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FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES | 9 Months Ended
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Sep. 30, 2025
Receivables [Abstract] |
FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES | FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios. 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. For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date. Ford Credit finance receivables, net were as follows (in millions):
| December 31, 2024 |  | September 30, 2025
Consumer |  |  |
Retail installment contracts, gross | $ | 79,459 |  |  | $ | 78,884 |
Finance leases, gross | 8,357 |  |  | 9,287 |
Retail financing, gross | 87,816 |  |  | 88,171 |
Unearned interest supplements | (4,598) |  |  | (4,333) |
Consumer finance receivables | 83,218 |  |  | 83,838 |
Non-Consumer |  |  |
Dealer financing | 29,282 |  |  | 25,420 |
Non-Consumer finance receivables | 29,282 |  |  | 25,420 |
Total recorded investment | $ | 112,500 |  |  | $ | 109,258 |
Recorded investment in finance receivables | $ | 112,500 |  |  | $ | 109,258 |
Allowance for credit losses | (864) |  |  | (897) |
Total finance receivables, net | $ | 111,636 |  |  | $ | 108,361 |
Current portion | $ | 51,850 |  |  | $ | 48,214 |
Non-current portion | 59,786 |  |  | 60,147 |
Total finance receivables, net | $ | 111,636 |  |  | $ | 108,361 |
Net finance receivables subject to fair value (a) | $ | 103,755 |  |  | $ | 99,610 |
Fair value (b) | 103,231 |  |  | 100,501 |
__________ (a)Net finance receivables subject to fair value exclude finance leases. (b)The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy. Ford Credit’s finance leases are comprised of sales-type and direct financing leases. Financing revenue from finance leases for the third quarter of 2024 and 2025 was $137 million and $146 million, respectively, and for the first nine months of 2024 and 2025 was $376 million and $431 million, respectively, and is included in Ford Credit revenues on our consolidated income statements. At December 31, 2024 and September 30, 2025, accrued interest was $335 million and $288 million, respectively, which we report in Other assets in the current assets section of our consolidated balance sheets. Included in the recorded investment in finance receivables at December 31, 2024 and September 30, 2025 were consumer receivables of $47.6 billion and $46.2 billion, respectively, and non-consumer receivables of $24.4 billion and $22.8 billion, respectively, (including Ford Blue, Ford Model e, and Ford Pro receivables sold to Ford Credit, which we report in Trade and other receivables) 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. NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) Credit Quality Consumer Portfolio. Credit quality ratings for consumer receivables are based on aging. Receivables over 60 days past due are in intensified collection status. The credit quality analysis of consumer receivables at December 31, 2024 and gross charge-offs during the year ended December 31, 2024 were as follows (in millions):
|  | Amortized Cost Basis by Origination Year |  |  |  |
|  | Prior to 2020 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | Total |  | Percent
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
31 - 60 days past due |  | $ | 43 |  |  | $ | 93 |  |  | $ | 104 |  |  | $ | 187 |  |  | $ | 242 |  |  | $ | 203 |  |  | $ | 872 |  |  | 1.0 | %
Greater than 60 days past due |  | 15 |  |  | 27 |  |  | 35 |  |  | 57 |  |  | 82 |  |  | 59 |  |  | 275 |  |  | 0.4 |
Total past due |  | 58 |  |  | 120 |  |  | 139 |  |  | 244 |  |  | 324 |  |  | 262 |  |  | 1,147 |  |  | 1.4 |
Current |  | 788 |  |  | 3,162 |  |  | 5,458 |  |  | 12,275 |  |  | 24,153 |  |  | 36,235 |  |  | 82,071 |  |  | 98.6 |
Total |  | $ | 846 |  |  | $ | 3,282 |  |  | $ | 5,597 |  |  | $ | 12,519 |  |  | $ | 24,477 |  |  | $ | 36,497 |  |  | $ | 83,218 |  |  | 100.0 | %
Gross charge-offs |  | $ | 46 |  |  | $ | 58 |  |  | $ | 71 |  |  | $ | 152 |  |  | $ | 191 |  |  | $ | 50 |  |  | $ | 568 |  |  |
The credit quality analysis of consumer receivables at September 30, 2025 and gross charge-offs during the first nine months of 2025 were as follows (in millions):
|  | Amortized Cost Basis by Origination Year |  |  |  |
|  | Prior to 2021 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025 |  | Total |  | Percent
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
31 - 60 days past due |  | $ | 67 |  |  | $ | 67 |  |  | $ | 136 |  |  | $ | 201 |  |  | $ | 237 |  |  | $ | 95 |  |  | $ | 803 |  |  | 1.0 | %
Greater than 60 days past due |  | 23 |  |  | 25 |  |  | 48 |  |  | 67 |  |  | 77 |  |  | 41 |  |  | 281 |  |  | 0.3 |
Total past due |  | 90 |  |  | 92 |  |  | 184 |  |  | 268 |  |  | 314 |  |  | 136 |  |  | 1,084 |  |  | 1.3 |
Current |  | 1,629 |  |  | 2,880 |  |  | 7,632 |  |  | 17,410 |  |  | 29,372 |  |  | 23,831 |  |  | 82,754 |  |  | 98.7 |
Total |  | $ | 1,719 |  |  | $ | 2,972 |  |  | $ | 7,816 |  |  | $ | 17,678 |  |  | $ | 29,686 |  |  | $ | 23,967 |  |  | $ | 83,838 |  |  | 100.0 | %
Gross charge-offs |  | $ | 44 |  |  | $ | 43 |  |  | $ | 96 |  |  | $ | 142 |  |  | $ | 148 |  |  | $ | 17 |  |  | $ | 490 |  |  |
Non-Consumer Portfolio. The credit quality of dealer financing receivables is evaluated based on Ford Credit’s internal dealer risk rating analysis. Ford Credit uses 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 are considered most significant in predicting a dealer’s ability to meet its financial obligations. Ford Credit also considers numerous other financial and qualitative factors of the dealer’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Ford Credit 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; and •Group IV – poor financial metrics, including dealers classified as uncollectible. Ford Credit generally suspends credit lines and extends no further funding to dealers classified in Group IV. NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) The credit quality analysis of dealer financing receivables at December 31, 2024 and gross charge-offs during the year ended December 31, 2024 were as follows (in millions):
|  | Amortized Cost Basis by Origination Year |  | Wholesale Loans |  |  |  |
|  | Dealer Loans |  |  |  |  |
|  | Prior to 2020 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | Total |  |  | Total |  | Percent
Group I |  | $ | 270 |  |  | $ | 63 |  |  | $ | 97 |  |  | $ | 47 |  |  | $ | 217 |  |  | $ | 245 |  |  | $ | 939 |  |  | $ | 25,257 |  |  | $ | 26,196 |  |  | 89.4 | %
Group II |  | 13 |  |  | — |  |  | 3 |  |  | 1 |  |  | 28 |  |  | 31 |  |  | 76 |  |  | 2,494 |  |  | 2,570 |  |  | 8.8 |
Group III |  | — |  |  | — |  |  | 2 |  |  | — |  |  | 1 |  |  | 4 |  |  | 7 |  |  | 462 |  |  | 469 |  |  | 1.6 |
Group IV |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | 46 |  |  | 47 |  |  | 0.2 |
Total (a) |  | $ | 283 |  |  | $ | 63 |  |  | $ | 102 |  |  | $ | 48 |  |  | $ | 246 |  |  | $ | 281 |  |  | $ | 1,023 |  |  | $ | 28,259 |  |  | $ | 29,282 |  |  | 100.0 | %
Gross charge-offs | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | $ | 6 |  |  | $ | 7 |  |  |
__________ (a)Total past due dealer financing receivables at December 31, 2024 were $8 million. The credit quality analysis of dealer financing receivables at September 30, 2025 and gross charge-offs during the first nine months of 2025 were as follows (in millions):
| Amortized Cost Basis by Origination Year |  | Wholesale Loans |  |  |  |
| Dealer Loans |  |  |  |  |
