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 |
|
Change |
Change 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 ($23.0 billion at December 31,
2022).
|
Agriculture |
| |
|
Q2 2023 |
|
Q2 2022 |
|
Change |
Change at c.c.(1) |
| Net sales ($
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 $158 million (or
2.8 p.p.) increase from Q2 2022 was the result of favorable pricing
and improved mix, partially offset by increased production costs,
SG&A expenditures, and R&D investments.
|
Construction |
| |
|
Q2 2023 |
|
Q2 2022 |
|
Change |
Change at c.c.(1) |
| Net sales ($
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 $38 million due to
favorable price realization and favorable volume/mix partially
offset by higher production costs, SG&A spend, and R&D
investments. Adjusted EBIT margin at 6.8% increased by 300 bps vs.
the same quarter of 2022.
|
Financial Services |
| |
|
Q2 2023 |
|
Q2 2022 |
|
Change |
Change at c.c.(1) |
| Revenue ($
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 |
|
Change |
Change 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 |
|
Change |
Change 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 |
|
Change |
Change 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 |
|
Change |
Change 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.
-
c.c. means at constant currency.
-
Comparison vs. December 31, 2022
-
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.
-
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:
-
North America: United States, Canada, and Mexico;
-
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;
-
South America: Central and South America, and the Caribbean
Islands; and
-
Asia Pacific: Continental Asia (including the India subcontinent),
Indonesia and Oceania.
-
Net sales reflecting the exchange rate of 1.10 EUR/USD
-
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 |
|
8,211 |
1,296 |
(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% |
- 20230728_PR_CNH_Industrial_Q2_Results_2023
CNH Industrial NV (NYSE:CNHI)
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