


 
$
723

 
$
31

__________
(a)
Includes forward contracts between Ford Credit and an affiliated company.
(b)
As of December 31, 2015 and December 31, 2014, we did not receive or pledge any cash collateral.
v3.3.1.900
Other Assets and Other Liabilities and Deferred Income
 12 Months Ended
Dec. 31, 2015
Other Assets and Other Liabilities and Deferred Income [Abstract]  
OTHER ASSETS AND OTHER LIABILITIES AND DEFERRED INCOME
OTHER ASSETS AND OTHER LIABILITIES AND DEFERRED INCOME

Other assets and other liabilities and deferred income consist of various balance sheet items that are combined for financial statement presentation due to their respective materiality compared with other individual asset and liability items.

Other assets were as follows (in millions):
 
December 31,
2015
 
December 31,
2014
Accrued interest and other non-finance receivables
$
763

 
$
921

Collateral held for resale, at net realizable value
498

 
382

Prepaid reinsurance premiums and other reinsurance receivables
472

 
401

Property and equipment, net of accumulated depreciation (a)
142

 
120

Deferred charges – income taxes
135

 
185

Investment in non-consolidated affiliates
133

 
141

Deferred charges
63

 
268

Restricted cash (b)
56

 
130

Other
24

 
53

Total other assets
$
2,286

 
$
2,601

__________
(a)
Accumulated depreciation was $335 million and $326 million at December 31, 2015 and 2014, respectively.
(b)
Restricted cash primarily includes cash held to meet certain local governmental and regulatory reserve requirements and cash held under the terms of certain contractual agreements. Restricted cash does not include required minimum balances or cash securing debt issued through securitization transactions.

Other liabilities and deferred income were as follows (in millions):
 
December 31,
2015
 
December 31,
2014
Interest payable
$
553

 
$
587

Unearned insurance premiums
484

 
410

Tax related payables to Ford and affiliated companies
105

 
625

Unrecognized tax benefits
75

 
91

Other
448

 
497

Total other liabilities and deferred income
$
1,665

 
$
2,210
v3.3.1.900
Debt and Commitments
 12 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
DEBT AND COMMITMENTS

We have a commercial paper program with qualified institutional investors. We also obtain other short-term funding from the issuance of demand notes to retail investors through our floating rate demand notes program. 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 U.S. 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 recorded on our balance sheet at par value adjusted for unamortized discount or premium, unamortized issuance costs and adjustments related to designated fair value hedges (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, net.

Debt outstanding and interest rates were as follows (in millions):
 
 
 
 
 
Interest Rates
 
Debt
 
Average Contractual
 
Average Effective
 
December 31,
2015
 
December 31, 2014
 
2015
 
2014
 
2015
 
2014
Short-term debt
 
 
 
 
 
 
 
 
 
 
 
Unsecured debt
 
 
 
 
 
 
 
 
 
 
 
Floating rate demand notes
$
5,926

 
$
5,559

 
 
 
 
 
 
 
 
Commercial paper
1,722

 
1,651

 
 
 
 
 
 
 
 
Other short-term debt
2,708

 
2,564

 
 
 
 
 
 
 
 
Asset-backed debt
1,855

 
1,377

 
 
 
 
 
 
 
 
Total short-term debt
12,211

 
11,151

 
1.6
%
 
1.9
%
 
1.6
%
 
1.9
%
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
Unsecured debt
 
 
 
 
 
 
 
 
 
 
 
Notes payable within one year
10,254

 
9,102

 
 
 
 
 
 
 
 
Notes payable after one year
48,672

 
42,488

 
 
 
 
 
 
 
 
Asset-backed debt
 
 
 
 
 
 
 
 
 
 
 
Notes payable within one year
18,855

 
16,722

 
 
 
 
 
 
 
 
Notes payable after one year
29,390

 
25,197

 
 
 
 
 
 
 
 
Unamortized discount
(25
)
 
(51
)
 
 
 
 
 
 
 
 
Unamortized issuance costs (a)
(214
)
 
—

 
 
 
 
 
 
 
 
Fair value adjustments
458

 
428

 
 
 
 
 
 
 
 
Total long-term debt
107,390

 
93,886

 
2.3
%
 
2.7
%
 
2.4
%
 
2.8
%
Total debt
$
119,601

 
$
105,037

 
2.2
%
 
2.6
%
 
2.3
%
 
2.7
%
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of debt
$
120,546

 
$
107,190

 
 
 
 
 
 
 
 
Interest rate characteristics of debt payable after one year
 
 
 
 
 
 
 
 
 
 
 
Fixed interest rate
54,396

 
49,148

 
 
 
 
 
 
 
 
Variable interest rate (generally based on LIBOR or other short-term rates)
23,666

 
18,537

 
 
 
 
 
 
 
 
Total payable after one year
$
78,062

 
$
67,685

 
 
 
 
 
 
 
 

__________
(a)
The new accounting standard regarding the presentation of debt issuance costs was adopted in the current period and applied prospectively.
NOTE 9. DEBT AND COMMITMENTS (Continued)

With the exception of commercial paper, which is issued at a discount, 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. Fair value adjustments relate to designated fair value hedges of unsecured debt.

The fair value of debt reflects interest accrued but not yet paid of $550 million and $586 million at December 31, 2015 and 2014, respectively. Accrued interest is reported in Other liabilities and deferred income for outside debt and Accounts payable - affiliated companies for debt with affiliated companies. The fair value of debt includes $10.4 billion and $9.8 billion of short-term debt at December 31, 2015 and 2014, respectively, carried at cost, which approximates fair value (see Note 15 for additional information).

Debt with affiliated companies included in the above table was as follows (in millions):
 
December 31,
2015
 
December 31,
2014
Other short-term debt
$
88

 
$
13

Notes payable within one year
13

 
307

Notes payable after one year
83

 
5

Total debt with affiliated companies
$
184

 
$
325


Interest expense on debt with affiliated companies is reported in Interest expense and was $19 million, $25 million, and $22 million for the years ended December 31, 2015, 2014, and 2013, respectively.

Maturities

Debt maturities at December 31, 2015, were as follows (in millions):
 
2016 (a)
 
2017
 
2018
 
2019
 
2020
 
Thereafter (b)
 
Total
Unsecured debt
$
20,610

 
$
12,503

 
$
11,288

 
$
6,151

 
$
6,882

 
$
11,848

 
$
69,282

Asset-backed debt
20,710

 
17,109

 
4,640

 
3,576

 
3,765

 
300

 
50,100

Total
41,320

 
29,612

 
15,928

 
9,727

 
10,647

 
12,148

 
119,382

Unamortized discount
 
 
 
 
 
 
 
 
 
 
 
 
(25
)
Unamortized issuance costs
 
 
 
 
 
 
 
 
 
 
 
 
(214
)
Fair value adjustments
 
 
 
 
 
 
 
 
 
 
 
 
458

Total debt


 


 


 


 


 


 
$
119,601

__________
(a)
Includes $12,211 million for short-term and $29,109 million for long-term debt.
(b)
Includes $12,020 million of unsecured debt maturing between 2021 and 2025 with the remaining balance maturing by 2048.

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 receivables or to purchase or make advances under asset-backed securities backed by retail or wholesale finance receivables or operating leases for proceeds of up to $33.2 billion ($17.6 billion of retail financing, $6.7 billion of wholesale financing, and $8.9 billion of operating lease assets) at December 31, 2015. These committed liquidity facilities have varying maturity dates, with $16.2 billion having maturities within the next twelve months and the remaining balance having maturities through 2017. We plan capacity renewals to protect our global funding needs, optimize capacity utilization, and maintain sufficient liquidity.

NOTE 9. DEBT AND COMMITMENTS (Continued)

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. Our capacity in excess of eligible receivables protects us against the risk of lower than planned renewal rates. At December 31, 2015, $20.6 billion of these commitments were in use. 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.

Effective June 2015, FCE Bank plc (“FCE”) has pre-positioned retail receivables with the Bank of England which supports access to the Discount Window Facility. Pre-positioned assets are neither pledged to nor held as collateral by the Bank of England unless the Discount Window Facility is accessed.

Unsecured Credit Facilities

At December 31, 2015, we and our majority-owned subsidiaries had $5.3 billion of contractually committed unsecured credit facilities with financial institutions, including the FCE Credit Agreement (as defined below) and the allocation under Ford’s revolving credit facility (as defined below). At December 31, 2015, $4.5 billion was available for use.

FCE’s £830 million (equivalent to $1.2 billion at December 31, 2015) syndicated credit facility (the “FCE Credit Agreement”) matures in 2018. At December 31, 2015, £380 million (equivalent to $560 million) was available for use. The FCE Credit Agreement contains certain covenants, including an obligation for FCE to maintain its ratio of regulatory capital to risk-weighted assets at no less than the applicable regulatory minimum, and for the support agreement between FCE and Ford Credit to remain in full force and effect (and enforced by FCE to ensure that its net worth is maintained at no less than $500 million). In addition to customary payment, representation, bankruptcy, and judgment defaults, the FCE Credit Agreement contains cross-payment and cross-acceleration defaults with respect to other debt.

Lenders under Ford’s Third Amended and Restated Credit Agreement dated as of April 30, 2015 and as further amended (“Ford’s revolving credit facility”) have commitments totaling $13.4 billion, with about 75% of the commitments maturing on April 30, 2020 and about 25% of commitments maturing on April 30, 2018. Ford has allocated $3.0 billion of these commitments, including commitments under a Chinese renminbi sub-facility, to us on an irrevocable and exclusive basis to support our growth and liquidity. At December 31, 2015, all $3.0 billion was available for use.
v3.3.1.900
Income Taxes
 12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

Ford Motor Credit Company LLC is a disregarded entity for United States income tax purposes and Ford’s consolidated United States federal and state income tax returns include certain of our domestic subsidiaries. In accordance with our intercompany tax sharing agreement with Ford, United States income tax liabilities or credits are allocated to us generally on a separate return basis calculated as if we were taxable as a corporation.

The Provision for income taxes for the years ended December 31 was estimated as follows (in millions):
 
2015
 
2014
 
2013
Current
 
 
 
 
 
Federal
$
(454
)
 
$
(198
)
 
$
185

Non-U.S.
161

 
154

 
169

State and local
(26
)
 
(38
)
 
(55
)
Total current
(319
)
 
(82
)
 
299

Deferred
 
 
 
 
 
Federal
893

 
193

 
—

Non-U.S.
93

 
(6
)
 
(29
)
State and local
56

 
44

 
7

Total deferred
1,042

 
231

 
(22
)
Provision for income taxes
$
723

 
$
149

 
$
277



A reconciliation of the Provision for income taxes with the United States statutory tax rate as a percentage of Income before income taxes for the years ended December 31 is as follows:

 
2015
 
2014
 
2013
U.S. statutory tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
Effect of (in percentage points):
 
 
 
 
 
Non-U.S. tax rates under U.S. rate
(3.0
)
 
(3.0
)
 
(2.3
)
State and local income taxes
1.0

 
(0.2
)
 
(1.0
)
U.S. tax on non-U.S. earnings (a)
0.2

 
(21.4
)
 
(15.0
)
Other
(0.2
)
 
(2.4
)
 
1.9

Valuation allowance
1.7

 
—

 
(2.8
)
Effective tax rate
34.7
 %
 
8.0
 %
 
15.8
 %
________
(a)
During 2014, we changed our method for measuring currency gains and losses in computing the earnings of our European operations under U.S. tax law.  Implementation of the new method resulted in a reduction of U.S. tax on non-U.S. earnings of approximately $360 million due to realization of additional foreign tax credits.

At December 31, 2015, $2.9 billion of non-U.S. earnings are considered indefinitely reinvested in operations outside the United States, for which deferred taxes have not been provided.  Repatriation of these earnings in their entirety would result in a residual U.S. tax liability of about $600 million. Our measure of the amount of non-U.S. earnings considered indefinitely reinvested in operations outside the United States reflects accumulated earnings determined under U.S. tax law.

NOTE 10. INCOME TAXES (Continued)

During 2013, we concluded that $500 million in earnings from our European operations, previously planned for distribution to the United States and for which we recognized U.S. tax expense, will now be indefinitely reinvested outside the United States. These earnings will be used to fund non-U.S. operations, and therefore they are not planned to be distributed to the United States in the foreseeable future.

Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and their respective tax bases, and net operating loss carryforwards and tax credit carryforwards on a taxing jurisdiction basis. We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be recovered or paid.

Our accounting for deferred tax consequences represents our best estimate of the likely future tax consequences of events that have been recognized in our financial statements or tax returns and their future probability. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, we record a valuation allowance.

The components of deferred tax assets and liabilities were as follows (in millions):
 
December 31, 2015
 
December 31, 2014
Deferred tax assets
 
 
 
Net operating loss carryforwards
$
540

 
$
227

Provision for credit losses
87

 
140

Other foreign
75

 
186

Employee benefit plans
10

 
11

Foreign tax credits
756

 
685

Other
280

 
282

Total gross deferred tax assets
1,748

 
1,531

Less: Valuation allowance
(47
)
 
(10
)
Total net deferred tax assets
1,701

 
1,521

Deferred tax liabilities
 
 
 
Leasing transactions
3,338

 
2,035

Finance receivables
688

 
647

Other foreign
330

 
480

Other
18

 
23

Total deferred tax liabilities
4,374

 
3,185

Net deferred tax liability
$
2,673

 
$
1,664



At December 31, 2015, we have a valuation allowance of $47 million for deferred tax assets related to our Latin American operations.

In accordance with our intercompany tax sharing agreement with Ford, United States income tax liabilities or credits are allocated to us, generally on a separate return basis. In this regard, the deferred tax assets related to foreign tax credits and net operating loss carryforwards represent amounts primarily due from Ford. Under our tax sharing agreement with Ford, we are generally paid for these assets at the earlier of our use on a separate return basis or their expiration.

Operating loss carryforwards for tax purposes were $1.6 billion at December 31, 2015, resulting in a deferred tax asset of $540 million. These losses begin to expire in 2019 with a substantial portion expiring in 2036. Tax benefits of net operating loss carryforwards and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances.

NOTE 10. INCOME TAXES (Continued)

In accordance with our intercompany tax sharing agreement with Ford, we earn interest on net tax assets and pay interest on certain tax liabilities. Interest earned is included in Other income, net while interest expense is included in Interest expense.

The changes in the unrecognized tax benefits for the years ended December 31 were as follows (in millions):
 
2015
 
2014
 
2013
Beginning balance
$
111

 
$
159

 
$
491

Increase - tax positions in prior periods
9

 
28

 
28

Increase - tax positions in current period
1

 
1

 
1

Decrease - tax positions in prior periods
(22
)
 
(44
)
 
(68
)
Settlements
(8
)
 
(33
)
 
(293
)
Ending balance
$
91

 
$
111

 
$
159


The amount of unrecognized tax benefits at December 31, 2015, 2014, and 2013 that would impact the effective tax rate if recognized, was $76 million, $88 million, and $128 million, respectively. We do not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease during the next twelve months.

We have settled our U.S. federal income tax matters related to tax years prior to 2012 in accordance with our intercompany tax sharing agreement with Ford. The Ford consolidated tax return is currently under examination for the 2012 and 2013 tax years. Examinations by tax authorities have been completed through 2008 in Germany, 2010 in Canada, and 2013 in the United Kingdom.

We recognize income tax-related penalties in Provision for/(Benefit from) income taxes on our income statement.  We recognize accrued interest expense related to unrecognized tax benefits in jurisdictions where we file tax returns separate from Ford in Other income, net on our income statement. For the years ended December 31, 2015, 2014, and 2013, we recorded $3 million in net tax related interest income, $13 million in net tax related interest expense, and $17 million in net tax related interest income, respectively, in our income statement. At December 31, 2015 and 2014, we recorded a net payable of $37 million and $50 million, respectively, for tax related interest in Other liabilities and deferred income.
v3.3.1.900
Accumulated Other Comprehensive Income
 12 Months Ended
Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)
ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The changes in the balance of Accumulated Other Comprehensive Income/(Loss) (“AOCI”) for the years ended December 31 were as follows (in millions):
 
2015
 
2014
 
2013
Foreign currency translation
 
 
 
 
 
Beginning balance
$
160

 
$
717

 
$
743

Net gain/(loss) on foreign currency translation
(767
)
 
(547
)
 
(86
)
Reclassifications from shareholder’s interest (a)(b)
—

 
(10
)
 
60

Other comprehensive income/(loss) including reclassification adjustments, net of tax
(767
)
 
(557
)
 
(26
)
Ending balance
$
(607
)
 
$
160

 
$
717

 
 
 
 
 
 
Total AOCI ending balance at December 31
$
(607
)
 
$
160

 
$
717


__________
(a)
In 2014, we recorded a foreign currency translation adjustment related to the acquisition of a subsidiary of Ford. This adjustment also increased Shareholder’s interest and did not impact the Total Shareholder’s interest on our balance sheet.
(b)
In 2013, we recorded a foreign currency translation adjustment related to FCE’s acquisition of the net residual assets of an affiliated company. This adjustment also decreased Shareholder’s interest and did not impact the Total shareholder’s interest on our balance sheet.
v3.3.1.900
Insurance
 12 Months Ended
Dec. 31, 2015
Insurance [Abstract]  
INSURANCE
INSURANCE

We conduct insurance underwriting operations primarily through The American Road Insurance Company (“TARIC”) and other subsidiaries. TARIC is a wholly owned subsidiary of Ford Credit operating in the United States and Canada. TARIC provides physical damage insurance coverage for Ford Credit financed vehicles at dealer locations and Ford and Lincoln vehicles in transit between final assembly plants and dealer locations. In addition, TARIC provides a variety of insurance products and services to Ford and its affiliates, including contractual liability insurance on extended service contracts. For Ford US, TARIC provides commercial automobile and general liability insurance, and surety bonds.

Insurance premiums earned are reported net of reinsurance as Insurance premiums earned. These premiums are earned over their respective policy periods. Physical damage insurance premiums, including premiums on vehicles financed at wholesale by us, are recognized as income on a monthly basis. Premiums from extended service plan contracts and other contractual liability coverages are earned over the life of the policy based on historical loss experience. Commissions and premium taxes are deferred and amortized over the term of the related policies on the same basis on which premiums are earned.