| Prior to 2021 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025 |  | Total |  |  | Total |  | Percent
Group I | $ | 295 |  |  | $ | 70 |  |  | $ | 33 |  |  | $ | 171 |  |  | $ | 82 |  |  | $ | 169 |  |  | $ | 820 |  |  | $ | 20,352 |  |  | $ | 21,172 |  |  | 83.3 | %
Group II | 26 |  |  | 8 |  |  | 3 |  |  | 34 |  |  | 47 |  |  | 34 |  |  | 152 |  |  | 3,519 |  |  | 3,671 |  |  | 14.4 |
Group III | — |  |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | 5 |  |  | 7 |  |  | 526 |  |  | 533 |  |  | 2.1 |
Group IV | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 5 |  |  | 6 |  |  | 38 |  |  | 44 |  |  | 0.2 |
Total (a) | $ | 321 |  |  | $ | 78 |  |  | $ | 36 |  |  | $ | 206 |  |  | $ | 131 |  |  | $ | 213 |  |  | $ | 985 |  |  | $ | 24,435 |  |  | $ | 25,420 |  |  | 100.0 | %
Gross charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |  |  | $ | — |  |  | $ | 3 |  |  | $ | 10 |  |  | $ | 13 |  |  |
__________ (a)Total past due dealer financing receivables at September 30, 2025 were $6 million. NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued) Allowance for Credit Losses The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in finance receivables as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly. Adjustments to the allowance for credit losses are made by recording charges to Ford Credit interest, operating, and other expenses on our consolidated income statements. The uncollectible portion of a finance receivable is 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 or borrower, the value of the collateral, recourse to guarantors, and other factors. Charge-offs on finance receivables include uncollected amounts related to principal, interest, late fees, and other allowable charges. Recoveries on finance receivables previously charged off as uncollectible are credited to the allowance for credit losses. In the event Ford Credit repossesses the collateral, the receivable is charged off and the collateral is recorded at its estimated fair value less costs to sell and reported in Other assets on our consolidated balance sheets. An analysis of the allowance for credit losses related to finance receivables for the periods ended September 30 was as follows (in millions):
| Third Quarter 2024 |  | First Nine Months 2024
| Consumer |  | Non-Consumer |  | Total |  | Consumer |  | Non-Consumer |  | Total
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 876 |  |  | $ | 4 |  |  | $ | 880 |  |  | $ | 879 |  |  | $ | 3 |  |  | $ | 882 |
Charge-offs | (155) |  |  | — |  |  | (155) |  |  | (408) |  |  | (7) |  |  | (415) |
Recoveries | 41 |  |  | — |  |  | 41 |  |  | 122 |  |  | 3 |  |  | 125 |
Provision for credit losses | 99 |  |  | — |  |  | 99 |  |  | 277 |  |  | 5 |  |  | 282 |
Other (a) | (3) |  |  | — |  |  | (3) |  |  | (12) |  |  | — |  |  | (12) |
Ending balance | $ | 858 |  |  | $ | 4 |  |  | $ | 862 |  |  | $ | 858 |  |  | $ | 4 |  |  | $ | 862 |
| Third Quarter 2025 |  | First Nine Months 2025
| Consumer |  | Non-Consumer |  | Total |  | Consumer |  | Non-Consumer |  | Total
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 885 |  |  | $ | 5 |  |  | $ | 890 |  |  | $ | 860 |  |  | $ | 4 |  |  | $ | 864 |
Charge-offs | (177) |  |  | 1 |  |  | (176) |  |  | (490) |  |  | (13) |  |  | (503) |
Recoveries | 48 |  |  | — |  |  | 48 |  |  | 133 |  |  | — |  |  | 133 |
Provision for credit losses | 134 |  |  | 1 |  |  | 135 |  |  | 374 |  |  | 15 |  |  | 389 |
Other (a) | — |  |  | — |  |  | — |  |  | 13 |  |  | 1 |  |  | 14 |
Ending balance | $ | 890 |  |  | $ | 7 |  |  | $ | 897 |  |  | $ | 890 |  |  | $ | 7 |  |  | $ | 897 |
__________ (a) Primarily represents amounts related to foreign currency translation adjustments.

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