Attached files
file | filename |
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EX-12 - EXHIBIT 12 - FORD MOTOR CREDIT CO LLC | fmcc09302015ex12.htm |
EX-15 - EXHIBIT 15 - FORD MOTOR CREDIT CO LLC | fmcc09302015ex15.htm |
EX-31.1 - EXHIBIT 31.1 - FORD MOTOR CREDIT CO LLC | fmcc09302015ex311.htm |
EX-31.2 - EXHIBIT 31.2 - FORD MOTOR CREDIT CO LLC | fmcc09302015ex312.htm |
EX-32.1 - EXHIBIT 32.1 - FORD MOTOR CREDIT CO LLC | fmcc09302015ex321.htm |
EX-32.2 - EXHIBIT 32.2 - FORD MOTOR CREDIT CO LLC | fmcc09302015ex322.htm |
10-Q - PRINTABLE PDF OF FORM 10-Q - FORD MOTOR CREDIT CO LLC | fmcc930201510q.pdf |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 10-Q
(Mark One)
R | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
For the quarterly period ended September 30, 2015 |
or
£ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
For the transition period from ____________________ to ____________________ | ||
Commission file number 1-6368 |
Ford Motor Credit Company LLC
(Exact name of registrant as specified in its charter)
Delaware | 38-1612444 |
(State of organization) | (I.R.S. employer identification no.) |
One American Road, Dearborn, Michigan | 48126 |
(Address of principal executive offices) | (Zip code) |
(313) 322-3000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o Yes þ No
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.
REDUCED DISCLOSURE FORMAT
The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.
Exhibit Index begins on page 44 |
FORD MOTOR CREDIT COMPANY LLC
QUARTERLY REPORT ON FORM 10-Q
For the Quarter Ended September 30, 2015
Table of Contents | Page | ||
Part I. Financial Information | |||
Part II. Other Information | |||
i
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements.
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
(in millions)
For the periods ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Third Quarter | First Nine Months | ||||||||||||||
(unaudited) | |||||||||||||||
Financing revenue | |||||||||||||||
Operating leases | $ | 1,256 | $ | 1,062 | $ | 3,560 | $ | 3,029 | |||||||
Retail financing | 717 | 708 | 2,087 | 2,095 | |||||||||||
Dealer financing | 383 | 424 | 1,131 | 1,241 | |||||||||||
Other | 12 | 20 | 44 | 62 | |||||||||||
Total financing revenue | 2,368 | 2,214 | 6,822 | 6,427 | |||||||||||
Depreciation on vehicles subject to operating leases | (956 | ) | (801 | ) | (2,630 | ) | (2,248 | ) | |||||||
Interest expense | (582 | ) | (663 | ) | (1,819 | ) | (2,002 | ) | |||||||
Net financing margin | 830 | 750 | 2,373 | 2,177 | |||||||||||
Other revenue | |||||||||||||||
Insurance premiums earned | 32 | 31 | 97 | 94 | |||||||||||
Other income, net (Note 11) | 78 | 67 | 179 | 184 | |||||||||||
Total financing margin and other revenue | 940 | 848 | 2,649 | 2,455 | |||||||||||
Expenses | |||||||||||||||
Operating expenses | 279 | 276 | 820 | 807 | |||||||||||
Provision for credit losses (Note 4) | 100 | 57 | 239 | 115 | |||||||||||
Insurance expenses | 20 | 17 | 60 | 102 | |||||||||||
Total expenses | 399 | 350 | 1,119 | 1,024 | |||||||||||
Income before income taxes | 541 | 498 | 1,530 | 1,431 | |||||||||||
Provision for/(Benefit from) income taxes | 176 | (220 | ) | 519 | 137 | ||||||||||
Net income | $ | 365 | $ | 718 | $ | 1,011 | $ | 1,294 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in millions)
For the periods ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Third Quarter | First Nine Months | ||||||||||||||
(unaudited) | |||||||||||||||
Net income | $ | 365 | $ | 718 | $ | 1,011 | $ | 1,294 | |||||||
Other comprehensive income/(loss), net of tax (Note 10) | |||||||||||||||
Foreign currency translation | (275 | ) | (335 | ) | (561 | ) | (332 | ) | |||||||
Total other comprehensive income/(loss), net of tax | (275 | ) | (335 | ) | (561 | ) | (332 | ) | |||||||
Comprehensive income/(loss) | 90 | 383 | 450 | 962 | |||||||||||
Less: Comprehensive income/(loss) attributable to noncontrolling interests | — | — | 1 | — | |||||||||||
Comprehensive income/(loss) attributable to Ford Motor Credit Company | $ | 90 | $ | 383 | $ | 449 | $ | 962 |
The accompanying notes are part of the financial statements.