TARIC is required by law to maintain deposits with regulatory authorities. These deposited securities totaled $12 million and $13 million at December 31, 2015 and 2014, respectively.
Insurance Expenses and Liabilities

Insurance underwriting losses and expenses are reported as Insurance expenses. The components of insurance expenses were as follows for the years ended December 31 (in millions):
 
2015
 
2014
 
2013
Insurance losses
$
80

 
$
115

 
$
70

Loss adjustment expenses
5

 
6

 
6

Reinsurance income and other expenses, net
(16
)
 
(14
)
 
(13
)
Insurance expenses
$
69

 
$
107

 
$
63



The insurance loss and loss adjustment expenses, net of recoveries, with related parties were $36 million, $30 million, and $26 million for the years ended December 31, 2015, 2014, and 2013, respectively.

Reserves for insurance losses and loss adjustment expenses are established based on actuarial estimates and historical loss development patterns, which represents management’s best estimate. If management believes the reserves do not reflect all losses due to changes in conditions, or other relevant factors, an adjustment is made based on management judgment. The reserve for reported insurance losses and an estimate of unreported insurance losses, based on past experience, was $8 million and $11 million at December 31, 2015 and 2014, respectively, and was included in Other liabilities and deferred income.

Reinsurance

Reinsurance activity primarily consists of ceding a majority of automotive extended service plan contracts for a ceding commission. Amounts recoverable from reinsurers on unpaid losses, including incurred but not reported losses, and amounts paid to reinsurers relating to the unexpired portion of reinsurance contracts are reported in Other assets. Ceded insurance expenses that were deducted from the amounts reported as Insurance expenses were $76 million, $68 million, and $64 million for the years ended December 31, 2015, 2014, and 2013, respectively.

NOTE 12. INSURANCE (Continued)

The effect of reinsurance on premiums written and earned was as follows for the years ended December 31 (in millions):
 
2015
 
2014
 
2013
 
Written
 
Earned
 
Written
 
Earned
 
Written
 
Earned
Direct
$
328

 
$
254

 
$
293

 
$
230

 
$
270

 
$
216

Assumed
—

 
—

 
—

 
—

 
—

 
—

Ceded
(194
)
 
(121
)
 
(166
)
 
(105
)
 
(151
)
 
(97
)
Net premiums
$
134

 
$
133

 
$
127

 
$
125

 
$
119

 
$
119



The insurance premiums earned, net of amounts ceded, with related parties were $90 million, $75 million, and $64 million for the years ended December 31, 2015, 2014, and 2013, respectively. The amount of unearned insurance premiums ceded to related parties were $176 million and $149 million at December 31, 2015 and 2014, respectively.

Commissions on reinsurance ceded are earned on the same basis as related premiums. Reinsurance contracts do not relieve TARIC from its obligations to its policyholders. Failure of reinsurers to honor their obligations could result in losses to TARIC. Therefore, TARIC either directly or indirectly (via insurance brokers) monitors the underlying business and financial performance of the reinsurers. In addition, where deemed necessary, TARIC may require collateral or utilize multiple reinsurers to mitigate concentration risk.
v3.3.1.900
Other Income
 12 Months Ended
Dec. 31, 2015
Other Income and Expenses [Abstract]  
OTHER INCOME
OTHER INCOME, NET

Other income consists of various line items that are combined on the income statement due to their respective materiality compared with other individual income and expense items.

The amounts included in Other income, net were as follows for the years ended December 31 (in millions):
 
2015
 
2014
 
2013
Gains/(Losses) on derivatives
$
110

 
$
208

 
$
(148
)
Currency revaluation gains/(losses)
(161
)
 
(236
)
 
82

Interest and investment income (a)
69

 
53

 
50

Insurance fee income
88

 
74

 
61

Other
178

 
166

 
213

Total other income, net
$
284

 
$
265

 
$
258

__________
(a)
Includes interest income primarily on notes receivable from affiliated companies of $3 million, $5 million, $11 million for December 31, 2015, 2014, and 2013 respectively.
v3.3.1.900
Retirement Benefits
 12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
RETIREMENT BENEFITS AND SHARE-BASED COMPENSATION
RETIREMENT BENEFITS

We are a participating employer in certain retirement plans that are sponsored by Ford. As described below, Ford allocates costs to us under these plans based on the total number of participating or eligible employees at Ford Credit. Further information about these sponsored plans is available in Ford’s Annual Report on Form 10-K for the year ended December 31, 2015, filed separately with the Securities and Exchange Commission.
  
Benefits earned under certain Ford-sponsored retirement plans are generally based on an employee’s length of service, salary, and contributions. The allocation amount can be impacted by key assumptions (for example, discount rate and average rate of increase in compensation) that Ford uses in determining its retirement plan obligations. Also, we are jointly and severally liable to the Pension Benefit Guaranty Corporation (“PBGC”) for certain Ford IRS-qualified U.S. defined benefit pension plan liabilities and to any trustee appointed if one or more of these pension plans were to be terminated by the PBGC in a distress termination. We are liable to pay any plan deficiencies and could have a lien placed on our assets by the PBGC to collateralize this liability.

Retirement plan service costs allocated to Ford Credit for our employees in the U.S. participating in the Ford-sponsored plans were $30 million, $26 million, and $26 million for the years ended December 31, 2015, 2014, and 2013, respectively, and were charged to Operating expenses. The allocated cost for 2015 was equivalent to 9% of Ford’s total U.S. salaried retirement plan service cost.
v3.3.1.900
Fair Value Measurements
 12 Months Ended
Dec. 31, 2015
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

Cash equivalents, marketable securities, and derivative financial instruments are remeasured and presented on our financial statements on a recurring basis at fair value, while other assets and liabilities are measured at fair value on a nonrecurring basis.

Fair Value Measurements

In measuring fair value, we use various valuation methods and prioritize the use of observable inputs. The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our fair value hierarchy.

•
Level 1 – inputs include quoted prices for identical instruments and are the most observable
•
Level 2 – inputs include quoted prices for similar instruments and observable inputs such as interest rates, currency exchange rates, and yield curves
•
Level 3 – inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the instruments

Transfers into and transfers out of the hierarchy levels are recognized as if they had taken place at the end of the reporting period.
    
Valuation Methods

Cash and Cash Equivalents. Included in Cash and cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal. A debt security is classified as a cash equivalent if it meets these criteria and if it has a remaining time to maturity of three months or less from the date of acquisition. Amounts on deposit and available upon demand, or negotiated to provide for daily liquidity without penalty, are classified as Cash and cash equivalents. Time deposits, certificates of deposit, and money market accounts that meet the above criteria are reported at par value on our balance sheet and are excluded from the table below.

NOTE 15. FAIR VALUE MEASUREMENTS (Continued)

Marketable Securities. Investments in securities with a maturity date greater than three months at the date of purchase and other securities for which there is more than an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal are classified as Marketable securities. We generally measure fair value using prices obtained from pricing services. Pricing methods and inputs to valuation models used by the pricing services depend on the security type (i.e., asset class). Where possible, fair values are generated using market inputs including quoted prices (the closing price in an exchange market), bid prices (the price at which a buyer stands ready to purchase), and other market information. For fixed income securities that are not actively traded, the pricing services use alternative methods to determine fair value for the securities, including quotes for similar fixed income securities, matrix pricing, discounted cash flow using benchmark curves, or other factors. In certain cases, when market data are not available, we may use broker quotes to determine fair value.

An annual review is performed on the security prices received from our pricing services, which includes discussion and analysis of the inputs used by the pricing services to value our securities. We also compare the price of certain securities sold close to the quarter end to the price of the same security at the balance sheet date to ensure the reported fair value is reasonable.

Realized and unrealized gains and losses and interest income on our marketable securities are recorded in Other income, net. Realized gains and losses are measured using the specific identification method.  

Derivative Financial Instruments. Our derivatives are over-the-counter customized derivative transactions and are not exchange traded. We estimate the fair value of these instruments using industry-standard valuation models such as a discounted cash flow. These models project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates, foreign exchange rates, and the contractual terms of the derivative instruments. The discount rate used is the relevant interbank deposit rate (e.g., LIBOR) plus an adjustment for non-performance risk. The adjustment reflects the full credit default swap (“CDS”) spread applied to a net exposure, by counterparty, considering the master netting agreements and any posted collateral. We use our counterparty’s CDS spread when we are in a net asset position and our own CDS spread when we are in a net liability position.

Finance Receivables. We measure finance receivables at fair value for purposes of disclosure (see Note 2 for additional information) using internal valuation models. These models project future cash flows of financing contracts based on scheduled contract payments (including principal and interest). The projected cash flows are discounted to present value based on assumptions regarding credit losses, pre-payment speed, and applicable spreads to approximate current rates. Our assumptions regarding pre-payment speed and credit losses are based on historical performance. The fair value of finance receivables is categorized within Level 3 of the hierarchy.

On a nonrecurring basis, we also measure at fair value retail contracts greater than 120 days past due or deemed to be uncollectible, and individual dealer loans probable of foreclosure. We use the fair value of collateral, adjusted for estimated costs to sell, to determine the fair value of our receivables. The collateral for a retail receivable is the vehicle financed, and for dealer loans is real estate or other property.

The fair value of collateral for retail receivables is calculated by multiplying the outstanding receivable balances by the average recovery value percentage. The fair value of collateral for dealer loans is determined by reviewing various appraisals, which include total adjusted appraised value of land and improvements, alternate use appraised value, broker’s opinion of value, and purchase offers.



NOTE 15. FAIR VALUE MEASUREMENTS (Continued)

Debt. We measure debt at fair value for purposes of disclosure (see Note 9 for additional information) 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.

Input Hierarchy of Items Measured at Fair Value on a Recurring Basis

The following table categorizes the fair values of items measured at fair value on a recurring basis on our balance sheet, none of which are Level 3 (in millions):
 
December 31, 2015
 
December 31, 2014
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents-financial instruments
 
 
 
 
 
 
 
 
 
 
 
Non-U.S. government and agencies
$
—

 
$
266

 
$
266

 
$
—

 
$
341

 
$
341

Corporate debt
—

 
—

 
—

 
—

 
10

 
10

Total cash equivalents-financial instruments (a)
—

 
266

 
266

 
—

 
351

 
351

Marketable securities
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
298

 
1,169

 
1,467

 
17

 
1,251

 
1,268

Non-U.S. government and agencies
—

 
832

 
832

 
—

 
405

 
405

Corporate debt
—

 
384

 
384

 
—

 
1,555

 
1,555

Other marketable securities
—

 
40

 
40

 
—

 
30

 
30

Total marketable securities
298

 
2,425

 
2,723

 
17

 
3,241

 
3,258

Derivative financial instruments
 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments (b)
—

 
924

 
924

 
—

 
859

 
859

Total assets at fair value
$
298

 
$
3,615

 
$
3,913

 
$
17

 
$
4,451

 
$
4,468

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments (b)
$
—

 
$
243

 
$
243

 
$
—

 
$
167

 
$
167

Total liabilities at fair value
$
—

 
$
243

 
$
243

 
$
—

 
$
167

 
$
167

__________
(a)
Excludes time deposits, certificates of deposit, and money market accounts reported at par value on our balance sheet totaling $6.3 billion and $3.8 billion at December 31, 2015 and 2014, respectively. In addition to these cash equivalents, we also had cash on hand totaling $2.3 billion and $2.0 billion at December 31, 2015 and 2014, respectively.
(b)
See Note 7 for additional information regarding derivative financial instruments.
v3.3.1.900
Segment and Geographic Information
 12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
SEGMENT INFORMATION
SEGMENT AND GEOGRAPHIC INFORMATION

We conduct our financing operations directly and indirectly through our subsidiaries and affiliates. We offer substantially similar products and services throughout many different regions, subject to local legal restrictions and market conditions. We divide our business segments based on geographic regions: North America (“North America Segment”) and International (“International Segment”). The North America Segment includes our operations in the United States and Canada. The International Segment includes our operations in all other countries in which we do business directly and indirectly.

We review our business performance on a managed basis.  Receivables for the North America and International Segments are presented on a managed basis, as it closely approximates the customer's outstanding balance on the receivables, which is the basis for earning revenue. Our managed receivables equal net finance receivables and net investment in operating leases, excluding unearned interest supplements and residual support, allowance for credit losses, and other (primarily accumulated supplemental depreciation).

We measure the performance of our North America and International Segments primarily on an income before income taxes basis, after excluding the impact to earnings from gains and losses related to market valuation adjustments to derivatives primarily related to movements in interest rates. These adjustments are included in unallocated risk management and are excluded in assessing our North America and International segment performance, because they are carried out on a centralized basis at the corporate level. We also adjust segment performance to re-allocate interest expense between the North America and International segments reflecting debt and equity levels proportionate to their product risk.

NOTE 16. SEGMENT AND GEOGRAPHIC INFORMATION (Continued)

Key operating data for our business segments for the years ended or at December 31 were as follows (in millions):

 
 
 
 
 
Unallocated/Eliminations
 
 
 
North
America
Segment
 
International
Segment
 
Unallocated
Risk Management
 
Adjustment to
Receivables (a)
 
Total Unallocated/Eliminations
 
Total
2015
 
 
 
 
 
 
 
 
 
 
 
Total revenue (b)
$
8,048

 
$
1,650

 
$
(1
)
 
$
—

 
$
(1
)
 
$
9,697

Income before income taxes
1,629

 
458

 
(1
)
 
—

 
(1
)
 
2,086

Other disclosures:
 
 
 
 
 
 
 
 
 
 
 
Depreciation on vehicles subject to operating leases
3,603

 
37

 
—

 
—

 
—

 
3,640

Interest expense
1,811

 
605

 
—

 
—

 
—

 
2,416

Provision for credit losses
294

 
53

 
—

 
—

 
—

 
347

Net finance receivables and net investment in operating leases
103,268

 
23,964

 
—

 
(5,330
)
 
(5,330
)
 
121,902

Total assets
109,339

 
28,109

 
—

 
—

 
—

 
137,448

 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
Total revenue (b)
$
7,351

 
$
1,651

 
$
(6
)
 
$
—

 
$
(6
)
 
$
8,996

Income before income taxes
1,399

 
461

 
(6
)
 
—

 
(6
)
 
1,854

Other disclosures:
 
 
 
 
 
 
 
 
 
 
 
Depreciation on vehicles subject to operating leases
3,045

 
43

 
—

 
—

 
—

 
3,088

Interest expense
2,010

 
646

 
—

 
—

 
—

 
2,656

Provision for credit losses
157

 
40

 
—

 
—

 
—

 
197

Net finance receivables and net investment in operating leases
91,021

 
21,762

 
—

 
(4,350
)
 
(4,350
)
 
108,433

Total assets
96,016

 
26,092

 
—

 
—

 
—

 
122,108

 
 
 
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
 
 
 
Total revenue (b)
$
6,708

 
$
1,527

 
$
(53
)
 
$
—

 
$
(53
)
 
$
8,182

Income before income taxes
1,438

 
371

 
(53
)
 
—

 
(53
)
 
1,756

Other disclosures:
 
 
 
 
 
 
 
 
 
 
 
Depreciation on vehicles subject to operating leases
2,369

 
28

 
—

 
—

 
—

 
2,397

Interest expense
2,088

 
642

 
—

 
—

 
—

 
2,730

Provision for credit losses
114

 
32

 
—

 
—

 
—

 
146

Net finance receivables and net investment in operating leases
83,722

 
19,688

 
—

 
(3,497
)
 
(3,497
)
 
99,913

Total assets
90,720

 
24,888

 
—

 
—

 
—

 
115,608

__________
(a)
Includes unearned interest supplements and residual support, allowances for credit losses, and other (primarily accumulated supplemental depreciation).
(b)
Represents Total financing revenue, Insurance premiums earned, and Other income, net.

NOTE 16. SEGMENT AND GEOGRAPHIC INFORMATION (Continued)

Geographic Information

Key data for our geographic operations in the United States, Canada, Europe, and other foreign operations were as follows for the years ended or at December 31 (in millions):
 
2015
 
2014
 
2013
Total revenue (a)
 
 
 
 
 
United States
$
7,070

 
$
6,377

 
$
5,739

Canada
981

 
998

 
909

Europe
979

 
1,041

 
1,132

All other
667

 
580

 
402

Total revenue
$
9,697

 
$
8,996

 
$
8,182

 
 
 
 
 
 
Income before income taxes
 
 
 
 
 
United States
$
1,298

 
$
1,199

 
$
1,160

Canada
247

 
148

 
127

Europe
316

 
332

 
319

All other
225

 
175

 
150

Total income before income taxes
$
2,086

 
$
1,854

 
$
1,756

 
 
 
 
 
 
Finance receivables, net and net investment in operating leases
 
 
 
 
 
United States
$
88,237

 
$
76,578

 
$
70,513

Canada
10,037

 
10,449

 
10,085

Europe
18,657

 
16,708

 
15,674

All other
4,971

 
4,698

 
3,641

Total finance receivables, net and net investment in operating leases
$
121,902

 
$
108,433

 
$
99,913

__________
(a)
Represents Total financing revenue, Insurance premiums earned, and Other income, net.
v3.3.1.900
Selected Quarterly Financial Data
 12 Months Ended
Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]  
SELECTED QUARTERLY FINANCIAL DATA
SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

Selected financial data by calendar quarter were as follows (in millions):
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
 
Full Year
2015
 
 
 
 
 
 
 
 
 
Total revenue (a)
$
2,282

 
$
2,338

 
$
2,478

 
$
2,599

 
$
9,697

Depreciation on vehicles subject to operating leases
(816
)
 
(858
)
 
(956
)
 
(1,010
)
 
(3,640
)
Interest expense
(638
)
 
(599
)
 
(582
)
 
(597
)
 
(2,416
)
Total financing margin and other revenue
828

 
881

 
940

 
992

 
3,641

Provision for credit losses
67

 
72

 
100

 
108

 
347

Net income
306

 
340

 
365

 
352

 
1,363

 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
Total revenue (a)
$
2,159

 
$
2,234

 
$
2,312

 
$
2,291

 
$
8,996

Depreciation on vehicles subject to operating leases
(705
)
 
(742
)
 
(801
)
 
(840
)
 
(3,088
)
Interest expense
(666
)
 
(673
)
 
(663
)
 
(654
)
 
(2,656
)
Total financing margin and other revenue
788

 
819

 
848

 
797

 
3,252

Provision for credit losses
31

 
27

 
57

 
82

 
197

Net income (b)
312

 
264

 
718

 
411

 
1,705

__________
(a)
Represents Total financing revenue, Insurance premiums earned, and Other income, net.
(b)
The third quarter net income includes favorable tax items of approximately $360 million resulting from a change in our method for measuring currency gains and losses in computing earnings of our European operations under U.S. tax law. See Note 10 for additional information.
v3.3.1.900
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

Commitments and contingencies primarily consist of lease commitments, guarantees and indemnifications, and litigation and claims.

