Sign In  |  Register  |  About Pleasanton  |  Contact Us

Pleasanton, CA
September 01, 2020 1:32pm
7-Day Forecast | Traffic
  • Search Hotels in Pleasanton

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

CNH Industrial Reports Record Second Quarter Net Income of $710 Million

CNH Industrial Reports Record Second Quarter Net Income of $710 Million

Q2 Consolidated revenues of $6.57 billion (up 8% compared to Q2 2022)

Net income of $710 million and Adjusted Net Income of $711 million, with diluted EPS and adjusted diluted EPS of $0.52

Net cash used by operating activities of $139 million and Industrial Free Cash Flow generation of $386 million in Q2

Net sales for Industrial Activities of $5.95 billion (up $341 million compared to Q2 2022)

Significant improvements in Gross Profit Margin for the Agriculture and Construction Segments, both reporting the highest quarterly Adjusted EBIT margin ever

Financial results presented under U.S. GAAP

“The CNH Industrial team delivered great results in Q2 as we capitalized on favorable market fundamentals and solid operational execution. Our Agriculture segment set margin records, and for the first quarter in our history, Construction net sales surpassed $1 billion. The CNH Business System is becoming a way of life, engaging our employees in improving processes and removing unnecessary costs. We are transforming the business and expanding our technology investments to drive growth and improve through-cycle margins.”

 Scott W. Wine, Chief Executive Officer

2023 Second Quarter Results

(all amounts $ million, comparison vs Q2 2022 - unless otherwise stated)

US-GAAP
  Q2 2023 Q2 2022 ChangeChange at c.c.(1)
Consolidated revenue 6,567 6,082 +8%+9%
of which Net sales of Industrial Activities 5,954 5,613 +6%+7%
Net income 710 552 +29% 
Diluted EPS $ 0.52 0.40 +0.12 
Cash flow from operating activities (139) (271) +132 
Cash and cash equivalents(2) 3,194 4,376 (1,182) 
Gross profit margin of Industrial Activities 25.0% 22.0% +300 bps 
NON-GAAP(3)
  Q2 2023 Q2 2022 Change 
Adjusted EBIT of Industrial Activities 822 654 +168 
Adjusted EBIT Margin 13.8% 11.7% +210 bps 
Adjusted net income 711 583 +128 
Adjusted diluted EPS $ 0.52 0.43 +0.09 
Free Cash flow of Industrial Activities 386 404 (18) 

Net sales of Industrial Activities were $5.95 billion, an increase of 6% compared to the same period of the prior year, mainly due to favorable price realization, offsetting adverse currency conversion impacts. Sales were higher despite a proactive reduction in South American deliveries to moderate dealer inventory, and a delayed start of production on new North American sprayers.

Net income was $710 million, with diluted earnings per share of $0.52 (net income of $552 million in Q2 2022, with diluted earnings per share of $0.40). Adjusted net income was $711 million, with adjusted diluted earnings per share of $0.52 (adjusted net income of $583 million in Q2 2022, with adjusted diluted earnings per share of $0.43).

Gross profit margin of Industrial Activities was 25.0% (22.0% in Q2 2022) with improvement both sequentially and versus the prior year in Agriculture and Construction, reflective of favorable price realization and of improving operating performance of our production system, which is limiting the effects of continued inflationary pressures.

Reported income tax expense was $192 million, and effective tax rate (ETR) was 22.9% with adjusted ETR(3) of 24.0% for the second quarter.

Cash flow used in operating activities in the quarter was $139 million ($271 million in Q2 2022). Free cash flow of Industrial Activities was $386 million. Consolidated Debt was $24.9 billion as of June 30, 2023 ($23.0 billion at December 31, 2022).

Agriculture
  Q2 2023 Q2 2022 ChangeChange at c.c.(1)
Net sales ($ million) 4,890 4,722 +4%+5%
Adjusted EBIT ($ million) 821 663 +158 
Adjusted EBIT margin 16.8% 14.0% +280 bps 

In North America, industry volume was up 21% year over year in the second quarter for tractors over 140 HP and was down 8% for tractors under 140 HP; combines were up 27% from prior year. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 6% and up 32%, respectively, which included Europe tractor and combine demand down 1% and up 11%, respectively. South America tractor demand was down 4% and combine demand was down 27%. Asia Pacific tractor demand was down 4% and combine demand was down 29% (mostly in China).

Agriculture net sales increased for the quarter by 4% to $4.89 billion as a result of favorable price realization, partially offset by lower volume.

Gross profit margin was 27.0% (23.4% in Q2 2022) as a result of favorable price realization and increased efficiencies in the plants, offsetting continued inflation in supply chain costs.

Adjusted EBIT was $821 million ($663 million in Q2 2022), with Adjusted EBIT margin at 16.8%. The $158 million (or 2.8 p.p.) increase from Q2 2022 was the result of favorable pricing and improved mix, partially offset by increased production costs, SG&A expenditures, and R&D investments.

