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Debt and Commitments (Notes)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
DEBT AND COMMITMENTS DEBT AND COMMITMENTS
Our debt consists of short-term and long-term secured and unsecured debt securities, and secured and unsecured borrowings from banks and other lenders.  Debt issuances are placed directly by us or through securities dealers or underwriters and are held by institutional and retail investors.  In addition, Ford Credit sponsors securitization programs that provide short-term and long-term asset-backed financing through institutional investors in the U.S. and international capital markets.

Debt is reported on our consolidated balance sheets at par value adjusted for unamortized discount or premium, unamortized issuance costs, and adjustments related to designated fair value hedging (see Note 20). Discounts, premiums, and costs directly related to the issuance of debt are capitalized and amortized over the life of the debt or to the put date and are recorded in interest expense using the effective interest method. Gains and losses on the extinguishment of debt are recorded in Other income/(loss), net.
NOTE 19.  DEBT AND COMMITMENTS (Continued)

The carrying value of Company debt excluding Ford Credit and Ford Credit debt at December 31 was as follows (in millions):
Interest Rates
Average Contractual Average Effective (a)
Company excluding Ford Credit202120222021202220212022
Debt payable within one year  
Short-term$286 $359 0.4 %2.8 %0.4 %2.8 %
Long-term payable within one year 
Public unsecured debt securities86 — 
U.S. Department of Energy Advanced Technology Vehicles Manufacturing (“DOE ATVM”) Incentive Program953 — 
Delayed draw term loan1,500 — 
Other debt348 372 
Unamortized (discount)/premium2 (1)
Total debt payable within one year3,175 730 
Long-term debt payable after one year 
Public unsecured debt securities13,643 14,935 
Convertible notes2,300 2,300 
U.K. Export Finance Program843 1,654 
Other debt768 682 
Unamortized (discount)/premium(188)(180)
Unamortized issuance costs
(166)(191)
Total long-term debt payable after one year
17,200 19,200 4.4 %(b)4.9 %(b)4.6 %(b)5.1 %(b)
Total Company excluding Ford Credit$20,375 $19,930 
Fair value of Company debt excluding Ford Credit (c)$24,044 $18,557 
Ford Credit  
Debt payable within one year  
Short-term$14,810 $19,624 1.2 %3.8 %1.3 %3.8 %
Long-term payable within one year 
Unsecured debt13,660 7,980 
Asset-backed debt18,049 21,839 
Unamortized (discount)/premium1 — 
Unamortized issuance costs
(13)(13)
Fair value adjustments (d)10 4 
Total debt payable within one year46,517 49,434 
Long-term debt payable after one year
Unsecured debt44,337 39,620 
Asset-backed debt26,654 31,840 
Unamortized (discount)/premium28 23 
Unamortized issuance costs
(199)(184)
Fair value adjustments (d)380 (1,694)
Total long-term debt payable after one year71,200 69,605 2.6 %(b)3.6 %(b)2.6 %(b)3.6 %(b)
Total Ford Credit$117,717 $119,039 
Fair value of Ford Credit debt (c)$120,204 $117,214 
__________
(a)Average effective rates reflect the average contractual interest rate plus amortization of discounts, premiums, and issuance costs.
(b)Includes interest on long-term debt payable within one year and after one year.
(c)At December 31, 2021 and 2022, the fair value of debt includes $209 million and $359 million of Company excluding Ford Credit short-term debt and $14.1 billion and $16.9 billion of Ford Credit short-term debt, respectively, carried at cost, which approximates fair value. All other debt is categorized within Level 2 of the fair value hierarchy.
(d)These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $257 million and $31 million at December 31, 2021 and 2022, respectively. The carrying value of hedged debt was $37.5 billion and $33.3 billion at December 31, 2021 and 2022, respectively.
NOTE 19.  DEBT AND COMMITMENTS (Continued)

Cash paid for interest was $1.4 billion, $1.9 billion, and $1.2 billion in 2020, 2021, and 2022, respectively, on Company excluding Ford Credit debt. Cash paid for interest was $3.4 billion, $2.8 billion, and $3.2 billion in 2020, 2021, and 2022, respectively, on Ford Credit debt.