1
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
September 30, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 6,913 | $ | 6,179 | |||
Marketable securities | 2,757 | 3,258 | |||||
Finance receivables, net (Note 2) | 92,680 | 86,915 | |||||
Net investment in operating leases (Note 3) | 24,510 | 21,518 | |||||
Notes and accounts receivable from affiliated companies | 968 | 778 | |||||
Derivative financial instruments (Note 7) | 1,168 | 859 | |||||
Other assets (Note 8) | 2,494 | 2,601 | |||||
Total assets | $ | 131,490 | $ | 122,108 | |||
LIABILITIES | |||||||
Accounts payable | |||||||
Customer deposits, dealer reserves, and other | $ | 1,290 | $ | 1,148 | |||
Affiliated companies | 539 | 330 | |||||
Total accounts payable | 1,829 | 1,478 | |||||
Debt (Note 9) | 113,309 | 105,037 | |||||
Deferred income taxes | 2,662 | 1,849 | |||||
Derivative financial instruments (Note 7) | 280 | 167 | |||||
Other liabilities and deferred income (Note 8) | 1,649 | 2,210 | |||||
Total liabilities | 119,729 | 110,741 | |||||
SHAREHOLDER’S INTEREST | |||||||
Shareholder’s interest | 5,227 | 5,227 | |||||
Accumulated other comprehensive income (Note 10) | (402 | ) | 160 | ||||
Retained earnings | 6,935 | 5,980 | |||||
Total shareholder’s interest attributable to Ford Motor Credit Company | 11,760 | 11,367 | |||||
Shareholder’s interest attributable to noncontrolling interests | 1 | — | |||||
Total shareholder’s interest | 11,761 | 11,367 | |||||
Total liabilities and shareholder’s interest | $ | 131,490 | $ | 122,108 |
The following table includes assets to be used to settle the liabilities of the consolidated variable interest entities (“VIEs”). These assets and liabilities are included in the consolidated balance sheet above. See Notes 5 and 6 for additional information on our VIEs.
September 30, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 2,443 | $ | 2,094 | |||
Finance receivables, net | 44,036 | 39,522 | |||||
Net investment in operating leases | 11,266 | 9,631 | |||||
Derivative financial instruments | 64 | 27 | |||||
LIABILITIES | |||||||
Debt | $ | 41,712 | $ | 37,156 | |||
Derivative financial instruments | 30 | 22 |
The accompanying notes are part of the financial statements.
2
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDER’S INTEREST
(in millions, unaudited)
Shareholder’s Interest Attributable to Ford Motor Credit Company | ||||||||||||||||||||||||
Shareholder’s Interest | Accumulated Other Comprehensive Income (Note 10) | Retained Earnings | Total | Shareholder’s Interest Attributable to Non-Controlling Interests | Total Shareholder’s Interest | |||||||||||||||||||
Balance at December 31, 2014 | $ | 5,227 | $ | 160 | $ | 5,980 | $ | 11,367 | $ | — | $ | 11,367 | ||||||||||||
Net income | — | — | 1,011 | 1,011 | — | 1,011 | ||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | (562 | ) | — | (562 | ) | 1 | (561 | ) | |||||||||||||||
Distributions to parent | — | — | (56 | ) | (56 | ) | — | (56 | ) | |||||||||||||||
Balance at September 30, 2015 | $ | 5,227 | $ | (402 | ) | $ | 6,935 | $ | 11,760 | $ | 1 | $ | 11,761 | |||||||||||
Balance at December 31, 2013 | $ | 5,217 | $ | 717 | $ | 4,670 | $ | 10,604 | $ | — | $ | 10,604 | ||||||||||||
Net income | — | — | 1,294 | 1,294 | — | 1,294 | ||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | (332 | ) | — | (332 | ) | — | (332 | ) | |||||||||||||||
Distributions to parent | — | — | (244 | ) | (244 | ) | — | (244 | ) | |||||||||||||||
Balance at September 30, 2014 | $ | 5,217 | $ | 385 | $ | 5,720 | $ | 11,322 | $ | — | $ | 11,322 |
The accompanying notes are part of the financial statements.