Construction
  Q2 2023 Q2 2022 ChangeChange at c.c.(1)
Net sales ($ million) 1,064 891 +19%+20%
Adjusted EBIT ($ million) 72 34 +38 
Adjusted EBIT margin 6.8% 3.8% +300 bps 

Global industry volume for construction equipment was down 9% year over year in the second quarter for Heavy construction equipment; Light construction equipment was flat year over year. Aggregated demand increased 8% in North America, was flat in EMEA, decreased 16% in South America and decreased 13% for Asia Pacific (excluding China, Asia Pacific markets decreased 3%).

Construction net sales increased for the quarter by 19% to $1.06 billion, driven by favorable price realization and positive volume/mix mainly in North America partially offset by lower net sales from South America.

Gross profit margin was 16.0%, up 2.2 p.p. compared to Q2 2022, mainly due to higher volume and favorable price realization partially offset by higher raw material costs and manufacturing costs.

Adjusted EBIT increased $38 million due to favorable price realization and favorable volume/mix partially offset by higher production costs, SG&A spend, and R&D investments. Adjusted EBIT margin at 6.8% increased by 300 bps vs. the same quarter of 2022.

Financial Services
  Q2 2023 Q2 2022 ChangeChange at c.c.(1)
Revenue ($ million) 603 471 +28%+29%
Net income ($ million) 94 95 (1) 
Equity at quarter-end ($ million)(2) 2,534 2,285 +249 
Retail loan originations ($ million) 2,770 2,440 +14% 

Revenues were up 28.0% due to favorable volumes and higher base rates across all regions, partially offset by lower used equipment sales due to diminished inventory levels.

Net income decreased $1 million to $94 million, primarily due to margin compression in North America and higher risk costs, partially offset by favorable volumes in all regions and a lower tax rate.

The managed portfolio (including unconsolidated joint ventures) was $26.0 billion as of June 30, 2023 (of which retail was 64% and wholesale was 36%), up $4.9 billion compared to June 30, 2022 (up $4.5 billion on a constant currency basis).

The receivable balance greater than 30 days past due as a percentage of receivables was 1.8% (1.3% as of December 31, 2022) with increases mainly in South America.

2023 Outlook

The Company is reaffirming the following 2023 outlook for its Industrial Activities:

  • Net sales(5) up between 8% and 11% year on year including currency translation effects
  • SG&A up no more than 5% vs 2022
  • Free Cash Flow of Industrial Activities(6) between $1.3bn and $1.5bn
  • R&D expenses and capital expenditures at around $1.6bn

RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2023

Consolidated revenues of $11.9 billion (up 11% year on year, up 13% at constant currency), net income of $1,196 million, with adjusted diluted EPS of $0.87 adjusted EBIT of Industrial Activities of $1,377 million, and free cash flow absorption of $287 million (Industrial Activities).

Results for the Six Months Ended June 30, 2023

(all amounts $ million, comparison vs YTD Q2 2022 - unless otherwise stated)

US-GAAP
  YTD Q2 2023 YTD Q2 2022 ChangeChange at c.c.(1)
Consolidated revenue 11,909 10,727 +11%+13%
of which Net sales of Industrial Activities 10,730 9,793 +10%+11%
Net income 1,196 888 +35% 
Diluted EPS $ 0.88 0.65 +0.23 
Cash flow from operating activities (840) (1,158) +318 
Cash and cash equivalents(2) 3,194  4,376 (1,182) 
Gross profit margin of Industrial Activities 24.8% 21.8% +300 bps

 
 
        
NON-GAAP(3)
  YTD Q2 2023 YTD Q2 2022 Change 
Adjusted EBIT of Industrial Activities 1,377 1,083 +294 
Adjusted EBIT Margin 12.8% 11.1% +170 bps 
Adjusted net income 1,186 961 +225 
Adjusted diluted EPS $  0.87 0.70 +0.17 
Free Cash flow of Industrial Activities (287) (655) +368 
Adjusted Gross profit margin of Industrial Activities 24.8% 22.1% +270 bps 


Agriculture
  YTD Q2 2023 YTD Q2 2022 ChangeChange at c.c.(1)
Net sales ($ million) 8,817 8,099 +9%+11%
Adjusted EBIT ($ million) 1,391 1,089 +302 
Adjusted EBIT margin 15.8% 13.4% +240 bps 
        
Construction
  YTD Q2 2023 YTD Q2 2022 ChangeChange at c.c.(1)
Net sales ($ million) 1,913 1,694 +13%+14%
Adjusted EBIT ($ million) 116 66 +50 
Adjusted EBIT margin 6.1% 3.9% +220 bps 
        
Financial Services
  YTD Q2 2023 YTD Q2 2022 ChangeChange at c.c.(1)
Revenue ($ million) 1,152 937 +23%+24%
Net income ($ million) 172 177 (5) 

Notes

CNH Industrial reports quarterly and annual consolidated financial results under U.S. GAAP and EU-IFRS. The tables and discussion related to the financial results of the Company and its segments shown in this press release are prepared in accordance with U.S. GAAP. EU-IFRS reports will be published on approximately August 2, 2023.