Maturities

Debt maturities at December 31, 2022 were as follows (in millions):
 20232024202520262027ThereafterAdjustmentsTotal Debt Maturities
Company excluding Ford Credit       
Public unsecured debt securities$— $— $176 $3,972 $— $13,087 $(258)$16,977 
Short-term and other debt731 95 820 65 939 417 (114)2,953 
Total$731 $95 $996 $4,037 $939 $13,504 $(372)$19,930 
Ford Credit       
Unsecured debt$24,798 $11,533 $10,888 $5,184 $6,187 $5,828 $(1,816)$62,602 
Asset-backed debt24,645 15,625 10,896 3,509 1,110 700 (48)56,437 
Total$49,443 $27,158 $21,784 $8,693 $7,297 $6,528 $(1,864)$119,039 
NOTE 19.  DEBT AND COMMITMENTS (Continued)

Company excluding Ford Credit Segment

Public Unsecured Debt Securities

Our public unsecured debt securities outstanding at December 31 were as follows (in millions):
 Aggregate Principal Amount Outstanding
Title of Security20212022
8 7/8% Debentures due January 15, 2022$86 $— 
9.000% Notes due April 22, 2025
1,058 — 
7 1/8% Debentures due November 15, 2025176 176 
0.00% Notes due March 15, 2026
2,300 2,300 
7 1/2% Debentures due August 1, 2026172 172 
4.346% Notes due December 8, 2026
1,500 1,500 
6 5/8% Debentures due February 15, 2028104 104 
6 5/8% Debentures due October 1, 2028 (a) 
446 446 
6 3/8% Debentures due February 1, 2029 (a) 
202 202 
9.30% Notes due March 1, 2030
294 294 
9.625% Notes due April 22, 2030
432 432 
7.45% GLOBLS due July 16, 2031 (a) 
1,070 1,070 
8.900% Debentures due January 15, 2032
108 108 
3.25% Notes due February 12, 2032
2,500 2,500 
9.95% Debentures due February 15, 2032
4 4 
6.10% Notes due August 19, 2032
— 1,750 
4.75% Notes due January 15, 2043
2,000 2,000 
7.75% Debentures due June 15, 2043
73 73 
7.40% Debentures due November 1, 2046
398 398 
5.291% Notes due December 8, 2046
1,300 1,300 
9.980% Debentures due February 15, 2047
114 114 
6.20% Notes due June 1, 2059
750 750 
6.00% Notes due December 1, 2059
800 800 
6.50% Notes due August 15, 2062
— 600 
7.70% Debentures due May 15, 2097
142 142 
Total public unsecured debt securities$16,029 $17,235 
__________
(a)    Listed on the Luxembourg Exchange and on the Singapore Exchange.
NOTE 19.  DEBT AND COMMITMENTS (Continued)

Debt Extinguishment

Pursuant to our November 2021 cash tender offer and December 2021 redemption, we repurchased or redeemed $7.6 billion principal amount of our public unsecured debt securities for an aggregate cost of $9.3 billion (including transaction costs and accrued and unpaid interest payments for such tendered securities). As a result of these transactions, we recorded a pre-tax loss of $1.7 billion (net of unamortized discounts, premiums, and fees) in Other income/(loss), net in 2021.

In September 2022, we redeemed approximately $1.1 billion principal amount of our public unsecured debt securities for an aggregate cost of approximately $1.2 billion (including redemption costs and accrued and unpaid interest payments for such redeemed securities). As a result of this transaction, we recorded a pre-tax loss of $135 million (net of unamortized discounts, premiums, and fees) in Other income/(loss), net in 2022.

Environmental, Social, Governance (“ESG”) Bonds

In November 2021 and August 2022, we issued $2.5 billion and approximately $1.8 billion aggregate principal amount of green bonds, respectively, under our sustainable financing framework. The interest rates of these green bonds are 3.250% and 6.1%, respectively. We are allocating the net proceeds from this issuance to the design, development, and manufacturing of our electric vehicle portfolio.

Convertible Debt

In March 2021, we issued $2.3 billion aggregate principal amount of unsecured 0% Convertible Senior Notes due 2026, including $300 million aggregate principal amount of such notes pursuant to the exercise in full of the overallotment option granted to the initial purchasers. The notes will not bear regular interest and the principal amount of the notes will not accrete. The total net proceeds from the offering, after deducting debt issuance costs, were approximately $2.267 billion.