3
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
For the periods ended September 30, | |||||||
2015 | 2014 | ||||||
First Nine Months | |||||||
(unaudited) | |||||||
Cash flows from operating activities | |||||||
Net income | $ | 1,011 | $ | 1,294 | |||
Adjustments to reconcile net income to net cash provided by operations | |||||||
Provision for credit losses | 239 | 115 | |||||
Depreciation and amortization | 3,256 | 2,842 | |||||
Amortization of upfront interest supplements | (786 | ) | (756 | ) | |||
Net change in deferred income taxes | 860 | 2 | |||||
Net change in other assets | (280 | ) | 222 | ||||
Net change in other liabilities | (88 | ) | 13 | ||||
All other operating activities | 110 | 43 | |||||
Net cash provided by/(used in) operating activities | 4,322 | 3,775 | |||||
Cash flows from investing activities | |||||||
Purchases of finance receivables (excluding wholesale and other) | (30,275 | ) | (27,082 | ) | |||
Collections of finance receivables (excluding wholesale and other) | 23,745 | 22,755 | |||||
Purchases of operating lease vehicles | (10,902 | ) | (9,815 | ) | |||
Liquidations of operating lease vehicles | 4,887 | 4,849 | |||||
Net change in wholesale receivables and other | (1,521 | ) | (589 | ) | |||
Net change in notes receivable from affiliated companies | (1 | ) | 30 | ||||
Purchases of marketable securities | (7,745 | ) | (10,952 | ) | |||
Proceeds from sales and maturities of marketable securities | 8,238 | 9,092 | |||||
Settlements of derivatives | 116 | (161 | ) | ||||
All other investing activities | 22 | 54 | |||||
Net cash provided by/(used in) investing activities | (13,436 | ) | (11,819 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from issuances of long-term debt | 35,366 | 30,951 | |||||
Principal payments on long-term debt | (25,693 | ) | (21,630 | ) | |||
Change in short-term debt, net | 634 | (2,822 | ) | ||||
Cash distributions to parent | (56 | ) | (244 | ) | |||
All other financing activities | (84 | ) | (86 | ) | |||
Net cash provided by/(used in) financing activities | 10,167 | 6,169 | |||||
Effect of exchange rate changes on cash and cash equivalents | (319 | ) | (220 | ) | |||
Net increase/(decrease) in cash and cash equivalents | $ | 734 | $ | (2,095 | ) | ||
Cash and cash equivalents at January 1 | $ | 6,179 | $ | 9,424 | |||
Net increase/(decrease) in cash and cash equivalents | 734 | (2,095 | ) | ||||
Cash and cash equivalents at September 30 | $ | 6,913 | $ | 7,329 |
The accompanying notes are part of the financial statements.
4
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
Table of Contents
Footnote | Page | |
Accounting Policies | ||
Finance Receivables | ||
Net Investment in Operating Leases | ||
Allowance for Credit Losses | ||
Transfers of Receivables | ||
Variable Interest Entities | ||
Derivative Financial Instruments and Hedging Activities | ||
Other Assets and Other Liabilities and Deferred Income | ||
Debt | ||
Accumulated Other Comprehensive Income | ||
Other Income | ||
Fair Value Measurements | ||
Segment Information | ||
Commitments and Contingencies |
5
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information, and instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, these unaudited financial statements include all adjustments considered necessary for a fair statement of the results of operations and financial condition for interim periods for Ford Motor Credit Company LLC, its consolidated subsidiaries 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”). Results for interim periods should not be considered indicative of results for any other interim period or for the full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2014 (“2014 Form 10-K Report”). We are an indirect, wholly owned subsidiary of Ford Motor Company (“Ford”).