  1. c.c. means at constant currency.
  2. Comparison vs. December 31, 2022
  3. This item is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Information” section of this press release for information regarding non-GAAP financial measures. Refer to the specific table in the “Other Supplemental Financial Information” section of this press release for the reconciliation between the non-GAAP financial measure and the most comparable GAAP financial measure.
  4. Certain financial information in this report has been presented by geographic area. Our geographical regions are: (1) North America; (2) Europe, Middle East and Africa (“EMEA”); (3) South America and (4) Asia Pacific. The geographic designations have the following meanings:
    1. North America: United States, Canada, and Mexico;
    2. Europe, Middle East, and Africa: member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine and Balkans, Russia, Turkey, Uzbekistan, Pakistan, the African continent, and the Middle East;
    3. South America: Central and South America, and the Caribbean Islands; and
    4. Asia Pacific: Continental Asia (including the India subcontinent), Indonesia and Oceania.
  5. Net sales reflecting the exchange rate of 1.10 EUR/USD
  6. The Company is unable to provide this reconciliation without unreasonable effort due to the uncertainty and inherent difficulty of predicting the occurrence, the financial impact, and the periods in which the adjustments may be recognized. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.

Non-GAAP Financial Information

CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers’ ability to assess CNH Industrial’s financial performance and financial position. Management uses these non-GAAP measures to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions as they provide additional transparency with respect to our core operations. These non-GAAP financial measures have no standardized meaning under U.S. GAAP and are unlikely to be comparable to other similarly titled measures used by other companies and are not intended to be substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP.

CNH Industrial’s non-GAAP financial measures are defined as follows:

  • Adjusted EBIT of Industrial Activities under U.S. GAAP is defined as net income (loss) before the following items: Income taxes, Financial Services’ results, Industrial Activities’ interest expenses, net, foreign exchange gains/losses, finance and non-service component of pension and other post-employment benefit costs, restructuring expenses, and certain non-recurring items. In particular, non-recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of on-going operational activities.
  • Adjusted EBIT Margin of Industrial Activities: is computed by dividing Adjusted EBIT of Industrial Activities by Net Sales of Industrial Activities.
  • Adjusted Net Income (Loss): is defined as net income (loss), less restructuring charges and non-recurring items, after tax.
  • Adjusted Diluted EPS: is computed by dividing Adjusted Net Income (loss) attributable to CNH Industrial N.V. by a weighted-average number of common shares outstanding during the period that takes into consideration potential common shares outstanding deriving from the CNH Industrial share-based payment awards, when inclusion is not anti-dilutive. When we provide guidance for adjusted diluted EPS, we do not provide guidance on an earnings per share basis because the GAAP measure will include potentially significant items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end.
  • Adjusted Income Tax (Expense) Benefit: is defined as income taxes less the tax effect of restructuring expenses and non-recurring items, and non-recurring tax charges or benefits.
  • Adjusted Effective Tax Rate (Adjusted ETR): is computed by dividing a) adjusted income taxes by b) income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates, less restructuring expenses and non-recurring items.
  • Adjusted Gross Profit Margin of Industrial Activities: is computed by dividing Net sales less Cost of goods sold, as adjusted by non-recurring items, by Net sales.
  • Net Cash (Debt) and Net Cash (Debt) of Industrial Activities: Net Cash (Debt) is defined as total debt less intersegment notes receivable, cash and cash equivalents, restricted cash, other current financial assets (primarily current securities, short-term deposits and investments towards high-credit rating counterparties) and derivative hedging debt. CNH Industrial provides the reconciliation of Net Cash (Debt) to Total (Debt), which is the most directly comparable measure included in the consolidated balance sheets. Due to different sources of cash flows used for the repayment of the debt between Industrial Activities and Financial Services (by cash from operations for Industrial Activities and by collection of financing receivables for Financial Services), management separately evaluates the cash flow performance of Industrial Activities using Net Cash (Debt) of Industrial Activities.
  • Free Cash Flow of Industrial Activities (or Industrial Free Cash Flow): refers to Industrial Activities only, and is computed as consolidated cash flow from operating activities less: cash flow from operating activities of Financial Services; investments of Industrial Activities in assets sold under operating leases, property, plant and equipment and intangible assets; change in derivatives hedging debt of Industrial Activities; as well as other changes and intersegment eliminations.
  • Change excl. FX or Constant Currency: CNH Industrial discusses the fluctuations in revenues on a constant currency basis by applying the prior year average exchange rates to current year’s revenues expressed in local currency in order to eliminate the impact of foreign exchange rate fluctuations.

The tables attached to this press release provide reconciliations of the non-GAAP measures used in this press release to the most directly comparable GAAP measures.

Forward-looking statements

All statements other than statements of historical fact contained in this filing, including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. Forward-looking statements also include statements regarding the future performance of CNH Industrial and its subsidiaries on a standalone basis. These statements may include terminology such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “outlook”, “continue”, “remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “prospects”, “plan”, or similar terminology. Forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside our control and are difficult to predict. If any of these risks and uncertainties materialize (or they occur with a degree of severity that the Company is unable to predict) or other assumptions underlying any of the forward-looking statements prove to be incorrect, including any assumptions regarding strategic plans, the actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements.