Each $1,000 principal amount of the notes will be convertible into 59.3505 shares of our Common Stock, which is equivalent to a conversion price of approximately $16.85 per share, subject to adjustment upon the occurrence of specified events. The notes are convertible, at the option of the noteholders, on or after December 15, 2025. Prior to December 15, 2025, the notes are convertible only under the following circumstances:

•During any fiscal quarter commencing after the fiscal quarter ending on September 30, 2021 (and only during such fiscal quarter), if the last reported sale price of our Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the notes on each applicable trading day;
•During the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the notes for each day of that five consecutive trading day period was less than 98% of the product of the last reported sale price of our Common Stock and the conversion rate of the notes on such trading day;
•If we call any or all of the notes for redemption; or
•Upon the occurrence of specific corporate events such as a change in control or certain beneficial distributions to common stockholders (as set forth in the indenture governing the notes).

Upon conversion, we will pay cash up to the aggregate principal amount of the notes to be converted and cash, shares of our Common Stock, or a combination of cash and shares of our Common Stock, at our election for the remainder of our obligation in excess, if any, of the aggregate principal amount of the notes being converted.
NOTE 19.  DEBT AND COMMITMENTS (Continued)

We may not redeem the notes prior to March 20, 2024. On or after March 20, 2024, we may redeem all or any portion of the notes for cash equal to 100% of the principal amount of the notes being redeemed if the last reported sale price of our Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period.

If we undergo a fundamental change (e.g., change of control), subject to certain conditions, holders of the notes may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes. In addition, if specific corporate events occur prior to the maturity date or if we issue a notice of redemption, we will increase the conversion rate by pre-defined amounts for holders who elect to convert their notes in connection with such a corporate event. The conditions allowing holders of the notes to convert were not met in 2021 or 2022.

The notes were issued at par and fees associated with the issuance of these notes are amortized to Interest expense on Company debt excluding Ford Credit over the contractual term of the notes. Amortization of issuance costs was $5 million and $7 million in 2021 and 2022, respectively. The effective interest rate of the notes is 0.3%.

The total estimated fair value of the notes as of December 31, 2021 and December 31, 2022 was approximately $3.2 billion and $2.2 billion, respectively. The fair value was determined using commonly employed valuation methodologies applying observable market inputs and is classified within Level 2 of the fair value hierarchy.

The notes did not have an impact on our full year 2021 or 2022 diluted EPS.

DOE ATVM Incentive Program

In September 2009, we entered into a Loan Arrangement and Reimbursement Agreement with the DOE, under which we borrowed through multiple draws $5.9 billion to finance certain costs for fuel-efficient, advanced-technology vehicles. We made our final repayment to the DOE in June 2022.

U.K. Export Finance Program

In 2020 and 2022, Ford Motor Company Limited (“Ford of Britain”), our operating subsidiary in the United Kingdom, entered into, and drew in full, £625 million and £750 million term loan credit facilities, respectively, with a syndicate of banks to support Ford of Britain’s general export activities. Accordingly, U.K. Export Finance (“UKEF”) provided £500 million and £600 million guarantees of the credit facilities, respectively, under its Export Development Guarantee scheme, which supports high value commercial lending to U.K. exporters. We have also guaranteed Ford of Britain’s obligations under the credit facilities to the lenders. As of December 31, 2022, the full £1,375 million under the two credit facilities remained outstanding. These five-year, non-amortizing loans mature on June 30, 2025 and June 30, 2027.
NOTE 19.  DEBT AND COMMITMENTS (Continued)

Company Excluding Ford Credit Facilities

Total Company committed credit lines, excluding Ford Credit, at December 31, 2022 were $19.3 billion, consisting of $13.5 billion of our corporate credit facility, $2 billion of our supplemental revolving credit facility, $1.75 billion of our 364-day revolving credit facility, and $2.1 billion of local credit facilities. At December 31, 2022, the utilized portion of the corporate credit facility was $19 million, representing amounts utilized for letters of credit, and the full $1.75 billion of our 364-day revolving credit facility was utilized by Ford Credit, in its capacity as a subsidiary borrower under that facility. In addition, $1.7 billion of committed Company credit lines, excluding Ford Credit, was utilized under local credit facilities for our affiliates as of December 31, 2022. As of January 25, 2023, Ford Credit had repaid the full $1.75 billion outstanding under the 364-day revolving credit facility.

Lenders under our corporate credit facility have $3.4 billion of commitments maturing on June 23, 2025 and $10.1 billion of commitments maturing on June 23, 2027. Lenders under our supplemental revolving credit facility have $0.1 billion of commitments maturing on September 29, 2024 and $1.9 billion of commitments maturing on June 23, 2025. Lenders under our 364-day revolving credit facility have $1.75 billion of commitments maturing on June 22, 2023.