We reclassified certain prior period amounts in our consolidated financial statements to conform to the presentation in our 2014 Form 10-K Report.
Provision for Income Taxes
For interim tax reporting we estimate one single effective tax rate, which is applied to the year-to-date ordinary income/(loss). Tax effects of significant unusual or extraordinary items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.
During the third quarter of 2014, we completed a study that led to a change in our methodology for measuring currency gains and losses in computing the earnings of our European operations under U.S. tax law. Implementation of the new methodology substantially reduced the accumulated earnings of those operations under U.S. tax law and resulted in a tax benefit of $364 million in the third quarter of 2014 from the realization of additional foreign tax credits.
Adoption of New Accounting Standards
Accounting Standards Update (“ASU”) 2014-11, Transfers and Servicing - Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures. On January 1, 2015, we adopted the new accounting standard that changes the accounting for repurchase-to-maturity transactions and repurchase financing arrangements. The new standard also requires additional disclosures for certain transfers of financial assets with agreements that both entitle and obligate the transferor to repurchase the transferred assets from the transferee. The adoption of this accounting standard did not impact our financial statements or financial statement disclosures.
Accounting Standards Issued But Not Yet Adopted
ASU 2014-09, Revenue - Revenue from Contracts with Customers. In May 2014, the Financial Accounting Standards Board (“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 virtually all present 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.
6
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES (Continued)
The FASB also issued the following standards, none of which are expected to have a material impact to our financial statements or financial statement disclosures.
Standard | Effective Date (a) | ||
2015-16 | Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments | January 1, 2016 | |
2015-09 | Insurance - Disclosures about Short-Duration Contracts | January 1, 2016 | |
2015-07 | Fair Value Measurement - Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent) | January 1, 2016 | |
2015-05 | Internal-Use Software - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement | January 1, 2016 | |
2015-03 | Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs | January 1, 2016 | |
2015-02 | Consolidation - Amendments to the Consolidation Analysis | January 1, 2016 | |
2015-01 | Extraordinary and Unusual Items - Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items | January 1, 2016 | |
2014-16 | Derivatives and Hedging - Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity | January 1, 2016 | |
2014-13 | Consolidation - Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity | January 1, 2016 | |
2014-12 | Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period | January 1, 2016 | |
2014-15 | Going Concern - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern | December 31, 2016 |
__________
(a) | Early adoption for each of the standards is permitted. |
7
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. 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, net were as follows (in millions):
September 30, 2015 | December 31, 2014 | ||||||
Consumer | |||||||
Retail financing, gross | $ | 61,241 | $ | 55,856 | |||
Less: Unearned interest supplements (a) | (2,117 | ) | (1,760 | ) | |||
Consumer finance receivables | 59,124 | 54,096 | |||||
Non-Consumer | |||||||
Dealer financing (b) | 32,722 | 31,875 | |||||
Other financing | 1,190 | 1,265 | |||||
Non-Consumer finance receivables | 33,912 | 33,140 | |||||
Total recorded investment | $ | 93,036 | $ | 87,236 | |||
Recorded investment in finance receivables | $ | 93,036 | $ | 87,236 | |||
Less: Allowance for credit losses | (356 | ) | (321 | ) | |||
Finance receivables, net | $ | 92,680 | $ | 86,915 | |||
Net finance receivables subject to fair value (c) | $ | 90,875 | $ | 85,242 | |||
Fair value | 92,560 | 86,715 |
__________
(a) | Ford-sponsored special financing programs attributable to retail financing. |
(b) | At September 30, 2015 and December 31, 2014, includes $571 million and $535 million, respectively, of dealer financing receivables with entities (primarily dealers) that are reported as consolidated subsidiaries of Ford. The associated vehicles that are being financed by us are reported as inventory on Ford’s balance sheet. |
(c) | At September 30, 2015 and December 31, 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 September 30, 2015 and December 31, 2014 was $184 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 September 30, 2015 and December 31, 2014 were consumer receivables of $27.7 billion and $24.4 billion, respectively, and non-consumer receivables of $23.1 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).