Factors, risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others: economic conditions in each of our markets, including the significant uncertainty caused by the war in the Ukraine; production and supply chain disruptions, including industry capacity constraints, material availability, and global logistics delays and constraints; the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products, changes in government policies regarding banking, monetary and fiscal policy; legislation, particularly pertaining to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program policies, trade and commerce and infrastructure development; government policies on international trade and investment, including sanctions, import quotas, capital controls and tariffs; volatility in international trade caused by the imposition of tariffs, sanctions, embargoes, and trade wars; actions of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities and material price increases; housing starts and other construction activity; our ability to obtain financing or to refinance existing debt; price pressure on new and used equipment; the resolution of pending litigation and investigations on a wide range of topics, including dealer and supplier litigation, intellectual property rights disputes, product warranty and defective product claims, and emissions and/or fuel economy regulatory and contractual issues; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of CNH Industrial and its suppliers and dealers; security breaches with respect to our products; our pension plans and other post-employment obligations; political and civil unrest; volatility and deterioration of capital and financial markets, including pandemics (such as the COVID-19 pandemic), terrorist attacks in Europe and elsewhere; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or divestitures and other similar risks and uncertainties, and our success in managing the risks involved in the foregoing. Forward-looking statements are based upon assumptions relating to the factors described in this filing, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside CNH Industrial’s control. CNH Industrial expressly disclaims any intention or obligation to provide, update or revise any forward-looking statements in this announcement to reflect any change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based. Further information concerning CNH Industrial, including factors that potentially could materially affect CNH Industrial’s financial results, is included in CNH Industrial’s reports and filings with the SEC, the Autoriteit Financiële Markten and Commissione Nazionale per le Società e la Borsa.

All future written and oral forward-looking statements by CNH Industrial or persons acting on the behalf of CNH Industrial are expressly qualified in their entirety by the cautionary statements contained herein or referred to above.

Conference Call and Webcast

Today, at 3:30 p.m. CEST / 2:30 p.m. BST / 9:30 a.m. EDT, management will hold a conference call to present second quarter 2023 results to financial analysts and institutional investors. The call can be followed live online at https://bit.ly/CNH_Industrial_Q2_2023 and a recording will be available later on the Company’s website www.cnhindustrial.com. A presentation will be made available on the CNH Industrial website prior to the conference call.

Basildon, UK, July 28, 2023

CONTACTS

Media Inquiries – Laura Overall Tel +44 207 925 1964 or Rebecca Fabian Tel +1 312 515 2249 (Email mediarelations@cnhind.com)

Investor Relations – Jason Omerza Tel +1 630 740 8079 or Federico Pavesi Tel +39 345 605 6218 (Email investor.relations@cnhind.com)

CNH INDUSTRIAL N.V.
Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022
(Unaudited, U.S.-GAAP)

  Three Months Ended June 30, Six Months Ended June 30,
($ million) 2023 2022 2023 2022
Revenues        
Net sales  5,954 5,613 10,730 9,793
Finance, interest and other income 613 469 1,179 934
TOTAL REVENUES 6,567 6,082 11,909 10,727
Costs and Expenses        
Cost of goods sold 4,463 4,377 8,074 7,663
Selling, general and administrative expenses 485 424 923 802
Research and development expenses 269 212 500 396
Restructuring expenses 2 6 3 8
Interest expense 323 162 595 300
Other, net 187 148 350 331
TOTAL COSTS AND EXPENSES  5,729 5,329 10,445 9,500
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES 838 753 1,464 1,227
Income tax (expense) benefit (192) (228) (365) (387)
Equity in income (loss) of unconsolidated subsidiaries and affiliates 64 27 97 48
NET INCOME (LOSS) 710 552 1,196 888
Net income attributable to noncontrolling interests 4 4 8 7
NET INCOME (LOSS) ATTRIBUTABLE TO CNH INDUSTRIAL N.V.  706 548 1,188 881
Earnings (loss) per share attributable to CNH Industrial N.V.        
Basic 0.53 0.40 0.89 0.65
Diluted 0.52 0.40 0.88 0.65
Weighted average shares outstanding (in millions)        
Basic 1,338 1,355 1,340 1,355
Diluted 1,355 1,360 1,357 1,360
Cash dividends declared per common share 0.396 0.302 0.396 0.302

These Consolidated Statements of Operations should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the year ended December 31, 2022 included in the Annual Report on Form 10-K. These Consolidated Statements of Operations represent the consolidation of all CNH Industrial N.V. subsidiaries.