Lease Commitments

We have rental commitments for certain land, buildings, and equipment that expire over various contractual periods. Minimum non-cancelable operating lease commitments at December 31, 2015 were as follows (in millions):
 
2016
 
2017
 
2018
 
2019
 
2020
 
Thereafter
Minimum rentals on operating leases
$
19

 
$
16

 
$
10

 
$
6

 
$
5

 
$
7



Rental expense under cancelable and non-cancelable leases of $27 million, $26 million, and $25 million was recorded in Operating expenses for the years ended December 31, 2015, 2014, and 2013, respectively.

Guarantees and Indemnifications

Guarantees and indemnifications are recorded at fair value at their inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we will be required to perform under a guarantee or indemnity, the amount of probable payment is recorded.

In some cases, we have guaranteed debt and other financial obligations of outside third parties and unconsolidated affiliates, including Ford. Expiration dates vary, and guarantees will terminate on payment and/or cancellation of the underlying obligation. A payment by us would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee. In some circumstances, we are entitled to recover from Ford, an affiliate of Ford, or a third party amounts paid by us under the guarantee. However, our ability to enforce these rights is sometimes stayed until the guaranteed party is paid in full, and may be limited in the event of insolvency of the third party or other circumstances.
NOTE 18. COMMITMENTS AND CONTINGENCIES (Continued)

In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction. These indemnifications might include and are not limited to claims relating to any of the following: environmental, tax, and shareholder matters; intellectual property rights; governmental regulations and employment-related matters; dealer and other commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities generally would be triggered by a breach of terms of the contract or by a third-party claim. While some of these indemnifications are limited in nature, many of them do not limit potential payment. Therefore, we are unable to estimate a maximum amount of future payments that could result from claims made under these unlimited indemnities.
  
The maximum potential payments under these guarantees and limited indemnities totaled $80 million and $107 million at December 31, 2015 and 2014, respectively. Of these values, $74 million and $101 million at December 31, 2015 and 2014, respectively, were counter-guaranteed by Ford to us. There were no recorded liabilities related to guarantees and limited indemnities at December 31, 2015 and 2014.

Litigation and Claims

Various legal actions, proceedings, and claims (generally, “matters”) are pending or may be instituted or asserted against us. These include but are not limited to matters arising out of governmental regulations; tax matters; alleged illegal acts resulting in fines or penalties; financial services; employment-related matters; dealer and other contractual relationships; personal injury matters; investor matters; and financial reporting matters. Certain of the pending legal actions are, or purport to be, class actions. Some of the matters involve or may involve claims for compensatory, punitive, or antitrust or other treble damages in very large amounts, sanctions, assessments, or other relief, which, if granted, would require very large expenditures.

The extent of our financial exposure to these matters is difficult to estimate. Many matters do not specify a dollar amount for damages, and many others specify only a jurisdictional minimum. To the extent an amount is asserted, our historical experience suggests that in most instances the amount asserted is not a reliable indicator of the ultimate outcome.
We accrue for matters when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood that we will prevail, and the severity of any potential loss. We reevaluate and update our accruals as matters progress over time.

For nearly all of our matters, where our historical experience with similar matters is of limited value (i.e., “non-pattern matters”), we evaluate the matters primarily based on the individual facts and circumstances. For non-pattern matters, we evaluate whether there is a reasonable possibility of a material loss in excess of any accrual that can be estimated. It is reasonably possible that some of the matters for which accruals have not been established could be decided unfavorably to us and could require us to pay damages or make other expenditures. We do not reasonably expect, based on our analysis, that such matters would have a material effect on future financial statements for a particular year, although such an outcome is possible.
As noted, the litigation process is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. Our assessments are based on our knowledge and experience, but the ultimate outcome of any matter could require payment substantially in excess of the amount that we have accrued and/or disclosed.
v3.3.1.900
Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2015
Basis of Accounting and Intercompany Transactions [Abstract]  
Basis of Accounting and Intercompany Transactions [Policy Text Block]
The accompanying consolidated financial statements include Ford Motor Credit Company LLC, its controlled domestic and foreign subsidiaries and joint ventures, and consolidated VIEs in which Ford Motor Credit Company LLC is the primary beneficiary (collectively referred to herein as “Ford Credit,” “we,” “our,” or “us”). Affiliates that we do not consolidate, but for which we have significant influence over operating and financial policies, are accounted for using the equity method. We are an indirect, wholly owned subsidiary of Ford Motor Company (“Ford”).

Use of estimates, as determined by management, is required in the preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”). Because of the inherent uncertainty involved in making estimates, actual results reported in future periods might be based upon amounts that differ from those estimates. The accounting estimates that are most important to our business include the allowance for credit losses and accumulated depreciation on vehicles subject to operating leases.
Reclassifications [Abstract]  
Comparability of Prior Year Financial Data, Policy [Policy Text Block]
We reclassified certain prior period amounts in our consolidated financial statements to conform to current year presentation.
Foreign Currency Translation [Abstract]  
Foreign Currency Transactions and Translations Policy [Policy Text Block]
Foreign Currency. We remeasure monetary assets and liabilities denominated in a currency that is different from a reporting entity’s functional currency from the transactional currency to the legal entity’s functional currency. The effect of this remeasurement process, and the results of our foreign currency hedging activities are reported in Other income, net.

Generally, our foreign subsidiaries use the local currency as their functional currency. We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies to U.S. dollars using end-of-period exchange rates. Changes in the carrying value of these assets and liabilities attributable to fluctuations in exchange rates are recognized in Accumulated other comprehensive income/(loss). Upon sale or upon complete or substantially complete liquidation of an investment in a foreign subsidiary, the amount of accumulated foreign currency translation related to the entity is reclassified to Net income and recognized as part of the gain or loss on the investment.
Loans and Leases Receivable Disclosure [Abstract]  
Finance, Loans and Leases Receivable, Policy [Policy Text Block]
Impaired consumer receivables include accounts that have been rewritten or modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code that are considered to be Troubled Debt Restructurings (“TDRs”), as well as all accounts greater than 120 days past due. Impaired non-consumer receivables represent accounts with dealers that have weak or poor financial metrics or dealer financing that has been modified in TDRs.
A restructuring of debt constitutes a TDR if we grant a concession to a debtor for economic or legal reasons related to the debtor’s financial difficulties that we otherwise would not consider. Consumer and non-consumer receivables that have a modified interest rate below market rate or that were modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code, except non-consumer receivables that are current with minimal risk of loss, are considered to be TDRs. We do not grant concessions on the principal balance of our receivables. If a receivable is modified in a reorganization proceeding, all payment requirements of the reorganization plan need to be met before remaining balances are forgiven. Finance receivables involved in TDRs are specifically assessed for impairment.
Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses.

Revenue from finance receivables is recognized using the interest method and includes the accretion of certain direct origination costs that are deferred and interest supplements received from Ford and affiliated companies. The unearned interest supplements on consumer finance receivables are included in Finance receivables, net on the balance sheet, and the earned interest supplements are included in Financing revenue on the income statement.
For all finance receivables, we define “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date.
The accrual of revenue is discontinued at the time a receivable is determined to be uncollectible. Accounts may be restored to accrual status only when a customer settles all past-due deficiency balances and future payments are reasonably assured. For receivables in non-accrual status, subsequent financing revenue is recognized only to the extent a payment is received. Payments are generally applied first to outstanding interest and then to the unpaid principal balance.
Lease Policy [Abstract]  
Lease, Policy [Policy Text Block]
Revenue from rental payments received on operating leases is recognized on a straight-line basis over the term of the lease. The accrual of revenue on operating leases is discontinued at the time an account is determined to be uncollectible.

We receive interest supplements and residual support payments on certain leasing transactions under agreements with Ford. We recognize these upfront collections from Ford and other vehicle acquisition costs as part of Net investment in operating leases, which are amortized to Depreciation on vehicles subject to operating leases over the term of the lease contract.
Depreciation expense on vehicles subject to operating leases is provided on a straight-line basis in an amount necessary to reduce the leased vehicle value to its estimated residual value at the end of the lease term. Our policy is to promptly sell returned off-lease vehicles. We evaluate our depreciation for leased vehicles on a regular basis taking into consideration various assumptions, such as expected residual values at lease termination (including residual value support payments from Ford) and the estimated number of vehicles that will be returned to us. Adjustments to depreciation expense reflecting revised estimates of expected residual values at the end of the lease terms are recorded prospectively on a straight-line basis. Upon disposition of the vehicle, the difference between net book value and actual proceeds is recorded as an adjustment to Depreciation on vehicles subject to operating leases.

We evaluate the carrying value of held-and-used long-lived asset groups (such as vehicles subject to operating leases) for potential impairment when we determine a triggering event has occurred. When a triggering event occurs, a test for recoverability is performed by comparing projected undiscounted future cash flows to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured in accordance with the fair value measurement framework. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. For the periods presented, we have not recorded any impairment charges.
Allowance for Credit Losses [Abstract]  
Allowance for Credit Losses, Policy [Policy Text Block]
The allowance for credit losses represents our estimate of the probable credit loss inherent in finance receivables and operating leases as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly and the assumptions and models used in establishing the allowance are evaluated regularly. Because credit losses may vary substantially over time, estimating credit losses requires a number of assumptions about matters that are uncertain. The majority of credit losses are attributable to consumer receivables.

Additions to the allowance for credit losses are made by recording charges to the Provision for credit losses on the income statement. The uncollectible portion of finance receivables and operating leases are charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the customer, borrower or lessee, the value of the collateral, recourse to guarantors, and other factors.

In the event we repossess the collateral, the receivable is charged off and we record the collateral at its estimated fair value less costs to sell and report it in Other assets on the balance sheet. Charge-offs on finance receivables and operating leases include uncollected amounts related to principal, interest, rental payments, late fees, and other allowable charges. Recoveries on finance receivables and operating leases previously charged off as uncollectible are credited to the allowance for credit losses.

Consumer Segment and Operating Leases

We estimate the allowance for credit losses on consumer receivables and on operating leases using a combination of measurement models and management judgment. The models consider factors such as historical trends in credit losses and recoveries (including key metrics such as delinquencies, repossessions, and bankruptcies), the composition of the present portfolio (including vehicle brand, term, risk evaluation, and new/used vehicles), trends in historical used vehicle values, and economic conditions. Estimates from these models rely on historical information and may not fully reflect losses inherent in the present portfolio. Therefore, we may adjust the estimate to reflect management judgment regarding observable changes in recent economic trends and conditions, portfolio composition, and other relevant factors.

We make projections of two key assumptions to assist in estimating the consumer allowance for credit losses:

•
Frequency – number of finance receivables and operating lease contracts that are expected to default over the loss emergence period, measured as repossessions
•
Loss severity – expected difference between the amount a customer owes when the finance contract is charged off and the amount received, net of expenses, from selling the repossessed vehicle, including any recoveries from the customer
NOTE 4. ALLOWANCE FOR CREDIT LOSSES (Continued)

Collective Allowance for Credit Losses. The collective allowance is evaluated primarily using a collective loss-to-receivables (“LTR”) model that, based on historical experience, indicates credit losses have been incurred in the portfolio even though the particular accounts that are uncollectible cannot be specifically identified. The LTR model is based on the most recent years of history. Each LTR is calculated by dividing credit losses by average finance receivables or average operating leases, excluding unearned interest supplements and allowance for credit losses. An average LTR is calculated for each product and multiplied by the end-of-period balances for that given product.

Our largest markets also use a loss projection model to estimate losses inherent in the portfolio. The loss projection model applies recent monthly performance metrics, stratified by contract type (retail or lease), contract term (e.g., 60-month), and risk rating to our active portfolio to estimate the losses that have been incurred.

The loss emergence period (“LEP”) is a key assumption within our models and represents the average amount of time between when a loss event first occurs to when it is charged off. This time period starts when the consumer begins to experience financial difficulty. It is evidenced, typically through delinquency, before eventually resulting in a charge-off. The LEP is a multiplier in the calculation of the collective consumer allowance for credit losses.

For accounts greater than 120 days past due, the uncollectible portion is charged off, such that the remaining recorded investment is equal to the estimated fair value of the collateral less costs to sell.

Specific Allowance for Impaired Receivables. Consumer receivables involved in TDRs are specifically assessed for impairment. A specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the contract’s original effective interest rate or the fair value of any collateral adjusted for estimated costs to sell.     

After establishing the collective and specific allowance for credit losses, if management believes the allowance does not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant factors, an adjustment is made based on management judgment.

Non-Consumer Segment

We estimate the allowance for credit losses for non-consumer receivables based on historical LTR ratios, expected future cash flows, and the fair value of collateral.

Collective Allowance for Credit Losses. We estimate an allowance for non-consumer receivables that are not specifically identified as impaired using a LTR model for each financing product based on historical experience. This LTR is an average of the most recent historical experience and is calculated consistent with the consumer receivables LTR approach. All accounts that are specifically identified as impaired are excluded from the calculation of the non-specific or collective allowance.

Specific Allowance for Impaired Receivables. Dealer financing is evaluated by segmenting individual loans by the risk characteristics of the loan (such as the amount of the loan, the nature of the collateral, and the financial status of the debtor). The loans are analyzed to determine whether individual loans are impaired, and a specific allowance is estimated based on the present value of the expected future cash flows of the receivable discounted at the loan’s original effective interest rate or the fair value of the collateral adjusted for estimated costs to sell.

After establishing the collective and specific allowance for credit losses, if management believes the allowance does not reflect all losses inherent in the portfolio due to changes in recent economic trends and conditions, or other relevant factors, an adjustment is made based on management judgment.
Transfers of Receivables [Abstract]  
Receivables Classification, Policy [Policy Text Block]
Receivables Classification

Receivables are accounted for as held for investment (“HFI”) if management has the intent and ability to hold the receivables for the foreseeable future or until maturity or payoff. Receivables that are classified as HFI are recorded at cost. The determination of intent and ability to hold for the foreseeable future is highly judgmental and requires management to make good faith estimates based on all information available at the time of origination. Once a decision has been made to sell specific receivables not previously classified as held for sale (“HFS”), such receivables are transferred into the HFS classification and carried at the lower of cost or fair value. Any amount by which cost exceeds fair value is accounted for as a valuation allowance with the offset recorded to income. We use internally developed quantitative methods to determine fair value that incorporate appropriate funding pricing and enhancement requirements, as well as estimates concerning credit losses and prepayments.

We classify receivables on a receivable-by-receivable basis. Specific receivables included in off-balance sheet securitizations or whole-loan sale transactions are usually not identified until the month in which the sale occurs. Each quarter, we make a determination of whether it is probable that receivables originated during the quarter will be held for the foreseeable future based on historical receivables sale experience, internal forecasts and budgets, as well as other relevant, reliable information available through the date of evaluation. For purposes of this determination, we define probable to mean at least 70% likely and, consistent with our budgeting and forecasting period, we define foreseeable future to mean twelve months. We also consider off-balance sheet funding channels in connection with our quarterly receivables classification determination.

Held for Investment

Finance receivables originated during the quarter for which we determine that it is probable we will hold for the following twelve months are classified as HFI and carried at amortized cost. All retail and wholesale receivables are classified as HFI at origination during all periods presented. Cash flows resulting from the purchase of these receivables that are originally classified as HFI are recorded as an investing activity. Once a decision has been made to sell specifically identified receivables that were originally classified as HFI and the receivables are sold in the same reporting period, the receivables are reclassified as HFS and simultaneously removed from the balance sheet. The fair value adjustment is incorporated and recognized in the net gain or loss on sale of receivables and reported in Other income, net. In the event that receivables have been selected for an off-balance sheet transaction that has not occurred at the end of the reporting period, the receivables are reclassified as HFS and a valuation adjustment is recorded in Other income, net to recognize the receivables at the lower of cost or fair value. Cash flows resulting from the sale of receivables that were originally classified as HFI are recorded as an investing activity since GAAP requires the statement of cash flows presentation to be based on the original classification of the receivables.
NOTE 5. TRANSFERS OF RECEIVABLES (Continued)

Held for Sale

Finance receivables originated during the quarter for which we determine that it is not probable we will hold for the following twelve months are classified as HFS and carried at the lower of cost or fair value. Cash flows resulting from the purchase of these receivables are recorded as an operating activity. The valuation adjustment, if applicable, is recorded in Other income, net to recognize the receivables at the lower of cost or fair value. Once specifically identified receivables that were originally classified as HFS are sold, the receivables are removed from the balance sheet and the fair value adjustment is incorporated into the book value of receivables for purposes of determining the gain or loss on sale. Cash flows resulting from the sale of receivables that were originally classified as HFS are recorded as an operating activity. At December 31, 2015 and 2014, there were no finance receivables classified as HFS.
Variable Interest Entities [Abstract]  
Consolidation, Variable Interest Entity, Policy [Policy Text Block]
A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. Nearly all of our VIEs are special purpose entities used for our securitizations.

We have the power to direct the activities of our special purpose entities 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.

Assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against our general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on our general assets; rather, they represent claims against the specific assets of the consolidated VIEs.
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives, Policy [Policy Text Block]
Derivative Financial Instruments and Hedge Accounting. Derivative assets and derivative liabilities are recorded in Derivative financial instruments on our balance sheet at fair value and presented on a gross basis.

We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.

Fair Value Hedges. We use derivatives to reduce the risk of changes in the fair value of debt. We have designated certain receive-fixed, pay-float interest rate swaps as fair value hedges of fixed-rate debt. The risk being hedged is the risk of changes in the fair value of the hedged debt attributable to changes in the benchmark interest rate. If the hedge relationship is deemed to be highly effective, we record the changes in the fair value of the hedged debt related to the risk being hedged in Debt with the offset in Other income, net. The change in fair value of the related derivative (excluding accrued interest) also is recorded in Other income, net. Net interest settlements and accruals on fair value hedges are excluded from the assessment of hedge effectiveness and are reported in Interest expense. The cash flows associated with fair value hedges are reported in Net cash provided by/(used in) operating activities in our statement of cash flows.

When a fair value hedge is de-designated, or when the derivative is terminated before maturity, the fair value adjustment to the hedged debt continues to be reported as part of the carrying value of the debt and is amortized over its remaining life.

Derivatives Not Designated as Hedging Instruments. We report net interest settlements and accruals and changes in the fair value of interest rate swaps not designated as hedging instruments in Other income, net. Foreign currency revaluation on accrued interest along with gains and losses on foreign exchange contracts and cross currency interest rate swaps are reported in Other income, net. Cash flows associated with non-designated or de-designated derivatives are reported in Net cash provided by/(used in) investing activities in our statement of cash flows.
Debt Disclosure [Abstract]  
Debt, Policy [Policy Text Block]
Debt is recorded on our balance sheet at par value adjusted for unamortized discount or premium, unamortized issuance costs and adjustments related to designated fair value hedges (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, net.
Income Tax Disclosure [Abstract]  
Income Tax, Policy [Policy Text Block]
Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and their respective tax bases, and net operating loss carryforwards and tax credit carryforwards on a taxing jurisdiction basis. We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be recovered or paid.

Our accounting for deferred tax consequences represents our best estimate of the likely future tax consequences of events that have been recognized in our financial statements or tax returns and their future probability. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, we record a valuation allowance.
Insurance [Abstract]  
Insurance Premiums Revenue Recognition, Policy [Policy Text Block]
Insurance premiums earned are reported net of reinsurance as Insurance premiums earned. These premiums are earned over their respective policy periods. Physical damage insurance premiums, including premiums on vehicles financed at wholesale by us, are recognized as income on a monthly basis. Premiums from extended service plan contracts and other contractual liability coverages are earned over the life of the policy based on historical loss experience. Commissions and premium taxes are deferred and amortized over the term of the related policies on the same basis on which premiums are earned.
Reinsurance Accounting Policy [Policy Text Block]
Reinsurance activity primarily consists of ceding a majority of automotive extended service plan contracts for a ceding commission. Amounts recoverable from reinsurers on unpaid losses, including incurred but not reported losses, and amounts paid to reinsurers relating to the unexpired portion of reinsurance contracts are reported in Other assets.
Commissions on reinsurance ceded are earned on the same basis as related premiums.
Insurance Losses and Claims, Policy [Policy Text Block]
Reserves for insurance losses and loss adjustment expenses are established based on actuarial estimates and historical loss development patterns, which represents management’s best estimate. If management believes the reserves do not reflect all losses due to changes in conditions, or other relevant factors, an adjustment is made based on management judgment.
Insurance underwriting losses and expenses are reported as Insurance expenses.
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments, Policy [Policy Text Block]
In measuring fair value, we use various valuation methods and prioritize the use of observable inputs. The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our fair value hierarchy.

•
Level 1 – inputs include quoted prices for identical instruments and are the most observable
•
Level 2 – inputs include quoted prices for similar instruments and observable inputs such as interest rates, currency exchange rates, and yield curves
•
Level 3 – inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the instruments

Transfers into and transfers out of the hierarchy levels are recognized as if they had taken place at the end of the reporting period.
    
Valuation Methods

Cash and Cash Equivalents. Included in Cash and cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal. A debt security is classified as a cash equivalent if it meets these criteria and if it has a remaining time to maturity of three months or less from the date of acquisition. Amounts on deposit and available upon demand, or negotiated to provide for daily liquidity without penalty, are classified as Cash and cash equivalents. Time deposits, certificates of deposit, and money market accounts that meet the above criteria are reported at par value on our balance sheet and are excluded from the table below.

NOTE 15. FAIR VALUE MEASUREMENTS (Continued)

Marketable Securities. Investments in securities with a maturity date greater than three months at the date of purchase and other securities for which there is more than an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal are classified as Marketable securities. We generally measure fair value using prices obtained from pricing services. Pricing methods and inputs to valuation models used by the pricing services depend on the security type (i.e., asset class). Where possible, fair values are generated using market inputs including quoted prices (the closing price in an exchange market), bid prices (the price at which a buyer stands ready to purchase), and other market information. For fixed income securities that are not actively traded, the pricing services use alternative methods to determine fair value for the securities, including quotes for similar fixed income securities, matrix pricing, discounted cash flow using benchmark curves, or other factors. In certain cases, when market data are not available, we may use broker quotes to determine fair value.

An annual review is performed on the security prices received from our pricing services, which includes discussion and analysis of the inputs used by the pricing services to value our securities. We also compare the price of certain securities sold close to the quarter end to the price of the same security at the balance sheet date to ensure the reported fair value is reasonable.

Realized and unrealized gains and losses and interest income on our marketable securities are recorded in Other income, net. Realized gains and losses are measured using the specific identification method.  

Derivative Financial Instruments. Our derivatives are over-the-counter customized derivative transactions and are not exchange traded. We estimate the fair value of these instruments using industry-standard valuation models such as a discounted cash flow. These models project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates, foreign exchange rates, and the contractual terms of the derivative instruments. The discount rate used is the relevant interbank deposit rate (e.g., LIBOR) plus an adjustment for non-performance risk. The adjustment reflects the full credit default swap (“CDS”) spread applied to a net exposure, by counterparty, considering the master netting agreements and any posted collateral. We use our counterparty’s CDS spread when we are in a net asset position and our own CDS spread when we are in a net liability position.

Finance Receivables. We measure finance receivables at fair value for purposes of disclosure (see Note 2 for additional information) using internal valuation models. These models project future cash flows of financing contracts based on scheduled contract payments (including principal and interest). The projected cash flows are discounted to present value based on assumptions regarding credit losses, pre-payment speed, and applicable spreads to approximate current rates. Our assumptions regarding pre-payment speed and credit losses are based on historical performance. The fair value of finance receivables is categorized within Level 3 of the hierarchy.

On a nonrecurring basis, we also measure at fair value retail contracts greater than 120 days past due or deemed to be uncollectible, and individual dealer loans probable of foreclosure. We use the fair value of collateral, adjusted for estimated costs to sell, to determine the fair value of our receivables. The collateral for a retail receivable is the vehicle financed, and for dealer loans is real estate or other property.

The fair value of collateral for retail receivables is calculated by multiplying the outstanding receivable balances by the average recovery value percentage. The fair value of collateral for dealer loans is determined by reviewing various appraisals, which include total adjusted appraised value of land and improvements, alternate use appraised value, broker’s opinion of value, and purchase offers.



NOTE 15. FAIR VALUE MEASUREMENTS (Continued)

Debt. We measure debt at fair value for purposes of disclosure (see Note 9 for additional information) 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.
Commitments and Contingencies Disclosure [Abstract]  
Guarantees and Indemnifications Policies [Policy Text Block]
Guarantees and indemnifications are recorded at fair value at their inception. We regularly review our performance risk under these arrangements, and in the event it becomes probable we will be required to perform under a guarantee or indemnity, the amount of probable payment is recorded.
We accrue for matters when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood that we will prevail, and the severity of any potential loss. We reevaluate and update our accruals as matters progress over time.

For nearly all of our matters, where our historical experience with similar matters is of limited value (i.e., “non-pattern matters”), we evaluate the matters primarily based on the individual facts and circumstances. For non-pattern matters, we evaluate whether there is a reasonable possibility of a material loss in excess of any accrual that can be estimated.
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Finance Receivables (Tables)
 12 Months Ended
Dec. 31, 2015
Financing Receivables [Line Items]  
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]
Finance receivables, net were as follows for the years ended December 31 (in millions):
 
2015
 
2014
Consumer
 
 
 
Retail financing, gross
$
62,068

 
$
55,856

Unearned interest supplements from Ford and affiliated companies
(2,119
)
 
(1,760
)
Consumer finance receivables
59,949

 
54,096

 
 
 
 
Non-Consumer
 
 
 
Dealer financing (a)
36,037

 
31,875

Other financing
1,210

 
1,265

Non-Consumer finance receivables (b)
37,247

 
33,140

Total recorded investment (c)
$
97,196

 
$
87,236

 
 
 
 
Recorded investment in finance receivables
$
97,196

 
$
87,236

Allowance for credit losses
(373
)
 
(321
)
Finance receivables, net (a)
$
96,823

 
$
86,915

 
 
 
 
Net finance receivables subject to fair value (d)
$
95,008

 
$
85,242

Fair Value
96,180

 
86,715

__________
(a)
At December 31, 2015 and 2014, includes $4.4 billion and $4.0 billion, respectively, of receivables generated by divisions and affiliates of Ford in connection with vehicle inventories released from Ford and in delivery to the destination dealers and $508 million and $535 million, respectively, of dealer financing receivables with entities (primarily dealers) that are reported as consolidated subsidiaries of Ford. For the years ended December 31, 2015, 2014, and 2013, the interest earned on receivables from consolidated subsidiaries of Ford to which we provide financing was $6 million, $5 million, and $6 million, respectively. Consolidated subsidiaries of Ford include dealerships that are partially owned by Ford as consolidated VIEs and also certain overseas affiliates. The associated vehicles that are being financed by us are reported as inventory on Ford’s balance sheet.
(b)
The amount of interest earned from Ford and affiliated companies associated with purchased receivables and receivables from gate released vehicles in transit to dealers for the years ended December 31, 2015, 2014, and 2013, were $183 million, $171 million, and $170 million, respectively.
(c)
The amount of interest supplements from Ford and affiliated companies earned for the years ended December 31, 2015, 2014, and 2013 were $1.3 billion, $1.4 billion, and $1.5 billion, respectively, and the amount of interest supplements cash received related to consumer finance receivables totaled $1.5 billion, $1.3 billion, and $1.0 billion, respectively.
(d)
At December 31, 2015 and 2014, excludes $1.8 billion and $1.7 billion, respectively, of certain receivables (primarily direct financing leases) that are not subject to fair value disclosure requirements.

Schedule of Financing Receivables, Minimum Payments [Table Text Block]
Contractual maturities of total finance receivables outstanding at December 31, 2015 reflect contractual repayments due from customers or borrowers and were as follows (in millions):
 
2016
 
2017
 
2018
 
Thereafter
 
Total
Consumer
 
 
 
 
 
 
 
 
 
Retail financing, gross (a)
$
17,627

 
$
15,811

 
$
12,847

 
$
15,783

 
$
62,068

 
 
 
 
 
 
 
 
 
 
Non-Consumer
 
 
 
 
 
 
 
 
 
Dealer financing
32,899

 
1,823

 
267

 
1,048

 
36,037

Other financing
1,210

 
—

 
—

 
—

 
1,210

   Total finance receivables
$
51,736

 
$
17,634

 
$
13,114

 
$
16,831

 
$
99,315

__________
(a)
Contractual maturities of retail financing, gross include $162 million of estimated unguaranteed residual values related to direct financing leases.
Schedule of Aging Analysis for Total Finance Receivables [Table Text Block]
The aging analysis of finance receivables balances at December 31, 2015 was as follows (in millions):

 
2015
 
2014
Consumer
 
 
 
31-60 days past due
$
708

 
$
718

61-90 days past due
108

 
97

91-120 days past due
27

 
29

Greater than 120 days past due
38

 
52

Total past due
881

 
896

Current
59,068

 
53,200

Consumer finance receivables
59,949

 
54,096

 
 
 
 
Non-Consumer
 
 
 
Total past due
116

 
117

Current
37,131

 
33,023

Non-Consumer finance receivables
37,247

 
33,140

  Total recorded investment
$
97,196

 
$
87,236
Non-Consumer Segment [Member]  
Financing Receivables [Line Items]  
Schedule of Financing Receivable Credit Quality Indicators [Table Text Block]
The credit quality analysis of our dealer financing receivables at December 31 was as follows (in millions):
 
2015
 
2014
Dealer financing
 
 
 
Group I
$
27,054

 
$
23,641

Group II
7,185

 
6,360

Group III
1,687

 
1,787

Group IV
111

 
87

Total recorded investment
$
36,037

 
$
31,875
v3.3.1.900
Net Investment in Operating Leases (Tables)
 12 Months Ended
Dec. 31, 2015
Leases, Operating [Abstract]  
Net investment in operating leases [Table Text Block]
Net investment in operating leases were as follows (in millions):
 
December 31,
2015
 
December 31,
2014
Vehicles, at cost (a)
$
29,673

 
$
24,952

Accumulated depreciation
(4,545
)
 
(3,396
)
Net investment in operating leases before allowance for credit losses
25,128

 
21,556

Allowance for credit losses
(49
)
 
(38
)
Net investment in operating leases
$
25,079

 
$
21,518

__________
(a)
Includes unearned interest supplements and residual support payments we receive on certain leasing transactions under agreements with Ford and affiliated companies, and other vehicle acquisition costs.
Schedule of Minimum Payments Receivable on Operating Leases [Table Text Block]
The amounts contractually due for minimum rentals on operating leases at December 31, 2015 were as follows (in millions):
 
2016
 
2017
 
2018
 
2019
 
2020
Minimum rentals on operating leases
$
4,021

 
$
2,504

 
$
919

 
$
59

 
$
3
v3.3.1.900
Allowance for Credit Losses (Tables)
 12 Months Ended
Dec. 31, 2015
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]  
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 and net investment in operating leases for the years ended December 31 (in millions) was as follows:

 
2015
 
Finance Receivables
 
Net Investment in Operating Leases
 
Total Allowance
 
Consumer
 
Non-Consumer
 
Total
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
Beginning balance
$
305

 
$
16

 
$
321

 
$
38

 
$
359

Charge-offs
(333
)
 
(3
)
 
(336
)
 
(123
)
 
(459
)
Recoveries
120

 
6

 
126

 
62

 
188

Provision for credit losses
276

 
(2
)
 
274

 
73

 
347

Other (a)
(11
)
 
(1
)
 
(12
)
 
(1
)
 
(13
)
Ending balance
$
357

 
$
16

 
$
373

 
$
49

 
$
422

 
 
 
 
 
 
 
 
 
 
Analysis of ending balance of allowance for credit losses
 
 
 
 
 
 
 
 
 
Collective impairment allowance
$
338

 
$
12

 
$
350

 
$
49

 
$
399

Specific impairment allowance
19

 
4

 
23

 
—

 
23

Ending balance
357

 
16

 
373

 
49

 
$
422

 
 
 
 
 
 
 
 
 
 
Analysis of ending balance of finance receivables and net investment in operating leases
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
59,574

 
37,113

 
96,687

 
25,128

 
 
Specifically evaluated for impairment
375

 
134

 
509

 
—

 
 
Recorded investment
59,949

 
37,247

 
97,196

 
25,128

 
 
 
 
 
 
 
 
 
 
 
 
Ending balance, net of allowance for credit losses
$
59,592

 
$
37,231

 
$
96,823

 
$
25,079

 
 
__________
(a)
Primarily represents amounts related to translation adjustments.
 
2014
 
Finance Receivables
 
Net Investment in Operating Leases
 
Total Allowance
 
Consumer
 
Non-Consumer
 
Total
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
Beginning balance
$
327

 
$
30

 
$
357

 
$
23

 
$
380

Charge-offs
(294
)
 
(6
)
 
(300
)
 
(111
)
 
(411
)
Recoveries
131

 
9

 
140

 
62

 
202

Provision for credit losses
150

 
(17
)
 
133

 
64

 
197

Other (a)
(9
)
 
—

 
(9
)
 
—

 
(9
)
Ending balance
$
305

 
$
16

 
$
321

 
$
38

 
$
359

 
 
 
 
 
 
 
 
 
 
Analysis of ending balance of allowance for credit losses
 
 
 
 
 
 
 
 
 
Collective impairment allowance
$
282

 
$
16

 
$
298

 
$
38

 
$
336

Specific impairment allowance
23

 
—

 
23

 
—

 
23

Ending balance
305

 
16

 
321

 
38

 
$
359

 
 
 
 
 
 
 
 
 
 
Analysis of ending balance of finance receivables and net investment in operating leases
 
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
53,681

 
33,030

 
86,711

 
21,556

 
 
Specifically evaluated for impairment
415

 
110

 
525

 
—

 
 
Recorded investment
54,096

 
33,140

 
87,236

 
21,556

 
 
 
 
 
 
 
 
 
 
 
 
Ending balance, net of allowance for credit losses
$
53,791

 
$
33,124

 
$
86,915

 
$
21,518

 
 
__________
(a)
Primarily represents amounts related to translation adjustments.
v3.3.1.900
Transfers of Receivables (Tables)
 12 Months Ended
Dec. 31, 2015
Transfers and Servicing [Abstract]  
Schedule of Assets and Liabilities Related to Securitization Transactions [Table Text Block]
The following tables show the assets and debt related to our securitization transactions that were included in our financial statements (in billions):

 
December 31, 2015
 
Cash and Cash Equivalents
 
Finance 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
$
1.4

 
$
20.9

 
$
0.1

 
$
20.8

 
$
18.9

Wholesale financing
2.0

 
25.1

 
—

 
25.1

 
15.3

Finance receivables
3.4

 
46.0

 
0.1

 
45.9

 
34.2

Net investment in operating leases
0.5

 
13.3

 
—

 
13.3

 
8.9

Total VIE
$
3.9

 
$
59.3

 
$
0.1

 
$
59.2

 
$
43.1

 
 
