Transfers of Receivables

9 Months Ended

Sep. 30, 2019

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 primarily in the United States, Canada, the United Kingdom, Germany, and China.

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.

Most of these securitization transactions utilize VIEs. See Note 8 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, 2018
	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	$	1.9	$	34.0	$	0.2	$	33.8	$	29.2
Wholesale financing	0.3		24.9		—		24.9		13.9
Finance receivables	2.2		58.9		0.2		58.7		43.1
Net investment in operating leases	0.5		16.3		—		16.3		10.2
Total VIE	$	2.7	$	75.2	$	0.2	$	75.0	$	53.3
Non-VIE
Retail financing	$	0.3	$	6.7	$	—	$	6.7	$	5.9
Wholesale financing	—		0.8		—		0.8		0.6
Finance receivables	0.3		7.5		—		7.5		6.5
Net investment in operating leases	—		—		—		—		—
Total Non-VIE	$	0.3	$	7.5	$	—	$	7.5	$	6.5
Total securitization transactions
Retail financing	$	2.2	$	40.7	$	0.2	$	40.5	$	35.1
Wholesale financing	0.3		25.7		—		25.7		14.5
Finance receivables	2.5		66.4		0.2		66.2		49.6
Net investment in operating leases	0.5		16.3		—		16.3		10.2
Total securitization transactions	$	3.0	$	82.7	$	0.2	$	82.5	$	59.8

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(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 7. TRANSFERS OF RECEIVABLES (Continued)

	September 30, 2019
	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	$	1.8	$	33.3	$	0.2	$	33.1	$	28.8
Wholesale financing	0.3		23.4		—		23.4		14.2
Finance receivables	2.1		56.7		0.2		56.5		43.0
Net investment in operating leases	0.6		12.7		—		12.7		8.0
Total VIE	$	2.7	$	69.4	$	0.2	$	69.2	$	51.0
Non-VIE
Retail financing	$	0.2	$	4.5	$	—	$	4.5	$	4.0
Wholesale financing	—		0.6		—		0.6		0.5
Finance receivables	0.2		5.1		—		5.1		4.5
Net investment in operating leases	—		—		—		—		—
Total Non-VIE	$	0.2	$	5.1	$	—	$	5.1	$	4.5
Total securitization transactions
Retail financing	$	2.0	$	37.8	$	0.2	$	37.6	$	32.8
Wholesale financing	0.3		24.0		—		24.0		14.7
Finance receivables	2.3		61.8		0.2		61.6		47.5
Net investment in operating leases	0.6		12.7		—		12.7		8.0
Total securitization transactions	$	2.9	$	74.5	$	0.2	$	74.3	$	55.5

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(a) Unearned interest supplements and residual support are excluded from securitization transactions.

(b) Includes assets to be used to settle the liabilities of the consolidated VIEs.

(c) Includes unamortized discount and debt issuance cost.