CNH INDUSTRIAL N.V.
Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022
(Unaudited, U.S.-GAAP)

($ million) June 30, 2023 December 31, 2022
ASSETS    
Cash and cash equivalents 3,194 4,376
Restricted cash 731 753
Financing receivables, net 21,541 19,260
Receivables from Iveco Group N.V. 260 298
Inventories, net 6,411 4,811
Property, plant and equipment, net and equipment under operating lease 3,101 3,034
Intangible assets, net 4,719 4,451
Other receivables and assets 2,730 2,398
TOTAL ASSETS 42,687 39,381
LIABILITIES AND EQUITY    
Debt 24,870 22,962
Payables to Iveco Group N.V. 111 156
Other payables and liabilities 10,076 9,287
Total Liabilities 35,057 32,405
Redeemable noncontrolling interest 55 49
Equity 7,575 6,927
TOTAL LIABILITIES AND EQUITY  42,687 39,381

These Consolidated Balance Sheets should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the year ended December 31, 2022 included in the Annual Report on Form 10-K. These Consolidated Balance Sheets represent the consolidation of all CNH Industrial N.V. subsidiaries.  

CNH INDUSTRIAL N.V.
Consolidated Statement of Cash Flows for the Six Months ended June 30, 2023 and 2022
(Unaudited, U.S.-GAAP)

  Six Months Ended June 30,
($ million) 2023 2022
Operating activities:    
Net income (loss) 1,196 888
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation and amortization expense, excluding depreciation and amortization of assets under operating leases 178 167
Depreciation and amortization expense of assets under operating leases 92 105
(Gain) loss on disposal of assets 20 16
Undistributed (income) loss of unconsolidated subsidiaries (46) (13)
Other non-cash items 78 89
Changes in operating assets and liabilities:    
Provisions 445 (51)
Deferred income taxes (188) 27
Trade and financing receivables related to sales, net (1,380) (963)
Inventories, net (1,379) (1,164)
Trade payables 202 56
Other assets and liabilities (58) (315)
Net Cash provided (used) by operating activities (840) (1,158)
Investing activities:    
Additions to retail receivables (3,576) (2,703)
Collections of retail receivables 2,995 2,392
Proceeds from the sale of assets, net of assets under operating leases 1 2
Expenditures for property, plant and equipment and intangible assets, net of assets under operating leases (224) (139)
Expenditures for assets under operating leases (237) (252)
Other (206) (300)
Net Cash provided (used) by investing activities (1,247) (1,000)
Financing activities:    
Net increase (decrease) in debt 1,535 527
Dividends paid (529) (415)
Other (169) (40)
Net Cash provided (used)by financing activities 837 72
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash 46 (175)
Increase (decrease) in cash and cash equivalents and restricted cash (1,204) (2,261)
Cash and cash equivalents and restricted cash, beginning of year 5,129 5,845
Cash and cash equivalents and restricted cash, end of period 3,925 3,584

These Consolidated Statements of Cash Flow should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Notes for the year ended December 31, 2022 included in the Annual Report on Form 10-K. These Consolidated Statements of Cash Flows represent the consolidation of all CNH Industrial N.V. subsidiaries.

   
CNH INDUSTRIAL N.V.
Supplemental Statements of Operations for the Three Months ended June 30, 2023 and 2022
(Unaudited, U.S.-GAAP)

  Three Months Ended June 30, 2023 Three Months Ended June 30, 2022
($ million) Industrial Activities(1) Financial Services Eliminations Consolidated Industrial Activities(1) Financial Services Eliminations Consolidated
Revenues                
Net sales  5,954   5,954 5,613   5,613
Finance, interest, and other income 47 603 (37)(2)        613 15 471 (17)(2)        469
TOTAL REVENUES 6,001 603 (37) 6,567 5,628 471 (17) 6,082
Costs and Expenses                
Cost of goods sold 4,463   4,463 4,377   4,377
Selling, general and administrative expenses 434 51  485 381 43  424
Research and development expenses 269   269 212   212
Restructuring expenses 2   2 6   6
Interest expense 69 291 (37)(3)        323 50 129 (17)(3)        162
Other, net 42 145  187 (21) 169  148
TOTAL COSTS AND EXPENSES  5,279 487 (37) 5,729 5,005 341 (17) 5,329
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates 722 116  838 623 130  753
Income tax (expense) benefit (166) (26)  (192) (190) (38)  (228)
Equity in income (loss) of unconsolidated subsidiaries and affiliates 60 4  64 24 3  27
NET INCOME (LOSS) 616 94  710 457 95  552

(1)  Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)   Elimination of Financial Services’ interest income earned from Industrial Activities.
(3)  Elimination of Industrial Activities’ interest expense to Financial Services.