 
 
 
 
 
 
 
 
Non-VIE
 
 
 
 
 
 
 
 
 
Retail financing
$
0.4

 
$
6.7

 
$
—

 
$
6.7

 
$
6.1

Wholesale financing
—

 
1.0

 
—

 
1.0

 
0.8

Finance receivables
0.4

 
7.7

 
—

 
7.7

 
6.9

Net investment in operating leases
—

 
—

 
—

 
—

 
—

Total Non-VIE
$
0.4

 
$
7.7

 
$
—

 
$
7.7

 
$
6.9

 
 
 
 
 
 
 
 
 
 
Total securitization transactions
 
 
 
 
 
 
 
 
 
Retail financing
$
1.8

 
$
27.6

 
$
0.1

 
$
27.5

 
$
25.0

Wholesale financing
2.0

 
26.1

 
—

 
26.1

 
16.1

Finance receivables
3.8

 
53.7

 
0.1

 
53.6

 
41.1

Net investment in operating leases
0.5

 
13.3

 
—

 
13.3

 
8.9

Total securitization transactions
$
4.3

 
$
67.0

 
$
0.1

 
$
66.9

 
$
50.0

__________
(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 5. TRANSFERS OF RECEIVABLES (Continued)

 
December 31, 2014
 
Cash and Cash Equivalents
 
Finance Receivables and Net Investment in Operating Leases (a)
 
Related Debt
 
Before Allowance
for Credit Losses
 
Allowance for
Credit Losses
 
After Allowance
for Credit Losses
 
VIE (b)
 
 
 
 
 
 
 
 
 
Retail financing
$
1.4

 
$
18.8

 
$
0.1

 
$
18.7

 
$
17.3

Wholesale financing
0.3

 
20.8

 
—

 
20.8

 
13.3

Finance receivables
1.7

 
39.6

 
0.1

 
39.5

 
30.6

Net investment in operating leases
0.4

 
9.6

 
—

 
9.6

 
6.6

Total VIE
$
2.1

 
$
49.2

 
$
0.1

 
$
49.1

 
$
37.2

 
 
 
 
 
 
 
 
 
 
Non-VIE
 
 
 
 
 
 
 
 
 
Retail financing
$
0.3

 
$
5.6

 
$
—

 
$
5.6

 
$
5.2

Wholesale financing
—

 
1.0

 
—

 
1.0

 
0.9

Finance receivables
0.3

 
6.6

 
—

 
6.6

 
6.1

Net investment in operating leases
—

 
—

 
—

 
—

 
—

Total Non-VIE
$
0.3

 
$
6.6

 
$
—

 
$
6.6

 
$
6.1

 
 
 
 
 
 
 
 
 
 
Total securitization transactions
 
 
 
 
 
 
 
 
 
Retail financing
$
1.7

 
$
24.4

 
$
0.1

 
$
24.3

 
$
22.5

Wholesale financing
0.3

 
21.8

 
—

 
21.8

 
14.2

Finance receivables
2.0

 
46.2

 
0.1

 
46.1

 
36.7

Net investment in operating leases
0.4

 
9.6

 
—

 
9.6

 
6.6

Total securitization transactions
$
2.4

 
$
55.8

 
$
0.1

 
$
55.7

 
$
43.3

__________
(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.
Schedule Of Interest Expense related to Securitization Transactions [Table Text Block]
Interest expense related to securitization debt for the years ended December 31 was as follows (in millions):
 
2015
 
2014
 
2013
VIE
$
541

 
$
504

 
$
563

Non-VIE
89

 
91

 
77

Total securitization transactions
$
630

 
$
595

 
$
640
Schedule of Exposures Based on the Fair Value of Derivative Instruments Related to Securitization Programs [Table Text Block]
Our exposures based on the fair value of derivative instruments with external counterparties related to securitization programs were as follows (in millions):
 
December 31, 2015
 
December 31, 2014
 
Derivative
Asset
 
Derivative
Liability
 
Derivative
Asset
 
Derivative
Liability
Derivatives of the VIEs
$
85

 
$
19

 
$
27

 
$
22

Derivatives related to the VIEs
19

 
29

 
16

 
7

Other securitization related derivatives
12

 
—

 
5

 
1

Total exposures related to securitization
$
116

 
$
48

 
$
48

 
$
30
Schedule of Derivative Expense/(Income) Related to Securitization Transactions [Table Text Block]
Derivative expense/(income) related to our securitization transactions for the years ended December 31 was as follows (in millions):
 
2015
 
2014
 
2013
Derivatives of the VIEs
$
(32
)
 
$
(9
)
 
$
3

Derivatives related to the VIEs
12

 
(16
)
 
16

Other securitization related derivatives
18

 
21

 
6

Total derivative expense/(income) related to securitization
$
(2
)
 
$
(4
)
 
$
25
v3.3.1.900
Derivative Financial Instruments and Hedging Activities (Tables)
 12 Months Ended
Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]
The gains/(losses), by hedge designation, recorded in income for the years ended December 31 were as follows (in millions):
 
2015
 
2014
 
2013
Fair value hedges
 
 
 
 
 
Interest rate contracts
 
 
 
 
 
Net interest settlements and accruals excluded from the assessment of hedge effectiveness
$
370

 
$
304

 
$
254

Ineffectiveness (a)
3

 
20

 
(44
)
Derivatives not designated as hedging instruments
 
 
 
 
 
Interest rate contracts
(58
)
 
(41
)
 
(28
)
Foreign currency exchange contracts (b)
66

 
68

 
12

Cross-currency interest rate swap contracts
100

 
161

 
(88
)
Total
$
481

 
$
512

 
$
106

__________
(a)
For 2015, 2014, and 2013, hedge ineffectiveness reflects the net change in fair value on derivatives of $72 million gain, $407 million gain, and $658 million loss, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $69 million loss, $387 million loss, and $614 million gain, respectively.
(b)
The gains related to forward contracts between Ford Credit and an affiliated company were $66 million, $68 million, and $10 million for the years ended December 31, 2015, 2014, and 2013, respectively.
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]
The fair value of our derivative instruments and the associated notional amounts, presented gross, at December 31 were as follows (in millions):
 
2015
 
2014
 
Notional
 
Fair Value of Assets
 
Fair Value of Liabilities
 
Notional
 
Fair Value of Assets
 
Fair Value of Liabilities
Fair value hedges
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
$
28,964

 
$
670

 
$
16

 
$
23,203

 
$
602

 
$
38

Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
62,638

 
159

 
112

 
56,558

 
168

 
89

Foreign currency exchange contracts (a)
1,713

 
22

 
4

 
1,527

 
18

 
1

Cross-currency interest rate swap contracts
3,137

 
73

 
111

 
2,425

 
71

 
39

Total derivative financial instruments, gross
$
96,452

 
924

 
243

 
$
83,713

 
859

 
167

Counterparty netting and collateral (b)
 
 
(167
)
 
(167
)
 
 
 
(136
)
 
(136
)
Total derivative financial instruments, net


 
$
757

 
$
76

 


 
$
723

 
$
31

__________
(a)
Includes forward contracts between Ford Credit and an affiliated company.
(b)
As of December 31, 2015 and December 31, 2014, we did not receive or pledge any cash collateral.
v3.3.1.900
Other Assets and Other Liabilities and Deferred Income (Tables)
 12 Months Ended
Dec. 31, 2015
Other Assets and Other Liabilities and Deferred Income [Abstract]  
Schedule of Other Assets and Other Liabilities [Table Text Block]
Other assets were as follows (in millions):
 
December 31,
2015
 
December 31,
2014
Accrued interest and other non-finance receivables
$
763

 
$
921

Collateral held for resale, at net realizable value
498

 
382

Prepaid reinsurance premiums and other reinsurance receivables
472

 
401

Property and equipment, net of accumulated depreciation (a)
142

 
120

Deferred charges – income taxes
135

 
185

Investment in non-consolidated affiliates
133

 
141

Deferred charges
63

 
268

Restricted cash (b)
56

 
130

Other
24

 
53

Total other assets
$
2,286

 
$
2,601

__________
(a)
Accumulated depreciation was $335 million and $326 million at December 31, 2015 and 2014, respectively.
(b)
Restricted cash primarily includes cash held to meet certain local governmental and regulatory reserve requirements and cash held under the terms of certain contractual agreements. Restricted cash does not include required minimum balances or cash securing debt issued through securitization transactions.

Other liabilities and deferred income were as follows (in millions):
 
December 31,
2015
 
December 31,
2014
Interest payable
$
553

 
$
587

Unearned insurance premiums
484

 
410

Tax related payables to Ford and affiliated companies
105

 
625

Unrecognized tax benefits
75

 
91

Other
448

 
497

Total other liabilities and deferred income
$
1,665

 
$
2,210
v3.3.1.900
Debt (Tables)
 12 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
Schedule of Debt [Table Text Block]
Debt outstanding and interest rates were as follows (in millions):
 
 
 
 
 
Interest Rates
 
Debt
 
Average Contractual
 
Average Effective
 
December 31,
2015
 
December 31, 2014
 
2015
 
2014
 
2015
 
2014
Short-term debt
 
 
 
 
 
 
 
 
 
 
 
Unsecured debt
 
 
 
 
 
 
 
 
 
 
 
Floating rate demand notes
$
5,926

 
$
5,559

 
 
 
 
 
 
 
 
Commercial paper
1,722

 
1,651

 
 
 
 
 
 
 
 
Other short-term debt
2,708

 
2,564

 
 
 
 
 
 
 
 
Asset-backed debt
1,855

 
1,377

 
 
 
 
 
 
 
 
Total short-term debt
12,211

 
11,151

 
1.6
%
 
1.9
%
 
1.6
%
 
1.9
%
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
Unsecured debt
 
 
 
 
 
 
 
 
 
 
 
Notes payable within one year
10,254

 
9,102

 
 
 
 
 
 
 
 
Notes payable after one year
48,672

 
42,488

 
 
 
 
 
 
 
 
Asset-backed debt
 
 
 
 
 
 
 
 
 
 
 
Notes payable within one year
18,855

 
16,722

 
 
 
 
 
 
 
 
Notes payable after one year
29,390

 
25,197

 
 
 
 
 
 
 
 
Unamortized discount
(25
)
 
(51
)
 
 
 
 
 
 
 
 
Unamortized issuance costs (a)
(214
)
 
—

 
 
 
 
 
 
 
 
Fair value adjustments
458

 
428

 
 
 
 
 
 
 
 
Total long-term debt
107,390

 
93,886

 
2.3
%
 
2.7
%
 
2.4
%
 
2.8
%
Total debt
$
119,601

 
$
105,037

 
2.2
%
 
2.6
%
 
2.3
%
 
2.7
%
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of debt
$
120,546

 
$
107,190

 
 
 
 
 
 
 
 
Interest rate characteristics of debt payable after one year
 
 
 
 
 
 
 
 
 
 
 
Fixed interest rate
54,396

 
49,148

 
 
 
 
 
 
 
 
Variable interest rate (generally based on LIBOR or other short-term rates)
23,666

 
18,537

 
 
 
 
 
 
 
 
Total payable after one year
$
78,062

 
$
67,685

 
 
 
 
 
 
 
 
Schedule of Debt with Affilated Companies [Table Text Block]
Debt with affiliated companies included in the above table was as follows (in millions):
 
December 31,
2015
 
December 31,
2014
Other short-term debt
$
88

 
$
13

Notes payable within one year
13

 
307

Notes payable after one year
83

 
5

Total debt with affiliated companies
$
184

 
$
325
Schedule of Maturities of Long-term Debt [Table Text Block]
Debt maturities at December 31, 2015, were as follows (in millions):
 
2016 (a)
 
2017
 
2018
 
2019
 
2020
 
Thereafter (b)
 
Total
Unsecured debt
$
20,610

 
$
12,503

 
$
11,288

 
$
6,151

 
$
6,882

 
$
11,848

 
$
69,282

Asset-backed debt
20,710

 
17,109

 
4,640

 
3,576

 
3,765

 
300

 
50,100

Total
41,320

 
29,612

 
15,928

 
9,727

 
10,647

 
12,148

 
119,382

Unamortized discount
 
 
 
 
 
 
 
 
 
 
 
 
(25
)
Unamortized issuance costs
 
 
 
 
 
 
 
 
 
 
 
 
(214
)
Fair value adjustments
 
 
 
 
 
 
 
 
 
 
 
 
458

Total debt


 


 


 


 


 


 
$
119,601

__________
(a)
Includes $12,211 million for short-term and $29,109 million for long-term debt.
(b)
Includes $12,020 million of unsecured debt maturing between 2021 and 2025 with the remaining balance maturing by 2048.
v3.3.1.900
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
The Provision for income taxes for the years ended December 31 was estimated as follows (in millions):
 
2015
 
2014
 
2013
Current
 
 
 
 
 
Federal
$
(454
)
 
$
(198
)
 
$
185

Non-U.S.
161

 
154

 
169

State and local
(26
)
 
(38
)
 
(55
)
Total current
(319
)
 
(82
)
 
299

Deferred
 
 
 
 
 
Federal
893

 
193

 
—

Non-U.S.
93

 
(6
)
 
(29
)
State and local
56

 
44

 
7

Total deferred
1,042

 
231

 
(22
)
Provision for income taxes
$
723

 
$
149

 
$
277
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
A reconciliation of the Provision for income taxes with the United States statutory tax rate as a percentage of Income before income taxes for the years ended December 31 is as follows:

 
2015
 
2014
 
2013
U.S. statutory tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
Effect of (in percentage points):
 
 
 
 
 
Non-U.S. tax rates under U.S. rate
(3.0
)
 
(3.0
)
 
(2.3
)
State and local income taxes
1.0

 
(0.2
)
 
(1.0
)
U.S. tax on non-U.S. earnings (a)
0.2

 
(21.4
)
 
(15.0
)
Other
(0.2
)
 
(2.4
)
 
1.9

Valuation allowance
1.7

 
—

 
(2.8
)
Effective tax rate
34.7
 %
 
8.0
 %
 
15.8
 %
________
(a)
During 2014, we changed our method for measuring currency gains and losses in computing the earnings of our European operations under U.S. tax law.  Implementation of the new method resulted in a reduction of U.S. tax on non-U.S. earnings of approximately $360 million due to realization of additional foreign tax credits.

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
The components of deferred tax assets and liabilities were as follows (in millions):
 
December 31, 2015
 
December 31, 2014
Deferred tax assets
 
 
 
Net operating loss carryforwards
$
540

 
$
227

Provision for credit losses
87

 
140

Other foreign
75

 
186

Employee benefit plans
10

 
11

Foreign tax credits
756

 
685

Other
280

 
282

Total gross deferred tax assets
1,748

 
1,531

Less: Valuation allowance
(47
)
 
(10
)
Total net deferred tax assets
1,701

 
1,521

Deferred tax liabilities
 
 
 
Leasing transactions
3,338

 
2,035

Finance receivables
688

 
647

Other foreign
330

 
480

Other
18

 
23

Total deferred tax liabilities
4,374

 
3,185

Net deferred tax liability
$
2,673

 
$
1,664
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]
The changes in the unrecognized tax benefits for the years ended December 31 were as follows (in millions):
 
2015
 
2014
 
2013
Beginning balance
$
111

 
$
159

 
$
491

Increase - tax positions in prior periods
9

 
28

 
28

Increase - tax positions in current period
1

 
1

 
1

Decrease - tax positions in prior periods
(22
)
 
(44
)
 
(68
)
Settlements
(8
)
 
(33
)
 
(293
)
Ending balance
$
91

 
$
111

 
$
159
v3.3.1.900
Accumulated Other Comprehensive Income (Tables)
 12 Months Ended
Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
The changes in the balance of Accumulated Other Comprehensive Income/(Loss) (“AOCI”) for the years ended December 31 were as follows (in millions):
 
2015
 
2014
 
2013
Foreign currency translation
 
 
 
 
 
Beginning balance
$
160

 
$
717

 
$
743

Net gain/(loss) on foreign currency translation
(767
)
 
(547
)
 
(86
)
Reclassifications from shareholder’s interest (a)(b)
—

 
(10
)
 
60

Other comprehensive income/(loss) including reclassification adjustments, net of tax
(767
)
 
(557
)
 
(26
)
Ending balance
$
(607
)
 
$
160

 
$
717

 
 
 
 
 
 
Total AOCI ending balance at December 31
$
(607
)
 
$
160

 
$
717


__________
(a)
In 2014, we recorded a foreign currency translation adjustment related to the acquisition of a subsidiary of Ford. This adjustment also increased Shareholder’s interest and did not impact the Total Shareholder’s interest on our balance sheet.
(b)
In 2013, we recorded a foreign currency translation adjustment related to FCE’s acquisition of the net residual assets of an affiliated company. This adjustment also decreased Shareholder’s interest and did not impact the Total shareholder’s interest on our balance sheet.
v3.3.1.900
Insurance (Tables)
 12 Months Ended
Dec. 31, 2015
Insurance [Abstract]  
Schedule of Insurance Underwriting Losses and Expenses [Table Text Block]
The components of insurance expenses were as follows for the years ended December 31 (in millions):
 
2015
 
2014
 
2013
Insurance losses
$
80

 
$
115

 
$
70

Loss adjustment expenses
5

 
6

 
6

Reinsurance income and other expenses, net
(16
)
 
(14
)
 
(13
)
Insurance expenses
$
69

 
$
107

 
$
63
Schedule of the Effect of Reinsurance Premiums Written and Earned [Table Text Block]
The effect of reinsurance on premiums written and earned was as follows for the years ended December 31 (in millions):
 
2015
 
2014
 
2013
 
Written
 
Earned
 
Written
 
Earned
 
Written
 
Earned
Direct
$
328

 
$
254

 
$
293

 
$
230

 
$
270

 
$
216

Assumed
—

 
—

 
—

 
—

 
—

 
—

Ceded
(194
)
 
(121
)
 
(166
)
 
(105
)
 
(151
)
 