The corporate, supplemental, and 364-day credit agreements include certain sustainability-linked targets, pursuant to which the applicable margin and facility fees may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, renewable electricity consumption, and Ford Europe CO2 tailpipe emissions.

The corporate credit facility is unsecured and free of material adverse change conditions to borrowing, restrictive financial covenants (for example, interest or fixed-charge coverage ratio, debt-to-equity ratio, and minimum net worth requirements), and credit rating triggers that could limit our ability to obtain funding or trigger early repayment. The corporate credit facility contains a liquidity covenant that requires us to maintain a minimum of $4 billion in aggregate of domestic cash, cash equivalents, and loaned and marketable securities and/or availability under the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility. The terms and conditions of the supplemental and 364-day revolving credit facilities are consistent with our corporate credit facility. Ford Credit has been designated as a subsidiary borrower under the corporate credit facility and the 364-day revolving credit facility.

Each of the corporate credit facility, supplemental revolving credit facility, and 364-day revolving credit facility include a covenant that requires us to provide guarantees from certain of our subsidiaries in the event that our senior, unsecured, long-term debt does not maintain at least two investment grade ratings from Fitch, Moody’s, and S&P. The following subsidiaries have provided unsecured guarantees to the lenders under the credit facilities: Ford Component Sales, LLC; Ford European Holdings Inc.; Ford Global Technologies, LLC; Ford Holdings LLC (the parent company of Ford Credit); Ford International Capital LLC; Ford Mexico Holdings LLC; Ford Motor Service Company; Ford Next LLC; and Ford Trading Company, LLC.

Ford Credit Segment

Debt Extinguishment

Pursuant to Ford Credit’s June 2022 cash tender offer, Ford Credit repurchased approximately $3 billion principal amount of its public unsecured debt securities for an aggregate cost of approximately $3 billion (including transaction costs and accrued and unpaid interest payments for such tendered securities). As a result of these transactions, Ford Credit recorded a pre-tax gain of $17 million (net of unamortized discounts, premiums, fees, and fair value adjustments) in Other income/(loss), net in 2022.
NOTE 19.  DEBT AND COMMITMENTS (Continued)

Asset-Backed Debt

At December 31, 2022, the carrying value of our asset-backed debt was $56.4 billion. This secured debt is issued by Ford Credit and includes asset-backed securities used to fund operations and maintain liquidity. Assets securing the related debt issued as part of all our securitization transactions are included in our consolidated results and are based upon the legal transfer of the underlying assets in order to reflect legal ownership and the beneficial ownership of the debt holder. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt and do not have such recourse to us, except for the customary representation and warranty provisions or when we are counterparty to certain derivative transactions of the special purpose entities (“SPEs”). In addition, the cash flows generated by the assets are restricted only to pay such liabilities; Ford Credit retains the right to residual cash flows. See Note 24 for additional information.

Although not contractually required, we regularly support our wholesale securitization programs by repurchasing receivables of a dealer from a SPE when the dealer’s performance is at risk, which transfers the corresponding risk of loss from the SPE 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 required levels. The balance of cash related to these contributions was $1,150 million and $0 at December 31, 2021 and December 31, 2022, respectively, and ranged from $25 million to $3,700 million during 2021 and from $0 to $2,850 million during 2022.

SPEs 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 derivative transactions with the SPEs. Derivative income/(expense) related to the derivative transactions that support Ford Credit’s securitization programs were $(234) million, $41 million, and $466 million for the years ended December 31, 2020, 2021, and 2022, respectively. See Note 20 for additional information regarding the accounting for derivatives.

Interest expense on securitization debt was $1.2 billion, $0.9 billion, and $1.3 billion in 2020, 2021, and 2022, respectively.

The assets and liabilities related to our asset-backed debt arrangements included in our consolidated financial statements at December 31 were as follows (in billions):
 20212022
Assets
Cash and cash equivalents$3.8 $2.8 
Finance receivables, net50.6 61.6 
Net investment in operating leases7.5 12.5 
Liabilities
Debt (a)$45.4 $56.4 
__________
(a)Debt is net of unamortized discount and issuance costs.

Committed Credit Facilities

At December 31, 2022, Ford Credit’s committed capacity totaled $39.7 billion, compared with $39.8 billion at December 31, 2021.  Ford Credit’s committed capacity is primarily comprised of committed asset-backed security facilities from bank-sponsored commercial paper conduits and other financial institutions and unsecured credit facilities with financial institutions.