CNH INDUSTRIAL N.V.
Supplemental Statements of Operations for the Six Months ended June 30, 2023 and 2022
(Unaudited, U.S.-GAAP)

  Six Months Ended June 30, 2023 Six Months Ended June 30, 2022
($ million) Industrial Activities(1) Financial Services Eliminations Consolidated Industrial Activities(1) Financial Services Eliminations Consolidated
Revenues                
Net sales  10,730   10,730 9,793   9,793
Finance, interest, and other income 104 1,152 (77)(2)        1,179 25 937 (28)(2)        934
TOTAL REVENUES 10,834 1,152 (77) 11,909 9,818 937 (28) 10,727
Costs and Expenses                
Cost of goods sold 8,074   8,074 7,663   7,663
Selling, general and administrative expenses 821 102  923 710 92  802
Research and development expenses 500   500 396   396
Restructuring expenses 3   3 8   8
Interest expense 130 542 (77)(3)        595 95 233 (28)(3)        300
Other, net 62 288  350 (38) 369  331
TOTAL COSTS AND EXPENSES  9,590 932 (77) 10,445 8,834 694 (28) 9,500
Income (loss) before income taxes and equity in income of unconsolidated subsidiaries and affiliates 1,244 220  1,464 984 243  1,227
Income tax (expense) benefit (310) (55)  (365) (313) (74)  (387)
Equity in income (loss) of unconsolidated subsidiaries and affiliates 90 7  97 40 8  48
NET INCOME (LOSS) 1,024 172  1,196 711 177  888

(1)  Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)   Elimination of Financial Services’ interest income earned from Industrial Activities.
(3)  Elimination of Industrial Activities’ interest expense to Financial Services.

CNH INDUSTRIAL N.V.
Supplemental Balance Sheets as of June 30, 2023 and December 31, 2022
(Unaudited, U.S.-GAAP)

  June 30, 2023 December 31, 2022
($ million) Industrial Activities(1) Financial Services Eliminations Consolidated Industrial Activities(1) Financial Services Eliminations Consolidated
ASSETS                
Cash and cash equivalents 2,730 464  3,194 3,802 574  4,376
Restricted cash 166 565  731 158 595  753
Financing receivables, net 765 21,770 (994)(2)        21,541 898 19,313 (951)(2)        19,260
Receivables from Iveco Group N.V. 179 81  260 234 64  298
Inventories, net 6,396 15  6,411 4,798 13  4,811
Property, plant and equipment, net and equipment on operating lease 1,671 1,430  3,101 1,561 1,473  3,034
Intangible assets, net 4,556 163  4,719 4,287 164  4,451
Other receivables and assets 2,460 527 (257)(3)        2,730 2,141 477 (220)(3)        2,398
TOTAL ASSETS 18,923 25,015 (1,251) 42,687 17,879 22,673 (1,171) 39,381
LIABILITIES AND EQUITY                
Debt 4,861 21,003 (994)(2)        24,870 4,972 18,941 (951)(2)        22,962
Payables to Iveco Group N.V. 4 107  111 5 151  156
Other payables and liabilities 8,962 1,371 (257)(3)        10,076 8,2111,296(220)(3)        9,287
Total Liabilities 13,827 22,481 (1,251) 35,057 13,188 20,388 (1,171) 32,405
Redeemable noncontrolling interest 55   55 49   49
Equity 5,041 2,534  7,575 4,642 2,285  6,927
TOTAL LIABILITIES AND EQUITY/ 18,923 25,015 (1,251) 42,687 17,879 22,673 (1,171) 39,381

(1)  Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)   This item includes the elimination of receivables/payables between Industrial Activities and Financial Services.
(3)  This item primarily represents the reclassification of deferred tax assets/liabilities in the same taxing jurisdiction and elimination of intercompany activity between Industrial Activities and Financial Service.

CNH INDUSTRIAL N.V.
Supplemental Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022
(Unaudited, U.S.-GAAP)

  Six Months ended June 30, 2023 Six Months ended June 30, 2022
($ million) Industrial Activities(1) Financial Services Elimination(3) 

 
Consolidated Industrial Activities(1) Financial Services Elimination(3) Consolidated
Operating activities:                           
Net income (loss) 1,024 172  1,196 711 177  888 
Adjustments to reconcile net income to net cash provided (used) by operating activities:                 
Depreciation and amortization expense, excluding depreciation and amortization of assets under operating lease 176 2  178 166 1  167 
Depreciation and amortization expense of assets under operating lease 3 89  92 1 104  105 
(Gain) loss on disposal of assets 20   20 16   16 
Undistributed (income) loss of unconsolidated subsidiaries (35) (7) (4)(2) (46) 85 (8) (90)(2) (13) 
Other non-cash items 43 35  78 59 30  89 
Changes in operating assets and liabilities:                           
Provisions 445   445 (51)   (51) 
Deferred income taxes (179) (9)  (188) 53 (26) 27 
Trade and financing receivables related to sales, net (19) (1,367) 6(3) (1,380) 105 (1,068) (3) (963) 
Inventories, net (1,567) 188  (1,379) (1,433) 269  (1,164) 
Trade payables 273 (66) (5)(3) 202 81 (32) 7(3) 56 
Other assets and liabilities (134) 77 (1)(3) (58) (274) (34) (7)(3) (315) 
Net cash provided (used)by operating activities 50 (886) (4) (840) (481) (587) (90) (1,158) 
Investing activities:                           
Additions to retail receivables  (3,576)  (3,576)  (2,703)  (2,703) 
Collections of retail receivables  2,995  2,995  2,392  2,392 
Proceeds from sale of assets, net of assets sold under operating leases 1   1 2   2 
Expenditures for property, plant and equipment and intangible assets, net of assets under operating lease (221) (3)  (224) (137) (2)  (139) 
Expenditures for assets under operating lease (9) (228)  (237) (6) (246)  (252) 
Other 137 (422) 79 (206) (623) 323  (300) 
Net cash provided (used) by investing activities (92) (1,234) 79 (1,247) (764) (236)  (1,000) 
Financing activities:                           
Net increase (decrease) in debt (361) 1,896  1,535 (58) 585  527 
Dividends paid (529) (4) 4(2) (529) (415) (90) 90(2) (415) 
Other (169) 79 (79) (169) (40)   (40) 
Net cash provided (used) by financing activities (1,059) 1,971 (75) 837 (513) 495 90 72 
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash 37 9  46 (182) 7  (175) 
Increase (decrease) in cash and cash equivalents (1,064) (140)  (1,204) (1,940) (321)  (2,261) 
Cash and cash equivalents, beginning of year 3,960 1,169  5,129 4,514 1,331  5,845 
Cash and cash equivalents, end of year  2,896 1,029  3,925 2,574 1,010  3,584 