(97
)
Net premiums
$
134

 
$
133

 
$
127

 
$
125

 
$
119

 
$
119
v3.3.1.900
Other Income (Tables)
 12 Months Ended
Dec. 31, 2015
Other Income and Expenses [Abstract]  
Schedule of Other Income [Table Text Block]
The amounts included in Other income, net were as follows for the years ended December 31 (in millions):
 
2015
 
2014
 
2013
Gains/(Losses) on derivatives
$
110

 
$
208

 
$
(148
)
Currency revaluation gains/(losses)
(161
)
 
(236
)
 
82

Interest and investment income (a)
69

 
53

 
50

Insurance fee income
88

 
74

 
61

Other
178

 
166

 
213

Total other income, net
$
284

 
$
265

 
$
258

__________
(a)
Includes interest income primarily on notes receivable from affiliated companies of $3 million, $5 million, $11 million for December 31, 2015, 2014, and 2013 respectively.
v3.3.1.900
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2015
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
The following table categorizes the fair values of items measured at fair value on a recurring basis on our balance sheet, none of which are Level 3 (in millions):
 
December 31, 2015
 
December 31, 2014
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents-financial instruments
 
 
 
 
 
 
 
 
 
 
 
Non-U.S. government and agencies
$
—

 
$
266

 
$
266

 
$
—

 
$
341

 
$
341

Corporate debt
—

 
—

 
—

 
—

 
10

 
10

Total cash equivalents-financial instruments (a)
—

 
266

 
266

 
—

 
351

 
351

Marketable securities
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
298

 
1,169

 
1,467

 
17

 
1,251

 
1,268

Non-U.S. government and agencies
—

 
832

 
832

 
—

 
405

 
405

Corporate debt
—

 
384

 
384

 
—

 
1,555

 
1,555

Other marketable securities
—

 
40

 
40

 
—

 
30

 
30

Total marketable securities
298

 
2,425

 
2,723

 
17

 
3,241

 
3,258

Derivative financial instruments
 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments (b)
—

 
924

 
924

 
—

 
859

 
859

Total assets at fair value
$
298

 
$
3,615

 
$
3,913

 
$
17

 
$
4,451

 
$
4,468

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments (b)
$
—

 
$
243

 
$
243

 
$
—

 
$
167

 
$
167

Total liabilities at fair value
$
—

 
$
243

 
$
243

 
$
—

 
$
167

 
$
167

__________
(a)
Excludes time deposits, certificates of deposit, and money market accounts reported at par value on our balance sheet totaling $6.3 billion and $3.8 billion at December 31, 2015 and 2014, respectively. In addition to these cash equivalents, we also had cash on hand totaling $2.3 billion and $2.0 billion at December 31, 2015 and 2014, respectively.
(b)
See Note 7 for additional information regarding derivative financial instruments.
v3.3.1.900
Segment Information (Tables)
 12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
Key operating data for our business segments for the years ended or at December 31 were as follows (in millions):

 
 
 
 
 
Unallocated/Eliminations
 
 
 
North
America
Segment
 
International
Segment
 
Unallocated
Risk Management
 
Adjustment to
Receivables (a)
 
Total Unallocated/Eliminations
 
Total
2015
 
 
 
 
 
 
 
 
 
 
 
Total revenue (b)
$
8,048

 
$
1,650

 
$
(1
)
 
$
—

 
$
(1
)
 
$
9,697

Income before income taxes
1,629

 
458

 
(1
)
 
—

 
(1
)
 
2,086

Other disclosures:
 
 
 
 
 
 
 
 
 
 
 
Depreciation on vehicles subject to operating leases
3,603

 
37

 
—

 
—

 
—

 
3,640

Interest expense
1,811

 
605

 
—

 
—

 
—

 
2,416

Provision for credit losses
294

 
53

 
—

 
—

 
—

 
347

Net finance receivables and net investment in operating leases
103,268

 
23,964

 
—

 
(5,330
)
 
(5,330
)
 
121,902

Total assets
109,339

 
28,109

 
—

 
—

 
—

 
137,448

 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
Total revenue (b)
$
7,351

 
$
1,651

 
$
(6
)
 
$
—

 
$
(6
)
 
$
8,996

Income before income taxes
1,399

 
461

 
(6
)
 
—

 
(6
)
 
1,854

Other disclosures:
 
 
 
 
 
 
 
 
 
 
 
Depreciation on vehicles subject to operating leases
3,045

 
43

 
—

 
—

 
—

 
3,088

Interest expense
2,010

 
646

 
—

 
—

 
—

 
2,656

Provision for credit losses
157

 
40

 
—

 
—

 
—

 
197

Net finance receivables and net investment in operating leases
91,021

 
21,762

 
—

 
(4,350
)
 
(4,350
)
 
108,433

Total assets
96,016

 
26,092

 
—

 
—

 
—

 
122,108

 
 
 
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
 
 
 
Total revenue (b)
$
6,708

 
$
1,527

 
$
(53
)
 
$
—

 
$
(53
)
 
$
8,182

Income before income taxes
1,438

 
371

 
(53
)
 
—

 
(53
)
 
1,756

Other disclosures:
 
 
 
 
 
 
 
 
 
 
 
Depreciation on vehicles subject to operating leases
2,369

 
28

 
—

 
—

 
—

 
2,397

Interest expense
2,088

 
642

 
—

 
—

 
—

 
2,730

Provision for credit losses
114

 
32

 
—

 
—

 
—

 
146

Net finance receivables and net investment in operating leases
83,722

 
19,688

 
—

 
(3,497
)
 
(3,497
)
 
99,913

Total assets
90,720

 
24,888

 
—

 
—

 
—

 
115,608

__________
(a)
Includes unearned interest supplements and residual support, allowances for credit losses, and other (primarily accumulated supplemental depreciation).
(b)
Represents Total financing revenue, Insurance premiums earned, and Other income, net.
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]
Key data for our geographic operations in the United States, Canada, Europe, and other foreign operations were as follows for the years ended or at December 31 (in millions):
 
2015
 
2014
 
2013
Total revenue (a)
 
 
 
 
 
United States
$
7,070

 
$
6,377

 
$
5,739

Canada
981

 
998

 
909

Europe
979

 
1,041

 
1,132

All other
667

 
580

 
402

Total revenue
$
9,697

 
$
8,996

 
$
8,182

 
 
 
 
 
 
Income before income taxes
 
 
 
 
 
United States
$
1,298

 
$
1,199

 
$
1,160

Canada
247

 
148

 
127

Europe
316

 
332

 
319

All other
225

 
175

 
150

Total income before income taxes
$
2,086

 
$
1,854

 
$
1,756

 
 
 
 
 
 
Finance receivables, net and net investment in operating leases
 
 
 
 
 
United States
$
88,237

 
$
76,578

 
$
70,513

Canada
10,037

 
10,449

 
10,085

Europe
18,657

 
16,708

 
15,674

All other
4,971

 
4,698

 
3,641

Total finance receivables, net and net investment in operating leases
$
121,902

 
$
108,433

 
$
99,913

__________
(a)
Represents Total financing revenue, Insurance premiums earned, and Other income, net.
v3.3.1.900
Selected Quarterly Financial Data (Tables)
 12 Months Ended
Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]  
Schedule of Quarterly Financial Information [Table Text Block]
Selected financial data by calendar quarter were as follows (in millions):
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
 
Full Year
2015
 
 
 
 
 
 
 
 
 
Total revenue (a)
$
2,282

 
$
2,338

 
$
2,478

 
$
2,599

 
$
9,697

Depreciation on vehicles subject to operating leases
(816
)
 
(858
)
 
(956
)
 
(1,010
)
 
(3,640
)
Interest expense
(638
)
 
(599
)
 
(582
)
 
(597
)
 
(2,416
)
Total financing margin and other revenue
828

 
881

 
940

 
992

 
3,641

Provision for credit losses
67

 
72

 
100

 
108

 
347

Net income
306

 
340

 
365

 
352

 
1,363

 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
Total revenue (a)
$
2,159

 
$
2,234

 
$
2,312

 
$
2,291

 
$
8,996

Depreciation on vehicles subject to operating leases
(705
)
 
(742
)
 
(801
)
 
(840
)
 
(3,088
)
Interest expense
(666
)
 
(673
)
 
(663
)
 
(654
)
 
(2,656
)
Total financing margin and other revenue
788

 
819

 
848

 
797

 
3,252

Provision for credit losses
31

 
27

 
57

 
82

 
197

Net income (b)
312

 
264

 
718

 
411

 
1,705

__________
(a)
Represents Total financing revenue, Insurance premiums earned, and Other income, net.
(b)
The third quarter net income includes favorable tax items of approximately $360 million resulting from a change in our method for measuring currency gains and losses in computing earnings of our European operations under U.S. tax law. See Note 10 for additional information.
v3.3.1.900
Commitments and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
Minimum rentals on operating leases [Table Text Block]
Minimum non-cancelable operating lease commitments at December 31, 2015 were as follows (in millions):
 