8
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. FINANCE RECEIVABLES (Continued)
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 $15 million and $17 million at September 30, 2015 and December 31, 2014, respectively. The recorded investment of non-consumer receivables greater than 90 days past due and still accruing interest was $3 million at September 30, 2015 and December 31, 2014.
The aging analysis of finance receivables balances was as follows (in millions):
September 30, 2015 | December 31, 2014 | ||||||
Consumer | |||||||
31-60 days past due | $ | 597 | $ | 718 | |||
61-90 days past due | 94 | 97 | |||||
91-120 days past due | 25 | 29 | |||||
Greater than 120 days past due | 39 | 52 | |||||
Total past due | 755 | 896 | |||||
Current | 58,369 | 53,200 | |||||
Consumer finance receivables | 59,124 | 54,096 | |||||
Non-Consumer | |||||||
Total past due | 127 | 117 | |||||
Current | 33,785 | 33,023 | |||||
Non-Consumer finance receivables | 33,912 | 33,140 | |||||
Total recorded investment | $ | 93,036 | $ | 87,236 |
Credit Quality
Consumer Segment
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 |
Non-Consumer Segment
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 |
9
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. FINANCE RECEIVABLES (Continued)
The credit quality analysis of our dealer financing receivables was as follows (in millions):
September 30, 2015 | December 31, 2014 | ||||||
Dealer financing | |||||||
Group I | $ | 24,763 | $ | 23,641 | |||
Group II | 6,389 | 6,360 | |||||
Group III | 1,462 | 1,787 | |||||
Group IV | 108 | 87 | |||||
Total recorded investment | $ | 32,722 | $ | 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 September 30, 2015 and December 31, 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 September 30, 2015 and December 31, 2014 was $129 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.
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.
10
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 3. 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.
Net investment in operating leases were as follows (in millions):
September 30, 2015 | December 31, 2014 | ||||||
Vehicles, at cost (a) | $ | 28,674 | $ | 24,952 | |||
Less: Accumulated depreciation | (4,117 | ) | (3,396 | ) | |||
Net investment in operating leases before allowance for credit losses | 24,557 | 21,556 | |||||
Less: Allowance for credit losses | (47 | ) | (38 | ) | |||
Net investment in operating leases | $ | 24,510 | $ | 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 September 30, 2015 and December 31, 2014, includes net investment in operating leases before allowance for credit losses of $11.3 billion and $9.6 billion, respectively, 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).
11
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4. ALLOWANCE FOR CREDIT LOSSES
An analysis of the allowance for credit losses related to finance receivables and net investment in operating leases for the periods ended September 30 (in millions) was as follows:
Third Quarter 2015 | |||||||||||||||||||
Finance Receivables | Net Investment in Operating Leases | Total Allowance | |||||||||||||||||
Consumer | Non-Consumer | Total | |||||||||||||||||
Allowance for credit losses | |||||||||||||||||||
Beginning balance | $ | 322 | $ | 13 | $ | 335 | $ | 45 | $ | 380 | |||||||||
Charge-offs | (85 | ) | (2 | ) | (87 | ) | (31 | ) | (118 | ) | |||||||||
Recoveries | 29 | 1 | 30 | 15 | 45 | ||||||||||||||
Provision for credit losses | 80 | 2 | 82 | 18 | 100 | ||||||||||||||
Other (a) | (4 | ) | — | (4 | ) | — | (4 | ) | |||||||||||
Ending balance | $ | 342 | $ | 14 | $ | 356 | $ | 47 | $ | 403 |
First Nine Months 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 | (235 | ) | (3 | ) | (238 | ) | (87 | ) | (325 | ) | |||||||||
Recoveries | 90 | 4 | 94 | 46 | 140 | ||||||||||||||
Provision for credit losses | 190 | (2 | ) | 188 | 51 | 239 | |||||||||||||
Other (a) | (8 | ) | (1 | ) | (9 | ) | (1 | ) | (10 | ) | |||||||||
Ending balance | $ | 342 | $ | 14 | $ | 356 | $ | 47 | $ | 403 | |||||||||
Analysis of ending balance of allowance for credit losses | |||||||||||||||||||
Collective impairment allowance | $ | 323 | $ | 12 | $ | 335 | $ | 47 | $ | 382 | |||||||||
Specific impairment allowance | 19 | 2 | 21 | — | 21 | ||||||||||||||
Ending balance | 342 | 14 | 356 | 47 | $ | 403 | |||||||||||||
Analysis of ending balance of finance receivables and net investment in operating leases | |||||||||||||||||||
Collectively evaluated for impairment | 58,749 | 33,783 | 92,532 | 24,557 | |||||||||||||||
Specifically evaluated for impairment | 375 | 129 | 504 | — | |||||||||||||||
Recorded investment | 59,124 | 33,912 | 93,036 | 24,557 | |||||||||||||||
Ending balance, net of allowance for credit losses | $ | 58,782 | $ | 33,898 | $ | 92,680 | $ | 24,510 |
__________
(a) | Primarily represents amounts related to translation adjustments. |
12
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4. ALLOWANCE FOR CREDIT LOSSES (Continued)
Third Quarter 2014 | |||||||||||||||||||
Finance Receivables | Net Investment in Operating Leases | Total Allowance | |||||||||||||||||
Consumer | Non-Consumer | Total | |||||||||||||||||
Allowance for credit losses | |||||||||||||||||||
Beginning balance | $ | 303 | $ | 24 | $ | 327 | $ | 26 | $ | 353 | |||||||||
Charge-offs | (68 | ) | (2 | ) | (70 | ) | (28 | ) | (98 | ) | |||||||||
Recoveries | 33 | 2 | 35 | 15 | 50 | ||||||||||||||
Provision for credit losses | 42 | (3 | ) | 39 | 18 | 57 | |||||||||||||
Other (a) | (5 | ) | (1 | ) | (6 | ) | — | (6 | ) | ||||||||||
Ending balance | $ | 305 | $ | 20 | $ | 325 | $ | 31 | $ | 356 |
First Nine Months 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 | (200 | ) | (7 | ) | (207 | ) | (82 | ) | (289 | ) | |||||||||
Recoveries | 101 | 8 | 109 | 47 | 156 | ||||||||||||||
Provision for credit losses | 82 | (10 | ) | 72 | 43 | 115 | |||||||||||||
Other (a) | (5 | ) | (1 | ) | (6 | ) | — | (6 | ) | ||||||||||
Ending balance | $ | 305 | $ | 20 | $ | 325 | $ | 31 | $ | 356 | |||||||||
Analysis of ending balance of allowance for credit losses | |||||||||||||||||||
Collective impairment allowance | $ | 283 | $ | 19 | $ | 302 | $ | 31 | $ | 333 | |||||||||
Specific impairment allowance | 22 | 1 | 23 | — | 23 | ||||||||||||||
Ending balance | 305 | 20 | 325 | 31 | $ | 356 | |||||||||||||
Analysis of ending balance of finance receivables and net investment in operating leases | |||||||||||||||||||
Collectively evaluated for impairment | 53,150 | 31,815 | 84,965 | 20,947 | |||||||||||||||
Specifically evaluated for impairment | 421 | 136 | 557 | — | |||||||||||||||
Recorded investment | 53,571 | 31,951 | 85,522 | 20,947 | |||||||||||||||
Ending balance, net of allowance for credit losses | $ | 53,266 | $ | 31,931 | $ | 85,197 | $ | 20,916 |
__________
(a) | Primarily represents amounts related to translation adjustments. |
13
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5. 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 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 6 for more 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):
September 30, 2015 | |||||||||||||||||||
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 | $ | 1.5 | $ | 21.9 | $ | 0.1 | $ | 21.8 | $ | 19.9 | |||||||||
Wholesale financing | 0.3 | 22.2 | — | 22.2 | 14.5 | ||||||||||||||
Finance receivables | 1.8 | 44.1 | 0.1 | 44.0 | 34.4 | ||||||||||||||
Net investment in operating leases | 0.6 | 11.3 | — | 11.3 | 7.3 | ||||||||||||||
Total VIE | $ | 2.4 | $ | 55.4 | $ | 0.1 | $ | 55.3 | $ | 41.7 | |||||||||
Non-VIE | |||||||||||||||||||
Retail financing | $ | 0.4 | $ | 5.8 | $ | — | $ | 5.8 | $ | 5.3 | |||||||||
Wholesale financing | — | 0.9 | — | 0.9 | 0.9 | ||||||||||||||
Finance receivables | 0.4 | 6.7 | — | 6.7 | 6.2 | ||||||||||||||
Net investment in operating leases | — | — | — | — | — | ||||||||||||||
Total Non-VIE | $ | 0.4 | $ | 6.7 | $ | — | $ | 6.7 | $ | 6.2 | |||||||||
Total securitization transactions | |||||||||||||||||||
Retail financing | $ | 1.9 | $ | 27.7 | $ | 0.1 | $ | 27.6 | $ | 25.2 | |||||||||
Wholesale financing | 0.3 | 23.1 | — | 23.1 | 15.4 | ||||||||||||||
Finance receivables | 2.2 | 50.8 | 0.1 | 50.7 | 40.6 | ||||||||||||||
Net investment in operating leases | 0.6 | 11.3 | — | 11.3 | 7.3 | ||||||||||||||
Total securitization transactions | $ | 2.8 | $ | 62.1 | $ | 0.1 | $ | 62.0 | $ | 47.9 |
__________
(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. |
14
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
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. |
NOTE 6. VARIABLE INTEREST ENTITIES
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, bank conduits, and government-sponsored entities or others who obtain funding from government programs. We have deemed most of these special purpose entities to be VIEs as we have determined we have both the power to direct the activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits of the entity that could be significant. 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.
15
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
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.
See Note 5 for information on the financial position and financial performance of our VIEs.
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 September 30, 2015 and December 31, 2014.
NOTE 7. 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. 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.
Income Effect of Derivative Financial Instruments
The gains/(losses), by hedge designation, recorded in income for the periods ended September 30 were as follows (in millions):
Third Quarter | First Nine Months | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Fair value hedges | |||||||||||||||
Interest rate contracts | |||||||||||||||
Net interest settlements and accruals excluded from the assessment of hedge effectiveness | $ | 94 | $ | 79 | $ | 271 | $ | 220 | |||||||
Ineffectiveness (a) | 10 | (2 | ) | 6 | 8 | ||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||
Interest rate contracts | (22 | ) | (10 | ) | (83 | ) | (37 | ) | |||||||
Foreign currency exchange contracts | 40 | 52 | 40 | 22 | |||||||||||
Cross-currency interest rate swap contracts | 63 | 118 | 75 | 102 | |||||||||||
Total | $ | 185 | $ | 237 | $ | 309 | $ | 315 |
__________
(a) | For the third quarter and first nine months of 2015, hedge ineffectiveness reflects the net change in fair value on derivatives of $373 million gain and $345 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $363 million loss and $339 million loss, respectively. For the third quarter and first nine months of 2014, hedge ineffectiveness reflects the net change in fair value on derivatives of $88 million loss and $179 million gain, respectively, and change in value on hedged debt attributable to the change in benchmark interest rates of $86 million gain and $171 million loss, respectively. |
16
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)
Balance Sheet Effect of Derivative Financial Instruments
Derivative financial instruments are recorded on the balance sheet at fair value, presented on a gross basis, and include an adjustment for non-performance risk. Notional amounts are presented on a gross basis. The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our financial risk exposure. We enter into master agreements with counterparties that may allow for netting of exposure in the event of default or termination of the counterparty agreement due to breach of contract.