(1)  Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes the Company’s Agriculture and Construction segments, and other corporate assets, liabilities, revenues and expenses not reflected within Financial Services.
(2)  This item includes the elimination of dividends from Financial Services to Industrial Activities, which are included in Industrial Activities net cash used in operating activities.
(3)  This item includes the elimination of certain minor activities between Industrial Activities and Financial Services.


Other Supplemental Financial Information
(Unaudited)

  Adjusted EBIT of Industrial Activities by Segment  
  Three Months Ended June 30, Six Months Ended June 30,
  2023 2022 2023 2022
  (in millions) (in millions)
Industrial Activities segments        
Agriculture 821 663 1,391 1,089
Construction 72 34 116 66
Unallocated items, eliminations and other (71) (43) (130) (72)
Total Adjusted EBIT of Industrial Activities 822 654 1,377 1,083


Reconciliation of Consolidated Net Income under US-GAAP to Adjusted EBIT of Industrial Activities
  Three Months Ended June 30, Six Months Ended June 30,
  2023 2022 2023 2022
  (in millions)

 
 (in millions)

 
Net Income 710 552 1,196 888
Less: Consolidated income tax expense (192) (228) (365) (387)
Consolidated income before taxes 902 780 1,561 1,275
Less: Financial Services        
Financial Services Net Income 94 95 172 177
Financial Services Income Taxes 26 38 55 74
Add back of the following Industrial Activities items:        
Interest expense of Industrial Activities, net of Interest income and eliminations 22 35 26 70
Foreign exchange (gains) losses, net of Industrial Activities  (13) 6 
Finance and non-service component of Pension and other post-employment benefit costs of Industrial Activities(1) (1) (40) (2) (77)
Adjustments for the following Industrial Activities items:        
Financial Services Income Taxes 2 6 3 8
Other discrete items(2) 17 19 10 58
Total Adjusted EBIT of Industrial Activities 822 654 1,377 1,083

(1)  In the three and six months ended June 30, 2023 and 2022, this item includes the pre-tax gain of $6 million and $12 million as a result of the amortization over the 4 years of the $101 million positive impact from the 2021 modifications of a healthcare plan in the U.S. In the three and six months ended June 30, 2022, this item includes the pre-tax gain of $30 million and $60 million as a result of the 2018 modification of a healthcare plan in the U.S.

(2)  In the three months ended June 30, 2023, this item included a loss of $17 million related to the sale of CNH Industrial Russia. In the six months ended June 30, 2023, this item included a gain of $13 million in relation to the fair value remeasurement of Augmenta and Bennamann, offset by a $23 million loss on the sale of the CNH Industrial Russia and CNH Capital Russia businesses. In the three and six months ended June 30, 2022, this item included $3 million and $6 million of separation costs incurred in connection with our spin-off of the Iveco Group Business and $16 million and $8 million of loss from the activity of the two Raven businesses held for sale, including the loss on the sale of the Engineered Films Division. In the six months ended June 30, 2022, this item also included $44 million of asset write-downs.

Other Supplemental Financial Information

(Unaudited)

Reconciliation of Total (Debt) to Net Cash (Debt) under US-GAAP
($ million) Consolidated Industrial Activities Financial Services
  June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022
Third party (debt) (24,870) (22,962) (4,619) (4,909) (20,251) (18,053)
Intersegment notes payable   (242) (63) (752) (888)
Payable to Iveco Group N.V. (111) (156) (4) (5) (107) (151)
Total (Debt)(1) (24,981) (23,118) (4,865) (4,977) (21,110) (19,092)
Cash and cash equivalents  3,194 4,376 2,730 3,802 464 574
Restricted cash  731 753 166 158 565 595
Intersegment notes receivable   752 888 242 63
Receivables from Iveco Group N.V. 260 298 179 234 81 64
Other current financial assets(2) 300 300 300 300  
Derivatives hedging debt (39) (43) (39) (43)  
Net Cash (Debt)(3)  (20,535) (17,434) (777) 362 (19,758) (17,796)

