XML 32 R21.htm IDEA: XBRL DOCUMENT
v3.26.1

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended
--- | ---
Jun. 30, 2026
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 foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into derivative and nonderivative contracts and have elected to apply hedge accounting to certain of these instruments. 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. Income Effect of Derivative Financial Instruments The gains/(losses), by hedge designation, reported in income for the periods ended June 30 were as follows (in millions):
| Second Quarter |  | First Half
Cash flow hedges | 2025 |  | 2026 |  | 2025 |  | 2026
Reclassified from AOCI to Cost of sales |  |  |  |  |  |  |
Foreign currency exchange contracts (a) | $ | 21 |  |  | $ | 9 |  |  | $ | 95 |  |  | $ | (3) |
Commodity contracts (b) | (1) |  |  | 59 |  |  | 10 |  |  | 87 |
Fair value hedges |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |
Net interest settlements and accruals on hedging instruments | (44) |  |  | (7) |  |  | (92) |  |  | (14) |
Fair value changes on hedging instruments | 235 |  |  | (187) |  |  | 564 |  |  | (365) |
Fair value changes on hedged debt | (219) |  |  | 186 |  |  | (543) |  |  | 356 |
Cross-currency interest rate swap contracts |  |  |  |  |  |  |
Net interest settlements and accruals on hedging instruments | (18) |  |  | (14) |  |  | (43) |  |  | (26) |
Fair value changes on hedging instruments | 358 |  |  | (37) |  |  | 504 |  |  | (240) |
Fair value changes on hedged debt | (339) |  |  | 29 |  |  | (475) |  |  | 233 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |
Foreign currency exchange contracts (c) | (69) |  |  | (2) |  |  | (9) |  |  | (36) |
Cross-currency interest rate swap contracts | 246 |  |  | 16 |  |  | 348 |  |  | (74) |
Interest rate contracts | (18) |  |  | 1 |  |  | (63) |  |  | 92 |
Commodity contracts | 11 |  |  | (13) |  |  | 22 |  |  | 28 |
Total | $ | 163 |  |  | $ | 40 |  |  | $ | 318 |  |  | $ | 38 |
__________ (a)For the second quarter and first half of 2025, a $527 million loss and a $605 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax. For the second quarter and first half of 2026, a $93 million gain and a $229 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax (b)For the second quarter and first half of 2025, a $12 million gain and an $8 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax. For the second quarter and first half of 2026, a $38 million loss and a $40 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax. (c)For the second quarter and first half of 2025, a $56 million gain and a $126 million gain, respectively, were reported in Cost of sales, and a $125 million loss and a $135 million loss, respectively, were reported in Other income/(loss), net. For the second quarter and first half of 2026, a $49 million loss and a $112 million loss, respectively, were reported in Cost of sales, and a $47 million gain and a $76 million gain, respectively, were reported in Other income/(loss), net. NOTE 13. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued) Balance Sheet Effect of Derivative Financial Instruments Derivative assets and liabilities are reported on our consolidated balance sheets 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. Collateral represents cash received or paid under reciprocal arrangements that we have entered into with our derivative counterparties, which we do not use to offset our derivative assets and liabilities. The fair value of our derivative instruments and the associated notional amounts were as follows (in millions):
| December 31, 2025 |  | June 30, 2026
| Notional |  | Fair Value of Assets |  | Fair Value of Liabilities |  | Notional |  | Fair Value of Assets |  | Fair Value of Liabilities
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts | $ | 17,750 |  |  | $ | 98 |  |  | $ | 114 |  |  | $ | 14,383 |  |  | $ | 268 |  |  | $ | 100 |
Commodity contracts | 940 |  |  | 122 |  |  | — |  |  | 1,049 |  |  | 84 |  |  | 15 |
Fair value hedges |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | 18,582 |  |  | 374 |  |  | 220 |  |  | 22,422 |  |  | 170 |  |  | 336 |
Cross-currency interest rate swap contracts | 4,158 |  |  | 383 |  |  | 5 |  |  | 6,330 |  |  | 234 |  |  | 72 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts | 24,934 |  |  | 150 |  |  | 180 |  |  | 21,855 |  |  | 175 |  |  | 248 |
Cross-currency interest rate swap contracts | 7,121 |  |  | 379 |  |  | 28 |  |  | 5,406 |  |  | 204 |  |  | 13 |
Interest rate contracts | 87,293 |  |  | 364 |  |  | 619 |  |  | 84,868 |  |  | 411 |  |  | 432 |
Commodity contracts | 803 |  |  | 56 |  |  | 1 |  |  | 977 |  |  | 53 |  |  | 31 |
Total derivative financial instruments, gross (a) (b) | $ | 161,581 |  |  | $ | 1,926 |  |  | $ | 1,167 |  |  | $ | 157,290 |  |  | $ | 1,599 |  |  | $ | 1,247 |
Current portion |  |  | $ | 634 |  |  | $ | 643 |  |  |  |  | $ | 593 |  |  | $ | 788 |
Non-current portion |  |  | 1,292 |  |  | 524 |  |  |  |  | 1,006 |  |  | 459 |
Total derivative financial instruments, gross |  |  | $ | 1,926 |  |  | $ | 1,167 |  |  |  |  | $ | 1,599 |  |  | $ | 1,247 |
__________ (a)At December 31, 2025 and June 30, 2026, we held collateral of $5 million and $4 million, respectively, and we posted collateral of $102 million and $90 million, respectively. (b)At December 31, 2025 and June 30, 2026, the fair value of assets and liabilities available for counterparty netting was $814 million and $855 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy. Nonderivative Hedging Instruments In the first quarter of 2026, we designated a foreign-denominated debt issuance as a net investment hedge to manage the foreign currency risk of a portion of our investment in a foreign subsidiary with a non-U.S. dollar functional currency. The designated balance of $831 million at June 30, 2026 is reported in Ford Credit debt on our consolidated balance sheets. The cumulative foreign currency remeasurement gains and losses on the designated debt are recorded in Accumulated other comprehensive income/(loss), offsetting translation adjustments on the investment. Upon the sale or substantial liquidation of our investment in the foreign subsidiary, the gains and losses are reclassified to Other income/(loss), net. For the second quarter and first half of 2026, an $8 million gain and a $36 million gain, respectively, were recognized in Foreign currency translation, a component of Other comprehensive income/(loss), net of tax, and no amount was reclassified to income.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 Reference 4: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 181 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-181 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 182 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-182 Reference 6: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 184 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-184 Reference 7: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 185 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-185 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a)(5) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4H -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4H Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4H -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4H Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 15 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480960/815-15-50-3 Reference 16: http://www.xbrl.org/2003/role/exampleRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 183 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480401/815-10-55-183 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a)(4) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4K -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4K Reference 20: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4I -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4I Reference 21: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4F -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-4F Reference 22: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 23: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 24: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1)(iii) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 25: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1)(ii) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 26: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1)(i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-2 Reference 27: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1B Reference 28: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1A Reference 29: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1A Reference 30: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1A Reference 31: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-1A Reference 32: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent Reference 33: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration