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DEBT AND COMMITMENTS
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
DEBT AND COMMITMENTS DEBT AND COMMITMENTS
We obtain short-term funding from the issuance of demand notes to retail investors through our Ford Interest Advantage and retail deposit programs. We have certain securitization programs that issue short-term asset-backed debt securities that are sold to institutional investors. Bank borrowings by several of our international affiliates in the ordinary course of business are an additional source of short-term funding. We obtain long-term debt funding through the issuance of a variety of unsecured and asset-backed debt securities in the United States and international capital markets.

Asset-backed debt issued in securitizations is the obligation of the consolidated securitization entity that issued the debt and is payable only out of collections on the underlying securitized assets and related enhancements. This asset-backed debt is not the obligation of Ford Credit or our other subsidiaries.

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 7 for additional information). Debt due within one year at issuance is classified as short-term. Debt due after one year at issuance is classified as long-term. 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 9. DEBT AND COMMITMENTS (Continued)

Debt outstanding and interest rates at December 31 were as follows (in millions):
 Interest Rates
DebtAverage Contractual
 2024202520242025
Short-term debt
Unsecured debt
Floating rate demand notes$12,040 $12,950 
Other short-term debt4,173 3,478 
Asset-backed debt1,200 1,922 
Total short-term debt
17,413 18,350 4.7 %3.7 %
Long-term debt
Unsecured debt
Notes payable within one year12,871 13,625 
Notes payable after one year49,607 52,357 
Asset-backed debt
Notes payable within one year23,050 19,831 
Notes payable after one year36,224 37,741 
Unamortized (discount)/premium and issuance costs(253)(247)
Fair value adjustments (a)(1,044)(240)
Total long-term debt120,455 123,067 4.8 %4.7 %
Total debt$137,868 $141,417 4.8 %4.6 %
Fair value of debt$140,046 $144,213 
Interest rate characteristics of debt payable after one year
Fixed interest rate69,085 71,962 
Variable interest rate (generally based on SOFR or other short-term rates)16,746 18,136 
Total payable after one year
$85,831 $90,098 
__________
(a)These adjustments are related to hedging activity and include discontinued hedging relationship adjustments of $(450) million and $(319) million at December 31, 2024 and 2025, respectively. The carrying value of hedged debt was $41.1 billion and $41.7 billion at December 31, 2024 and 2025, respectively.

We measure debt at fair value for purposes of disclosure using quoted prices for our own debt with approximately the same remaining maturities. Where quoted prices are not available, we estimate fair value using discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of the debt instruments. For certain short-term debt with an original maturity date of one year or less, we assume that book value is a reasonable approximation of the debt’s fair value. The fair value of debt is categorized within Level 2 of the hierarchy. The fair value of debt includes $16.2 billion and $16.4 billion of short-term debt at December 31, 2024 and 2025, respectively, carried at cost, which approximates fair value. We paid interest of $5.8 billion, $7.0 billion, and $6.7 billion in 2023, 2024, and 2025, respectively, on debt.
NOTE 9. DEBT AND COMMITMENTS (Continued)

Maturities

The amounts contractually due for our debt maturities, including both scheduled principal and interest payments, at December 31, 2025 were as follows (in millions):
2026 (a)2027202820292030Thereafter (b)Total
Unsecured debt $30,053 $12,941 $11,657 $8,613 $7,836 $11,310 $82,410 
Asset-backed debt21,753 17,819 12,104 4,581 3,237 — 59,494 
Total
51,806 30,760 23,761 13,194 11,073 11,310 141,904 
Unamortized (discount)/premium and issuance costs(247)
Fair value adjustments (240)
Total debt$141,417 
Interest payments related to long-term debt$5,309 $3,858 $2,583 $1,633 $1,057 $1,666 $16,106 
__________
(a)Includes $18,350 million for short-term and $33,456 million for long-term debt.
(b)Matures between 2031 and 2035.

Committed Asset-Backed Facilities

We and our subsidiaries have entered into agreements with a number of banks and bank-sponsored asset-backed commercial paper conduits. Such counterparties are contractually committed, at our option, to purchase from us eligible retail financing receivables or to purchase or make advances under asset-backed securities backed by retail financing or wholesale finance receivables or operating leases for proceeds of up to $43.6 billion ($24.9 billion of retail financing, $11.0 billion of operating leases, and $7.7 billion of wholesale financing) at December 31, 2025. In the United States, we are able to obtain funding within two days for our unutilized capacity in some of our committed asset-backed facilities. These committed facilities have varying maturity dates, with $11.4 billion having maturities within the next twelve months and the remaining balance having maturities through second quarter 2029. We plan capacity renewals to protect our global funding needs and to optimize capacity utilization.

Our ability to obtain funding under these facilities is subject to having a sufficient amount of eligible assets as well as our ability to obtain interest rate hedging arrangements for certain facilities. At December 31, 2025, $26.4 billion of these commitments were in use and we had $0.3 billion of asset-backed capacity that was in excess of eligible receivables. These programs are free of material adverse change clauses, restrictive financial covenants (for example, debt-to-equity limitations and minimum net worth requirements), and generally, credit rating triggers that could limit our ability to obtain funding. However, the unused portion of these commitments may be terminated if the performance of the underlying assets deteriorates beyond specified levels. Based on our experience and knowledge as servicer of the related assets, we do not expect any of these programs to be terminated due to such events.

As of December 31, 2025, FCE had liquidity of £36 million (equivalent to $48 million) in the form of eligible collateral available for use in the monetary policy programs of the Bank of England. In addition, Ford Bank had liquidity of €311 million (equivalent to $366 million) in the form of eligible collateral available for use in the monetary policy programs of the European Central Bank.
NOTE 9. DEBT AND COMMITMENTS (Continued)

Unsecured Credit Facilities

At December 31, 2025, we and our subsidiaries had $1.5 billion of contractually committed unsecured credit facilities with financial institutions, including the FCE Credit Agreement and the Ford Bank Credit Agreement. At December 31, 2025, $0.9 billion was available for use.

At December 31, 2025, £310 million (equivalent to $418 million) was available for use under FCE’s £585 million (equivalent to $787 million) Credit Agreement and €50 million (equivalent to $59 million) was available for use under Ford Bank’s €210 million (equivalent to $247 million) Credit Agreement. Both the FCE Credit Agreement and Ford Bank Credit Agreement mature in 2028.

Both the FCE Credit Agreement and Ford Bank Credit Agreement contain certain covenants, including an obligation for FCE and Ford Bank to maintain their ratio of regulatory capital to risk-weighted assets at no less than the applicable regulatory minimum. The FCE Credit Agreement requires the support agreement between FCE and Ford Credit to remain in effect (and enforced by FCE to ensure that its net worth is maintained at no less than $500 million). The Ford Bank Credit Agreement requires a guarantee of Ford Bank’s obligations under the agreement, provided by Ford Credit, to remain in effect. In addition, both the FCE Credit Agreement and the Ford Bank Credit Agreement include certain sustainability-linked targets, pursuant to which the applicable margin may be adjusted if Ford achieves, or fails to achieve, the specified targets related to global manufacturing facility greenhouse gas emissions, carbon-free electricity consumption, and Ford Europe CO2 tailpipe emissions. For the most recent performance period, Ford outperformed the global manufacturing facility greenhouse gas emissions and carbon-free electricity consumption metrics, and it was neutral on the Ford Europe CO2 tailpipe emissions metric.