(1)  Total (Debt) of Industrial Activities includes Intersegment notes payable to Financial Services of $242 million and $63 million as of June 30, 2023 and December 31, 2022, respectively. Total (Debt) of Financial Services includes Intersegment notes payable to Industrial Activities of $752 million and $888 million as of June 30, 2023 and December 31, 2022, respectively.
(2)  This item includes short-term deposits and investments towards high-credit rating counterparties.
(3)  The net intersegment receivable/(payable) balance recorded by Financial Services relating to Industrial Activities was ($510) million and ($825) million as of June 30, 2023 and December 31, 2022, respectively.

Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities under US-GAAP
Six Months ended June 30, 2023   Three Months ended June 30,
2023 2022 ($ million) 2023 2022
(840) (1,158) Net cash provided by (used in) Operating Activities  (139) (271)
890 677 Cash flows from Operating Activities of Financial Services net of eliminations 732 773
4 (29) Change in derivatives hedging debt of Industrial Activities and other (3) (11)
(9) (6) Investments in assets sold under operating lease assets of Industrial Activities (5) (4)
(221) (137) Investments in property, plant and equipment, and intangible assets of Industrial Activities (131) (84)
(111) (2) Other changes(1) (68) 1
(287) (655) Free cash flow of Industrial Activities 386 404

(1)   This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments.

Other Supplemental Financial Information

(Unaudited) 

Reconciliation of Adjusted net income and Adjusted income tax (expense) benefit to Net income (loss) and Income tax (expense) benefit and calculation of Adjusted diluted EPS and Adjusted ETR under US-GAAP
Six Months ended June 30,   Three Months ended June 30,
2023 2022 ($ million) 2023 2022
1,196 888 Net income (loss)  710 552
1 9 Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) 13 (12)
(11) 64 Adjustments impacting Income tax (expense) benefit (b) (12) 43
1,186 961 Adjusted net income (loss) 711 583
1,178 954 Adjusted net income (loss) attributable to CNH Industrial N.V. 707 579
1,357 1,360 Weighted average shares outstanding – diluted (million) 1,355 1,360
0.87 0.70 Adjusted diluted EPS ($) 0.52 0.43
         
1,464 1,227 Income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates 838 753
1 9 Adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (a) 13 (12)
1,465 1,236 Adjusted income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates (A) 851 741
(365) (387) Income tax (expense) benefit (192) (228)
(11) 64 Adjustments impacting Income tax (expense) benefit (b) (12) 43
(376) (323) Adjusted income tax (expense) benefit (B) (204) (185)
         
25.7% 26.1% Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A) 24.0% 25.0%
    a) Adjustments impacting Income (loss) from continuing operations before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates    
3 8 Restructuring expenses 2 5
 (60) Pre-tax gain related to the 2018 modification of a healthcare plan in the U.S.  (30)
(12) (12) Pre-tax gain related to the 2021 modification of a healthcare plan in the U.S. (6) (6)
 44 Asset write-down: Industrial Activities, Russia Operations  
 15 Asset write-down: Financial Services, Russia Operations  
17  Loss on sale of Industrial Activities, Russia Operations 17 
6  Loss on sale of Financial Services, Russia Operations  
 6 Spin related costs  3
(13)  Investment fair value adjustment  
 8 Activity of the Raven Segments held for sale, including loss on sale of the Aerostar and Engineered Films Division  16
1 9 Total  13 (12)
    b) Adjustments impacting Income tax (expense) benefit    
(11) 61 Tax effect of adjustments impacting Income (loss) before income tax (expense) benefit and equity in income of unconsolidated subsidiaries and affiliates(1) (12) 39
 3 Adjustment to valuation allowances on deferred tax assets  4
(11) 64 Total (12) 43

(1)   In the six months ended June 30, 2022, this balance included $12 million of increase to the valuation allowances on historical deferred tax assets as a result of the suspension of operations in Russia.

Other Supplemental Financial Information

(Unaudited)

Reconciliation of Adjusted gross profit to gross profit under US-GAAP
Six Months ended June 30,   Three Months ended June 30,
2023 2022 ($ million) 2023 2022
10,730 9,793 Net Sales (A) 5,954 5,613
8,074 7,663 Cost of goods sold  4,463 4,377
2,656 2,130 Gross profit (B) 1,491 1,236
 34 Asset write down (Russia operations)   
2,656 2,164 Adjusted gross profit (C) 1,491 1,236
         
24.8% 21.8% Gross profit margin (B ÷ A) 25.0% 22.0%
24.8% 22.1% Adjusted gross profit margin (C ÷ A) 25.0% 22.0%

 

Attachment


 


Primary Logo

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Photography by Christophe Tomatis
Copyright © 2010-2020 Pleasanton.com & California Media Partners, LLC. All rights reserved.