2016
 
2017
 
2018
 
2019
 
2020
 
Thereafter
Minimum rentals on operating leases
$
19

 
$
16

 
$
10

 
$
6

 
$
5

 
$
7
v3.3.1.900
Finance Receivables Net (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Wholesale Loans Percentage of Dealer Financing 95.00%    
Net Finance Receivables [Abstract]      
Finance receivables before unearned interest supplements $ 99,315    
Financing Receivable, Gross 97,196 $ 87,236  
Allowance for credit losses (373) (321) $ (357)
Financing Receivable, Net 96,823 86,915  
Net finance receivables subject to fair value 95,008 85,242  
Fair value 96,180 86,715  
Related Party, Interest Income, Finance Receivables 6 5 6
Related Party Transaction, Interest Income, Purchased Receivables 183 171 170
Related Party Transaction, Earned Interest Supplements, Financing Receivables 1,300 1,400 1,500
Related Party Transactions Cash Received Interest Supplements Financing Receivables 1,500 1,300 1,000
Finance receivables not subject to fair value 1,800 1,700  
Capital Leases, Net Investment in Direct Financing Leases 1,800 1,700  
Other Assets on Statement of Financial Position [Member]      
Net Finance Receivables [Abstract]      
Uncollected interest receivable excluded from finance receivable 209 192  
Consumer Segment [Member]      
Net Finance Receivables [Abstract]      
Financing Receivable, Gross 59,949 54,096  
Allowance for credit losses (357) (305) (327)
Financing Receivable, Net 59,592 53,791  
Consumer Segment [Member] | Securitization Transactions [Member]      
Net Finance Receivables [Abstract]      
Amount of finance receivables that secure certain debt obligations 27,600 24,400  
Non-Consumer Segment [Member]      
Net Finance Receivables [Abstract]      
Financing Receivable, Gross 37,247 33,140  
Allowance for credit losses (16) (16) $ (30)
Financing Receivable, Net 37,231 33,124  
Non-Consumer Segment [Member] | Securitization Transactions [Member]      
Net Finance Receivables [Abstract]      
Amount of finance receivables that secure certain debt obligations 26,100 21,800  
Retail [Member] | Consumer Segment [Member]      
Net Finance Receivables [Abstract]      
Finance receivables before unearned interest supplements 62,068 55,856  
Related Party Transaction Unearned Interest Supplements From Transactions With Related Party (2,119) (1,760)  
Financing Receivable, Gross 59,949 54,096  
Wholesale and Dealer Loans [Member] | Non-Consumer Segment [Member]      
Net Finance Receivables [Abstract]      
Financing Receivable, Gross 36,037 31,875  
Wholesale and Dealer Loans [Member] | Non-Consumer Segment [Member] | Subsidiary of Common Parent [Member]      
Net Finance Receivables [Abstract]      
Related Party Transaction, Dealer Financing 508 535  
Wholesale and Dealer Loans [Member] | Non-Consumer Segment [Member] | Ford Motor Company [Member]      
Net Finance Receivables [Abstract]      
Related Party Transaction, Dealer Financing 4,400 4,000  
Other Finance Receivables [Member] | Non-Consumer Segment [Member]      
Net Finance Receivables [Abstract]      
Financing Receivable, Gross $ 1,210 $ 1,265  
v3.3.1.900
Finance Receivables - Contractual Maturities (Details) - USD ($)
$ in Millions
Dec. 31, 2015
Dec. 31, 2014
Finance Receivables Maturity [Abstract]    
2016 $ 51,736  
2017 17,634  
2018 13,114  
Thereafter 16,831  
Financing Receivable, Gross 97,196 $ 87,236
Finance receivables before unearned interest supplements 99,315  
Finance Receivables Due by Three Customers With Largest Receivables Balance 1,600  
Consumer Segment [Member]    
Finance Receivables Maturity [Abstract]    
Financing Receivable, Gross 59,949 54,096
Consumer Segment [Member] | Retail [Member]    
Finance Receivables Maturity [Abstract]    
2016 17,627  
2017 15,811  
2018 12,847  
Thereafter 15,783  
Financing Receivable, Gross 59,949 54,096
Finance receivables before unearned interest supplements 62,068 55,856
Consumer Segment [Member] | Finance Leases Portfolio Segment [Member]    
Finance Receivables Maturity [Abstract]    
Capital Leases, Net Investment in Direct Financing Leases, Unguaranteed Residual Values of Leased Property 162  
Non-Consumer Segment [Member]    
Finance Receivables Maturity [Abstract]    
Financing Receivable, Gross 37,247 33,140
Non-Consumer Segment [Member] | Wholesale and Dealer Loans [Member]    
Finance Receivables Maturity [Abstract]    
2016 32,899  
2017 1,823  
2018 267  
Thereafter 1,048  
Financing Receivable, Gross 36,037 31,875
Non-Consumer Segment [Member] | Other Finance Receivables [Member]    
Finance Receivables Maturity [Abstract]    
2016 1,210  
2017 0  
2018 0  
Thereafter 0  
Financing Receivable, Gross $ 1,210 $ 1,265
v3.3.1.900
Finance Receivables - Aging Analysis (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Number Of Days After Which Finance Receivable Is Considered Past Due any payment, including principal and interest, that is at least 31 days past the contractual due date  
Number Of Days At Which Finance Receivables Are In Process Of Collection 90 days  
Finance Receivables Aging Analysis [Abstract]    
Financing Receivables $ 97,196 $ 87,236
Consumer Segment [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing 16 17
Finance Receivables Aging Analysis [Abstract]    
Total past due 881 896
Current 59,068 53,200
Financing Receivables 59,949 54,096
Non-Consumer Segment [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing 1 3
Finance Receivables Aging Analysis [Abstract]    
Total past due 116 117
Current 37,131 33,023
Financing Receivables 37,247 33,140
31-60 Days Past Due [Member] | Consumer Segment [Member]    
Finance Receivables Aging Analysis [Abstract]    
Total past due 708 718
61-90 Days Past Due [Member] | Consumer Segment [Member]    
Finance Receivables Aging Analysis [Abstract]    
Total past due 108 97
91-120 Days Past Due [Member] | Consumer Segment [Member]    
Finance Receivables Aging Analysis [Abstract]    
Total past due 27 29
Greater Than 120 Days Past Due [Member] | Consumer Segment [Member]    
Finance Receivables Aging Analysis [Abstract]    
Total past due $ 38 $ 52
v3.3.1.900
Finance Receivables - Credit Quality,Impaired Receivables, TDRs and Non-Accrual Status (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivables $ 97,196 $ 87,236
Number of Days Past Due After Which Consumer Receivables are Considered Impaired greater than 120 days past due  
Pass [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Term, in days, for credit quality rating current to 60 days past due  
Special Mention [Member] | Minimum [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Finance Receivables Credit Quality Ratings Term Range 61 days  
Special Mention [Member] | Maximum [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Finance Receivables Credit Quality Ratings Term Range 120 days  
Substandard [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Term, in days, for credit quality rating greater than 120 days past due  
Consumer Segment [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivables $ 59,949 54,096
Impaired Financing Receivable, Recorded Investment $ 375 $ 415
Impaired Financing Receivable Recorded Investment, Percentage of Receivable 0.60% 0.80%
Non-Consumer Segment [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivables $ 37,247 $ 33,140
Impaired Financing Receivable, Recorded Investment $ 134 $ 110
Impaired Financing Receivable Recorded Investment, Percentage of Receivable 0.40% 0.30%
Non-Consumer Segment [Member] | Wholesale and Dealer Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivables $ 36,037 $ 31,875
Non-Consumer Segment [Member] | Wholesale and Dealer Loans [Member] | Group I    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivables 27,054 23,641
Non-Consumer Segment [Member] | Wholesale and Dealer Loans [Member] | Group II    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivables 7,185 6,360
Non-Consumer Segment [Member] | Wholesale and Dealer Loans [Member] | Group III    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivables 1,687 1,787
Non-Consumer Segment [Member] | Wholesale and Dealer Loans [Member] | Group IV    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Financing Receivables $ 111 $ 87
v3.3.1.900
Net Investments in Operating Leases (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Property Subject to or Available for Operating Lease [Line Items]      
Length of lease contract 60 months or less    
Vehicles, at cost $ 29,673 $ 24,952  
Accumulated depreciation (4,545) (3,396)  
Net investment in operating leases before allowance for credit losses 25,128 21,556  
Allowance for credit losses (49) (38) $ (23)
Net investment in operating leases 25,079 21,518  
Operating Leases, Future Minimum Payments Receivable [Abstract]      
2016 4,021    
2017 2,504    
2018 919    
2019 59    
2020 3    
Securitization Transactions [Member]      
Property Subject to or Available for Operating Lease [Line Items]      
Net investment in operating leases 13,300 9,600  
Affiliated Entity [Member]      
Property Subject to or Available for Operating Lease [Line Items]      
Related Party Transaction, Deferred Interest Supplements and Residual Support Payments on Net Investment in Operating Leases 2,400 2,100  
Related Party Transaction, Earned Interest Supplements and Residual Support Costs, Net Investment in Operating Lease 1,500 1,300 900
Related Party Transactions, Cash Received and Interest Supplements, Net Investment in Operating Lease 1,900 1,800 1,400
Net investment in leased vehicles-Employee and company vehicles 652 645  
Operating lease revenue on employee leased vehicles $ 284 $ 259 $ 228
v3.3.1.900
Allowance for Credit Losses (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]                      
Term To Charge Off Finance Receivables                 greater than 120 days past due    
Number Of Days At Which Finance Receivables Impaired                 when an account is deemed to be uncollectible or when an account is 120 days delinquent    
Allowance for credit losses, finance receivables                      
Beginning balance       $ 321       $ 357 $ 321 $ 357  
Charge-offs                 (336) (300)  
Recoveries                 126 140  
Provision for credit losses                 274 133  
Other                 (12) (9)  
Ending balance $ 373       $ 321       373 321 $ 357
Analysis of ending balance of allowance for credit losses, finance receivables                      
Collective impairment allowance 350       298       350 298  
Specific impairment allowance 23       23       23 23  
Ending balance 373       321       373 321 357
Analysis of ending balance of finance receivables                      
Collectively evaluated for impairment 96,687       86,711       96,687 86,711  
Specifically evaluated for impairment 509       525       509 525  
Financing Receivables 97,196       87,236       97,196 87,236  
Allowance for credit losses, net investment in operating leases                      
Beginning balance       38       23 38 23  
Charge-offs                 (123) (111)  
Recoveries                 62 62  
Other                 (1) 0  
Ending balance 49       38       49 38 23
Analysis of ending balance of allowance for credit losses, net investment in operating leases                      
Collective impairment allowance 49       38       49 38  
Specific impairment allowance 0       0       0 0  
Ending balance 49       38       49 38 23
Analysis of ending balance of net investment in operating leases                      
Collectively evaluated for impairment 25,128       21,556       25,128 21,556  
Individually evaluated for impairment 0       0       0 0  
Net investment in operating leases before allowance for credit losses 25,128       21,556       25,128 21,556  
Total allowance                      
Beginning balance       359       380 359 380  
Charge-offs                 (459) (411)  
Recoveries                 188 202  
Provision for credit losses 108 $ 100 $ 72 67 82 $ 57 $ 27 31 347 197 146
Other                 (13) (9)  
Ending balance 422       359       422 359 380
Analysis of Ending Balance of Finance Receivables and Net Investment in Operating Leases [Abstract]                      
Collective impairment allowance 399       336       399 336  
Specific impairment allowance 23       23       23 23  
Ending balance 422       359       422 359 380
Ending balance, net of allowance for credit losses 96,823       86,915       96,823 86,915  
Ending balance, net investment in operating leases 25,079       21,518       25,079 21,518  
Net Investment in Operating Leases [Member]                      
Allowance for credit losses, finance receivables                      
Provision for credit losses                 73 64  
Consumer Segment [Member]                      
Allowance for credit losses, finance receivables                      
Beginning balance       305       327 305 327  
Charge-offs                 (333) (294)  
Recoveries                 120 131  
Provision for credit losses                 276 150  
Other                 (11) (9)  
Ending balance 357       305       357 305 327
Analysis of ending balance of allowance for credit losses, finance receivables                      
Collective impairment allowance 338       282       338 282  
Specific impairment allowance 19       23       19 23  
Ending balance 357       305       357 305 327
Analysis of ending balance of finance receivables                      
Collectively evaluated for impairment 59,574       53,681       59,574 53,681  
Specifically evaluated for impairment 375       415       375 415  
Financing Receivables 59,949       54,096       59,949 54,096  
Analysis of Ending Balance of Finance Receivables and Net Investment in Operating Leases [Abstract]                      
Ending balance, net of allowance for credit losses 59,592       53,791       59,592 53,791  
Non-Consumer Segment [Member]                      
Allowance for credit losses, finance receivables                      
Beginning balance       $ 16       $ 30 16 30  
Charge-offs                 (3) (6)  
Recoveries                 6 9  
Provision for credit losses                 (2) (17)  
Other                 (1) 0  
Ending balance 16       16       16 16 30
Analysis of ending balance of allowance for credit losses, finance receivables                      
Collective impairment allowance 12       16       12 16  
Specific impairment allowance 4       0       4 0  
Ending balance 16       16       16 16 $ 30
Analysis of ending balance of finance receivables                      
Collectively evaluated for impairment 37,113       33,030       37,113 33,030  
Specifically evaluated for impairment 134       110       134 110  
Financing Receivables 37,247       33,140       37,247 33,140  
Analysis of Ending Balance of Finance Receivables and Net Investment in Operating Leases [Abstract]                      
Ending balance, net of allowance for credit losses $ 37,231       $ 33,124       $ 37,231 $ 33,124  
v3.3.1.900
Transfers of Receivables - Assets and Liabilities of Securitizations (Details) - USD ($)
$ in Millions
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Securitization Transactions [Line Items]        
Loans Receivable Held-for-sale, Net $ 0 $ 0    
Cash and cash equivalents 8,886 6,179 $ 9,424 $ 9,189
Financing and Loans and Leases Receivable Allowance 422 359 380  
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 121,902 108,433 $ 99,913  
Related Debt 119,601 105,037    
Variable Interest Entity, Primary Beneficiary [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 3,949 2,094    
Related Debt 43,086 37,156    
Securitization Transactions [Member] | Consolidated Entity Including Variable Interest Entities (VIE) [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 4,300 2,400    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 67,000 55,800    
Financing and Loans and Leases Receivable Allowance 100 100    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 66,900 55,700    
Related Debt 50,000 43,300    
Securitization Transactions [Member] | Consolidated Entity Including Variable Interest Entities (VIE) [Member] | Financing Receivable [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 3,800 2,000    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 53,700 46,200    
Financing and Loans and Leases Receivable Allowance 100 100    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 53,600 46,100    
Related Debt 41,100 36,700    
Securitization Transactions [Member] | Consolidated Entity Including Variable Interest Entities (VIE) [Member] | Retail [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 1,800 1,700    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 27,600 24,400    
Financing and Loans and Leases Receivable Allowance 100 100    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 27,500 24,300    
Related Debt 25,000 22,500    
Securitization Transactions [Member] | Consolidated Entity Including Variable Interest Entities (VIE) [Member] | Wholesale [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 2,000 300    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 26,100 21,800    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 26,100 21,800    
Related Debt 16,100 14,200    
Securitization Transactions [Member] | Consolidated Entity Including Variable Interest Entities (VIE) [Member] | Net Investment in Operating Leases [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 500 400    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 13,300 9,600    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 13,300 9,600    
Related Debt 8,900 6,600    
Securitization Transactions [Member] | Variable Interest Entity, Primary Beneficiary [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 3,900 2,100    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 59,300 49,200    
Financing and Loans and Leases Receivable Allowance 100 100    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 59,200 49,100    
Related Debt 43,100 37,200    
Securitization Transactions [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Financing Receivable [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 3,400 1,700    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 46,000 39,600    
Financing and Loans and Leases Receivable Allowance 100 100    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 45,900 39,500    
Related Debt 34,200 30,600    
Securitization Transactions [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Retail [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 1,400 1,400    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 20,900 18,800    
Financing and Loans and Leases Receivable Allowance 100 100    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 20,800 18,700    
Related Debt 18,900 17,300    
Securitization Transactions [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Wholesale [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 2,000 300    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 25,100 20,800    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 25,100 20,800    
Related Debt 15,300 13,300    
Securitization Transactions [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Net Investment in Operating Leases [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 500 400    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 13,300 9,600    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 13,300 9,600    
Related Debt 8,900 6,600    
Securitization Transactions [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 400 300    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 7,700 6,600    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 7,700 6,600    
Related Debt 6,900 6,100    
Securitization Transactions [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | Financing Receivable [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 400 300    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 7,700 6,600    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 7,700 6,600    
Related Debt 6,900 6,100    
Securitization Transactions [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | Retail [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 400 300    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 6,700 5,600    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 6,700 5,600    
Related Debt 6,100 5,200    
Securitization Transactions [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | Wholesale [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 0 0    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 1,000 1,000    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 1,000 1,000    
Related Debt 800 900    
Securitization Transactions [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | Net Investment in Operating Leases [Member]        
Securitization Transactions [Line Items]        
Cash and cash equivalents 0 0    
Finance Receivables & Net Investment in Operating Leases, Before Allowance for Credit Losses 0 0    
Financing and Loans and Leases Receivable Allowance 0 0    
Finance Receivables & Net Investment In Operating Leases, After Allowance for Credit Losses 0 0    
Related Debt $ 0 $ 0    
v3.3.1.900
Transfers of Receivables - Financial Performance Related to Securitizations (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Securitization Transactions [Line Items]                      
Interest expense $ 597 $ 582 $ 599 $ 638 $ 654 $ 663 $ 673 $ 666 $ 2,416 $ 2,656 $ 2,730
Securitization Transactions [Member]                      
Securitization Transactions [Line Items]                      
Interest expense                 630 595 640
Securitization Transactions [Member] | Variable Interest Entity, Primary Beneficiary [Member]                      
Securitization Transactions [Line Items]                      
Interest expense                 541 504 563
Securitization Transactions [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member]                      
Securitization Transactions [Line Items]                      
Interest expense                 $ 89 $ 91 $ 77
v3.3.1.900
Transfers of Receivables - Exposure Based on Fair Value of Derivative Instruments (Details) - USD ($)
$ in Millions
Dec. 31, 2015
Dec. 31, 2014
Securitization Transactions [Line Items]    
Fair Value of Derivative Assets $ 924 $ 859
Fair Value of Derivative Liabilities 243 167
Securitization Transactions [Member]    
Securitization Transactions [Line Items]    
Fair Value of Derivative Assets 116 48
Fair Value of Derivative Liabilities 48 30
Related to Variable Interest Entity - Not VIE [Member] | Securitization Transactions [Member]    
Securitization Transactions [Line Items]    
Fair Value of Derivative Assets 19 16
Fair Value of Derivative Liabilities 29 7
Other, Not Variable Interest Entity Related [Member] | Securitization Transactions [Member]    
Securitization Transactions [Line Items]    
Fair Value of Derivative Assets 12 5
Fair Value of Derivative Liabilities 0 1
Variable Interest Entity, Primary Beneficiary [Member]    
Securitization Transactions [Line Items]    
Fair Value of Derivative Assets 85 27
Fair Value of Derivative Liabilities 19 22
Variable Interest Entity, Primary Beneficiary [Member] | Securitization Transactions [Member]    
Securitization Transactions [Line Items]    
Fair Value of Derivative Assets 85 27
Fair Value of Derivative Liabilities $ 19 $ 22
v3.3.1.900
Transfers of Receivables - Derivative Income and Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Derivative expense/(income) related to securitization transactions [Abstract]      
Derivative expense/(income) $ (481) $ (512) $ (106)
Securitization Transactions [Member]      
Derivative expense/(income) related to securitization transactions [Abstract]      
Derivative expense/(income) (2) (4) 25
Related to Variable Interest Entity - Not VIE [Member] | Securitization Transactions [Member]      
Derivative expense/(income) related to securitization transactions [Abstract]      
Derivative expense/(income) 12 (16) 16
Other, Not Variable Interest Entity Related [Member] | Securitization Transactions [Member]      
Derivative expense/(income) related to securitization transactions [Abstract]      
Derivative expense/(income) 18 21 6
Variable Interest Entity, Primary Beneficiary [Member] | Securitization Transactions [Member]      
Derivative expense/(income) related to securitization transactions [Abstract]      
Derivative expense/(income) $ (32) $ (9) $ 3
v3.3.1.900
Variable Interest Entities (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Variable Interest Entity, Primary Beneficiary [Member]    
Variable Interest Entity [Line Items]    
Cash Collateral to Support Wholesale Transactions $ 0 $ 0
Variable Interest Entity, Not Primary Beneficiary [Member]    
Variable Interest Entity [Line Items]    
Total maximum exposure 66 66
Minimum [Member] | Variable Interest Entity, Primary Beneficiary [Member]    
Variable Interest Entity [Line Items]    
Cash Contribution Collateral to Support Wholesale Securitization Program 0 0
Maximum [Member] | Variable Interest Entity, Primary Beneficiary [Member]    