The notional amount and estimated fair value of our derivative financial instruments were as follows (in millions):
September 30, 2015 | December 31, 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 | $ | 26,323 | $ | 848 | $ | 4 | $ | 23,203 | $ | 602 | $ | 38 | |||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Interest rate contracts | 56,173 | 216 | 174 | 56,558 | 168 | 89 | |||||||||||||||||
Foreign currency exchange contracts (a) | 1,189 | 7 | 1 | 1,527 | 18 | 1 | |||||||||||||||||
Cross-currency interest rate swap contracts | 2,615 | 97 | 101 | 2,425 | 71 | 39 | |||||||||||||||||
Total derivative financial instruments, gross | $ | 86,300 | 1,168 | 280 | $ | 83,713 | 859 | 167 | |||||||||||||||
Counterparty netting and collateral (b) | (190 | ) | (190 | ) | (136 | ) | (136 | ) | |||||||||||||||
Total derivative financial instruments, net | $ | 978 | $ | 90 | $ | 723 | $ | 31 |
__________
(a) | Includes forward contracts between Ford Credit and an affiliated company. |
(b) | At September 30, 2015 and December 31, 2014, we did not receive or pledge any cash collateral. |
17
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8. 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):
September 30, 2015 | December 31, 2014 | ||||||
Accrued interest and other non-finance receivables | $ | 832 | $ | 921 | |||
Collateral held for resale, at net realizable value | 372 | 382 | |||||
Restricted cash (a) | 73 | 130 | |||||
Deferred charges | 280 | 268 | |||||
Deferred charges – income taxes | 164 | 185 | |||||
Prepaid reinsurance premiums and other reinsurance receivables | 435 | 401 | |||||
Investment in non-consolidated affiliates | 149 | 141 | |||||
Property and equipment, net of accumulated depreciation (b) | 134 | 120 | |||||
Other | 55 | 53 | |||||
Total other assets | $ | 2,494 | $ | 2,601 |
__________
(a) | 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. |
(b) | Accumulated depreciation was $335 million and $326 million at September 30, 2015 and December 31, 2014, respectively. |
Other liabilities and deferred income were as follows (in millions):
September 30, 2015 | December 31, 2014 | ||||||
Interest payable | $ | 486 | $ | 587 | |||
Tax related payables to Ford and affiliated companies | 138 | 625 | |||||
Unrecognized tax benefits | 99 | 91 | |||||
Unearned insurance premiums | 449 | 410 | |||||
Other | 477 | 497 | |||||
Total other liabilities and deferred income | $ | 1,649 | $ | 2,210 |
18
Item 1. Financial Statements (Continued)
FORD MOTOR CREDIT COMPANY LLC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9. DEBT
Interest rates and debt outstanding were as follows (in millions):
Interest Rates | |||||||||||||||||||
Debt | Average Contractual | Average Effective | |||||||||||||||||
September 30, 2015 | December 31, 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||
Short-term debt | |||||||||||||||||||
Unsecured debt | |||||||||||||||||||
Floating rate demand notes | $ | 5,854 | $ | 5,559 | |||||||||||||||
Commercial paper | 1,941 | 1,651 | |||||||||||||||||
Other short-term debt | 2,012 | 2,564 | |||||||||||||||||
Asset-backed debt | 1,877 | 1,377 | |||||||||||||||||
Total short-term debt | 11,684 | 11,151 | 1.5 | % | 1.9 | % | 1.5 | % | 1.9 | % | |||||||||
Long-term debt | |||||||||||||||||||
Unsecured debt | |||||||||||||||||||
Notes payable within one year | 7,899 | 9,102 | |||||||||||||||||
Notes payable after one year | 47,013 | 42,488 | |||||||||||||||||
Asset-backed debt (a) | |||||||||||||||||||
Notes payable within one year | 18,462 | 16,722 | |||||||||||||||||
Notes payable after one year | 27,553 | 25,197 | |||||||||||||||||
Unamortized discount | (37 | ) | (51 | ) | |||||||||||||||
Fair value adjustments (b) | 735 | 428 | |||||||||||||||||
Total long-term debt | 101,625 | 93,886 | 2.3 | % | 2.7 | % | 2.4 | % | 2.8 | % | |||||||||
Total debt | $ | 113,309 | $ | 105,037 | 2.2 | % | 2.6 | % | 2.3 | % | 2.7 | % | |||||||
Fair value of debt (c) | $ | 114,187 |