Variable Interest Entity [Line Items]    
Cash Contribution Collateral to Support Wholesale Securitization Program $ 72 $ 242
v3.3.1.900
Derivative Financial Instruments and Hedging Activities (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Effect of Derivative Financial Instruments [Abstract]      
Derivative, Gain (Loss) on Derivative, Net $ 481 $ 512 $ 106
Balance Sheet Effect of Derivative Financial Instruments [Abstract]      
Notional 96,452 83,713  
Fair Value of Derivative Assets 924 859  
Fair Value of Derivative Liabilities 243 167  
Counterparty Risk [Abstract]      
Derivative Asset, Fair Value, Amount Not Offset Against Collateral (167) (136)  
Derivative Liability, Fair Value, Amount Not Offset Against Collateral (167) (136)  
Derivative Asset 757 723  
Derivative Liability 76 31  
Interest Rate Contract [Member] | Not Designated as Hedging Instrument [Member]      
Income Effect of Derivative Financial Instruments [Abstract]      
Derivative, Gain (Loss) on Derivative, Net (58) (41) (28)
Balance Sheet Effect of Derivative Financial Instruments [Abstract]      
Notional 62,638 56,558  
Fair Value of Derivative Assets 159 168  
Fair Value of Derivative Liabilities 112 89  
Interest Rate Contract [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member]      
Income Effect of Derivative Financial Instruments [Abstract]      
Net interest settlements and accruals excluded from the assessment of hedge effectiveness 370 304 254
Ineffectiveness 3 20 (44)
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments 72 407 (658)
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge (69) (387) 614
Balance Sheet Effect of Derivative Financial Instruments [Abstract]      
Notional 28,964 23,203  
Fair Value of Derivative Assets 670 602  
Fair Value of Derivative Liabilities 16 38  
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member]      
Income Effect of Derivative Financial Instruments [Abstract]      
Derivative, Gain (Loss) on Derivative, Net 66 68 12
Balance Sheet Effect of Derivative Financial Instruments [Abstract]      
Notional 1,713 1,527  
Fair Value of Derivative Assets 22 18  
Fair Value of Derivative Liabilities 4 1  
Cross Currency Interest Rate Contract [Member] | Not Designated as Hedging Instrument [Member]      
Income Effect of Derivative Financial Instruments [Abstract]      
Derivative, Gain (Loss) on Derivative, Net 100 161 (88)
Balance Sheet Effect of Derivative Financial Instruments [Abstract]      
Notional 3,137 2,425  
Fair Value of Derivative Assets 73 71  
Fair Value of Derivative Liabilities 111 39  
Affiliated Entity [Member]      
Income Effect of Derivative Financial Instruments [Abstract]      
Gains/(Losses) from derivative transactions $ 66 $ 68 $ 10
v3.3.1.900
Other Assets and Other Liabilities and Deferred Income (Details) - USD ($)
$ in Millions
Dec. 31, 2015
Dec. 31, 2014
Other Assets [Abstract]    
Accrued interest and other non-finance receivables $ 763 $ 921
Collateral held for resale, at net realizable value 498 382
Prepaid reinsurance premiums and other reinsurance receivables 472 401
Property and equipment, net of accumulated depreciation 142 120
Deferred charges - income taxes 135 185
Investment in non-consolidated affiliates 133 141
Deferred charges 63 268
Restricted cash 56 130
Other 24 53
Total other assets 2,286 2,601
Accumulated depreciation 335 326
Other Liabilities and Deferred Income [Abstract]    
Interest payable 553 587
Unearned insurance premiums 484 410
Tax Related payables to Ford and affiliated companies 105 625
Unrecognized Tax Benefits, Other Liabilities 75 91
Other 448 497
Total other liabilities and deferred income $ 1,665 $ 2,210
v3.3.1.900
Debt (Details) - USD ($)
$ in Millions
Dec. 31, 2015
Dec. 31, 2014
Debt Instrument [Line Items]    
Total short-term debt $ 12,211 $ 11,151
Notes payable after one year 78,062 67,685
Unamortized discount (25) (51)
Unamortized debt issuance costs (214) 0
Fair value adjustments 458 428
Total long-term debt 107,390 93,886
Total debt 119,601 105,037
Fair value of debt 120,546 107,190
Fair value of short-term debt 10,400 9,800
Accrued interest included in fair value of debt $ 550 $ 586
Average Contractual (interest rate) 2.20% 2.60%
Average Effective (interest rate) 2.30% 2.70%
Fixed Interest Rate [Member]    
Debt Instrument [Line Items]    
Notes payable after one year $ 54,396 $ 49,148
Variable Interest Rate [Member]    
Debt Instrument [Line Items]    
Notes payable after one year 23,666 18,537
Floating Rate Demand Notes [Member]    
Debt Instrument [Line Items]    
Total short-term debt 5,926 5,559
Unsecured commercial paper [Member]    
Debt Instrument [Line Items]    
Total short-term debt 1,722 1,651
Other short-term debt [Member]    
Debt Instrument [Line Items]    
Total short-term debt 2,708 2,564
Asset-backed Securities [Member]    
Debt Instrument [Line Items]    
Total short-term debt 1,855 1,377
Notes payable within one year 18,855 16,722
Notes payable after one year 29,390 $ 25,197
Total debt $ 50,100  
Total short-term debt [Member]    
Debt Instrument [Line Items]    
Average Contractual (interest rate) 1.60% 1.90%
Average Effective (interest rate) 1.60% 1.90%
Unsecured Debt [Member]    
Debt Instrument [Line Items]    
Notes payable within one year $ 10,254 $ 9,102
Notes payable after one year 48,672 $ 42,488
Total debt $ 69,282  
Total long-term debt [Member]    
Debt Instrument [Line Items]    
Average Contractual (interest rate) 2.30% 2.70%
Average Effective (interest rate) 2.40% 2.80%
v3.3.1.900
Debt with Affiliated Companies (Details) - Affiliated Entity [Member] - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Debt Instrument [Line Items]      
Other short-term debt $ 88 $ 13  
Notes payable within one year 13 307  
Notes payable after one year 83 5  
Debt with affiliated companies 184 325  
Interest Expense, Related Party $ 19 $ 25 $ 22
v3.3.1.900
Debt Maturities (Details) - USD ($)
$ in Millions
Dec. 31, 2015
Dec. 31, 2014
Debt Maturities [Abstract]    
Debt maturities - 2016 $ 41,320  
Debt maturities - 2017 29,612  
Debt maturities - 2018 15,928  
Debt maturities - 2019 9,727  
Debt maturities - 2020 10,647  
Debt maturities - Thereafter 12,148  
DebtAndCapitalLeaseObligationTotal 119,382  
Total debt 119,601 $ 105,037
Total unamortized discount (25) (51)
Unamortized debt issuance costs (214) 0
Total fair value adjustments 458 $ 428
Unsecured Debt [Member]    
Debt Maturities [Abstract]    
Debt maturities - 2016 20,610  
Debt maturities - 2017 12,503  
Debt maturities - 2018 11,288  
Debt maturities - 2019 6,151  
Debt maturities - 2020 6,882  
Debt maturities - Thereafter 11,848  
Total debt 69,282  
Asset-backed Securities [Member]    
Debt Maturities [Abstract]    
Debt maturities - 2016 20,710  
Debt maturities - 2017 17,109  
Debt maturities - 2018 4,640  
Debt maturities - 2019 3,576  
Debt maturities - 2020 3,765  
Debt maturities - Thereafter 300  
Total debt 50,100  
Short-term debt [Member]    
Debt Maturities [Abstract]    
Debt maturities - 2016 12,211  
Long-term debt [Member]    
Debt Maturities [Abstract]    
Debt maturities - 2016 29,109  
Unsecured Debt Maturing Primarily by 2024 [Member]    
Debt Maturities [Abstract]    
Debt maturities - Thereafter $ 12,020  
v3.3.1.900
Debt - Credit Facilties and Committed Liquidity Programs (Details)
£ in Millions, $ in Millions
Dec. 31, 2015
USD ($)
Dec. 31, 2015
GBP (£)
FCE Bank plc [Member]    
Schedule Of Debt [Line Items]    
Debt Covenant Minimum Net Worth Requirement $ 500  
Ford Motor Company [Member]    
Schedule Of Debt [Line Items]    
Borrowing capacity under credit facilities 3,000  
Unsecured Debt [Member]    
Schedule Of Debt [Line Items]    
Borrowing capacity under credit facilities 5,300  
Borrowing availability 4,500  
Syndicated Credit Facility [Member] | FCE Bank plc [Member]    
Schedule Of Debt [Line Items]    
Borrowing capacity under credit facilities 1,200 £ 830
Borrowing availability 560 £ 380
Revolving Credit Facility [Member]    
Schedule Of Debt [Line Items]    
Borrowing availability 3,000  
Revolving Credit Facility [Member] | Ford Motor Company [Member]    
Schedule Of Debt [Line Items]    
Borrowing capacity under credit facilities $ 13,400  
Revolving Credit Facility [Member] | Ford Motor Company [Member] | Committments maturing by 2019 [Member]    
Schedule Of Debt [Line Items]    
Line of Credit, Percent Maturing 75.00% 75.00%
Revolving Credit Facility [Member] | Ford Motor Company [Member] | Commitments maturing by 2017 [Member]    
Schedule Of Debt [Line Items]    
Line of Credit, Percent Maturing 25.00% 25.00%
Contractually Committed Liquidity Facilities [Member]    
Schedule Of Debt [Line Items]    
Commitment To Sell Commercial Paper Conduits Maximum $ 33,200  
Commitment To Sell Commercial Paper Conduits Current 16,200  
Commitment To Sell Commercial Paper Conduits Utilized 20,600  
Operating Lease [Member] | Contractually Committed Liquidity Facilities [Member]    
Schedule Of Debt [Line Items]    
Commitment To Sell Commercial Paper Conduits Maximum 8,900  
Retail [Member] | Contractually Committed Liquidity Facilities [Member]    
Schedule Of Debt [Line Items]    
Commitment To Sell Commercial Paper Conduits Maximum 17,600  
Wholesale [Member] | Contractually Committed Liquidity Facilities [Member]    
Schedule Of Debt [Line Items]    
Commitment To Sell Commercial Paper Conduits Maximum $ 6,700  
v3.3.1.900
Income Taxes (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Current [Abstract]        
United States federal   $ (454) $ (198) $ 185
Current Foreign Tax Expense (Benefit)   161 154 169
State and local   (26) (38) (55)
Total current   (319) (82) 299
Deferred [Abstract]        
United States federal   893 193 0
Foreign   93 (6) (29)
State and local   56 44 7
Total deferred   1,042 231 (22)
Provision for income taxes   $ 723 $ 149 $ 277
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]        
Statutory tax rate   35.00% 35.00% 35.00%
Non-U.S. tax rates under U.S. rate   (3.00%) (3.00%) (2.30%)
State and local income taxes   1.00% (0.20%) (1.00%)
U.S. tax on non-U.S. earnings   0.20% (21.40%) (15.00%)
Other   (0.20%) (2.40%) 1.90%
Valuation allowance   1.70% 0.00% (2.80%)
Effective tax rate   34.70% 8.00% 15.80%
Undistributed Earnings of Foreign Subsidiaries       $ 500
Undistributed Foreign Earnings, Deferred Taxes Not Provided   $ 2,900    
Potential Deferred Tax Liability Undistributed Foreign Earnings   600    
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount $ 360      
Deferred tax assets [Abstract]        
Net operating loss carryforwards   540 $ 227  
Provision for credit losses   87 140  
Other foreign   75 186  
Employee benefit plans   10 11  
Foreign tax credits   756 685  
Other   280 282  
Total gross deferred tax assets   1,748 1,531  
Less: valuation allowance   (47) (10)  
Total deferred tax assets   1,701 1,521  
Deferred tax liabilities [Abstract]        
Leasing transactions   3,338 2,035  
Finance receivables   688 647  
Other foreign   330 480  
Other   18 23  
Deferred Tax Liabilities, Net   4,374 3,185  
Deferred Tax Liabilities Net of Tax Assets   2,673 1,664  
Amount of valuation allowance released   47    
Operating Loss Carryforwards   1,600    
Net operating loss carryforwards   540 227  
Reconciliation of Unrecognized Tax Benefits [Roll Forward]        
Balance at January 1   111 159 491
Increase - tax positions in prior years   9 28 28
Increases - tax positions in current year   1 1 1
Decrease - tax positions in prior years   (22) (44) (68)
Settlements   (8) (33) (293)
Balance at December 31   91 111 159
Unrecognized Tax Benefits that Would Impact Effective Tax Rate   76 88 128
Unrecognized Tax Benefits Interest Income   3   $ 17
Unrecognized Tax Benefits, Interest on Income Taxes Expense     13  
Unrecognized Tax Benefits, Interest on Income Taxes Accrued   $ 37 $ 50  
v3.3.1.900
Accumulated Other Comprehensive Income (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Cumulative Translation Adjustment Summary [Roll Forward]      
Beginning balance $ 160 $ 717 $ 743
Net gain/(loss) on Foreign Currency Transaction (767) (547) (86)
Ending balance (607) 160 717
Total AOCI ending balance at December 31 (607) 160 717
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax [Abstract]      
Net gain/(loss) on foreign currency translation, tax adjustment 0 0 0
Accumulated Other Comprehensive Income (Loss) [Member]      
Cumulative Translation Adjustment Summary [Roll Forward]      
Other Comprehensive Income/(Loss), Net of Tax (767) (557) (26)
Affiliated Entity [Member]      
Cumulative Translation Adjustment Summary [Roll Forward]      
Net gain/(loss) on Foreign Currency Transaction 0 (10) 60
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax [Abstract]      
Net gain/(loss) on foreign currency translation, tax adjustment $ 0 $ 0 $ 0
v3.3.1.900
Insurance (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statutory Accounting Practices [Line Items]      
Assets Held by Insurance Regulators $ 12 $ 13  
Insurance Expenses [Abstract]      
Insurance losses 80 115 $ 70
Loss adjustment expenses 5 6 6
Reinsurance Income and Other Expenses, Net (16) (14) (13)
Insurance expenses 69 107 63
Liability for reported insurance claims and estimate of unreported claims 8 11  
Ceded insurance expenses 76 68 64
Premiums Written and Earned [Abstract]      
Direct premiums written 328 293 270
Assumed premiums written 0 0 0
Ceded premiums written (194) (166) (151)
Net premiums written 134 127 119
Direct premiums earned 254 230 216
Assumed premiums earned 0 0 0
Ceded premiums earned (121) (105) (97)
Net premiums earned 133 125 119
Affiliated Entity [Member]      
Statutory Accounting Practices [Line Items]      
Earned insurance premiums 90 75 64
Insurance loss and loss adjustment expenses 36 30 $ 26
Affiliated Entity [Member]      
Statutory Accounting Practices [Line Items]      
Related Party Transaction, Unearned Insurance Premium $ 176 $ 149  
v3.3.1.900
Other Income (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Component of Other Income, Nonoperating [Line Items]      
Gains/(Losses) on derivatives $ 110 $ 208 $ (148)
Currency revaluation gains/(losses) (161) (236) 82
Interest and investment income 69 53 50
Insurance Fee Income 88 74 61
Other Nonoperating Income (Expense) 178 166 213
Other Income Loss Net 284 265 258
Affiliated Entity [Member]      
Component of Other Income, Nonoperating [Line Items]      
Related Party Transaction, Interest Income, Notes Receivable, Tax Sharing Agreement $ 3 $ 5 $ 11
v3.3.1.900
Retirement Benefits (Details) - United States Pension Plans of US Entity, Defined Benefit [Member] - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]      
Defined Benefit Plan, Allocated Service Cost $ 30 $ 26 $ 26
Retirement plan, allocated service cost percentage 9.00%    
v3.3.1.900
Fair Value Measurements (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Debt Security, Maturity Period for Classification as Cash Equivalent three months or less  
Investment Security, Maturity Period for Classification as Marketable Security greater than three months  
Fair Value Measurement, Period After Which Fair Value of Collateral is Adjusted greater than 120 days past due  
Fair Value of Derivative Assets $ 924 $ 859
Fair Value of Derivative Liabilities 243 167
Fair Value, Measurements, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 266 351
Marketable securities 2,723 3,258
Fair Value of Derivative Assets 924 859
Total assets at fair value 3,913 4,468
Fair Value of Derivative Liabilities 243 167
Total liabilities at fair value 243 167
Fair Value, Measurements, Recurring [Member] | Cash Equivalents [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Par value assets excluded from fair value by input 6,300 3,800
Fair Value, Measurements, Recurring [Member] | Cash [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Par value assets excluded from fair value by input 2,300 2,000
Fair Value, Measurements, Recurring [Member] | Foreign Government and Agencies [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 266 341
Marketable securities 832 405
Fair Value, Measurements, Recurring [Member] | Corporate debt [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 0 10
Marketable securities 384 1,555
Fair Value, Measurements, Recurring [Member] | US Treasury and Government [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Marketable securities 1,467 1,268
Fair Value, Measurements, Recurring [Member] | Other Marketable Securities [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Marketable securities 40 30
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 0 0
Marketable securities 298 17
Fair Value of Derivative Assets 0 0
Total assets at fair value 298 17
Fair Value of Derivative Liabilities 0 0
Total liabilities at fair value 0 0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Foreign Government and Agencies [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 0 0
Marketable securities 0 0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Corporate debt [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 0 0
Marketable securities 0 0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | US Treasury and Government [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Marketable securities 298 17
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other Marketable Securities [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Marketable securities 0 0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 266 351
Marketable securities 2,425 3,241
Fair Value of Derivative Assets 924 859
Total assets at fair value 3,615 4,451
Fair Value of Derivative Liabilities 243 167
Total liabilities at fair value 243 167
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Foreign Government and Agencies [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 266 341
Marketable securities 832 405
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate debt [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Cash equivalents - financial instruments 0 10
Marketable securities 384 1,555
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | US Treasury and Government [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Marketable securities 1,169 1,251
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other Marketable Securities [Member]    
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]    
Marketable securities $ 40 $ 30
v3.3.1.900
Segment Information (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting Information [Line Items]                      
Total revenue $ 2,599 $ 2,478 $ 2,338 $ 2,282 $ 2,291 $ 2,312 $ 2,234 $ 2,159 $ 9,697 $ 8,996 $ 8,182
Income before income taxes                 2,086 1,854 1,756
Other disclosures [Abstract]                      
Depreciation on vehicles subject to operating leases 1,010 956 858 816 840 801 742 705 3,640 3,088 2,397
Interest expense 597 582 599 638 654 663 673 666 2,416 2,656 2,730
Provision for credit losses 108 $ 100 $ 72 $ 67 82 $ 57 $ 27 $ 31 347 197 146
Net finance receivables and net investment in operating leases 121,902       108,433       121,902 108,433 99,913
Total assets 137,448       122,108       137,448 122,108 115,608
Adjustment to Receivables [Member]                      
Segment Reporting Information [Line Items]                      
Total revenue                 0 0 0
Income before income taxes                 0 0 0
Other disclosures [Abstract]                      
Depreciation on vehicles subject to operating leases                 0 0 0
Interest expense                 0 0 0
Provision for credit losses                 0 0 0
Net finance receivables and net investment in operating leases (5,330)       (4,350)       (5,330) (4,350) (3,497)
Total assets 0       0       0 0 0
North America Segment [Member]                      
Segment Reporting Information [Line Items]                      
Total revenue                 8,048 7,351 6,708
Income before income taxes                 1,629 1,399 1,438
Other disclosures [Abstract]                      
Depreciation on vehicles subject to operating leases                 3,603 3,045 2,369
Interest expense                 1,811 2,010 2,088
Provision for credit losses                 294 157 114
Net finance receivables and net investment in operating leases 103,268       91,021       103,268 91,021 83,722
Total assets 109,339       96,016       109,339 96,016 90,720
International Segment [Member]                      
Segment Reporting Information [Line Items]                      
Total revenue                 1,650 1,651 1,527
Income before income taxes                 458 461 371
Other disclosures [Abstract]                      
Depreciation on vehicles subject to operating leases                 37 43 28
Interest expense                 605 646 642
Provision for credit losses                 53 40 32
Net finance receivables and net investment in operating leases 23,964       21,762       23,964 21,762 19,688
Total assets 28,109       26,092       28,109 26,092 24,888
Total Unallocated/Eliminations [Member]                      
Segment Reporting Information [Line Items]                      
Total revenue                 (1) (6) (53)
Income before income taxes                 (1) (6) (53)
Other disclosures [Abstract]                      
Depreciation on vehicles subject to operating leases                 0 0 0
Interest expense                 0 0 0
Provision for credit losses                 0 0 0
Net finance receivables and net investment in operating leases (5,330)       (4,350)       (5,330) (4,350) (3,497)
Total assets 0       0       0 0 0
Unallocated Risk Management [Member]                      
Segment Reporting Information [Line Items]                      
Total revenue                 (1) (6) (53)
Income before income taxes                 (1) (6) (53)
Other disclosures [Abstract]                      
Depreciation on vehicles subject to operating leases                 0 0 0
Interest expense                 0 0 0
Provision for credit losses                 0 0 0
Net finance receivables and net investment in operating leases 0       0       0 0 0
Total assets $ 0       $ 0       $ 0 $ 0 $ 0
v3.3.1.900
Geographic Information (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting Information [Line Items]                      
Total revenue $ 2,599 $ 2,478 $ 2,338 $ 2,282 $ 2,291 $ 2,312 $ 2,234 $ 2,159 $ 9,697 $ 8,996 $ 8,182
Income before income taxes                 2,086 1,854 1,756
Net finance receivables and net investment in operating leases 121,902       108,433       121,902 108,433 99,913
United States                      
Segment Reporting Information [Line Items]                      
Total revenue                 7,070 6,377 5,739
Income before income taxes                 1,298 1,199 1,160
Net finance receivables and net investment in operating leases 88,237       76,578       88,237 76,578 70,513
Canada                      
Segment Reporting Information [Line Items]                      
Total revenue                 981 998 909
Income before income taxes                 247 148 127
Net finance receivables and net investment in operating leases 10,037       10,449       10,037 10,449 10,085
Europe                      
Segment Reporting Information [Line Items]                      
Total revenue                 979 1,041 1,132
Income before income taxes                 316 332 319
Net finance receivables and net investment in operating leases 18,657       16,708       18,657 16,708 15,674
All Other                      
Segment Reporting Information [Line Items]                      
Total revenue                 667 580 402
Income before income taxes                 225 175 150
Net finance receivables and net investment in operating leases $ 4,971       $ 4,698       $ 4,971 $ 4,698 $ 3,641
v3.3.1.900
Selected Quarterly Financial Data (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]                      
Total revenue $ 2,599 $ 2,478 $ 2,338 $ 2,282 $ 2,291 $ 2,312 $ 2,234 $ 2,159 $ 9,697 $ 8,996 $ 8,182
Depreciation on vehicles subject to operating leases (1,010) (956) (858) (816) (840) (801) (742) (705) (3,640) (3,088) (2,397)
Interest expense (597) (582) (599) (638) (654) (663) (673) (666) (2,416) (2,656) (2,730)
Total financing margin and other revenue 992 940 881 828 797 848 819 788 3,641 3,252 3,055
Provision for credit losses 108 100 72 67 82 57 27 31 347 197 146
Net income $ 352 $ 365 $ 340 $ 306 $ 411 718 $ 264 $ 312 $ 1,363 $ 1,705 $ 1,479
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount           $ 360          
v3.3.1.900
Commitments and Contingencies (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Minimum rentals on operating leases [Abstract]      
2016 $ 19    
2017 16    
2018 10    
2019 6    
2020 5    
Thereafter 7    
Rent expense 27 $ 26 $ 25
Guarantor Obligations, Current Carrying Value 0 0  
Financial Guarantee [Member]      
Minimum rentals on operating leases [Abstract]      
Maximum potential payments 80 107  
Counter Guarantee [Member] | Ford Motor Company [Member]      
Minimum rentals on operating leases [Abstract]      
Counter guarantee $ 74 $ 101